Our Business Model
Design and product selection
Our assortment consists primarily of proprietary products inspired by our Danish heritage and often with a quirky twist. Products are predominantly designed by our own design department or in close cooperation with external designers and our suppliers.
Our Category Management team together with our in-house designers continually optimise the assortment by applying retail insight and monitoring new trends, with the aim of maintaining a fresh and relevant product assortment that appeals to our customers.
We want to deliver value for money across our broad product range.
In 2016, we collaborated with external artists Misaki Kawai and David Shrigley on collections launched as part of two campaigns.
Our assortment includes categories ranging from home, hobby and party over toys, electronics and gadgets, to food and accessories and has a broad appeal across age and income groups.
Each month the assortment is refreshed with up to 300 new products divided in two product campaigns, typically adapted to seasonal themes and/or festive occasions, e.g. Valentine’s day, Back-to-School, Halloween, or Christmas.
To ensure relevance we focus on current trends but never shy away from trying new ideas. In 2016, we have among others successfully introduced vinyl records, pet accessories and virtual reality glasses.
The seasonal campaign products are complemented by our fixed assortment consisting of around 800 products that are relevant across seasons and that our customers should always be able to find in the store. Our products, both campaign and fixed assortment, are mainly offered at affordable round price points.
The price range of the product offering is typically from 10 to 100 Danish kroner with focus on keeping the majority in the lower price range.
Moreover, it is a key objective that the quality of products should meet or exceed the customer’s expectations, as well as suppliers and producers being able to fulfill Zebra’s corporate social responsibility (“CSR”) requirements (see CSR section).
While the continuous work with product selection, innovation and development is mainly carried out internally, production is outsourced to external suppliers who commit to our Supplier Code of Conduct and our quality and ethical policies, while working under our supervision.
All products go through our product safety process, which coupled with our test programme seek to ensure that quality and compliance requirements are met (see CSR section).
We have more than 600 suppliers primarily located in China.
A large part of logistics is handled by external operators facilitating an asset light and highly scalable logistics operation.
In 2016, this has been further extended with a new warehouse in China to support our expansion in the Asia Pacific region through a robust and cost-effective logistical setup.
Transportation is provided by forwarders, and while we operate our warehouse in Greve (DK), the warehouses in Barcelona (ES), Raunds (UK), New Jersey (US) and, Shanghai (China) are all operated by an external partner.
In 2016, we handled more than 500,000 pallets corresponding to more than 15,000 truckloads or if laid out as a floor approximately 90 football fields
Our stores are leased to minimise upfront investments and are located in high footfall locations on high streets and in popular shopping malls.
The typical size is between 150 and 250 m² of selling space. The store appears open and light, laid out in a maze simple to navigate, enabling the customer to seek inspiration and discover the full range of products as they go along. The décor is Scandinavian with unpretentious, practical, wooden furniture, white walls and warm lighting from simple pendants that illuminate the products.
The products are merchandised on pallet tables and slat walls and are all facing the customer while the friendly recognisable music creates a welcoming atmosphere.
We want to ensure a positive customer experience and we believe that our store employees play an integral role in doing so.
Their dedication and commitment to our concept is key for our customers’ shopping experience and the perception of our brand.
We owe a great part of our success to our store employees as they interact with thousands of customers on a daily basis.
We prioritise the development and training of our staff, as we believe that this will help us sustain a fun and inspiring customer experience.
Our rapid growth is supported by a flexible and scalable supply chain model, investments in new IT infrastructure and continued strengthening of the organisation and business processes.
It is a strategic imperative to continue to strengthen our backbone to cost effectively support future growth.
Financial and operating model
We have an operating model with a governance structure anchored around our management team. Management monitor and review the business units’ operational and financial performance aiming to proactively take advantage of opportunities as well as address potential challenges in our markets.
One area of focus is to ensure efficient supply chain operation and processes with low working capital requirements to service our stores effectively. We look to free up capital for further store expansion and future partner buy-outs. Our initiatives aim to improve inventory levels by lowering lead-time from purchase to sale, strengthening our forecasting processand improve payment terms with our suppliers as well as improving coordination across the organisation.
We want to simplify our business and increase transparency as we grow by implementing a common IT system.
Through investments in IT infrastructure, we want to streamline our business processes and ensure a greater level of standardisation to secure future scalability.
In 2016, we continued to work towards establishing a common group-wide ERP solution with an integrated Point of Sales (POS) terminal.
We have added 5 territories to the platform bringing the total to 10 territories across 8 countries, covering more than 200 stores.
In January 2017, all headquarter functions including finance, purchasing and store ordering went live on the new ERP platform.
The new group-wide ERP platform will strengthen the Group’s infrastructure, support the expected growth as well as enable optimisation of the existing stores, supply chain and category management.
Establishing new stores are generally achieved through 50/50 owned partnerships with a local partner, which ensures local entrepreneurship and significantly increases our organisational capacity for international expansion while reducing the risks when entering new markets.
A jointly owned local company is set up, and Zebra shares investments, costs and profits with the local partner. In other words, the cooperation is a business partnership, not a franchise operation.
The partnership is assigned a certain territory, with the size of the territories ranging from a region to an entire country.
Zebra owns the concept and brand, supplies the products, store interior and marketing material while the local partner is responsible for store roll-outs and day-to-day operations including staffing, training and local marketing under specific guidelines set out by Zebra.
Partners are typically individuals or a small group of people with an entrepreneurial mind-set who are appointed after a thorough selection process based on their capabilities to roll-out the concept as well as their retail experience, local market knowledge, managerial and financial capacity.
It is part of Zebra’s strategy to take full ownership of the local operating companies when this is assessed to be more beneficial than the partner model. Zebra’s operating companies in Denmark, Faeroe Islands, Northern Germany, Southern Sweden, Finland, Iceland, Scotland, USA as well as most of Poland are all fully owned.
Furthermore, at year-end 2016, Zebra took over seven partners’ shares in territories pertaining to Southeast and Northern England, the Netherlands, Barcelona, Madrid, Mallorca and Valencia in Spain, Berlin and Munich in Germany and the remaining parts of Sweden.