Dusseldorf Since the IPO in mid-June, the share price of the online retailer About You has tended to go in only one direction: down. In parallel to many other e-commerce companies in the post-lockdown phase, it has steadily lost and is now more than 20 percent below the issue price.
But Tarek Müller, founder and CEO of About You, is quite relaxed about it. “I don’t care about the current market price,” he says in an interview with the Handelsblatt. One has to be prepared for the fact that a stock exchange price can sometimes take a rollercoaster ride in fast-growing companies. “Those who invest in us do so because they believe in our long-term vision,” he emphasizes.
An offensive in software development could now sharpen the company’s vision again – and give the share price new impetus. Because the company now wants to go on the offensive with its technological competence and expand it into a second pillar. About You will sell packages of web shop software and additional services such as logistics and online marketing to other retailers and brand manufacturers under the name “Scayle”.
“We were never a fashion company, we have always been a technology company that sells fashion,” explains Müller. “And it was clear to us from the start that when you set up such an e-commerce machine, it also makes sense to monetize this machine in various ways.”
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Most people only know About You as an online fashion retailer. But the company is developing its own e-commerce software, which it has been offering to other retailers for three years. It generated sales of around 84 million euros last year, and more than 60 dealers and brands use About You software, including well-known names such as Depot, Tom Tailor and Marco Polo.
Attack on SAP and Salesforce
In the first quarter of the current fiscal year, sales in this segment, which the company has previously referred to as Tech, Media & Enabling, grew by more than 100 percent. This means that it is growing significantly faster than the company as a whole, for which management expects an increase of 52 percent to sales between 1.725 and 1.775 billion euros this year.
“We have now optimized the system in such a way that we are getting faster and faster to set up new customers, and we are now able to carry out significantly more projects in parallel,” explains Müller. “That’s why we decided to go on the offensive with it.” About You is targeting dealers who have a turnover of more than ten million euros.
This clientele has so far largely used the software of the large system houses such as SAP and Salesforce, and their market share is estimated at over 90 percent. But most of the newly set up web shops are now switching to modern, modular software from start-ups such as Spryker or Commercetools, which can be adapted more flexibly to customer requirements. “That offers us great opportunities,” hopes About You founder Müller.
Because his company also works precisely in this segment. And there, definitely on par with the competition. Last year Spryker made an estimated turnover of around 80 million euros. Commercetools, which was valued at more than one billion euros in the latest financing round, will, according to its own statements, generate almost 45 million euros in sales this year.
About You wants to distinguish itself from these competitors with additional opportunities for customers. “We differ from other modern system providers such as Spryker or Commercetools in that we have more extensive functions and we offer an all-round carefree technology package,” promises Müller.
Call center and marketing in 26 languages
In addition, About You not only offers technology, but also other services along the value chain. For example, the web shops can store their goods at About You. About You then takes over the entire logistics for a commission – also for foreign markets.
In addition, retailers can outsource both their online marketing and customer support to About You. “We now have call centers for 26 languages,” emphasizes Müller. And the company can also handle online and influencer marketing in 26 languages.
It is precisely these additional services and competencies that seem to convince customers. Christian Gries, owner and head of the decoration chain Depot, emphasizes: “We made the decision for About You because it has modern and innovative shop software and is the only technology provider that also has expertise in the retail business itself.”
“In the end, these two points result in a greater range of functions and a higher degree of flexibility in the individualization and expansion of the online shop,” says Gries. Depot also use the additional marketing services from About You.
In addition, the choice of About-You technology helped with the expansion abroad. “Internationalization is also easy with this software,” explains Gries. This summer, Depot also opened online shops in France, Belgium, the Netherlands and Slovakia.
Zalando also offers software for other companies
The example of Zalando also shows how important technology competence has become for large online retailers. The fashion retailer took over the company Tradebyte completely back in 2016. The British start-up develops software-as-a-service solutions for other fashion retailers.
Zalando also helps other companies in the industry to establish direct contact with customers and to further optimize their online trading. In contrast to Scayle, Tradebyte specializes in the integration of retailers in online marketplaces instead of comprehensive shop software.
Tradebyte also plays a key role within Zalando. The beauty retailer Sephora is being brought onto the Zalando platform as a new partner, and Tradebyte is playing a key role in the technical integration. Tradebyte also helps with the software solution to connect new partners within the partner program at Zalando.
“No customer orders because they think the technology is so great, but everything that inspires the customer can ultimately be traced back to the technology,” says About You founder Müller, emphasizing the increasing importance of technical solutions. Every retailer now knows what he has to do to inspire his customers, but many do not get it implemented technically. “We can offer these retailers an extremely powerful engine for their e-commerce,” said Müller.
More: About You, Adidas, Hugo Boss, Puma and Zalando – is it worth re-clothing the depot now?