March 18, 2016 / 4:46 PM / in 3 years

Zalando testing same-day delivery direct from retailer's store

BERLIN, March 18 (Reuters) - Europe’s largest dedicated online fashion retailer Zalando is testing a project to deliver stock directly from a retailer’s store so the buyer can receive it the same day, it said on Friday.

It is one of several new services the German company is exploring to keep ahead of rivals such as Amazon, which is looking to expand in the fashion market, and British online fashion retailer ASOS.

Other initiatives include a pilot project with German delivery start-up Liefery in Cologne and Berlin for same-day delivery, and making it easier to return unwanted products.

Delivering items ordered online directly from a retailer’s store, rather than from one of Zalando’s warehouses, would rapidly speed up dispatch times and increase the availability of stock.

Christoph Lange, vice president of Brand Solutions, said at an event at Zalando’s Berlin headquarters on Friday that the company had launched a pilot project to deliver directly from fashion store Bodycheck in the city’s Alexa shopping mall to customers the same day.

Using retailers’ own stocks could help reduce logistics costs in the long term. However, Jan Wilmking, a senior vice president at Zalando, said the concept was still in the early stages since European retailers have very fragmented stock systems at present.

Zalando hopes to eventually take 5 percent of the fragmented European fashion market, compared with about 1 percent now. It is investing in new technologies to help brands build their own flagship stores on its site and analyse customer data to make purchasing recommendations.

This year the German company plans to increase its total capital expenditure to 200 million euros ($226 mln), from 70 million last year.

It is also running a pilot project in Amsterdam whereby customers can simply click on their mobile phone to notify Zalando that they want to return a product.

Other applications being explored include the possibility to sell via a ‘buy’ button on social media apps, said Wilmking.

The company is also looking to facilitate purchasing by using smartphones to make payments or using Touch ID, Apple’s biometric fingerprint authentication technology, executives said. ($1 = 0.8859 euros) (Reporting by Caroline Copley; Editing by Susan Fenton)

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