Zalando Aims to Grow by Deepening Relationships With Customers

Zalando aims to keep growing even as the economic backdrop remains challenging.

Over the past year, the online platform serving the fashion and lifestyle market in Europe has grown its number of active customers by 6% to 51 million and doubled the number of members of its loyalty program, Plus, to 2 million, Zalando said in a Tuesday (March 7) press release.

“The fact that we were able to continue to grow our customer base in the current economic environment shows that our core strategy is working,” Zalando Co-CEO Robert Gentz said in the release. “We want our customers to love Zalando and that’s why we are deepening our relationships with them.”

Other fashion marketplaces and retailers have been impacted by economic headwinds too. For example, fast-fashion eCommerce marketplaces Wish, Shein and Temu are reeling in the face of inflation and a shift in consumer buying behavior.

During 2022, Zalando introduced minimum order values to achieve profitable growth, acquired Highsnobiety to help highlight fashion through storytelling, began offering logistics services to brands that don’t sell on its platform and encouraged customers to shop across its different fashion and lifestyle categories — boosting the percentage of customers who do so to 20%, according to the press release.

“There’s a lot of growth potential within our existing customer base,” Zalando Co-CEO David Schneider said in the release. “On top of that, we see further opportunity in increasing penetration across our markets, where huge potential lies ahead of us.”

In February, the company removed several hundred overhead roles across many of its teams as part of its effort to improve margin and simplify the organization, according to the press release.

About six months earlier, in August 2022, Gentz told the Financial Times that Zalando thought the company would be able to avoid the mass layoffs seen at Amazon, Klarna and Shopify.

Looking ahead, Zalando expects its GMV to grow between 1% and 7% in 2023 while its revenue growth trails behind at –1% to 4%, the release said.

“While consumer demand is hard to predict in the current environment, Zalando’s ambition remains to continue to outperform the online fashion segment in terms of growth,” the company said in the release.