Live from Shoptalk Europe: Megan Maley | Zalando

Speaker 1: Gabriella Bock: Hello, and welcome back to the RETHINK Retail podcast. We are here today live from Shoptalk Europe, and joining me today is Megan Maley. She is the GM For Benelux UK & Ireland at Zalando, which is one of Europe’s leading fashion platforms. Megan, thank you so much for being here today. Megan Maley: Thank you, Gabriella. I’m very excited to be here, here at Shoptalk, and to be speaking with you. Gabriella Bock: It’s great to have you. And how have you been enjoying the show so far? Megan Maley: It’s been amazing. I’m just so overwhelmed. It’s very big. So many incredible people to speak with. I’ve been able to attend quite a few of the keynote speeches, which has been really fascinating, and then this morning, I had the opportunity to be interviewed by Ian Jindal. Gabriella Bock: Oh. Megan Maley: So, we had a really nice chat. And since then, it’s been quite busy. So, really enjoying the opportunity so far. Gabriella Bock: Excellent. Well, it’s great to hear. And Ian is one of our top retail influencers. Megan Maley: Indeed. Indeed. Gabriella Bock: He’s fantastic. Great. Well, so I know that before prior to joining Zalando, you spent 16 years at Nike, which is pretty darn incredible. So, can you share a little bit about your professional journey with us? Megan Maley: Yeah, definitely. So, I am from Wisconsin originally. I grew up in the US, and I’ve always been really… I’ve loved retail. I worked in retail when I was in high school, working in shops. And then went on to really make that the focus, I would say, of my career, but it took on different formats across the years. I really started, first of all, working in the pharmaceutical area, then in beauty, and then I ended up working for Nike. And Nike was always in Europe. So, I worked for six years in France, then in the UK for a few years, then in the Netherlands, and then came back to the UK again. So, it’s been quite an interesting journey. Megan Maley: I think the red thread of all of it would definitely be just this love of retail, consumer goods, and I think customer centricity, and really knowing the customer to serve them. I think before on the brand side, it was much more around creating the right products and services, and now, I’m really enjoying being on the digital ecosystem side and finding ways to best serve our customers in all of the ways that at platform can and does. So, that’s kind of how I got to Zalando. I’ve been there for over a year now. Gabriella Bock: That’s amazing. Can you tell us a little bit why you decided to make that transition after 16 years with Nike? Megan Maley: Yeah. I think having worked on the brand side, it was always really exciting too. I think we were on a big journey at Nike, building the direct-to-consumer business, whether that was stores as well as the online business. And, Zalando has always been an important partner for Nike, so I always knew the company and really respected it. So, when I had an opportunity to get even closer to working on a platform ecosystem, I really fell in love, and this is really a lot about the future of customers. I think that there is obviously… direct-to-consumer is extremely important for brands, but then also, platforms are also important, because that’s really the path where customers are, where they’re going to have a multi-brand experience. And at Zalando, we serve 49 million customers across 25 markets, fashion and beauty. Gabriella Bock: Wow. Megan Maley: And so, the opportunity to really understand how this all works, the intricacies of the partners, so the brands and the retailers, as well as the customers in the various countries and everything that goes within it, it just seemed like a great time to learn and grow I think professionally and personally. Gabriella Bock: That’s fantastic. And so, you mentioned that you manage several different regions. So, can you share, now that you’ve been with the company for a year, was there a learning curve to managing operations and vastly different regions at the same time? Megan Maley: Oh, definitely. Looking after UK and Ireland and the Benelux, they’re very, very different. And even within the Benelux, I think people often lump these countries together, and yet we see very different customer behavior, very different trends. Everything is so different between Belgium and the Netherlands itself. So, I think what’s been, yeah, the biggest learning curve is really identifying what are the biggest game changers for each market. Because I do have five markets, you want to do everything- Gabriella Bock: Wow. Megan Maley: … but you can’t do it all, so you really have to- Gabriella Bock: Sure. Megan Maley: … focus on what are the things that are really going to move the needle for each of these markets. What are the biggest challenges or obstacles for our customers in these markets, and then how do we solve for them? And I think that has been the most exciting thing, is figuring out what those are, and then really working with the team to prioritize those and get those on the prioritization list for the company and move forward. So, yeah, I think that’s probably the biggest learning curve and the biggest challenge when you look after so many markets. Gabriella Bock: Absolutely. So, can you share some examples, then, of maybe some of those differences between markets, maybe something that surprised you? Megan Maley: Definitely. Yeah. I think if I maybe take Belgium as a good example, Belgium is… it’s a complex country because you have different linguistic regions, and within that as well, you have a lot of various differences in terms of sometimes even things like payment methods or delivery, on top of all of the translations. And so, I think when it comes to Belgium as an example, it’s really creating a deaveraged strategy, specifically for the country, to focus on understanding our customers in Wallonia, in Flanders, also in Brussels and the capital region, and really understanding how we can have even a completely tailored and personalized value proposition for them wherever they live within the country. Megan Maley: So, that’s really what the team has focused on. I have a team dedicated to every country, and these teams look after everything from upper funnel brand marketing through to the onsite experience, through to logistics, last mile carriers. And so, these teams really focus on how we create the most deaveraged experience so that we serve our customers in each region the best that we can. Gabriella Bock: Fantastic. What are some of the big digital trends that you’re seeing right now? Megan Maley: Let’s see. I think one thing that, of course, is an important digital trend is the fact that our customers are really… It’s not new, but they’re very impacted and influenced by very local influencers. So, there are global influencers, obviously, that everyone looks to for style inspiration, but I think one thing that we see is really a big rise of micro influencers- Gabriella Bock: Sure. Megan Maley: … very local influencers. And we actually have a program called the Style Creative Program, which is 400 and growing micro to, I guess, mid-level influencers that are very locally relevant within each country, and represent the diversity and the fashion choices of those countries. And so, we work with them to… They basically have an opportunity to shop the website with everything that they would want to buy and create looks with the latest collections. Gabriella Bock: Fantastic. Megan Maley: We just see an incredible impact by having really local talent. If I look at the Benelux, I think we have 90 style creators just from the Benelux. And you just see that this really, really resonates, because this is people looking towards people that they know. They might even know some of these influencers personally. So, I think that that’s a trend that we see, is certainly this localization of influence as well. Gabriella Bock: Absolutely. Yeah. We know that consumers more so than ever are less influenced by traditional marketing and really looking to people that they know or that they admire- Megan Maley: Absolutely. Gabriella Bock: So, speaking of consumer trends, we’ll switch gears a little bit here. Megan Maley: Yes. Gabriella Bock: But I know you have spoke in the past about Zalando’s commitment to sustainability. Megan Maley: Yes. Gabriella Bock: And that is becoming such an increasing importance among consumers, especially younger consumers. So, can you share how Zalando is incorporating sustainability in your operations? Megan Maley: Yeah, absolutely. I think sustainability is on the mind of every single person. I think every one of our 49 million customers across Europe is thinking about sustainability. And I think we also realize that it’s one of… To me, I think climate change is the biggest challenge of our time, and fashion is a contributor to climate change. And I think, then, as one of the most important platforms for fashion and beauty in Europe, it’s our role to play a positive role in this, and to have a net positive impact. Gabriella Bock: Sure. Megan Maley: So, I think Zalando, back already in 2017, really put a stake in the ground on sustainability with the Do More strategy, committed to some pretty big numbers in terms of reduction of our carbon footprint. And so, between 2017 when we first laid out this strategy and now, we’ve reduced our overall carbon footprint by 64%. Gabriella Bock: Fantastic. Megan Maley: Which is great. Gabriella Bock: Wow. Megan Maley: That continues. There’s no finish line. I would say when we look at… Obviously, the way we do that is through different choices when it comes to last mile delivery, whether that’s electric vehicles, et cetera. Packaging plays a very big role. But I think where our customers really expect us to come with really innovative solutions is especially around actual product. Like, where does it come from? Gabriella Bock: Right. Megan Maley: How is it made? And then, what is the circularity journey? And so, I think the way that we play within there is that we have a range of sustainable product, which is pretty massive. I think we have 140,000 sustainable articles on site, and that’s double versus 2020. Gabriella Bock: That’s amazing. Megan Maley: It’s great. But what’s really important is to help customers find them. Because obviously, with 5,800 brands, and 1.4 million articles on this site, we need to make it very easy for our customers to make choices based on their values. So, one thing that we really focus on is flagging the product in terms of being more sustainable, but then likewise, one thing that we really do is try to create filters so that people can look at their exact value set and shop like that. So, if you’re a vegan, as an example, you can literally filter for vegan, or clean water, or workers’ rights, and you can really focus on what are the products that match with the values in terms of how they were created. Megan Maley: And I think what we see is that our customers want more sustainable product. Because we’ve grown our GMV, or our gross merchandise value, from sustainable products, was 16% in 2020, and it’s already moving to 22%. So, the clear way forward is that our customers want more sustainable product. We need to provide more of them, but then we need to also continue to make it extremely easy for our customers to find them. Megan Maley: So, I think that’s one way. And then obviously, circularity is just so important for our customers, and they want to extend the life of the products they have, and then also give a new life to product that they see. And one insight we see is our customers don’t want to have to say, “I’m going shopping in a completely different place for secondhand versus new product.” Today, it would be like you go to either a store or you go to a charity stop and you buy secondhand, or there are a lot of online platforms offering secondhand, but it’s in a very different area than new fashion. Megan Maley: I think our unique take on it is that customers can buy new fashion as well as preowned fashion in one location, as well as that they can trade in very easily there the product they no longer wear, and then that can be redeemed against… Basically, the money made from it, you can either give it to charity through Zalando, or you can use it to buy either new or secondhand product on Zalando. So, it’s a very seamless experience. I personally like it. I’m a mom of… Well, we talked about it. Four year old, and I don’t really have time to be online bargaining with people or saying, “Let’s pick it up here or there.” I just put it in a box, send it, and it’s a very frictionless experience, I would say. Gabriella Bock: All right, Megan. Well, unfortunately, we’re closing on time here, so would like to ask you just one last question about brick and mortar as it’s shifting, as more of us shop online. Do you think that all brands have a responsibility to really be thinking about ramping up their e-commerce operations? Megan Maley: Yeah, definitely. I think what’s very clear now as we come into this post-pandemic world is that customers are going online. This becomes a very normal way for customers to shop. But I think what we also see is people, they love to shop in physical retail, and they don’t feel like they need to choose, and that should be a very seamless experience. And, I think the point of view of Zalando and what we do in this space is our role is to also help physical retailers to basically be able to benefit from our platform. And one way that we’ve been doing that is by our program called Connected Retail, which was launched in 2019. And this is basically a program that allows even the smallest physical store to connect their inventory to Zalando. Gabriella Bock: Oh, that’s amazing. Megan Maley: And benefit from the traffic of millions of customers, be able to get their product in the path of the customers. And there were some that during the pandemic, there were some stores where this was their only revenue stream in that time. And so, now as we come into the world where stores are open, online exists, we see that both benefit from that relationship. So, some of the stores that are part of Connected Retail have said that they’ve increased their sales up to 60%- Gabriella Bock: Wow. Megan Maley: … by also having the revenue stream of Connected Retail alongside their physical shop. And I think we are huge believers in physical shops. We want to support them and be part of this overall fashion ecosystem, and really connect the fashion industry so we can all continue to grow. Gabriella Bock: Wow, that’s amazing. I really appreciate your time and hearing more about Zalando. You guys are huge here in Europe. Megan Maley: Yes. Gabriella Bock: But I think in the States, we’re all just hearing about you now. So, really great to learn from you today, and thank you so much for joining the show. Megan Maley: Yes. Thank you so much, Gabriella.