Divante presents eCommerce Talks for industry experts share their insights about the ever-changing world of eCommerce, today we’ll be talking with ex VP of Markets at Zalando and founder of Digital Spike Dr. Felix Kreyer This time we have a really special guest Felix Kreyer. Felix thank you for having you here. – Thank you to be here. – It’s an honour first of all because I mean I’ve been reading through your experience and as a marketer, there is tons of things I would love to ask you so we’re going to try to organize it pretty well and start with with a little introduction from yourself I mean if you can tell us the last 10 years of your life how they how they looked like. – Sure so yeah good to be here I’m Felix I’m a German and have been in eCommerce mostly fashion eCommerce for about nine years now Rajan started my career with McKinsey as a consultant in Berlin and I’ve been working with a couple of startups spend over two years with Zalando and I mean there’s there’s never been a non heavy growth phase but that was really a heavy growth phase in 2012 to 2014 and was then a managing director with Marco Polo, German fashion brand where I was taking care of all the digital parts of the business only commerce also eCommerce multi-channel loyalty and then I founded my own company Digital Spike last summer which is of a consulting company with a bunch of you know people with heavy heavy experience from the from the industry eCommerce professionals trying to help mostly most brands also some retailers and accelerating their digital business. – So I mean I have to do my job in ask you about Zalando and is one of the most recognizable brands and fashion and online shopping and I mean the the way they grow from a small platform to be behemoth right now is it’s amazing so I’m if you were there through the whole transformation so the whole growth like you said rapid growth so what do you think played a key part of this growth I actually made it happen – Yeah I mean Zalando is amazing it’s still amazing today how after all those years they still managed to be sort of quite fast quite agile and still grow at a very heavy heavy pace and I mean the the time I joined Zalando was around 2012 the company was around four years old back then and it was like a steady flow of new faces from all over Europe building up IKEA tables and chairs every week and it’s a really I mean they had a fantastic track really of hiring talent and good people into the company I think it was also back then one of the first companies where I could actually work and live in Berlin without speaking a word of German which is great you know I’m really international I think there’s a few factors that I said I knew benefited from I mean I think one thing is really big big kudos to the founders to Robert Gentz and David Schneider and also the third managing director I mean they really put up pretty bold targets all the time and they managed to achieve and overachieve them so they really believed in it and the idea I think was a time was right to be honest and it was perfect timing not only to I think back in 2008 it was not a crystal clear case that fashion would become the next big vertical in eCommerce everybody was very sceptic about return rates and everything in Zalando they did the opposite I mean the actually the free shipping and free return was one of the main UPS’s of Zalando so they actually for some extent took away the fear of many first-time fashion icon buyers and then I think also time was right in terms of the approach to marketing ever in Zalando was one of the really first startups that went for TV advertising big time they had very loud and very different TV campaigns which really helped to boost the awareness for the brand and in no time in German in other markets and I think that’s something if you do today or even just five years later no way you would have been able to create such a such a buzz and awareness with TV advertising yeah so they I think there’s a few factors and but but it’s certainly a very unique case I think in Europe – For sure and something that calls my attention a lot is I was in Berlin last year and remember joining a Zalando meetup and there was like five or six data scientists from Zalando so for me it was very like why do you have so many data scientists like was what was probably now yeah I mean but what is the role that tech is playing in the in the innovation of Zalando. – You know I think the interesting part is that Zalando never really started as a fashion company and I think that’s the reason why it was so successful it really was a disrupting the industry and it was in the beginning in the early days was a was a performance marketing machine and it was a it was a tech company I think those were the two core competencies that Zalando really had no logistics, no fashion know-how that was something that was built up over time and also the first people that worked for Zalando think they had no clue and in fashion really but it’s more about the head and idea of internet business models they had an idea of how you how you work with data how you acquire quiet customers on the performance marketing side and then also how important it is to have technology know-how in the company to really grow and scale the business and Zalando is very famously today for trying to do not everything but pretty much everything themselves yeah I mean they’ve also started up tech hubs in in Finland and Portugal and other markets and I think that’s really the you know the core belief that tech as the driver of the business and it’s almost like a fashion tech company that was also a term that was used quite often – So there’s almost like take was beyond the actual product – Yeah I mean to some extent probably yes and I mean if you if you told this to sort of the the ordinary old-fashioned fashion guy either from brands or from fashion retailers they would all laugh at you you know and in this fashion as the core competences is so deeply embedded in the DNA of most of the of the companies in the industry that that Zalando really had a very different approach there that made them also ultimately so successful I think – When companies I mean Zalando is already a massive name but there’s still a lot of startups trying to do what Zalando did or trying to replicate the model where where do you see that they’re actually moving forward or not moving forward what what it’s just something stopping them to reach this Zalando model or do you think it’s just because the market is it’s full I don’t know to be honest if that’s really I mean probably copying the model in some other verticals and you can see that I think the in fashion it’s becoming more and more difficult to I mean Zalando is market leader than most of the European markets then and it’s it’s going to be more and more difficult to establish the same kind of persons model besides Zalando also cause I mean you know is especially this approach of really optimizing performance marketing to the max is something that was obviously much easier some years ago compared today well if all brands have their own e-commerce and you have tons of different multi band providers they’re all bidding on Google keywords at the same time search is moving from Google to Amazon so it’s I don’t see the the potential to to still optimize in a field where pretty much everything’s opportunist already so um I think that to that extent it’s actually quite difficult and if you look at other verticals I think I mean fashion being a really big vertical to be honest but this idea of being a specialist let’s call it a specialist eComm company and might also want to call it a niche but I think the there is really specialist be it in beauty, be it in sports or special sports categories yeah or be it in in pet food pet any kind of verticals you can think of I think this idea still works especially when in a world where you know for from a retailer perspective the the biggest threat is obviously Amazon who’s a big Spock big box everything store but which is not as specialized on an accustomed experience in a specific category that has certain needs for all sorts of elements of the user experience – I mean that’s something to me is very key the customer experience Amazon mean still looks almost the same I mean even though they try prime and a bunch of different things it still looks very similar to what it was a long time ago Zalando on the other hand and and not only Zalando but the experience that you had after with Marco Polo it was more customers center it was more about the experience – Yes, no I mean I wouldn’t say it’s more customer centered because I think to some extent you can’t be more customer centered than Amazon but it’s true that Amazon is more about the convenience aspect of it not so much about the I mean if you just take the example of buy clothes on Amazon the shopping experience is much less of a pleasant pleasant one and you would also probably be less likely to use Amazon as a first destination for discovery while if it’s for search is great yeah and I think to that extent it’s also the thing where Zalando can still stand out compared to Amazon yeah it’s just much more fun to shop fashion on Zalando and on the other hand everything around convenience be delivery convenience be it customer service and service levels on Amazon but also the effect that you have so many different services that sort of create also a log in effect it’s not only about shopping but it’s also about and it’s shopping in many categories I mean you can buy your firewood on Amazon as well as you your clothes but also in terms of video streaming if audible you have you have prime music you have all sorts of add-on services which create a log in effect so I would definitely did not say it’s not customer centric I think it’s very customer centric but I agree that the shift front and the user experience on the on the side on the on the in the app is much more tailored towards the specific category that a company like Zalando and on page like Zalando. – And when you listen and then try to move towards Marco Polo like what what are the things that you could replicate into a fashion a brand like Marco Polo – It’s obviously a completely different world I mean on the one hand it’s it’s it’s a brand versus versus retailer or marketplace but more importantly it’s also it’s it’s all the old economy versus new economy to some extent yeah and I mean I think the good thing about brands as opposed to retailers I think if you if you’re a retailer today with a with a history and a legacy and you’ve been out there 20 30 years ago most of them are really having a really bad time and really hard time also finding their USP today and just finding any aspect and any argument why customer should buy from them instead of Amazon, Zalando and the other at the pure players and I think if you look at if you look at brands it’s a different story I mean brands that have a products their product nobody else has the product it’s a it’s a brand heritage so it’s to some extent it’s in a healthier position and other problems other challenges and I think what you find in in legacy companies is obviously a completely different speed completely different approach also to priorities I mean thinking about the in the discussion we just had on on tech I mean look at any fashion brand and Marco Polo is not a exception I would not say that tech is at the core of their of the skill set and of what they believe is important for them going forward neither as data working with data business intelligence or simply using the data that they sit on and I mean brand sit on tons of data and so this kind of thing I think bringing a bit of this this yeah it was perspective from a pure play camping like Zalando is super helpful for for already culinary companies and also having people and I’m not only talking about myself it’s also on every level having people on board that have experienced the speed and the agility and the approach of young startup you play companies and then and then also to some extent you know creating a bit of a bit of uproar in the organization and make sure that that the the established companies also get a feel of what the speed is out there and how to what extent they need to change think that’s very helpful – Now you do you accumulated a lot of experiences from Zalando from Marco Polo from all your previous jobs as well when you bring this to Digital Spike when you create this company and try to I mean I’d like to come look a full-stack consulting services covering everything but like how do you approach companies or also what kind of problems or what kind of consulting companies are needing nowadays what do you see companies asking for so when you say covering everything it’s probably true to the extent that have been a very much of a generalist management person all the last years but they’re certain quite a few areas where I also say this is something where there’s much better consultants out there which I would not cover and I’m what I’m trying my approach to market is trying to you know obviously on the one end – to say – just bring really hands-on experience from the field to the companies where you say hey we’re not the were not born as consultants but we have all done it ourselves and we’ve been and we we know the issues we know also sometimes we know how to solve them because we have made all the mistakes that you can possibly make there’s something much better learning experience than saying yeah it saves a lot of time and money and then and then I think I mean the challenges I work with quite a few companies also that have been around before before the internet before e-commerce was a topic and it’s very important to have those two perspectives on the one hand to understand their specific challenges which are much different from challenge that a pure play company will start up has but at the same time also be very honest with them tell them look we understand this perspective and that’s why we might have to find sort of different approaches but the call and the way of doing things in the end is pretty much the same because if you don’t go with the speed of the market then the others will will eat you and so it’s it’s I think it’s very helpful to have those two perspectives and on most of those those companies because they are struggling with I mean some of them might not be doing very well I’m working with retailers and brands who you know have still a big portfolio of bricks and mortar stores which is quite a burden these days because they they have to pay rent and they many of them losing football and also losing money and you have really legacy IT architectures where with sometimes even without a person that it really has the overview and is driving the technology as a as a business driver rather than a support function and and then telling these companies you have to be there where Zalando others are while today you’re here is up is not very headfirst so you have to find ways with them to to solve it and to make progress and despite and give them their current state and set up – I can imagine most companies will come and say like we want to be the next Zalando or whatever be the next like what sort of plan would you set in place or or what would be the first step that you recommend the companies to like look now before you go global before you go big start by doing this yeah I mean it’s a good question I think um and again the companies that want to be the next Zalando and I would probably have a hard time helping them achieve that target to be very honest and I’m also wondering if that’s always the best the best target for them I think if we take a brand as an example and the most important question to me is always what’s your USP as a brand why has the world been waiting for you or why can’t the world without you or the customers too without you and and I have the experience that many companies are already struggle answering this question I mean there’s obviously an idea and there’s a heritage and something rounded but really being I mean what if the internet does one thing then I think it creates amount of transparency and while maybe 10, 20 years ago let’s say in fashion for example it was easy to say okay we have a pretty commodity product and we put a logo and on it a label and then we do a bit of marketing around it that usually would do the job at this for some time I think now it’s it’s impossible to stick out if you just do a commodity job on anything you have to be special and you have to stand for something and you really have to not only have a message but also a product that that stands out and this I think is the the first question before you even start thinking about technology no how about digital sales channels whatever the specific question is now and once the once you work on this with a company then I think it gets much easier also to to solve all the different steps that you need to solve on the way to I know whatever the target is maximizing revenue or optimizing profit and then you can’t start thinking about what are the right sales channels for you as a brand and you can think about how do I do selective distribution and you can see okay when I mean it’s not that you say everybody has to build up tech know-how nobody knows really why but you have to build up because everybody does it so then you also have to say ok what you need take capabilities for who might be the right partner for you if you don’t have the resources to hire 20 tech people and you will not find them anyway so that’s with the and I think the first starting point and it’s not so much about hey everybody does on webshop everybody this marketplace every day builds an app everybody is great on social media we also need to do it we don’t know exactly why but everybody doesn’t so seems to be the right thing and in the end the the result might be the same so they will end up with social media and with the webshop and and these kind of things if they don’t have it anyway but I think it’s much better if you if you develop this from the from the really core and not just as a we need to do it because everybody does it something you mentioned about the the human talent to find the right people for the right operation or growth or whatever you have in mind as a brand there’s two ways nowadays right you can you can either spend a lot of time trying to find the right people and hire the right people teaching the culture of the company or in the other hand you can just go and try to how to try to outsource everything and obviously you’re in the middle of there because people will come and ask you like what should I do like should I point me in the right direction of well what’s my next step how do you see it I mean not only convenience but the person comes like you should companies build their own teams and spend all this time and effort to get them their own or just try to find people with experiences and just get it done I think as usually there’s no black or white answer it really depends and I think I mean what I observe is let’s say the lesser skills are in an organization in the required areas the more difficult is that for companies to find the right partners also because it does not help if you have five different external partners or a team of 20 freelancers if you have no one in the company who actually knows you know what is the right the right people and what what do they do I really want them to solve I mean also an agency or finances just as good as he has a clear understanding of objective and what needs to be done so I think companies need definitely more and more to to work in sort of flexible models I mean they will not find any company will not find full-time employees and every requirement they have and they don’t have to so they I will have to find ways to work with freelancers externals whatever but I think what I often observe is for example there’s a lack of let’s say I take know-how in this case or take also resources and then you just hire an agency or hire some freelancers but in the end the first thing you should do is you should probably hire CTO to make sure that someone / CIO someone the company has the head on in terms of tech and this person can then decide okay what’s the right setup and the right partners what do we need to do ourselves what do we need external and this is the first step and then you can do the second step and I have the impression many companies do the second step before the first and then end up being unhappy with whoever they have taken on board because there’s no clear communication of objectives and and and one holding it all together probably probably it will be better to have some sort of a link between but your company means in the company wants to sell towards any group of freelancers or whatever yeah I mean it’s it’s also again around core competencies I mean I think in the in the not a really long term but short to mid-term and let’s take what’s the topic of tech it will be has to be a core competency of pretty much any company that’s that’s producing and selling products yeah but is it the right approach now to say ok we have to build a hub with 30 tech people tomorrow without really knowing you know what kind of profit we need and what we need them for of course not and if you look into those companies and there’s often also if you look at the board and who’s part of the board and what capabilities then you have sort of product capability you have sales capability might have got marketing capabilities but then take sometimes support function somewhere under the I don’t know CFO or whatever the where you want to put it and it’s then the people that know repair your laptop but it’s not the people that thrive innovation in the company – And exactly I mean I think I asked you in the beginning like the role of innovation and then and that role towards the future how do you mission the e-commerce and retail world in 10, 20 50 years from now I mean obviously there’s tons of tools every day they’re happening a lot of startups offering micro services and this and that for companies like I mean like any retail company you know anyone who was selling a product how do you envision the future and not only for this kind of approaches but also for for brick and mortars for example well how do you see we’re gonna be buying our stuff from 10, 20 years from now – To be honest 20 years I’ve no idea it’s too far away and I mean I think what you see are today that the boundaries and differences between channels but disappear yeah and that’s also probably not a very bold statement because you see this happening already so it’s not so much about do I buy offline do about online I mean today already everything is mobile and then customers don’t want to walk somewhere see if it’s available and if they’re lucky and it’s available take it with them and a big paperback or whatever so I think those there it’s clearly not going to be about channels but it’s it’s going to be about you know creating customer experience that’s and I hate to call it omni-channel and multi-channel because it’s the world channel in the end is not relevant it’s more about making sure that you are where the customers and this might also be on the smartphone doesn’t have to be in the specific location and that you actually make it as easily easy as possible for the customer to to run a transaction and buy your product it’s really it’s truly makes about getting sales marketing tech everybody together to figure out right how was our customer acting towards our brand and where are they buying our brand and absolutely I think it’s all about thinking from the customer I mean if you if you you can have tons of shitty and I use the body and multi-channel examples today if you go somewhere and you go into a store and the technology doesn’t work there’s no one who can check if something’s available online or they might actually have the wrong incentives they don’t want to check because then it’s not their sales you go there and want to return something this also doesn’t work or if it works you don’t get your money back but you have to find a different way of reimbursement I mean there’s tons of example why it doesn’t work and I mean ultimately the technologies are there I mean there’s no no reason why you shouldn’t be able today and I mean Amazon does it also there with the stores you should be able today to run into any store pick a piece maybe scan its if needed and then take it home and then you’re done but literally nobody is offering this because they’re all having trouble getting their shit together in terms of systems and and and setup it’s true and and and well I mean there’s this tons of companies and brands being created every day I mean that’s not gonna stop and even though there might be bigger big players that took over already the market but with the creation of new brands and and all these new startups coming up with with new things if you have to recommend them something where will be the first step like what what do they need to do first before they move into putting anything out I mean I know you talked about the niche and you talked about the certain things but I have a brand what’s my first step into moving into e-commerce mm I would say it’s again a very similar question that I asked before why has the world been waiting for you what’s new yeah what’s if you’re really honest and being honest also means if you listen to your consumer and that can someone can be very painful ask the consumer and find out if it’s really the right and it can be any sort of product and so and if it’s not then adjusted and it’s something you should do at a very early stage so it’s all about a prototyping an MVP kind of approach and and directly testing with a consumer and then really stop doing things where the consumer tells you at an early stage I mean there’s no better feedback you can get and and and change it yeah I think that’s the opportunities are out there today it’s it’s much easier it’s never been easier to do this and brands still take too little advantage of it – Felix if you have to recommend a good podcast and a good book for the people who’s watching well will be those – Yeah I’m afraid this is very German I guess my my focus and also as well the k5 conference it’s has been quite a couple of quite German days meaning which is good and bad it’s a great community and I have my good friend a man Fozzie here he recently joined the company phonetics and his his very had a very popular podcast in Germany which was called commerce corner some of the episodes also in English and now he put up a new podcast which is called fast break so it’s fast and then break would be our e YK just just took his first three or four episodes online you can also hear me and one of them and and this is something you want to get a very diverse perspective on different ecommerce and also more digital general digital topics and is definitely one thing I can recommend I look forget about best a message and then maybe link bigger there or you start audience to go and take a look Felix it’s been a pleasure I think it will send me here and we definitely learned a lot of from your experience and I hope people back at home they also did and thank you we hope to have you again in the show in the near future thank you very much thank you so much