​Ranking: Victorian Plumbing and Zalando winning in productivity – find out why

Victorian Plumbing 

• Launched: 1999 
• Employees: 532  
• Group sales: £269.4m (2022) +0.2% 2021/22  
• Group staff costs to sales ratio: 4.6 

Online bathroom retailer Victorian Plumbing ranks at number two for the second time, with its strong performance this year echoing its 2020 ranking. 

It floated in mid-2021 on London Stock Exchange’s Alternative Investment Market, with a market capitalisation of around £850m, and its turnover inched up 0.2% to £269.4m in the year ending September 30, 2022. 

When it comes to productivity, its success is down to two core areas of focus. 

The first is marketing and marketing technology — the business has invested significantly in SEO and TV advertising over the past few years, and this has paid off as brand awareness, traffic and sales have grown. 

The brand is continuing to develop this space, with current projects and future goals including improved data segmentation and customer targeting. It is working with Google to use automation and machine learning to further improve SEO, and a number of in-house projects are underway including an AR app and AI chatbot. 

Second is a strategic approach to people development. Managing director Stephnie Judge says one of the retailer’s core values is “we develop and grow”, with the business prioritising personal development, people management and hiring from within. 

In addition, the retailer has developed higher margin own-brand lines — in the 2021, financial year, its 20-plus own-brands generated around three-quarters of the total revenue at a significantly higher margin than third-party brands.  

Logistics is also an area of focus. In January 2023, Victorian Plumbing announced plans to open a new purpose-built distribution centre in Lancashire, a £50m investment that would enable consolidation of existing sites when it opens in autumn 2023. In the longer term, it expects the site to be “broadly neutral” when compared to current property costs. 

Zalando 

• Launched: 2008 
• Employees: 17,043  
• Group sales: £8.9bn (2021) +29.7% 2021/22  
• Group staff costs to sales ratio: 4.9 

German fashion retailer Zalando has pursued a technology-driven strategy for several years now, and the results are paying off. 

Having built an efficient customer-focused platform, it is using its tech prowess to bring on more third-party brands and offering marketing, fulfilment and sales tools to others. As this develops, it is able to expand its range and boost revenue without significant investment in stock. 

In addition, it is generating multichannel efficiencies via its Connected Retail division, which allows bricks-and-mortar retailers to ship products directly to customers from their stores. 

The platform grew significantly through the pandemic and as of full-year 2021 had almost 7,000 stores trading on the Zalando marketplace. 

Like Asos, it is focused on the sticking point of returns, which can significantly dent productivity at fashion retailers, exploring virtual fitting rooms, other fit tools and 360-degree product views in a bid to reduce them. In 2020, Zalando acquired Swiss mobile body scanning developer Fision.  

Looking ahead, it is offsetting price increases by focusing on profitability and reducing marketing expenditure. In mid-2022, co-founder and co-CEO Robert Gentz said the retailer was planning to reduce marketing spend rather than cut jobs, with the intention of keeping employment steady. However, in February 2023 he announced the “removal of several hundred overhead roles”, but added that frontline operations roles in logistics centres, customer care and outlet stores, as well as operational roles in its Zalando Studios, would not be affected. 

These inisghts are just a snapshot of the report’s full findings.