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Zalando: Competing for convenience

Defining themselves as Europe’s most fashionable tech company, combined with maintaining a start-up mentality, Zalando has innovation at its core. As they release their Q1 results, demonstrating their positive and on-target capturing of market share, we take a look at Barometer data to assess the brand’s position in the UK market.

In just ten years, Zalando has grown to serve 21m active users globally, a clear demonstration of the brand’s propelling growth. Zalando’s focus on technology is clearly evident in their SEO capabilities; effective across Europe where the brand is becoming a cultivating authority, however focus on the UK and the brand is relatively unfamiliar, weakening the effect. Within the world’s most competitive e-commerce market, it comes as no surprise that Zalando lags behind the likes of Amazon, ASOS and Zara in the UK when it comes to number of consumers, demonstrating their lack of awareness and acquisition.

 

Q: When, if ever, have you bought womenswear from the following retailer?

The penetration of the retailers over the last 12 months (stated as a percentage of all respondents who state ‘PURCHASED – in the last 12 months’).

 

However, looking at Average Stated Spend vs. Purchase Frequency online, with their extensive brand offering, free delivery and 100 day return policy, it’s unsurprising that Zalando succeeds in gaining trust amongst those consumers it acquires, driving high purchase frequency.

 

 

2017 saw Zalando focus on reinvesting in long-term growth and this looks set to continue throughout 2018, with their strategy focusing on ‘assortment, digital experience, convenience and emerging business’. We’ve seen the e-tailer transition to more of a brand platform, building partnerships with brands and charging commission rather than maintaining their own inventory, minimising risk yet expanding its offering.

 

These partnerships put brands in control of assortment, prices and image, differentiating from Amazon’s commoditised marketplace proposition, rather than a fashion experience, which is likely to prevent more luxurious brands from listing. Whilst this strategy is demonstrative of Zalando creating a safeguard against Amazon in Europe, who are more likely to favour a homegrown retailer than a global corporation, the UK market is a lot more volatile.

 

In the UK, Zalando not only has to put up a fight against Amazon but will also need to ensure they are in keeping with the new measures of success planted by online pureplay giants such as ASOS and Boohoo. Not only are they defining the UK market’s shopping habits and expectations but they have the ability to really resonate with their incubated, targeted audience, enabling them to build valuable relationships and pitching them a holistic branded lifestyle rather than just a product.

 

Should Zalando find the right balance between providing convenience through technology and innovation (resisting the threat of Amazon), and coinciding with the new measures of success, then their position in the UK market will be clear. In doing so, Zalando will be able to drive home brand awareness, capitalising further on their SEO capabilities and investments and utilising their trusted nature to build further on purchase frequencies.

 

Barometer is WGSN’s daily retail consumer intelligence tool across menswear and womenswear.

Every day, we interview 260 consumers on 300 fashion retailers across 150+ measures, allowing you to fully understand where you’re winning and failing in the eyes of your consumer. Get in touch to know more

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  • Florence GOUNI-T de G

    Interesting article!
    However, I am missing in here the UK share sales in fashion within Europe, and customers’ growth rate from retail to online buying, since Zalando serves customers across many more countries than just the UK. What if the UK is already a fashion mature market and there are much more interesting online growing markets in Europe (with more new customers to capture)?

    There are some interesting data to get from here to give more contrast to the above article:
    https://www.statist

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