E-commerce is both exciting and scary. It continues to negatively impact brick-and-mortar businesses that refuse to acknowledge the value proposition of a borderless commerce model. With forecasts for growth of US$4.9 trillion in 2021, it promises to continue to be an exciting place to be in.
Asia, for example, has become the world’s largest e-Commerce marketplace accounting for 59.7% of online retail and expect to reach 61.4% by 2024, according to Statista. While China continues to dwarf the region for its massive US$1 trillion market, Southeast Asia and South Asia are just as active and competitive with markets like India, Indonesia and Thailand forecasts to see CAGR of 13% or more, according to Statista.
One of the leading online fashion stores in Asia, Zalora has been carving a niche for its use of big data and artificial intelligence to drive new levels of personalisation for itself and its brand partners.
What a data-driven Zalora looks like
Quiron Aguiar, senior strategy director with Zalora, commented that from the very start the company had a strong analytics set-up – one that continues to evolve in the present. He confirmed the use of multiple data visualization analytics tools across the business with Tableau Software being one of them.
The rational for the multiple, but similar, tools were in part because of the different data processes the company maintains across the region.
"What is important," he says, "is that as a digital-first organisation we are using all the data inside to improve recommendations, personalisation, and the day-to-day lives of our customers."
Transforming data into experience
Aquiar confided that the experiences a customer has with Zalora generate a lot of data. It is this vast amount of data that the company maintains of customers, their interests and buying patterns that help Zalora, and its partner brands, have better control over inventory across the region.
Zalora developed an embedded analytics solution called TRENDER to reveal insights on customer preferences and behaviour. Aguiar is, however, quick to point that what makes the company and its partners successful is not just the availability of customer insight but having access to real-time data.
In comparing to a traditional brick-and-mortar retail business, he opined that they wait for one to two months to come up with a trend, whereas with Zalora’s approach they see the trends as these happen, allowing the company to create better experience for its customers. “The beauty of digital is that we see it as data meeting consumer, meeting fashion,” he concluded.
Challenges ahead
The amount of data the business creates and manages poses a challenge to an e-commerce business. To Aguiar, it is the use of this data to improve customer experience is what drives his team. The second challenge, that is specific to Zalora’s business model, is making this data available to its business partners to enable them to better plan inventory which eventually leads, indirectly, to customer experience.
Asked what is next on the horizon, Aguiar was quick to name artificial intelligence and machine learning capabilities as some thing the company needs to develop in-house. He also pointed out that Zalora’s partners have their data own and posed the idea of incorporating this into TRENDER to drive deeper insights.
Click on the podchat player and listen to the full dialogue with Aquiar to understand the strategies and approaches the fashion brand
- Please describe the business of Zalora today? What is different about it (compared to other e-commerce platforms)?
- Zalora is a data-driven organisation. How does this work?
- Why did Zalora decide to be data-driven?
- How do you use data within Zalora? (2 perspectives)
- What remains a challenge in terms of how data is created and used within Zalora (both at the leadership level and at operation levels)?
- Zalora is an online ecosystem – how do you encourage the ecosystem to work smoothly?
- What have you learned from COVID-19 that you think will be helpful in future crisis?
- What are the opportunities for retailers such as Zalora to leverage data in the current day?
- You spoke of events like Singles'' Day (November 11). How do you use data to make sure that capture the opportunities and keep it moving even after the event?
- What is your biggest concern today around the use of data and tools like Tableau?
- Is there anything missing in the data sets or tools that you have to extract more value from you?
- What remains in the future for Zalora?
- What is your advice to others seeking to derive greater value from their data?
