Zalora bringing fashion retailing to the Internet

Retail Asia speaks with Dione Song, managing director of Zalora Singapore, on its strategy to convince more consumers to buy online.

Zalora, a three-year-old online fashion retailer, has grown from a team of 20 employees to more than 2,000 today with a presence in seven different markets.

Winning consumers over to buy online is a challenge, and with that realisation, Zalora has deployed a same-day delivery option, cash-on-delivery service, self-collection at selected pick-up points and a 30-day return with no-questions-asked policy. It has also brokered partnerships with Asia’s Next Top Model and opened two pop-up stores in Singapore.

What are Zalora’s opportunities and challenges going into markets in Asia thus far?

Dione Song: One of the main challenges of going into Asian markets is the varied economies across these diverse regions. Poor payment infrastructures in developing markets and misconceptions about online shopping remain to be real challenges for e-commerce growth in some regions.

However, Zalora is able to overcome these challenges and survive this competitive landscape by focusing on local­isation — forming strong local teams who understand the local nuances in each market. We understand that having a strong local base with people on the ground who understand the challenging landscape gives us that extra edge in ensuring that campaigns appeal to local psyches, deliveries can be done quickly (with our same-day delivery option), and new products can go live in the shortest possible time. For e-commerce players within the unique market of South-east Asia with diverse cultures, diverse languages, it’s all about having a global outlook but a local approach.

What do you see are trends in fashion retail in the next five years?

Song: As our consumers are becoming more sophisticated with their expectations of an online retailer, it is crucial for fashion retail to provide impeccable customer service, characterised by efficiency and ease of use, in order for online businesses like Zalora to survive.

Furthermore, we believe that big data analytics and location-based technology will help us understand our customers better, create personalised customer experiences, and ultimately, improve and make the service we can provide unique.

How is Zalora staying competitive in this e-commerce market?

Song: At Zalora, we offer a wide array of payment options from all major credit cards, debit cards, eNETS, PayPal and cash-on-delivery where products are delivered to your doorstep before handing over your money. This is a great option especially for new shoppers or those who do not have credit cards, creating a safe and fuss-free shopping experience. We understand that customers might change their minds after making a purchase and cater to them with our 30-day free return policy. Customers can return their purchase conveniently at any SingPost counter or at any SingPost’s POPStation.

Furthermore, Zalora assists customers in choosing the right size by providing brand-specific size charts that can be found on our product pages. We have also partnered with award-winning Virtusize, a virtual fitting solution to help customers find the perfect size and fit when shopping on Zalora. To gauge the fit and measurement of the item they’d like to purchase, they have the option to either compare it with a previous item of the same category they purchased from Zalora, or measure an item of the same category from their own wardrobe. They can compare how different sizes relate to their reference garment and then choose the size that matches their fit preferences best.

What are your views about pop-up stores and how is Zalora getting into this trend?

Song: In Singapore, less than 1% of the total retail sales is online. This means the majority of customers are still not converting or comfortable with online shopping. We wanted to go offline because one of the usual issues with online shopping is the lack of ‘fit’ as customers can’t try on the clothes. With our pop-up stores, customers are able to touch the material, find the correct sizing and make informed decisions on their purchase.

Zalora’s pop-up stores are not so much the typical brick-and-mortar but rather click-and-mortar. At the end of the day, the core of our business is e-commerce, which is why despite going offline with our stores, we still strive to maintain most of the e-commerce shopping experience. The objective of this exercise was more about educating consumers on online shopping as well as instilling in them the benefits and USPs — it’s fuss-free, payment methods are safe and secure; there are a host of various payment and delivery methods according to your preferences.

How is Zalora working with its partners?

Song: The 12.12 Online Fever is a perfect example of how Zalora works with other e-commerce players from different industries and across the region to create a seamless shopping experience for consumers, connecting them to various partners from a myriad of verticals and their offerings. Zalora spearheaded the 12.12 Online Fever initiative with the main aim of helping accelerate the
e-commerce growth by making a concerted effort in driving consumer spending and fostering consumer confidence in online transactions.

The 12.12 Online Fever not only highlights the special deals that partners are offering but also showcases how the campaign is an integrated e-commerce collaboration to grow the entire ecosystem. Operational support from delivery partners such as SingPost and 7-Eleven convenience stores fortify their commitment to educate consumers on the ease of online shopping by highlighting and incentivising convenient pick-up options through added benefits, such as Zalora cash-back store credit and gifts with purchase.

For retail partners, due to the whole model and premise that the 12.12 Online Fever is built on — collaboration and co-marketing — the biggest advantage is that participating partners from a myriad of verticals are able to complement and leverage off one another, meaning more exposure, access to new customers and, hopefully, more revenues for all.

What does Zalora like its brand to stand for?

Song: As an e-tailer, Zalora offers customers the widest selection of leading international fashion brands with more than 6,000 brands retailing across the region. With the launch of our eponymous private label collection, the first for any online fashion retailer in Asia, it effectively transformed Zalora from being only a fashion platform to becoming a fashion brand.

Designed by an in-house team of fashion designers, the Zalora collection seeks to provide trendy yet affordable staples to our customers without forgetting our local roots and Asian authenticity.

Through the ‘Lunar New Year’ collection and ZALIA, a special Muslim wear label that was showcased at this year’s Singapore Fashion Week, we presented traditional and contemporary styles that are fashion-forward yet tailored to the specific needs of the market.

How does Zalora achieve a balance in offering ‘just enough’ versus ‘too much variety’? Is there such a thing as ‘too much’ for Zalora?

Song: Aside from giving our consumers a wide range of high street label options, we are starting to place more emphasis on interesting collaborations via our brand partners such as Wing Tai and up-and-coming designers such as Fiziwoo.

Through our partnership with Wing Tai, we’re its main online partner for its portfolio of brands, that is, Dorothy Perkins. As an e-commerce, we can complement its store activities post-store hours and be the one-stop portal offering the full assortment to its fans (as we have no physical space constraints) while Wing Tai can direct customers who cannot find their sizes or styles in-store with a call-to-action to its Dorothy Perkins store on Zalora, creating a rather seamless online to offline experience for the brand.

On the other hand, our collaboration with up-and-coming designers underline Zalora’s drive to become the online fashion powerhouse in South-east Asia, aimed at making fast-fashion accessible to the region’s fashion-savvy consumers while bringing Asian designers onto a regional platform. We also strongly believe in supporting local talent from the region which led us to work together with Fiziwoo, a designer whom we have worked with in Malaysia for our show at Singapore Fashion Week this year.

What is Zalora’s vision/plan for the next year, or three to five years?

Song: In order to remain relevant and competitive in this ever-changing landscape, Zalora plans to be present in all the different touch points, to capture the customers’ attention. Our vision for the future includes key pillars of creativity, curiosity and customer-centricity.

Creativity – when it comes to the variety of campaigns and new ways of content dissemination. Unlike offline retail, there’s the need to have new campaigns running every day especially when a high percentage of traffic comes from returning customers who want and expect to see something new.

Curiosity — because to grow and expand quickly online, you need to be constantly curious and hungry to try out new means and technology to reach out and connect with your customers. You need to be open and willing to ‘A/B test’ when necessary, and be always thinking of ways to improve the entire customer journey. Little changes can go a long way.

Customer-centricity — as the beauty of online means a wealth of data and the ability to track the behaviour and preferences of every customer. This means the capability to segment the most appropriate and relevant content for each customer in a way that will best resonate with them. Online retail is also a longer funnel of sorts versus offline, which means the journey from point of visit to point of delivery and even return (and interaction with CS) is crucial and e-commerce retailers need to address the needs and pain points of customers every step of the way in order to stand out and impress. In all objectivity, I believe Zalora’s a good poster-child for this in South-east Asia right now — we’re by no means perfect (it’s almost impossible to be), but we always strive to be close.

What should retailers look out for in e-commerce?

Song: Brand recognition, traffic and content are definitely imperative to building a successful e-commerce. When it comes to driving traffic, we focus on doing this via partnerships — collaborating with like-minded partners for distribution, specific promotions, customised content — allowing us to actively drive relevant traffic to the site.

At Zalora, we also find different models to interact with customers through different devices. It’s the mobile phone in the morning while commuting, the desktop during working hours and the tablet when watching TV. We have worked to make the transition from one device to the other seamless and a world-class experience. Additionally, we partner with messaging apps like LINE and WeChat, and work closely with the leading social networks to offer even more touch points to our customers.

What are your thoughts on opportunities and challenges in logistics?

Song: We take pride in our warehouse coordination of logistics, especially during peak periods of major sales or tactical campaigns. We have our own in-house delivery fleet in the markets we’re in and also work with various partners to offer other convenient delivery methods such as POPStation and 7-Eleven click-and-collect.

The 12.12 Online Fever, for instance, saw Zalora reaching out to more than two million consumers and we delivered nearly half-a-million items from its warehouses. Moving forward, we aim to continue maintaining our position as a market leader by continually delivering to our customers during similar innovative large-scale events.

As mentioned, Zalora’s wide range of payment options is also a great benefit for new shoppers or those who do not have credit cards, creating a safe and fuss-free shopping experience.

What is Zalora’s mobile strategy?

Song: Our goal is to interact with our customers through all digital channels and digital devices, and this is why we invested in building world-class quality iOS and Android app, in addition to our main site; this is also why we partner with digital players such as WeChat and LINE and we interact with our customers through all leading social media channels. Right now, these chat apps are definitely a good channel to reach out to a broad base of relevant audiences who are typically more engaged on their mobile devices and tech-savvy in nature, thus of most relevance to our e-commerce business. Given that they spend more time on their mobile, they have a higher propensity to also browse and shop on-the-go. Asians, in particular, spend more time on their mobile, making chat apps very effective and viable marketing channels to connect, engage and convert customers.

Launched last November, our official WeChat account is a valuable tool for us to improve mobile shopping experience in Asia. Our presence on WeChat will deepen our engagement with consumers and will allow us to reach them even when they’re messaging on their mobile. By subscribing to our official WeChat account, Zalora fans can keep an eye out for the latest happenings on Zalora and enjoy exclusive Zalora WeChat promotions. This collaboration is a testament of our commitment to provide more mobile shoppers fashion at their fingertips!

We also do periodic promotions on Line as well as engagement content on Snapchat. In fact, we will be expanding more into the mobile chat space, and will be launching official accounts soon on several other chat apps this quarter.