Zalando: Care for Customers and Partners

This article previously appeared in Cross-Border Magazine Nr.4, October 2017

Berlin – a blooming and friendly city – building the future that does not forget about its past. It is the city of Zalando’s headquarters as well. We are meeting up to talk to Vice President Customer Satisfaction Lisa Miczaika and Vice President Logistics Products Jan Bartels, who will tell us about Zalando’s way of handling their customer care and the brand new Zalando Fulfillment Solutions.

Customer Satisfaction: a team effort

In 2017, Zalando is a well-established fashion platform in Europe, dealing with thousands of customer queries every day. It all started when one of Zalando’s founders, David Schneider, put his phone number on the website in 2008, and since then, Zalando’s customer care has grown into a key factor of the organisation. Lisa Miczaika: “Customer satisfaction is one of the main cornerstones of our organisation and customer care an important aspect of it. Satisfaction is not produced from customer care alone, but rather an effort from everyone.” She continues: “A customer care team is very close to the customer, since they are always in contact with them through various channels.”

As Zalando started in Germany, this is where their customer care team started as well. Expanding across borders, into new markets, let to the demand of more service teams. Each team located in Berlin focused on their own market: the German team on the German market, Austria on the Austrian market, the Dutch team on the Dutch market and so on. “Every team had its own thing going on, and although we had processes, they were not clear for. At some times, it was chaotic in the beginning. We had some basics: a customer called with a problem and it had to be resolved. However, in the last four years, as Zalando grew, we became more professional in terms of having this backbone that you need to do customer care. What our team of specialists concentrates on is ‘what the customer wants’, and improving the NPS (Net Promoter Score).”

Measuring Satisfaction

Having the means to measure customer satisfaction lead to decent and effective changes in the workflow. For a large fashion platform, such as Zalando, it is essential to have satisfying workflows. The brand asks customers to fill out a survey, and when customers agree, they receive a survey that measures all important NPS scores. All touchpoints, from landing on the webshop up until the potential reimbursement of a returned order, are questioned. “We try to collect data on all aspects that influence the satisfaction of a purchase and look at them monthly. People are more than welcome to write a negative review, but naturally, that is not what we wish for. It is not just about preventing bad reviews to be written, it is more. Naturally it is not what we wish for, but people are more than welcome to write a negative review. Our goal is that in the end, the experience of the purchase was a good and positive one. Our goal is that customers come back to us the next time,” says Lisa. Analysis of gathered data from the survey, as well as from social media channels, review channels and more leads to very specific, localised changes in certain processes. “For example, when we notice that French customers may were not happy with certain promoted items during the previous summer, we try to find out why. Or, for instance the tendency that our customers are very used to their local delivery company. This is for example why we decided to work with PostNL for our regular deliveries and with DHL Express for fast delivery in the Netherlands.” Lisa explains.

Zalando has not rolled out a ‘one size fits all’ approach. Each market has its own tailored customer care approach. A common example is differences in payment preferences. The Dutch very much like to pay with the local payment method iDeal, while Italians like to pay with cash on delivery, since they are relatively new to shopping online and have not build up the necessary trust to use payment systems like credit cards.

Customer care and its development takes place in Berlin, as Zalando has their customer care for the largest part done from the capital of Germany. While it sometimes might be difficult to find the right employees to work on the local markets from Berlin, Zalando works with native speaking customer care employees, an approach the team views as highly effective. “We do not outsource 100% because we want to stay close to our customers to know what is on their minds. This means that outsourcing in general is not what we aim for. However, in some markets like the Finnish, and in certain periods the Dutch, we struggle to find the right native speakers to work in Berlin. That is why we outsource some of our work to sustain the stability in our service levels, and to have the people we need inhouse. Our partners in the local markets are a part of the Zalando family and know how we work. We handle all training ourselves to make sure our brand values are communicated, and to know that our personnel are able to provide service in line with the Zalando Identity. It is important that our customers experience these values when they visit the website or when they actually pick up the phone and contact us,” says Lisa.

The concept of the Zalando Identity only started about a year ago, but the results already show an increased customer satisfaction. “Customers feel that they are talking to a person instead of a robot. That is what we want customers to feel, that we really want to help them resolve any issues. Just as important for us was the change among our own employees. Being able to talk more freely to our customers is way more satisfying. For our diverse audience this works well, since our teams now have the autonomy to interpret how to talk to them. You do not talk in a stiff manner to an 18-year-old, and that is why we allowed more freedom to tailor the conversation.” comments Lisa.

Growing on a steady fundament

As Zalando is growing rapidly, all aspects of the company need to grow with it. Among these aspects are the customer care teams. Is it not very difficult to keep the customer satisfaction on the same level while expanding in so many ways at the same time? “The most important thing when growing is to have a reliable, steady fundament. If your fundament is steady, you have the opportunity to expand. If it isn’t strong enough, you will run into issues. We realised that in customer care, we would need outsourcing partners to keep our service levels up for some local markets.” says Lisa. “To me, there are different components to a steady foundation. Firstly, having the right number of people to deliver local service on the level we want. We do not want Swedish customer care in English, for example. The management part is very important too. Only employees who feel comfortable, and are happy with the offered working conditions will be able to deliver good customer care. Second is the process part. This means that we need to provide everyone with information so they know what they need to do, and on the other hand give them enough freedom so they feel comfortable doing it. The last is the technological part. You need a good CRM-system, have the right channels like Chat, WhatsApp and Facebook etc. When these three pillars are covered, you can grow.”

What about local differences in service?

Lisa says, “Zalando works with Experience Managers, one for each local market. They make suggestions to provide the best local services. Our Belgian Customer Experience Manager, for example, pushed us very strongly to provide customer service for native Flemish and Walloon speakers. Typical Dutch or French speakers do not go down too well for Belgian consumers. We also gained unique insights from our Finnish Experience Manager. The Finnish do not like to call and prefer to chat, as they think it is a more convenient and quicker solution to a problem. We increased the offering of chat in this market. Our Experience Managers really help us to localise and tailor the experience to a market.”

To make these changes, Zalando wants to confirm that something works. Therefore, new features are tested extensively upfront. “A lot of it is technological, AB-testing, where we divide customers into two groups and see how they react to different messages that are supposed to say the same. We did this for our Surprise & Delight programme, where we act when something goes wrong and send flowers or chocolate to apologise for the inconvenience. A handwritten card, drawing or anything else – even without a discount voucher – was received as more satisfying than a formal email message with a 20% off voucher.”

It is OK to make mistakes

Very interesting for Zalando, and something Lisa Miczaika clearly supports, is the open mind for new things. While being a very structured organisation with a lot of tailored processes and workflows, there is room to improve and to learn. It is okay to make – small – mistakes. Lisa explains: “Without making mistakes, we cannot learn as much as we do when we do make them. To find things out and see how they work, you must do tests. If something does not work, we stop. An example is a customer care chatbot utility we tried – it was not great and we decided to quit the experiment. It was important that we clearly told our customers we were testing this as a feature, so they hopefully would not blame us if things were not going perfectly. I still believe it could be a nice addition for our company, once the technology has developed itself. It could be a great addition to our dynamic FAQ.”

Zalando Fulfillment Solutions

As learning and development are so important to Zalando, it is only logical that new services are being introduced. One of the major new services are the Zalando Fulfillment Solutions. Here Jan Bartels comes in. With natural enthusiasm, he tells us about this new feature Zalando introduced for its partners. “One of our newest babies, Zalando Fulfillment Solutions, helps us expand the Zalando platform. In the past, we basically sold products launched on our platform. As we have built up strong logistic capabilities, we have now opened them to our partners.”

The fulfillment solution look a lot like Fulfilment by Amazon, which has the big advantage of being very close to the end-consumer. Jan Bartels says: “It is only logical for other companies to think about these kind of services, as they are very economical. Our partner programme is our approach to a marketplace. It is even more, as we have our own opinion about how to do things. Partners are offering their merchandise on our platform – they remain the owners of the goods and make all economical decisions, like pricing and offered quantity. In the past, we used to work with a dropship model, where our partner had to meet certain requirements to send his product(s). With the Zalando Fulfillment Solutions, this has changed. We did this to secure convenience levels of our end-customers. As we know what customers in local markets prefer and we have the technical connections to do so, we can easily provide them to our partners. For them, it would be very time-consuming and expensive to integrate all of this. We have been through this journey already, so why not make it easier for our partners? Besides that, by the end of this year, we have multiple warehouses in which our partners can store their inventory. Most big brands only have one, or maybe two in Europe. This way, we can help our partners to be more local to their customers as well.” says Jan.

“There is an economic benefit as well,” he continues. “Look at a typical Zalando order in our partner programme and it becomes clear – our customers, generally, do not buy one item on our shop. Usually, there are items from different brands and from Zalando as well. What happens in a classic dropship model is that every partner would send out a parcel with their part of the order. In the worst-case scenario, a customer would have to be at home for multiple deliveries on multiple days, which is not consumer friendly. Similarly, returning an order would happen in multiple packages. The Zalando Fulfillment Solutions makes sure that the customer only receives one package with all items. For our partner and us, it means a cut in logistic costs, which makes it possible for our partners to extend their offered range of products,” tells Jan.

This service is about enablement. By providing the service,  partners can extend their assortment, which helps brands to expand their European footprint. Naturally, Zalando started testing this solution service to make sure everything works. Just as in customer care, hiccups in service could be eliminated before a full launch took place. The programme is still developing itself. Jan Bartels: “As we were piloting the first Zalando Fulfillment Solutions, we were already testing a new service, Fast Replenishment. This is a service where our partners have weekly replenishments, resulting in a low capacity consumption on our side. For our partners, the benefit is to keep their stocked inventory more in control. We can predict what will be selling in the next one or two weeks and can recommend our partners what to send to us. When we provide our stated service levels, our consumers, partners and we can benefit from this solution. We have fully launched it since then.”

Bartels is very clear about one thing: the Zalando Fulfillment Solutions will be an exclusive feature for their partners. “We do not want to become a sole logistic service provider. Zalando will remain a fashion platform. We would not offer our fulfillment service to a brand that is not a part of our partner program – that is not the idea behind the Zalando Fulfillment Solutions.”