E-commerce fashion firm ZALORA frequently describes itself as a 'data first, fashion second' company, with executives citing the fast pace of change in the fashion industry as a driving reason for the need to constantly ramp up its use of data in decision making. In recent years, the company's approach to data has evolved from using data analytics in its own brand strategies, to providing its trade data to business partners, and even launching its own business intelligence platform last year to offer data solutions services.
People Matters asked Quiron Cunha, ZALORA's Senior Strategy Director – SEA, to share some thoughts on purposeful transformation, and how it affects the way companies operate and do business. Here are the highlights of what he said.
Companies in every industry have to reinvent themselves constantly these days to keep up with technological changes. What do you think is key to ensuring that the transformation is purposeful, and not just reactive?
Given the ever-changing nature of our world today, the need for companies to keep up with the times, whether in terms of technological changes or operational models, has never been clearer. As the pandemic has undoubtedly proven, companies that fail to adapt to shifts in the consumer landscape will be left behind, while those that are able to reinvent and adapt themselves will benefit immensely.
While reactive change demonstrates a company’s ability to be flexible amid uncertainty, purposeful change allows a company to be at the forefront of developments in the industry, which ultimately positions them as thought-leaders and pioneers in their respective fields. The key stems from having a culture of innovation in the company, as well as a constant desire to improve one’s products and offerings to enhance the customer experience.
As long as companies continuously seek the betterment of themselves, while keeping up with industry changes, any transformation done will undoubtedly be more purposeful and impactful.
Could you share some of the ways in which a data-driven strategy has changed ZALORA's business approach?
We owe a large part of our continued success over the years to being a data-first company. To constantly stay ahead of developments in the fashion landscape, we’ve established our own ‘Data Sciences Innovation Lab’, through which we are able to leverage on consumer insights to quickly respond to trends and gaps in the industry. For example, having noticed annual surges in interest for ethnic wear during the period leading up to the Festival of Eid, we started an annual ZALORAYA campaign to offer traditional and modest wear specifically during this time of year.
Our data-driven directives have also steered our offerings towards helping our brand partners better adapt to their customers’ needs, as was the case with TRENDER, our proprietary data solutions service.
Even as we navigate the future of e-commerce, data will always be a central tenet to our business, helping us understand customer preferences and adapt to evolving business priorities.
What have been the implications of your data strategy for talent sourcing and development?
With data being such a key part of our identity, it does mean that we are constantly looking to expand our team and bring in the next generation of Zalorians in the fields of data analytics, artificial intelligence, and machine learning.
Though this accelerated pace of hiring can lead to potential issues with large-scale talent management, we remain committed to supporting their journeys with us. In fact, we place a strong emphasis on providing sufficient Learning and Development opportunities, and, over the years, have been implementing and fine-tuning various measures and practices to help facilitate their growth process.
From the start of their time with us, we take all newcomers through a comprehensive onboarding process, which helps to introduce them to the company as well as our core values and beliefs. They are then presented with a plethora of opportunities throughout their tenures with us to drive ownership and accountability at work. They also receive constant and effective guidance from their seniors and line managers—something we are especially proud of. This is because many of our leaders, including, our CTO Silvia Thom, the Head of our Data Sciences Innovation Lab Vaidhyanathan Srikumar Subramaniam, and myself, genuinely believe in the importance of taking a hands-on approach, and have been personally coaching and mentoring our teams to upskill them.
Ultimately, the goal is to ensure we build a supportive and conducive environment that provides all our employees with equal opportunities to grow and excel.
I look forward to continuing our company’s efforts to help employees fully embody our spirit of data and innovation.
What are your thoughts on how to make sustainability a part of ongoing business transformation?
Sustainability has been growing in importance across all industries, especially as people increasingly realize that their individual consumption has a large impact on the environment and society. We strongly believe that fashion has a special role to play in reflecting the changing values of our time—particularly, in the fast-growing and extremely diverse region in which we operate in. In fact, with 62 percent of Generation Z preferring to buy from sustainable brands, and a majority (54 percent) willing to spend an incremental 10 percent or more on sustainable products, fashion and retail firms need to take decisive steps to deliver greener solutions to be in line with these evolving demands, or risk being perceived as obsolete in the eyes of today’s consumers.
This is why we formulated and launched our five-year Sustainability Strategy last April, establishing concrete targets and actionable commitments across four key Sustainability Pillars. Directly relating to our business operations and greatest areas of impact, these pillars include our Environmental Footprint, Sustainable Consumption, Ethical Sourcing, and Responsible Workplace and Community Engagement.
We have introduced products based on these pillars, and to ensure that we reduce our environmental footprint across every part of our supply chain, we have also been working hard to ensure that our delivery and internal packaging incorporate sustainable materials, and that we attain carbon offset from our operations and transport.
We are also committed to the transparent and regular reporting of our sustainability journey, which serves as a means for us to chart our progress over the years, as well as measure the effectiveness of our initiatives.
Moving forward, do you have any predictions for the next big change in the way business is done? How are you preparing for that possible shift?
There is no doubt that COVID-19 catalyzed the start of a new era in the world of retail, and caused significant changes in the way business is done. This is especially as firms strategize to align with evolving trends within the industry—including the increase in demand for categories such as sports and activewear, beauty and luxury, as well as the influx of consumers to the online shopping space as many lifestyles transition towards being more home-based.
While many companies are still in the midst of adjusting to these changes, other industry trends are continuing to surge ahead, especially as Southeast Asia’s e-commerce industry grows at an exponential rate. For instance, we foresee the future of fashion to be indisputably female—our data indicates that women contribute to 80 percent of household expenditure, and female shoppers outnumber their male counterparts by 4 to 1. A shift in demographics towards the younger generation is also fast approaching, with the region’s 200 million millennials and Gen Z-ers expected to comprise Southeast Asia’s largest consumer base in the years to come.
The rapid adoption of simple services such as digital payments and e-wallets, as well as complex features such as alternative reality (AR) or virtual reality (VR) product reviews, is also set to revolutionize the way e-commerce firms operate. Finally, a big feature that consumers will increasingly look for revolves around content marketing—from livestreaming to engaging campaigns that involve new storytelling app features and innovations around social media marketing.
In light of such industry trends, companies must thus look to tailor their services and offerings to an ever-changing customer base, such as through the adoption of new engagement strategies or the implementation of new payment methods.
We too are constantly looking to deliver appealing content to engage with the new consumer pool—be it through influencer marketing, Instagram Live video sessions, or even editorial productions. We also recently partnered with Rely, a ‘Buy Now Pay Later’ service provider, to offer interest-free payment solutions for our customers in Singapore, and are in the midst of crafting plans to do test runs of AR and VR in the markets we are operating in.
All in all, such industry shifts can and will happen quickly and abruptly—but as long as companies are agile enough to evolve with the times, they will be able to come out on the other side of this pandemic even stronger than before.