SLIDE 1 ZALANDO CONVENIEN C E
C A P I T A L M A R K E T S D A Y 2 0 1 7
D A V I D S C H R Ö D E R M A S O O D C H O U D H R Y 1 9 - 0 6 - 2 0 1 7
SLIDE 2 2
TABLE OF CONTENTS
- 1. WHERE WE WANT TO GO
- 2. HOW WE WILL MAKE IT HAPPEN
- 3. WHICH ROLE MÖNCHENGLADBACH PLAYS
- 4. Q&A
SLIDE 3 3
O U R M I S S I O N AS Z AL A N D O O P E R AT I O N S I S T O B E C O M E T H E B E S T F U L F I L M E N T P AR T N E R F O R F AS H I O N I N E U R O P E OPERATIONAL EXCELLENCE CUSTOMER SATISFACTION SUSTAINABLE GROWTH
SLIDE 4 4
Z AL AN D O C O N V E N I E N C E S U P P O R T S T H E Z AL AN D O P L AT F O R M W I T H T H R E E K E Y S E R V I C E S
- Payment processing
- Payment customer care
- Dunning & collection
- Fraud prevention
- Receivables accounting
- Deferred payments offering
P A Y M E N T S L O G I S T I C S C U S T O M E R C A R E
(inbound, storage, parcel
- utbound)
- Returns handling
- Transportation & shipping
- Network planning
- Warehouse engineering
- Mail & phone support
- Chat
- Social Media
- Self-help / Smart FAQ
SLIDE 5 5 Satisfaction in % Satisfaction in % Satisfaction in %
Note: Customer satisfaction in percent of customers evaluating service as 1 or 2 on a scale of 1 to 5 with 1 = very satisfied , 5 = not satisfied.
(1) YoY as per Dec-2016.
CLEAR CUSTOM ER CENTRICITY FOCUS LEADS TO SIGNIFICANT INCREASE IN CUSTOM ER SATISF AC TION
P AY M E N T L O G I S T I C S C U S T O M E R C AR E
2014 2016 2014 2016 2014 2016 + 4 % + 4 % + 1 1 % NPS at all- time high +5 points1 CAGR
SLIDE 6 6 Number of transactions in m Number of shipments in m Number of contacts in m
C O N T I N U E D C AP AC I T Y E X P AN S I O N SUPPORTS BUSI NESS GROWTH
P AY M E N T L O G I S T I C S C U S T O M E R C AR E
2014 2016 2014 2016 2014 2016 + 3 8 % + 2 8 % + 1 7 % CAGR
SLIDE 7 7 Total Payment costs in € / order Logistics costs in € / item Contact rate in % of orders
CONTINUOUS IM PROVEM ENT CULTURE DRIVES OPERATION AL EXCELLENCE
P AY M E N T L O G I S T I C S C U S T O M E R C AR E
2014 2016 2014 2016 2014 2016
CAGR
SLIDE 8 8
TABLE OF CONTENTS
- 1. WHERE WE WANT TO GO
- 2. HOW WE WILL MAKE IT HAPPEN
- 3. WHICH ROLE MÖNCHENGLADBACH PLAYS
- 4. Q&A
SLIDE 9 9
LOGISTICS NETWORK EXPANSION
SLIDE 10 10
ONLINE RETAILERS UNDER PRESSURE FROM GENERATION CONSUMERS FOR CHEAPER AND MORE CONVENIENT FULFILMENT OPTIONS Note: (1) Source: PWC, „Total Retail Survey“ 2016, n=22.618, Q: „Thinking of your favorite online retailer, why do you shop h ere?“
THE EUROPEAN ENVIRONM ENT IS CONTINUALLY CHANGING
THE CUSTOMER IS BECOMING MORE AND MORE DEMANDING THE MARKET IS BECOMING MORE AND MORE INNOVATIVE AND COMPETITIVE
“
THESE SIX-WHEELED DELIVERY ROBOTS ARE STARTING TRIALS IN EUROPE ECOMMERCE EUROPE SHAPES THE FUTURE OF CROSS-BORDER PARCEL DELIVERY AMAZON IS LOOKING TO EXPAND ITS TWO-HOUR PRIME NOW DELIVERY SERVICE IN EUROPE BY ESTABLISHING 1,300 NEW WAREHOUSES FAST DELIVERIES TO GROW BY 40 PERCENT YEAR-ON-YEAR UNTIL 2025, SAYS NEW STUDIE THE ASOS SUPPLY CHAIN CHARMS THE MILLENNIAL SHOPPERS
GOOD PRICES BRAND TRUST BROAD AND EXCLUSIVE SELECTION CONVENIENT RETURNS FAST AND RELIABLE DELIVERY EASY TO USE IN-STORE AVAILABILITY CHECKABLE GREAT LOYALTY PROGRAM STORE PRICES MATCH ONLINE PRICES SUPERIOR CUSTOMER REVIEWS
SLIDE 11 11
WE WILL CONTINUE TO PLACE OUR CUSTOM ERS FIRST AND WE WILL ENABLE NEW PARTNERS TO SCALE THEIR BUSINESS ON OUR PLATFORM
FREE & FASTER DELIVERY AND RETURNS PERSONALIZED CONVENIENCE OPEN UP OUR LOGISTIS CAPABILITIES
- Preferred delivery & returns option to
95% of our customers
- Personalized recommendation of
delivery and returns services
- Being able to reach 95% of our
customers within 1-2 days
- Leading returns proposition
- Free 24hr service for good customers
- Provide logistics solutions to help our
partners to scale their business on our platform in a cost efficient way
- Increase convenience level of Zalando
Partner Program for our customers MACRO NETWORK DEVELOPMENT MICRO NETWORK DEVELOPMENT ZALANDO FULFILLMENT SOLUTIONS
! !!
SLIDE 12 12
WE ARE EXPANDING OUR LOGISTICS OPERATIONS TO A TRULY EUROPEAN NETWORK
EXISTING FOOTPRINT HUB BUILT-OUT
Purpose: Scale, flexibility and process efficiency Serving majority of our markets (10-15 markets) High degree of automation
SPOKE BUILT-OUT
Purpose: Reduction of lead times to customers Serving only local markets (1-3 markets) Low-medium degree of automation TOTAL CAPACITY OF ~€8BN IN REVENUES
SZCZECIN HUB ~130,000 m2 Start in autumn ‘17 BRIESELANG HUB ~30,000 m2 Start in 2011 ERFURT HUB ~130,000 m2 Start in 2012 M’GLADBACH HUB ~130,000 m2 Start in 2013
!
MILAN SPOKE ~20,000 m2 Start in 2016 PARIS SPOKE ~20,000 m2 Start in 2017 LAHR HUB ~125,000 m2 Start in 2016 STOCKHOLM SPOKE Start end of 2017
SLIDE 13 13
WE CONTINUALLY STRIVE TO PROVIDE EVEN BETTER SERVICES TO OUR CUSTOM ERS ACROSS EUROPE
2011 2018 go-live Brieselang ... 2019 go-live Moissy (FR), Brunna (SWE), Gardno (PL) Planned extensions
!
Same day reach (LH1 < 2hrs), in % Next day reach (LH1 < 9hrs), in % 2nd day reach (LH1 < 18hrs) in % 1 19 20 22 31 66 69 79 72 95 92 92 2017
(1) LH = line-haul
SLIDE 14 14
WE CONTINUALLY STRIVE TO PROVIDE EVEN BETTER SERVICES TO OUR CUSTOM ERS ACROSS EUROPE
!!
CUSTOMER NEEDS OUR SERVICE OUR NETWORK
Free Standard Delivery & Return Free Delivery & Return Reliable Delivery Convenient Delivery & Return Fast Delivery & Return Express Delivery Timeslot Delivery Wish-day Delivery Pick-up & Drop-Off Points Same Day Delivery & Return on Demand Local Delivery Network LDN Carrier, Express & Parcel Network CEP
SLIDE 15 15
STRONG FOCUS ON DEFERRED PAYMENT METHODS
SLIDE 16 16
WE ALRE ADY OFFER A BROAD VARIETY OF PAYM ENT M ETHODS...
CHEQUE INVOICE PREPAYMENT
OVER 20 PAYMENT METHODS TAILORED TO LOCAL NEEDS PERSONALIZED OFFERING
SLIDE 17 17
INVOICE CREDIT CARD
...WITH A STRONG FOCUS ON DEFERRED PAYM ENT M ETHODS
CHARGES CUSTOMERS ONLY FOR THE GOODS THEY KEEP AFTER A CERTAIN TIME PERIOD
DEFERRED PAYMENT METHODS
HOW do you want to pay? WHEN do you want to provide the funds? payment term credit immediately
BANK TRANS. CREDIT CARD DIRECT DEBIT PAYPAL CASH ON DELIVERY INVOICE INSTALLMENTS PAYLATER
credit
CREDIT CARD DIRECT DEBIT PAYLATER
All funds transferred automatically Low merchant side risk
+
Order needs to be paid directly Large orders require high credit card limits
Only pay what you keep No risk as customer
+
Hassle of bank transfer Risky for merchant to offer
PAY LATER CREDIT CARD COMBINES THE BEST OF TWO WORLDS FIRST TESTS IN FRANCE SHOW PROMISING RESULTS
INVOICE
We already offer a strong invoice product in 9 countries!
SLIDE 18 18
INTERACTIVE AND SEAMLESS CUSTOMER CONTACT
SLIDE 19 19
WHY WE CREATED AN INTERACTIVE HELP AND CONTACT CENTER
REDUCE CUSTOMER CARE
- Approx. 40% of inquires can be
solved with easy replies or info the customer already has FULFILL CUSTOMER NEED Customers often search for answers via search engines FOCUS ON HIGH VALUE ADD We want customer care to Focus its resources on true value add inquiries COLLECT & LEVERAGE DATA Self-help usage data leads to better insight and categorization
SLIDE 20 20
WHAT WE OFFER IN OUR HELP AND CONTACT CENTER
Does Zalando refund the costs for express delivery?
CUSTOMER QUESTION
1 2 3
SLIDE 21 21
TABLE OF CONTENTS
- 1. WHERE WE WANT TO GO
- 2. HOW WE WILL MAKE IT HAPPEN
- 3. WHICH ROLE MÖNCHENGLADBACH PLAYS
- 4. Q&A
SLIDE 22 22
ZAL AND O LOGISTICS M ÖNCHENGLADB ACH AT A GLANCE
20km
conveyor system
~4 years old
>2,100
employees
New Bagsorter
500.000 bags
130,000m²
area of fulfillment center
SLIDE 23 23
M ÖNCHENGLADB ACH HAS AN IM PORTANT ROLE WITHIN OUR NETWORK, ESPECIALLY FOR WESTERN M ARKETS
LOCATED IN THE MIDDLE OF THE EU SERVING ALL OUR 15 MARKETS OUR FIRST ZALANDO FULFILLMENT SOLUTION LOCATION, FULFILLING SINCE 02/16 LOCATED IN A HIGH DENSITY AREA WITH 62 MILLION INHABITANTS WITHIN A 3 HOUR DRIVING TIME HIGHLY AUTOMATED, WITH BAG- SORTER IN RAMP-UP MODE
SLIDE 24 24
M ÖNCHENGLADB ACH – THE LAYOUT
Retoure Dock Singe & Multi-Order Pack Area Outbound Dock Receive Container Buffer (High Dynamic Storage)
Hall 3 Hall 5 Hall 4 Hall 1
Picktower Picktower Inbound/ Outbound Bagstore/ Bagsorter Outbound Picktower / Bagsorter Inbound PHASE 1: UNITS 1-3 (66K M²), 2013 PHASE 2: UNITS 4-5 (44K M²); 2017
Hall 2
Singe & Multi-Order Bag Pack Area Inbound Bagsorter
SLIDE 25 25
M ÖNCHENGLADB ACH KEY PROCESSES
PICKING SINGLE PACKING SORT
(MULTI ONLY)
MULTI PACKING SHIPPING CUSTOMER TRY ON POTENTIAL RETURN RECEIVE STOW
GOODS RECEIVE MANAGEMENT & INBOUND & RETURNS PROCESS CUSTOMER ORDER & OUTBOUND PROCESS
CUSTOMER ORDER INBOUND DOCK
SLIDE 26 26
SLIDE 27 27
C e r t a i n s t a t e m e n t s i n t h i s c o m m u n i c a t i o n m a y c o n s t i t u t e f o r wa r d l o o k i n g s t a t e m e n t s . T h e s e s t a t e m e n t s a r e b a s e d o n a s s u m p t i o n s t h a t a r e b e l i e v e d t o b e r e a s o n a b l e a t t h e t i m e t h e y a r e m a d e , a n d a r e s u b j e c t t o s i g n i f i c a n t r i s k s a n d u n c e r t a i n t i e s . Y o u s h o u l d n o t r e l y o n t h e s e f o r wa r d - l o o k i n g s t a t e m e n t s a s p r e d i c t i o n s o f f u t u r e e v e n t s a n d we u n d e r t a k e n o o b l i g a t i o n t o u p d a t e o r r e v i s e t h e s e s t a t e m e n t s . O u r a c t u a l r e s u l t s m a y d i f f e r m a t e r i a l l y a n d a d v e r s e l y f r o m a n y f o r wa r d - l o o k i n g s t a t e m e n t s d i s c u s s e d o n t h i s c a l l d u e t o a n u m b e r o f f a c t o r s , i n c l u d i n g wi t h o u t l i m i t a t i o n , r i s k s f r o m m a c r o e c o n o m i c d e v e l o p m e n t s , e xt e r n a l f r a u d , i n e f f i c i e n t p r o c e s s e s a t f u l f i l l m e n t c e n t e r s , i n a c c u r a t e p e r s o n n e l a n d c a p a c i t y f o r e c a s t s f o r f u l f i l l m e n t c e n t e r s , h a z a r d o u s m a t e r i a l / c o n d i t i o n s i n p r o d u c t i o n wi t h r e g a r d t o p r i v a t e l a b e l s , l a c k o f i n n o v a t i o n c a p a b i l i t i e s , i n a d e q u a t e d a t a s e c u r i t y , l a c k o f m a r k e t k n o wl e d g e , r i s k o f s t r i k e a n d c h a n g e s i n c o m p e t i t i o n l e v e l s .
DISCLAIM ER
