ZALORA’S SECRET TO SUCCESS: Delivering Outstanding Customer Experiences

E-commerce has broadened the customer base for companies, but has also drastically increased customer expectations and competition. In a battle to become “the name” in online shopping, etailers have been fighting to differentiate themselves through a variety of methods, including prioritising the customer experience. Harry Markl, Managing Director at Zalora Group, Asia’s fastest growing fashion etailer, shares the secret behind their success.

www.customerexperienceasia.com Delivering a great customer How do you define the best customer experience? experience starts with knowing Harry Markl: your customer.

For an organisation like ours, delivering a great customer experience starts with knowing your customer, buying the right product for them and then having it delivered to the customer seamlessly. But even more than this, we want the customer to feel that even once they have received their product, that they can reach out and return it, hassle free, in case the product doesn’t fit or they simply don’t like it.

Could you explain how Zalora puts this philosophy into practice?

Harry Markl:

The most important point is that the whole organisation, from the top management to the assistant in the warehouse, needs to be obsessed with delivering the best service day-in day-out. Every single step in the value chain matters.

When I mentioned the importance of buying the right product, what I mean is buying the right assortment of products for our the target customer. This means that you don’t over purchase, which is especially important in e-commerce. The reality is that a customer who comes to your site only spends a few minutes until they leave either with a purchase or without. So this means that buying the right assortment of products and predicting what you as a customer want to see when you come to our site is critical. We then invest a lot of money and resources into displaying the product on our site and making it easy for the customer to find their desired product. These methods include displaying products on models, shop-in-shops for selected brands, a monthly fashion magazine and world-class campaign images.

One factor that is imperative to e-commerce in , is the importance of offering different payment channels so that people can buy online with a credit card, or if they choose, cash on delivery. After the customer has made a purchase, the next part of the customer experience is the delivery of the product. Today when people talk about delivery in e-commerce they often ask whether the delivery is fast and reliable. In the realm of e-commerce, the world is becoming quite small, so in order to be competitive you need to be able to deliver the product ideally the same day or next day.

Consequently we are working on having same day delivery in some countries and we have already done this in Australia, where we have a 3 hours delivery option in both Sydney and Melbourne. Soon we are going to make this available in all the other markets, with a focus on the main cities in each country.

www.customerexperienceasia.com One of the common concerns for online shoppers is whether their purchased item will fit or whether they can return the product. How does Zalora address these concerns? Harry Markl:

Well after delivery, a key part of Zalora’s customer experience is the returns process. As you know it can be quite cumbersome for customers to return products they purchased online. So we are continuously focusing on making the return process as seamless as possible with a “no questions asked” return policy. This increases returns, but has an even greater effect on the top-line, as customers order more often. Despite this, the number of returns we get are in general lower than in mature markets, which is a result of both cultural differences and the maturity of e-commerce. As a result, it is an imperative to make this return process as seamless as possible and hence we partner with 7-Eleven in or use SingPost’s POPStations in . These allow customers to return their order 24/7 without queuing and there will be more of these models to introduced soon.

When it comes to after sales service, we have customer service call centres in all our countries. One big complication of working in Southeast Asia is that almost everybody speaks a different language, so in order to cater for customers local needs and accents, we have call centres in all markets. Whilst we started with one call centre in India to handle the Singapore market, we soon received some negative comments because people did not understand the person on the other end of the line properly; their accent was too strong. In the end we moved into the region and we now have call centres in almost every country, with one handling both Singapore and combined.

Why has Zalora decided to prioritise the customer experience over other approaches, like simply offering the lowest priced items? Harry Markl:

In order to make e-commerce in Southeast Asia successful, we need to convince the customer that this is a seamless and sustainable experience. Secondly, we need to convince them that the benefit of online shopping is not about price. While we offer affordable fashion and our prices are in-line with the offline stores in the respective countries, I believe that continuously discounting is not a sustainable way to win a customer. So instead we need to emphasise the value of getting the right product in the right size and desired color hassle-free delivered to your doorstep. It’s also because competition in e-commerce is really strong. It’s not just about the competition next door, but around the entire world. If you try to be competitive only on price, then your customers are less likely to be loyal to your site. Therefore, price is always the worst option to win a customer and we are doing a lot of things in many areas, which we consider as more important from a customer perspective. Consequently, we have made the provision of great customer experience along the entire chain of delivering the product our key differentiator in the market.

It’s not just about the competition next door, but around the entire world.

www.customerexperienceasia.com Could you give a few examples of the innovative ways Zalora is continuing to improve customer experience? Harry Markl:

There are many quick wins to enhance customer experience, like partnering with local logistic providers. SingPost, for example, has created something called POPStations, which are groups of electronic lockers dotted around the island where parcels can be delivered. Customers that choose this delivery method receive a message to their smartphone with a QR code the moment the parcel is delivered. Then the customer simply has to hold this code up to the locker to retrieve their parcel. The beauty of this is that customers can access the lockers anytime of day without any queuing, it’s an amazing customer experience.

Another recent example is the Zalora Virtual Fitting Solution. This makes it easier for customers to find the right size when shopping online. With this tool the customer is able to compare garments they want to buy with garments they already own, by overlaying the silhouettes of the two, thereby identifying the differences in size and cut between brands. Despite this, there are still some people who want to feel the product. So the next big thing we are working on is the creation of a Zalora store. Our reasoning is that if customers can feel the product and say, “wow this is great quality and affordable” then they will become a voice of the brand. There’s also the issue that people continue to believe that shopping online is cheaper. So to bridge this gap we envisage the creation of an innovative store concept that combines digital technology in a way you have never seen before. Customers will go there and try the products, but instead of taking the products home, they order the products from within the store and we deliver it to their home, office or anywhere they want.

I believe that this is the future as offline and online retailers converge to some extent. Offline will become more digitalised whereas e-commerce will need to be present offline in order to improve the overall experience and perception.

We have yet to decide whether this will be a pop-up store or a proper one, but one thing is for certain, it will be very different from any other store you see. I would call it “Apple-meets-fashion”, combining technology and fashion in bricks & mortar.

We envisage the creation of an innovative store concept that combines digital technology in a way you have never seen before.

www.customerexperienceasia.com How do you foresee the future of customer experience for e-commerce in Asia?

Harry Markl:

E-commerce is not just a bubble and going forwards more and more people will use it, particularly if it’s seamless and less cumbersome than travelling to purchase something from a In order to physical store. This is particularly relevant for people who live in remote areas where I expect we succeed in the will see strong growth and it will become these customers that will shop more online than other e-commerce customers. space you need Although there are a variety of ways to improve the customer experience, either through different delivery channels or technology, these will not revolutionise your company. Ultimately it all boils to focus on the down to the core philosophy of your company and the importance you place on the customer customer. experience. The trends we are seeing today with growing competition will only continue and so in order to succeed in the e-commerce space you need to focus on the customer.

Come and meet Harry Markl, Managing Director, Zalora Group at Singapore’s ONLY event focusing on CEM in Asia, where Harry will speak on the following topics: • Recognizing the importance of customer experience in e-commerce • Harnessing the benefits of an online business to design unique customer experience • How Zalora brings together fashion and convenience to deliver the best fashion forward experience?

2nd annual âCLICK HERE CUSTOMER to download the agenda EXPERIENCE 13th-16th October, 2014 MANAGEMENT Amara Sanctuary Resort ASIA SUMMIT Sentosa, Singapore

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