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ZMS Brand Partner

Study 2020

Key Findings.

1
 Why we initiated the brand
partner study with focus on
digitalization

Our commercial ecosystem in 2020

suddenly confronted with a new
seismic shift.

Need to gain market insights on our

partners’ situation and expectations.

Aim to share aggregated knowledge,

be your sparring partner and initiate
further discussions.

2
 Starting point confirmed:
95% of our partners expect a
slightly or highly accelerated rate of digitalization.1

1
ZMS Brand Partner Survey, Which of the following best describes your expectations of the rate of digitalization of the fashion industry in the next 3 years? n=118

3
 Guiding question

How does digitalization redefine

our commercial / marketing
strategies and organizations?

4
 Our ZMS Insights team examined
different dimensions of the digitalization

Sales / Strategic Consumer Data &

Organizational
Distribution Marketing Touchpoints Consumer
Implications
Channels Priorities & Content Understanding

5
 Approach:
Quantitative expectations & qualitative deep-dives

PHASE 1: BRAND PARTNER SURVEY PHASE 2: EXPERT INTERVIEWS

To understand and quantify the current To deep-dive into the evolution and specific
Goal Goal
digitalization context in the fashion industry strategies of our partners facing digitalization

118 anonymous brand partners from a mix of 26 expert interviews with decision-makers
Sample Sample
businesses, functions and seniorities. within our partners’ businesses

Timing June-July 2020 Timing August-September 2020

Partner
Category

Partner Partner Seniority of

Business Turnover Respondent

2%

2
2
ZMS Brand Partner Survey, Before we finish, we’d just like to ask a few questions about your company.

6
 The future of online retail is
platform-driven, seamlessly
connected with offline

7
 Digital sales are expected to soon overtake offline; brands are
reinforcing their own ecom while platforms highly accelerate

Overall, brands expect a 46% increase in sales Within online sales, the biggest expected
from online channels by 20233 increase is for platform e-commerce4

+46% +45%

In the new world of platform strategies, brands are having to take a more ‘active’ role than in the wholesale world.
They’re required to adopt end-to-end responsibility, from product planning to post purchase - which is a learning process for all.

3
ZMS Brand Partner Survey, Approximately what percentage of the annual sales of your organisation do you estimate to have come from online vs. offline distribution channels in 2019 vs. 2023? n=118
4
ZMS Brand Partner Survey, And approximately what proportion of your organisation’s online sales do you estimate to come from across the following e-commerce channels in 2019 vs. 2023? n=67

8
 Brick-and-mortar presence will not disappear,
but its role within the customer journey will be redefined

Many partners will continue to have a

significant brick-and-mortar presence

The key to success lies in using offline channels for its

strengths: to offer a physical interaction with the
consumer within the customer journey.
“ Offline remains important as a means to
create brand awareness – it’s challenging
to create a brand only online.6
“
1

43%

Expected proportion of brands’ sales

from offline channels in 20235

5
ZMS Brand Partner Survey, Approximately what percentage of the annual sales of your organisation do you estimate to have come from offline distribution channels in 2023? n=118
6,
Anonymous quotes from ZMS Brand Partner Expert Interviews

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 The ultimate goal is omnichannel: but still a long way to go
before offline and online channels are seamlessly connected

All the sales channels need to be seamlessly All of the touchpoints ensure a consistent brand
connected to fit within the customer’s life experience, beyond just the product

Online and offline touchpoints both form a part of the customer’s With the increasingly digital retail landscape, brands are looking for
journey, and should be interconnected to offer convenience. more ways to reinforce the unique brand experience to customers.

“ It should be a seamless shopping experience

for the customer: for example buy online and
return in store if it’s more convenient.7
“ “ We want to make the brand experience a
WOW on all channels for our customers -
offline as well as online.8
“

7, 8
Anonymous quotes from ZMS Brand Partner Expert Interviews

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 Competing only at product-level
isn’t enough: focus on brand
impact & unique experiences

11
 Performance is seen as a must, but leaders go beyond
“quick wins” and highlight branding as long-term success driver

Performance activities are expected to further Digital leaders aim to evolve their invest
increase, especially for smaller brands in a more holistic way

Driven by pressures to meet ROI targets, Performance is a The most digitally-advanced brands plan to increase performance
must-have for most brands as it boosts visibility and sales. and branding invest to a similar extent.
Increase in campaigns
Increase in campaigns to drive brand
that drive sales 9 39% 47% awareness/ build brand 46% 35%
image 10

DIGITAL LEADERS PERSPECTIVE

(Companies Highly Prepared for Digitalization)

Brands with up to
100M Turnover 27% 69% Increase in campaigns
that drive sales11 89%

Brands with >100M Increase in campaigns to

Turnover 45% 45% drive brand awareness/ 89%
build brand image12

HIghly Slightly Slightly Highly

increase increase decrease decrease

9,10,11,12
ZMS Brand Partner Survey, Do you expect your organisation to increase or decrease (or neither) the following marketing approaches/activities by 2023? n=118

12
 Performance is seen as a must,
but leaders go beyond “quick
wins” and highlight branding as
a long-term success driver
They each have their own goals, both of which are crucial for brands:
Performance - drives sales, in order to meet revenue targets.

“ ROI drives the budget decisions, therefore

we’re more focused on seeing quick returns.13
“
Branding - communicate the brand’s DNA, in order to stand out and
connect emotionally with consumers.

“ A 50/50 upper/lower funnel split works quite well.

When we once reduced upper funnel invest, we
saw a negative impact on performance.14
“
13,14
Anonymous quotes from ZMS Brand Partner Expert Interviews

13
 Brands without a clear and compelling story
or who lack purpose are under pressure

The consumers of today are extremely critical Brands recognize the importance of
and will see through inauthenticity brand-building campaigns.

Therefore, brands need to stay true to their values Regardless of readiness for digitalization, brands see
through their actions. that brand-building is crucial to build a strong connection
with consumers.

“ I think all brands are

afraid of getting called
out by Diet Prada 15
“
Increase in campaigns to drive brand
awareness/build brand image16

Highly prepared
for digitalization

Somewhat
prepared

Not at all
prepared

15
Anonymous quotes from ZMS Brand Partner Expert Interviews
16
ZMS Brand Partner Survey, Do you expect your organisation to increase or decrease (or neither) the following marketing approaches/activities by 2023?(Highly increase/Slightly increase) n=118

14
 The measurement challenge: broad variety
of brand and engagement metrics

“
Mostly
awareness”17
“
Meaningful engagement:
likes, video view time, etc.”17
“ Reach and engagement
are key”17

The challenge: to effectively

measure the impact of branding
“
Selected brand
health metrics”17
“ Social engagement
KPIs”17
“ Aided/unaided
awareness”17
It’s important to identify consistent metrics (across
accounts and channels) for branding, to enable
goals/KPIs to be set, similar to performance
activities.
“
Sources of
the clicks”17
“
Overall costs of customer
acquisition”17
“ No direct measurement
possible”17

17
Anonymous quotes from ZMS Brand Partner Expert Interviews

15
 The funnel is not linear, but rather
a flywheel: an ecosystem of
interconnected touchpoints

16
 Brands must feed inspiration
and storytelling across all the
scattered touchpoints within
the customer-centric flywheel

The customer journey today is complex, and is

more like a flywheel than a linear funnel

Inspiration and brand messaging can come from many

touchpoints and at various stages of the journey. Therefore,
brands need to think harder about the impact of different
touchpoints and content on the customer’s behaviour.

“ It’s not just about pulling the customer into the

funnel and that’s it. There needs to be different
triggers to keep the consumers engaged at all
stages.18
“
18
Anonymous quotes from ZMS Brand Partner Expert Interviews

17
 Brands must feed inspiration and storytelling across all the
scattered touchpoints within the customer-centric flywheel

The digitally leading brands are focusing on

campaigns along the whole customer journey The ultimate goal is to utilize each touchpoint to
their strengths, to ensure efficient investment
With this new focus, brands are also exploring how best to measure success at throughout the journey.
each stage of the journey, to understand the ‘customer lifetime value’.

Increase in campaigns along

the whole customer journey,
from awareness to sales19

HIghly
increase
Slightly
increase
No
change
Slightly
decrease
41%

Highly
decrease
27%
“ “In the future customer lifecycle
management will be key, to allow

DIGITAL LEADERS PERSPECTIVE

(% who indicated an increase)
us to better understand
consumers and their journeys.” 20
“
Highly prepared
for
digitalization
Somewhat
prepared

Not at all
prepared

20
Anonymous quotes from ZMS Brand Partner Expert Interviews
19
ZMS Brand Partner Survey, Do you expect your organisation to increase or decrease (or neither) the following marketing approaches/activities by 2023? n=118

18
 Targeted content is key: if content doesn't match
audience & channel, you are wasting ad budget

PAST NOW & THE FUTURE

Expected increase of online media spend by 202321 Tailor-made content:

Create content for offline and
● more channel /
use what’s left for digital (digital
audience specific
more as an ‘afterthought’)
● high speed / frequency
● more test and learn
+39%

21
Thinking now about Media, approximately what proportion of your total media spend do you estimate online media to represent in a) 2019 b) in 2023? n=64

19
 Targeted content is key: if content doesn't match
audience & channel, you are wasting ad budget

Tailored to different universes Test & learn, constantly optimize

Every channel is unique: they bring in different audiences, and can Digital is constantly evolving: therefore brands need to iterate on
achieve different goals. their learnings to find the best results.

“ You need to adapt content according to the channel - they all

represent different universes! One could be better for branding,
another better for sellout 22
“ “ Test & learn is important in order to find out what works. Which
type of content drives awareness, what inspires and what drives
commercial impact? 22
“
Fresh content matters

Digital requires more content and at higher frequencies, to refresh

the message and keep consumers engaged.

22
Anonymous quotes from ZMS Brand Partner Expert Interviews
“
We need so much more content than before! We create fresh
content and stories every month, different content for different
target groups. Content is king! 22
“
20
 Diversify from purely
brand-driven content to
maintain authenticity and
elevate relatability

Co-created content strikes a chord,

especially with younger consumers

Collaborating with influencers, local partners,

retailers, and others can help brands deliver
their message in a more authentic way.
Different content creators can build closer
connections with their specific audiences.

21
 Diversify from purely brand-driven content to
maintain authenticity and elevate relatability

Authenticity is key Emphasis of co-creation

Today’s consumer often prefer to hear brand stories from sources Collaborations between brands and various content creators can
they relate to, rather than in the tone of ‘traditional advertising’. drive the relevance of the content to the audience.

“ Content is a big challenge – it needs to be different to traditional

media, with a more rough, unprofessional, authentic feel. For this,
we collaborate closely with influencers and use their input 23
“ “ Take a story and give it a local spin, for example complimented and
enriched by content from local partners, influencers, employees, use
many sources. Collaboration drives real reactions.23
“
Need for meaningful stories

Ultimately, the brand story needs to be compelling and resonating,

to drive a lasting connection with the consumer.

23
“ Storytelling is at the forefront. Many aren’t so interested in one product. It's
more about sentiment, sustainability, the brand message and building loyalty.23

Anonymous quotes from ZMS Brand Partner Expert Interviews

“
22
 In the fast-paced digital world, data
and insights are key to pivoting
strategies & building a connection

23
 Brands must quickly move from the age of data collection to
the age of data interpretation and integration

The fast pace of technological innovation leads Therefore, it’s crucial to have the right data at
to constant evolution in digital marketing, hand, and the right skills to translate the data
which requires agile planning into actionable insights

Brands need to be flexible enough to welcome unexpected Data is abundant in the digital world, however the true value
changes, adopt new channels, and make quick decisions. comes from understanding the implications from it.

More agile/flexible Increased use of

marketing 75% consumer data 86%
planning24 and insights25

DIGITAL LEADERS PERSPECTIVE DIGITAL LEADERS PERSPECTIVE

Highly Highly
prepared for prepared for
digitalization digitalization
Somewhat Somewhat
prepared prepared

Not at all Not at all

prepared prepared

24,25
ZMS Brand Partner Survey, How likely is your organisation to adopt the following in the next 3 years? (Extremely/Somewhat likely) n=118

24
 Brands must quickly move from
the age of data collection to the
age of data interpretation and
integration
Data and agility are closely linked: to ensure success, brands
need to quickly translate the data insights into action, on an
ongoing basis.

“ Everything is changing so fast that we need to

adapt very quickly to everything. We even
make decisions on topics such as budgets on a
“
day-to-day basis 26

“ We value numbers before opinions. If it’s not

backed up by data, we don’t go for it 26
“
26
Anonymous quotes from ZMS Brand Partner Expert Interviews

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 Data-driven, personalized brand experiences
will outpace generic consumer touchpoints

The digital customer of today is exposed to an enormous clutter of content

Using data, brands can create tailored audience strategies -

cutting through the clutter to deliver tailored, relevant messages to each customer

% of brands who expect to adopt the following in the next 3 years 27:

“
Personalisation is the future. We need
to understand individual consumers so
as not to give them clutter - and we
need data to do this.28
“
27
ZMS Brand Partner Survey, How likely is your organisation to adopt the following in the next 3 years? (Extremely/Somewhat likely) n=118
28
Anonymous quotes from ZMS Brand Partner Expert Interviews

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 Internal organizational silos will
block collaboration toward the
customer-centric goal

27
 Now is no time for complacency: change is expected
to impact many areas of brands’ businesses

Which parts of your organisation do you expect to be

strongly impacted by Digitalization?29

Brands expect Digitalization to impact

all areas of their business:
Sales and Marketing are most expected
to be impacted by Digitalization, while
Product is the area least expected to
feel an impact.

29
ZMS Brand Partner Survey, n=118

28
 Breaking silos: the numerous reorganizations we see today, and
the 39% who expect it, may be just the tip of the iceberg

Which parts of your organisation do you expect

to be strongly impacted by Digitalization? 30 In order to offer a connected brand experience
through the entire funnel, different teams need
to ‘speak the same language’
80% Sales & Distribution

Now more than ever, silos between departments and functions will
hinder achievements towards the common goal: to connect with the
69% Marketing target consumer.

39% Overall organizational

structure
“ There's a wall between sales & marketing,
but it's currently being broken down.31
“
30
ZMS Brand Partner Survey, n=118
31
Anonymous quotes from ZMS Brand Partner Expert Interviews

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 There’s no one-size-fits-all
organisational structure, but
cross-functional collaboration
needs to be enabled
Organisational structures differ greatly between brands, due
to historical and contextual reasons. However, internal
structures which allow for smooth collaboration between
teams can expect the most success in the digital world.

“ It’s all about the mindset and the

willingness for collaboration within
the company.32
“

32
Anonymous quotes from ZMS Brand Partner Expert Interviews

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 In classical structures, there should be a facilitation
of close communication between teams

In more ‘traditional’ organisational structures, Sales & Marketing teams try to ensure
frequent communication and involvement in relevant topics

Split between upper vs. lower funnel Offline/online teams working in parallel

Brand Marketing
Marketing
Branding activities is Sales Separation of online sales
organised separately to sales. (online) functions from offline.
Sales
Sales
(Offline)

“ In the past, sales and marketing teams

didn’t have the same objective, and they
were working with different timelines for
“ “ Marketing and Sales are not structured
together but work together closely: we
meet once a month to discuss campaigns
“
the seasons.33 and align on our plans. 33

33
Anonymous quotes from ZMS Brand Partner Expert Interviews

31
 For the Digital Leaders, flexible organisation of teams and task
forces aim to focus on the entire customer journey

The more digitally advanced brands have set up structures in place to combine functions,
and/or facilitate topic-based cross-team collaboration.

Dedicated mix-function account teams ‘Multi-level governance’ structures

Several layers of organisation, or conventional

“
Multi-functional environments dedicated
structures with agile topic-based task forces.
to one key account.
Marketing Sales Product, This modern approach helps us work in
etc.
Account Team an integrated, consumer-oriented way.
Everyone has certain responsibilities

Social
Media
PR
Category/Topic

Sal
but we have shared accountability “
when we work in task forces together.34

Sales
Category/Topic es
Etc.
Merchandising
Category/Topic

34
Anonymous quotes from ZMS Brand Partner Expert Interviews

32
 Data, digital marketing and platform expertise are
non-negotiable to succeed in times of change

The future digital world (focus on customer journey, Data & translating it into
rising relevance of platform business) also requires actionable insights
new skills/functions to succeed

Increased relevance Managing and measuring the

of marketing tech & 81%
digital expertise 35 Customer Lifecycle

DIGITAL LEADERS PERSPECTIVE

Highly Platform business expertise
prepared for
digitalization
Somewhat
prepared

Not at all
prepared
Fluency in everything digital

35
ZMS Brand Partner Survey, How likely is your organisation to adopt the following in the next 3 years? (Extremely/Somewhat likely) n=118

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 Wrap-up: key levers
in the digital age

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 Wrap-up: key levers in the digital age

Focus on Think beyond linear

Define a strategy
unique brand customer journeys Moving from Drive cross-team
to succeed in the
experiences, to effectively “data collection” to collaboration and
platform &
next to a solid connect with better interpreting build up new skill
omnichannel
performance consumers across and activating data sets.
universe
foundation touchpoints

The rapid evolution of distribution channels goes along with the need to excel in platform Digital leaders emphasize data, tech and
expertise, digital marketing skills, and agile ways of working. Key differences between interconnected strategies along the full
digital leaders and novices are that leaders strongly embrace data and tech-driven
approaches and more emphasize the need for interconnected strategies along the full path to purchase.
path to purchase, such as integrated branding and performance measures. Sales and
marketing will be the areas most affected by digitalization, while a high number (39%)
also expect a strong impact on the overall organizational structure of their company.

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 Confidential usage

This presentation and its contents are strictly confidential.

It may not, in whole or in part, be reproduced, redistributed,
published or passed on to persons from other organizations.

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