THE FASHION FULFILLMENT NETWORK OF THE FUTURE

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1 THE FASHION FULFILLMENT NETWORK OF THE FUTURE CAPITAL MARKETS DAY 2017 JAN BARTELS

2 A G E N D A 1. THE VISION 2. A GLIMPSE 3. RECENT EXAMPLES 2

3 BE LIKE WATER MY FRIEND W E W A N T F A S H I O N T O F L O W L I K E W A T E R

4 E X AM P L E I : L O G I S T I C S M AI N F R I C T I O N P O I N T I N T O D AY S F L O W Browse + Shop Order Await Delivery Unpack + try on Return 4

E X A M P L E I I : C A R R I E R N E T W O R K S A R

S W A T E R C U S T O M E R O R D E R S P I C K I N G

T O U R S O R T I N G D E L I V E R Y Zalando

order time 1 1 : 3 0 1 : 3 0 P M 2 : 0 0 4 : 0 0 P M 4

5 E X A M P L E I I : C A R R I E R N E T W O R K S A R E R A T H E R R I G I D A S I C E T H A N F L U I D A S W A T E R C U S T O M E R O R D E R S P I C K I N G P A C K I N G C A R R I E R C O N S O L I D A T I O N T O U R S O R T I N G D E L I V E R Y Zalando Warehouse Carrier Sorting Hub 1 1 : 1 5 AM latest order time 1 1 : : 3 0 P M 2 : : 0 0 P M 4 : : 0 0 P M 6 : : 0 0 P M TECHNOLOGY OPERATIONS LEGACY 5

6 E X AM P L E I I I : T O D AY S F AS H I O N S U P P L Y C H AI N D E AD E N D S I N S T E AD O F FLOW 12 months 9 months 9 6 months 6 months months ORDER & PRODUCE DISTRIBUTE SELL End of Season Stores Retail / Offline Brand 6 ecom

7 O U R V I S I O N : M E L T I N G T H E I C E W E W A N T F A S H I O N T O F L O W L I K E W A T E R E X A M P L E I : Z a l a n d o O r d e r f u l f i l l e d b y B r a n d S t o r e Zalando customer in Madrid orders a Zalando owned article Brand offline store in Mardrid fulfills own article same day on behalf of Zalando E X A M P L E I I : B r a n d O r d e r f u l f i l l e d by Z a l a n d o Brand customer in Pisa orders on Brand.com article from Brand Zalando Warehouse in Stradella fulfills Zalando article same day on behalf of brand 7 NO MATTER WHO S CUSTOMER ORDERS WHERE - ZALANDO S FULFILLMENT BRAIN ALWAYS KNOWS THE BEST FULFILLMENT SOLUTION

8 A G E N D A 1. THE VISION 2. A GLIMPSE 3. RECENT EXAMPLES 8

9 T H E F AS H I O N F U L F I L L M E N T N E T W O R K O F T H E F U T U R E A WAREHOUSES: STRONG BACKBONE LOCAL ORCHESTRATED VIA TECHNOLOGY C DELIVERY NETWORKS: CONNECT FASHION & PEOPLE STORES: FASHION AROUND YOU 9 B

10 A B C HUB&S P O K E C L O S E TO O U R C U S T O M E R S SE AI - PREDICTIVE ANALYTICS BL GD MG EF OPEN & LH SEAMLESS FR IT 10

11 A B C OFFLINE INTEGRATION: MANY TRIED IT, MANY FAILED L E T S B E A B I T M O R E P R AG M AT I C H E R E DEEP SYSTEM INTEGRATION - MANY TRIED IT, MANY FAILED HANDSHAKE MODEL LEAN WAY OF INTEGRATING 11

12 A B C AT O M I Z I N G T H E L AS T M I L E AN D R E - AS S E M B L I N G I T V I A T E C H N O L O G Y Zalando/Partner Warehouses Linehaul, e.g., Senders, Schenker Delivery Shop Local Stores Linehaul, e.g.,tiramizoo Local Parcel hub Returns CUSTOMER FACING APPS FASHION STOCK LINEHAUL TRANSPORT SORTING, DISPATCHING, LABELING LAST MILE Parcel Hub SW Fashion Sprinter 12

13 A G E N D A 1. THE VISION 2. A GLIMPSE 3. RECENT EXAMPLES 13

14 E X AM P L E B E R L I N LOGISTICS PLATFORM INTEGRATING MULTIPLE P AR T N E R S WAREHOUSE BRIESELANG TOUR 1 SAME DAY PART- NER POINT 2 POINT RETURN ON DEMAND STORE Parcel Hub T2 FROM STORE TO DOOR 14 WAREHOUSE ERFURT

15 E C O N O M I C AL L Y F E AS I B L E - COSTS WELL BELOW EXPRESS APPROACHING S T AN D A R D SHIPMENT COSTS PER ORDER Express Standard SAME DAY BERLIN 15 J A N M A Y 2017

16 OUR CUSTOMERS LOVE SAME DAY Zalando Customer Pic SUPER POSITIVE FEEDBACK AT CUSTOMERS DOORSTEP SIGNIFICANTLY HIGHER NPS HIGHER REORDER FREQUENCY 16

RETURNS ON DEMAND AS E AS Y AS C AL L I N G A C AB 1 2 3 1 CUSTOMER PRESS A BUTTON IN YOUR ZALANDO APP

17 RETURNS ON DEMAND AS E AS Y AS C AL L I N G A C AB CUSTOMER PRESS A BUTTON IN YOUR ZALANDO APP WAIT MIN WHILE PREPARING YOUR RETURNS HANDOVER TO DRIVER AT YOUR DOOR STEP 14 MONTHS 106 USAGES 17

18 MELTING THE ICE WE WILL MAKE FASHION FLOW LIKE WATER

19 D I S C L AI M E R C e r t a i n s t a t e m e n t s i n t h i s c o m m u n i c a t i o n m a y c o n s t i t u t e f o r w a r d l o o k i n g s t a t e m e n t s. T h e s e s t a t e m e n t s a r e b a s e d o n a s s u m p t i o n s t h a t a r e b e l i e v e d t o b e r e a s o n a b l e a t t h e t i m e t h e y a r e m a d e, a n d a r e s u b j e c t t o s i g n i f i c a n t r i s k s a n d u n c e r t a i n t i e s. Y o u s h o u l d n o t r e l y o n t h e s e f o r w a r d - l o o k i n g s t a t e m e n t s a s p r e d i c t i o n s o f f u t u r e e v e n t s a n d w e u n d e r t a k e n o o b l i g a t i o n t o u p d a t e o r r e v i s e t h e s e s t a t e m e n t s. O u r a c t u a l r e s u l t s m a y d i f f e r m a t e r i a l l y a n d a d v e r s e l y f r o m a n y f o r w a r d - l o o k i n g s t a t e m e n t s d i s c u s s e d o n t h i s c a l l d u e t o a n u m b e r o f f a c t o r s, i n c l u d i n g w i t h o u t l i m i t a t i o n, r i s k s f r o m m a c r o e c o n o m i c d e v e l o p m e n t s, e x t e r nal f r a u d, i n e f f i c i e n t p r o c e s s e s a t f u l f i l l m e n t c e n t e r s, i n a c c u r a t e p e r s o n n e l a n d c a p a c i t y f o r e c a s t s f o r f u l f i l l m e n t c e n t e r s, h a z ardo u s m a t e r i a l / c o n d i t i o n s i n p r o d u c t i o n w i t h r e g a r d t o p r i v a t e l a b e l s, l a c k o f i n n o v a t i o n c a p a b i l i t i e s, i n a d e q u a t e d a t a s e c u r i t y, lac k o f m a r k e t k n o w l e d g e, r i s k o f s t r i k e a n d c h a n g e s i n c o m p e t i t i o n l e v e l s. 19

Z A L A N D O C O N V E N I E N C E

Z A L A N D O C O N V E N I E N C E C A P I T A L M A R K E T S D A Y 2 0 1 7 D A V I D S C H R Ö D E R M A S O O D C H O U D H R Y 19-06- 2017 T A B L E O F C O N T E N T S 1. WHERE WE WANT TO GO 2. HOW