Zalando finds the perfect fit for its fast-growing business

Zalando has grown rapidly to become one of the largest online fashion retailers in Europe. The company operates in 17 European countries, serving 35 million customers every month with products from more than 3,000 brands. 

Zalando’s growth remains strong, with sales rising by 25% in 2020 alone. But rapid expansion has created challenges. Zalando outgrew its ERP system, limiting its ability to make real-time business decisions based on reliable data. In the fast-moving fashion world, this threatened to dull its competitive edge. So the company set out to establish an SAP S/4HANA Retail & Finance system landscape to improve data quality and structure.

This provided an ideal opportunity for Zalando to re-engineer and optimise its operational business processes to increase end-to-end automation, by merging its granular, highly dynamic operational data with its finance data. At the same time, Zalando wanted to introduce sound data governance and build a best-in-class hybrid SAP and non-SAP technology environment. To achieve its goals, the company needed to transform its highly complex finance systems and mirrored the highly dynamic retail world into this new finance process world to leverage collaboration between financial and operational data.

Working closely with PwC, Zalando embarked on one of the world’s largest and most complex retail and finance transformations. This ambitious project included designing and implementing a new SAP S/4HANA Retail and Finance solution to support around 800 staff and €1 billion in stock volumes. PwC closely integrated SAP S/4HANA with Zalando’s custom in-house software (microservices based), existing SAP Concur solution and other third-party solutions via a total of 95 interfaces.

In addition, PwC helped Zalando ramp up its analytics capabilities by deploying a new SAP Business Warehouse solution integrated with SAP S/4HANA. This puts powerful real-time, self-service analytics at employees’ fingertips.

As Zalando’s key strategic implementation partner and trusted advisor, PwC took on the role of business and systems integrator. The project involved a total of around 200 profesionnals in accounting, treasury, retail, architecture and migration. Thanks to PwC’s flexibility and dedication, the transformation went live on schedule in July 2020, despite the sudden outbreak of COVID-19.      

PwC helped Zalando establish simplified, standardised, scalable business processes, featuring a high degree of end-to-end process automation. With PwC’s support, Zalando has also improved data governance and enabled a seamless flow of data between business functions.

Today, Zalando benefits from simplified, scalable and highly automated business processes that support its strong business growth. Staff have access to accurate, real-time data and enhanced analytics capabilities to support their decision-making. They also enjoy an enhanced user experience. What’s more, by ensuring that its financial data mirrors its highly granular retail data, Zalando can analyse and optimise its profitability even more effectively.

The automation of routine tasks has freed up finance personnel to focus on value-added work. This has fuelled a strategic shift, helping the finance function expand beyond reporting, compliance and transactions to become process managers, business partners and value managers.

It’s not just employees who benefit. With support from PwC, Zalando has automated e.g. its end-to-end invoicing process. This means customers enjoy better service and a first-class shopping experience.

Meg Greenhouse,VP Digital Workplace at Zalando SE, reflects on the project: “As one of the largest implementations of SAP S/4HANA, this is truly a technology benchmark for the retail industry. SAP and PwC enabled us to solve our business challenges while creating a platform to support our ambitious growth targets for the future.”