Zalando and adidas trial Integrated Commerce partnership

In its continued effort to transform into a multi-service platform that provides fashion as a service — Europe's biggest online fashion retailer, Zalando, partners with adidas for a new same-day pilot scheme.

The two big winners of last week’s Global E-commerce Summit Pure Player and Omni-channel European E-commerce awards, Zalando and adidas respectively, take steps to better cater to “the needs of today’s online and mobile savvy customers”. Zalando today announced an ‘Integrated Commerce’ pilot in which adidas would make stock from its Berlin Tauentzienstraße store available via Zalando for same day shipping.

How it works
Via Zalando’s delivery app ZipCart, Berlin customers can now view and shop eligible items in both Zalando’s inventory and the adidas Bodycheck active wear store in Berlin. Berlin customers will even receive same day delivery of their goodies free of charge provided they purchase their orders before 3PM.

Zalando is working together with logistics partner Liefery for same day delivery. Liefery is a Uber-style p2p on-demand delivery service that Zalando already works with for free return services. Such service is likely to cost a pretty penny, but Zalando did not disclose the cost of the pilot, only stating that it has plans to invest €200mn this year on technology and logistics.

Reuter reports this Integrated Commerce pilot scheme between Zalando and Adidas in Berlin is the first that allows a major pure-play e-commerce retailer to tap into the inventory held in a brands' own stores. That transparency is the real game changer.

Economies of scale
Unlike adidas, who claims 97-98% inventory accuracy in its stores in Europe, most brands lack real-time data about stock available in their stores and warehouses. Zalando last month announced the acquisition of Tradebyte Software to help it digitalize stock in brands' warehouses.

If Zalando is able to conquer the issue of inventory accuracy, it could extend the trial out to more brands and stores. Linking stores and warehouses stock in the future is where the real opportunity for efficiency occurs. The added transparency into the brand’s inventory back-end could lower working capital needs for the whole system and increase full price selling.

"I know there is enough volume in the market. I just can't connect it," Harm Ohlmeyer, head of digital commerce at Adidas, told Reuters in an interview. "Sharing or digitizing the inventory would make us all more efficient and able to read real consumer demand better, and buy better in future, and have less clearance."

Tags: Adidas, Logistics, Zalando

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