How a Swiss fashion retailer can compete against Zalando

Customer expectations are rising while retailers are under pressure

The trends of digitalization, individualization and sustainability have a strong influence on the fashion industry and are causing a major upheaval. This increases the pressure on retailers and demands answers to increased customer expectations. Our client, a Swiss Fashion Retailer has a strong presence online but also locally in Swiss-German and Swiss-French areas.

Nevertheless, it is important for fashion retailers to position themselves digitally and master Omni-Channel presence as customers are migrating online, Digital Leaders (like Zalando) are entering the market and the following key trends are shaping the Swiss Fashion Retail Market and putting the industry under pressure:

1. Customers are becoming increasingly digital

The majority of customers use digital channels before, during or after the purchase. Digitization is central for our client. Digitization must be recognized as a central aspect and must be at the heart of the business. After all, this will have a decisive impact on the customer's relationship with the brand.

2. Customer expectations are rising

The role of the consumer is changing from passive observer to a dominant market player. For our client it is important to transform from a product brand to a retailer who addresses their customers with personalized offers. Our client must consider the entire ecosystem of the customer experience and will be measured by its customers in the future.

3. In Switzerland, clothing is the second most popular product sold online

Already 14 % of the total revenue in fashion is generated online and with a rising trend. Customers are expecting a seamless shopping experiences across all channels. This is the reason why it's important to redesign the shopping experience for a digital world that encompasses physical, virtual and emotional aspects, from initial contact to customer loyalty and beyond. Our client recognized the need to provide its customers and stakeholders a future-proof and holistic range of digital services along their value chain. Although they are not competing against Zalando, digitization must still become a central element.

In this context, our client turned to Open Web Technology (OWT) to address this in a digitization strategy. The digital strategy focused on analysing the current customer journey and identifying gaps to a seamless shopping experience before, during and after the purchase, as well as prioritizing new digital services to outperform the Omni-Channel Experience for customers over Zalando.

How we helped to prioritize new digital services to compete with Zalando

Our retailer's strength is to consult customer physically in stores, but the holistic customer picture and Omni-Channel Journey has some gaps and could be ameliorated. To achieve this, we assessed their current customer journey including potential digital ideas and we analyzed their direct and best-in-class competitors, current market trends and emerging technologies. By combining both results, we were able to understand where the market was heading, which assets our client should expand and acquire, and how to generate lasting enthusiasm among the target group. Based on this, we organized several workshops and creative sessions in different groups and hierarchy levels. With the help of the output we developed the digital strategy. To compete with Zalando different channels need to be integrated and must be seamless for customers - before, while and after their shopping journey.

How should the application landscape look like in order to support digital transformation?

After an analysis of the current application landscape and IT systems, we have designed a green-field solution architecture, and identified and prioritized digital measures that our client can implement in the short to medium term to increase customer satisfaction and revenue online and in physical stores.

Iterative Journey

• Documentation of current customer journey, digital touchpoints, their pain points and possible digital solutions
• High-level documentation of As-Is IT architecture and assessment of current application landscape
• Proposal of an “Green-field architecture” for Omni-Channel Retailer
• Market Research of available best-in-class solutions (direct and indirect competitors) in the Swiss and European market
• Summary of all findings with three key digital initiatives
• Additional tips & tricks – what fashion tech leads should do in times of Covid-19