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The Amazing Ways
Retail Giant Zalando
Is Using AI
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Title
Text
IntroductionIntroduction
Founded in 2008 by business school friends Robert Gentz and David Schneider,
German-headquartered “etailer” Zalando is as much of a tech company as it is a retailer.
Today, it’s Europe’s leading online fashion platform serving 17 European markets with
400,000 products from 2,000 brands. One reason the company can provide a
personalized user experience to its 27 million customers is because of the way it uses
artificial intelligence (AI) and machine learning just like the other 28 percent of retailers
who used artificial intelligence in 2018. Here are only a few of the ways Zalando uses
machine learning and artificial intelligence today.
The Amazing Ways Retail Giant Zalando Is Using
Artificial Intelligence
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Algorithmic Fashion Companion (AFC)-
A Virtual Style Assistant
One of the ways Zalando uses technology to improve the user experience is through its
Algorithmic Fashion Companion (AFC), a digital outfit recommendation tool that can
generate outfit recommendations in real-time.
The algorithm’s recommendations are based on products that the customer has put in
their “wish list,” expressed interest in or purchased before. Human stylists provide
adjustments to the algorithm to be sure its recommendations follow current fashion
trends. AFC helps inspire Zalando customers as well as deliver outfit recommendations
from what otherwise could be an overwhelming amount of choices. It’s not only a good
user experience for the customer but drives business as well. Zalando reports that outfit
recommendations drive 40 percent larger basket sizes. They also found that male
customers are highly engaged with the recommendation engine. While AI helps the
company scale its recommendations, it anticipates that it will always need human stylists.
Zalando is working on how to create a similar recommendation engine for its beauty
products as well.
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Machine Learning to Understand
Customers Better
At Zalando, there are teams, that include 120 researchers, focused on how machine
learning, that can help the company better understand fashion, what makes a good outfit,
the intent of the customer at the moment they are on the site as well as to discern what
each customer likes. Ultimately, with the help of machine learning, Zalando hopes to be
able to provide a personalized boutique experience for every single customer. When they
are able to provide automated recommendations that are tailored to each individual’s in-
the-moment goals, they will be closer to achieving their ultimate goal to become the
continent’s fashion platform.
While machine learning certainly showed its abilities in fashion, there are limitations.
Celebrities, "influencers" and other social influences are important when driving fashion
trends, and it would be hard to imagine AI being able to fully respond to these human
idiosyncrasies with automatic recommendations. Additionally, consumers aren't always
shopping for themselves. Machine learning must analyse all the information at a given
moment, and while it gets better over time with more data, it doesn't hit the mark 100
percent of the time.
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Deep Learning for Visual Search
When customers see an article of clothing, accessory, or shoes on social media or worn by
one of their favorite celebrities, they often want to try to find it and buy it through on
online store. Visual search, where fashion items can be identified by an image and located
online to purchase, is available through Zalando’s app and Facebook chatbot. The Zalando
team continues to refine its deep learning algorithms for visual search by building on its
FashionDNA system.
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
How Has AI Affected
Human Zalando Employees?
While human fashion stylists might be safe for now, 250 marketing and communications
professionals were cut as part of a strategy to drive a “personalized customer approach
and AI-driven marketing solutions.” The realignment of the marketing team was aimed at
being able to provide more personalized solutions for customers using AI. Even though
this change was unexpected for the marketing and communications professionals, one
first-hand account offers a perspective of the trajectory of change that might be
experienced by humans when their positions have been eliminated by machines. Initially
there’s uncertainty and confusion, but, in this case anyway, it led to a new start.
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
A Leader in the
Artificial Intelligence Community
As a current focal point for Zalando, artificial intelligence not only helps to create a
personalized shopping experience for customers but it also helps to optimize its business
operations from supply chains to logistics and seasonal demand to preventing fraud.
As a result of its leadership in artificial intelligence and machine learning in Europe,
Zalando has employees at the European Commission, an organization that tackles ethical
questions of the technology as well as AI policy and investments on the part of the EU.
The company’s research team also released Fashion-MNIST, a dataset of the company’s
images, that it hopes will support the study of machine learning. They also made
Feidegger, a dataset of dress images with accompanying text descriptions, available to the
research community. These datasets can help the research community experiment and
create various machine-learning tasks. The datasets were already used to create a dress
recommendation and dress tagging systems that could benefit other retailers.
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
A Leader in the
Artificial Intelligence Community
To increase its influence as a fashion platform, Zalando gives infrastructure and new
customers to several fashion startups and has gone beyond fashion to offer financial
support and guidance to startups that “use technology to increase supply chain
transparency” with its zIMPACT program.
© 2017 Bernard Marr , Bernard Marr & Co. All rights reserved
© 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a
strategic business & technology advisor to governments and companies. He helps
organisations improve their business performance, use data more intelligently, and
understand the implications of new technologies such as artificial intelligence, big data,
blockchains, and the Internet of Things.
LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent
contributor to the World Economic Forum and writes a regular column for Forbes. Every day
Bernard actively engages his 1.5 million social media followers and shares content that
reaches millions of readers.
Visit The
Website
© 2017 Bernard Marr , Bernard Marr & Co. All rights reserved
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a
strategic business & technology advisor to governments and companies. He helps
organisations improve their business performance, use data more intelligently, and
understand the implications of new technologies such as artificial intelligence, big data,
blockchains, and the Internet of Things.
LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent
contributor to the World Economic Forum and writes a regular column for Forbes. Every day
Bernard actively engages his 1.5 million social media followers and shares content that
reaches millions of readers.
Visit The
Website
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© 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
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The Amazing Ways Retail Giant Zalando Is Using Artificial Intelligence

  • 1. The Amazing Ways Retail Giant Zalando Is Using AI
  • 2. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved Title Text IntroductionIntroduction Founded in 2008 by business school friends Robert Gentz and David Schneider, German-headquartered “etailer” Zalando is as much of a tech company as it is a retailer. Today, it’s Europe’s leading online fashion platform serving 17 European markets with 400,000 products from 2,000 brands. One reason the company can provide a personalized user experience to its 27 million customers is because of the way it uses artificial intelligence (AI) and machine learning just like the other 28 percent of retailers who used artificial intelligence in 2018. Here are only a few of the ways Zalando uses machine learning and artificial intelligence today. The Amazing Ways Retail Giant Zalando Is Using Artificial Intelligence
  • 3. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved Algorithmic Fashion Companion (AFC)- A Virtual Style Assistant One of the ways Zalando uses technology to improve the user experience is through its Algorithmic Fashion Companion (AFC), a digital outfit recommendation tool that can generate outfit recommendations in real-time. The algorithm’s recommendations are based on products that the customer has put in their “wish list,” expressed interest in or purchased before. Human stylists provide adjustments to the algorithm to be sure its recommendations follow current fashion trends. AFC helps inspire Zalando customers as well as deliver outfit recommendations from what otherwise could be an overwhelming amount of choices. It’s not only a good user experience for the customer but drives business as well. Zalando reports that outfit recommendations drive 40 percent larger basket sizes. They also found that male customers are highly engaged with the recommendation engine. While AI helps the company scale its recommendations, it anticipates that it will always need human stylists. Zalando is working on how to create a similar recommendation engine for its beauty products as well.
  • 4. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved Machine Learning to Understand Customers Better At Zalando, there are teams, that include 120 researchers, focused on how machine learning, that can help the company better understand fashion, what makes a good outfit, the intent of the customer at the moment they are on the site as well as to discern what each customer likes. Ultimately, with the help of machine learning, Zalando hopes to be able to provide a personalized boutique experience for every single customer. When they are able to provide automated recommendations that are tailored to each individual’s in- the-moment goals, they will be closer to achieving their ultimate goal to become the continent’s fashion platform. While machine learning certainly showed its abilities in fashion, there are limitations. Celebrities, "influencers" and other social influences are important when driving fashion trends, and it would be hard to imagine AI being able to fully respond to these human idiosyncrasies with automatic recommendations. Additionally, consumers aren't always shopping for themselves. Machine learning must analyse all the information at a given moment, and while it gets better over time with more data, it doesn't hit the mark 100 percent of the time.
  • 5. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved Deep Learning for Visual Search When customers see an article of clothing, accessory, or shoes on social media or worn by one of their favorite celebrities, they often want to try to find it and buy it through on online store. Visual search, where fashion items can be identified by an image and located online to purchase, is available through Zalando’s app and Facebook chatbot. The Zalando team continues to refine its deep learning algorithms for visual search by building on its FashionDNA system.
  • 6. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved How Has AI Affected Human Zalando Employees? While human fashion stylists might be safe for now, 250 marketing and communications professionals were cut as part of a strategy to drive a “personalized customer approach and AI-driven marketing solutions.” The realignment of the marketing team was aimed at being able to provide more personalized solutions for customers using AI. Even though this change was unexpected for the marketing and communications professionals, one first-hand account offers a perspective of the trajectory of change that might be experienced by humans when their positions have been eliminated by machines. Initially there’s uncertainty and confusion, but, in this case anyway, it led to a new start.
  • 7. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved A Leader in the Artificial Intelligence Community As a current focal point for Zalando, artificial intelligence not only helps to create a personalized shopping experience for customers but it also helps to optimize its business operations from supply chains to logistics and seasonal demand to preventing fraud. As a result of its leadership in artificial intelligence and machine learning in Europe, Zalando has employees at the European Commission, an organization that tackles ethical questions of the technology as well as AI policy and investments on the part of the EU. The company’s research team also released Fashion-MNIST, a dataset of the company’s images, that it hopes will support the study of machine learning. They also made Feidegger, a dataset of dress images with accompanying text descriptions, available to the research community. These datasets can help the research community experiment and create various machine-learning tasks. The datasets were already used to create a dress recommendation and dress tagging systems that could benefit other retailers.
  • 8. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved A Leader in the Artificial Intelligence Community To increase its influence as a fashion platform, Zalando gives infrastructure and new customers to several fashion startups and has gone beyond fashion to offer financial support and guidance to startups that “use technology to increase supply chain transparency” with its zIMPACT program.
  • 9. © 2017 Bernard Marr , Bernard Marr & Co. All rights reserved © 2018 Bernard Marr, Bernard Marr & Co. All rights reserved Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a strategic business & technology advisor to governments and companies. He helps organisations improve their business performance, use data more intelligently, and understand the implications of new technologies such as artificial intelligence, big data, blockchains, and the Internet of Things. LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent contributor to the World Economic Forum and writes a regular column for Forbes. Every day Bernard actively engages his 1.5 million social media followers and shares content that reaches millions of readers. Visit The Website © 2017 Bernard Marr , Bernard Marr & Co. All rights reserved © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a strategic business & technology advisor to governments and companies. He helps organisations improve their business performance, use data more intelligently, and understand the implications of new technologies such as artificial intelligence, big data, blockchains, and the Internet of Things. LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent contributor to the World Economic Forum and writes a regular column for Forbes. Every day Bernard actively engages his 1.5 million social media followers and shares content that reaches millions of readers. Visit The Website
  • 10. Title Subtitle Be the FIRST to receive news, articles, insights and event updates from Bernard Marr & Co straight to your inbox. Signing up is EASY! Simply fill out the online form and we’ll be in touch! © 2018 Bernard Marr, Bernard Marr & Co. All rights reserved