Zalando has become Europe’s biggest seller of shoes and clothing. The company started as an online site that sold flip flops in 2008, and quickly became the most important fashion online platform in the continent.
As the company’s website claims, Zalando goes one step further the traditional retail and catalogue sales by offering a broad selection of items with the benefits of their custom care process, company owned logistics centers, and unlimited opening hours.
Traditional retailers in Europe, as in the rest of the world, are seeing their customers walk away from their stores to shop online. In contrast, Zalando was one of the pioneers of the e-commerce and has grown into a giant, with increasing sales at a rate of 30% a year, in 2015 the company sold $3.3 billion. Zalando makes it easier to buy online even for customers in those countries where e-commerce is still a novelty. For example, in Italy and Poland shoppers can pay the postman in cash.
But not all retailers are racing against Zalando, some are starting to join the giant like the British retailer TopShop with whom Zalando started an alliance in 2014 and boosted sales with a popular tv commertial featuring Cara Delevigne.
Investors are also happy with Zalando’s performance, in the last three years the company’s shares have risen from €20 to around €40.
One key for this success was their TV commercials campaign that started in 2010 and quickly gained public attention. Using humor for the early commercials and then well-known models for the recent ones, the company reached almost 90 points in brand recognition in Germany.
Zalando’s competitive advantages are constantly underlined on their marketing campaigns: excellent logistic center that provides on time delivery, payment and customer care tailored to each country or market, and free returns are some of the constant themes not only on the tv commercials but also on their webpage and online ads.
With more than 5 million daily visits to its site, Zalando has also became a specialist in managing big data. The company uses this data to forecast change in fashion trends as well as to evaluate their marketing campaigns impact on sales.
The future for Zalando however, may not look as bright as their present. With big competitors entering the European market, such as Amazon and Alibaba, the company has to keep their customers engaged. Strategies that they may keep using are their very attractive online merchandising, and their ability to customize their operations in each different market to attract customers with different purchasing styles.