Driving Growth at Europe’s Largest Online Fashion Retailer
How Zalando redesigned the way it works and saw profits soar
To revolutionize the way Zalando innovates across the organization.
The Studio, a jointly-run IDEO-Zalando innovation lab, a suite of new digital products and services, and a shared language for a new method of working across the organization.
Fashion thrives on reinvention. Now, digital platforms and tools are reinventing fashion. E-commerce has reshaped the shopping experience and social media has democratized the once-exclusive industry.
Amidst this furious whirl of change, the fashion platform Zalando, founded in 2008, has become one of Europe’s fastest-growing tech companies. Headcount has ballooned to 15,000 and revenues grew 23 percent year over year. More than €1 out of every €100 spent on clothing in Europe is spent at Zalando.
In 2014, Zalando’s co-founder and CEO Robert Gentz approached IDEO to help think about the organization’s future in the face of increasing competition. Gentz realized that building design thinking capabilities across the company would allow Zalando to make systemic business shifts, like building better experiences for customers, and balancing operational excellence and execution with innovation.
So, he invited a team of IDEO designers and Zalando employees to create an innovation lab in its Berlin headquarters. They called it The Studio, and in the three years since its launch, it has helped the company build new products, experiences, and modes of working that are powering a digital transformation across Zalando and in the broader fashion world.
Gentz came to IDEO with a simple request: “I want my daughter to be proud of the company I created.” With that directive, the first order of business was to home in on the organization’s new strategy—to shift from an e-tailer to a full-blown fashion platform—and resurface purpose. After a series of interviews and workshops across the company, a unifying intent emerged:
Zalando exists to reimagine fashion, for the good of all.
To share that message, the team designed a five-day Festival of Purpose at the company’s Berlin headquarters and satellite locations, coupled with a long-term plan to help leaders and their teams weave that sense of purpose into everything they do.
Learn how Zalando used purpose to mobilize its community
Building Innovation Capacity
With a shared purpose to rally around, Zalando started to design and build at a clip. The Studio experimented and prototyped, launching products like Seen At, a mobile app that allows members to upload street style photos, and a digital tool called Collabary that connects online fashion influencers with brands. Projects are enabling cross-disciplinary teams to get into the practice of aligning around joint goals, making fast decisions, and building with agility.
The Studio focuses on both elevating the role of design within Zalando and on building bridges between strategy and product development. We are very excited by this journey.
Philipp Erler, Senior Vice President of Digital Experience, Zalando
Studio graduates ensure that anything prototyped there is implemented, and integrate what they’ve learned into their day jobs. Their experience makes them design ambassadors who spread the practice of experimentation, prototyping, and storytelling across the organization.
Learn how Zalando pioneered a new innovation studio
Teaching Leaders How to Scale Change
It’s one thing to start working differently in a small innovation lab, but how do you scale change across an organization and determine how it will affect each major business unit—product, technology, commercial, and logistics? IDEO interviewed Zalando employees to better understand how to embed what we called new Ways of Working (WoW), a method that combines design thinking with lean and agile approaches. WoW was then deployed by a centralized team that ran workshops and coaching sessions to help leaders adopt it, measure its impact through OKRs, KPIs, and NPSs, and help their teams understand the new processes.
Today, the Ways of Working method is being rolled out across the entire organization, reaching all 15,000 employees.
Together, the relationship between IDEO and Zalando and their multi-year project of change is spurring double-digit growth, and making good on the company’s vision of reimagining fashion, for the good of all.
Learn how Zalando scaled new ways of working across their organization
But just as important as identifying growth opportunities for the company has been The Studio’s role as a hub. Zalando employees from across business units cycled into the Studio, teaching IDEOers about their business and the company’s culture, while IDEOers helped them master the design thinking process so they could lead future projects.