Should Zalando prioritize faster delivery times or wider product selection?

Introduction

The trade-off between faster delivery times and wider product selection is a critical decision for Zalando's product strategy. This scenario involves balancing customer satisfaction, operational efficiency, and market competitiveness. I'll analyze this trade-off by examining its impact on various stakeholders, evaluating key metrics, and proposing an experimental approach to inform our decision.

Step 1

Clarifying Questions (3 minutes)

• Based on recent market trends, I'm thinking faster delivery might be a key differentiator. How does our current delivery speed compare to our main competitors?

Why it matters: Helps assess the urgency and potential impact of improving delivery times. Expected answer: We're slightly behind our main competitors. Impact on approach: Would prioritize faster delivery if we're significantly behind.

• Considering our business model, I assume we operate on a marketplace model with various sellers. What percentage of our inventory is directly controlled by Zalando versus third-party sellers?

Why it matters: Affects our ability to implement changes across the entire product selection. Expected answer: 60% third-party sellers, 40% Zalando-controlled inventory. Impact on approach: Higher third-party percentage would make wider selection easier but complicate delivery speed improvements.

• Looking at user behavior, I'm curious about the balance between browse time and purchase decision time. Do we have data on how long users typically spend browsing before making a purchase?

Why it matters: Indicates whether users value selection variety or quick decision-making. Expected answer: Average browse time is 20 minutes before purchase. Impact on approach: Longer browse times might favor wider selection, shorter times might prioritize faster delivery.

• From a technical perspective, I'm wondering about our current logistics infrastructure. How scalable is our current delivery system if we were to focus on speed?

Why it matters: Determines the feasibility and cost of improving delivery times. Expected answer: Moderate scalability with significant investment needed for major improvements. Impact on approach: Low scalability would shift focus towards product selection unless we're prepared for major infrastructure investment.

• Considering resource allocation, what's our current split in terms of investment between expanding product selection and improving delivery logistics?

Why it matters: Indicates current strategic priorities and potential for reallocation. Expected answer: 60% product selection, 40% delivery logistics. Impact on approach: Even split might suggest maintaining current strategy, while a significant imbalance could indicate an opportunity for strategic shift.