Zalando: A digital foundation for fashion supply chain success
Case Study

Zalando: A digital foundation for fashion supply chain success

20 pages
November 2022
Reference: IMD-7-2401

By 2021 Zalando had become Europe’s largest pure player in online fashion. But the road to success had not always been smooth. Back in 2014, six years after it was founded, the Germany-based company was at a crossroads. With an impending initial public offering (IPO) and investors looking for results, the company was nowhere near being profitable. Zalando realized that to achieve profitability and market leadership, it would have to leverage advanced technology and develop a data-driven supply chain. So, with the innovative spirit of a start-up, it embraced the challenge of building internal digital tools and competencies to drive supply chain efficiencies. The online fashion supply chain had to wrestle with the same challenges of tight margins and high customer expectations familiar to all online retailers. However, the fashion industry faced other unique challenges – high SKU counts, high seasonality, relentless product turnover and frighteningly elevated return rates. By developing proprietary systems and machine learning tools, Zalando developed a responsive, flexible distribution network, trustworthy order promises and a sophisticated, holistic approach to returns management. Through a data-driven journey born out of a crisis, Zalando discovered that these capabilities not only delivered supply chain excellence and pioneering new innovative techniques but also helped to fulfill the company’s vision of providing endless choice, seamless convenience and a tailored digital experience to millions of customers across Europe.

Learning Objective
  • How a digital and data program can integrate with a company’s vision and objectives, and how this vision creates structural supply chain requirements.
  • The importance of key structural decisions such as which supply chain competencies are considered core to the company’s mission.
  • How to foster a data-driven mindset across a supply chain organization.
  • The complexity of online fashion supply chains and how data can be leveraged to tackle this.
  • The emerging importance of sustainability in fast fashion.
Keywords
Operations, Digital Transformation, eCommerce, Supply Chain, Fast Fashion, Digital Technology, Big Data, Distribution
Settings
Europe, Germany
Zalando, Information Technology, eCommerce, Consumer Goods, Apparel and Fashion
2012-2021
Type
Field Research
Copyright
© 2022
Language
English
Related material
Teaching note, Video
Case clearing houses
IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre, UK Office

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Fax +44 (0)1234 751125
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

The Case Centre, US office

Babson College

Babson Park, Wellesley MA 02457, USA
Tel +1 781 239 5884
Fax +1 781 239 5885
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Looking for something specific?
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics