Zalando SE: Zalando grows customer base and progresses on platform transition in 2022, on path to be the Starting Point for Fashion
EQS-News: Zalando SE / Key word(s): Annual Results
Zalando grows customer base and progresses on platform transition in 2022, on path to be the Starting Point for Fashion
Berlin, March 7, 2023 // Zalando, one of Europe’s leading online platforms for fashion and lifestyle, is progressing on its strategy to grow its customer base and deepen customer relationships, outgrowing the online European fashion market in the three-year period through 2022. The number of active customers grew 6% to more than 51 million last year and Zalando’s loyalty program, Plus, more than doubled its membership to over 2 million compared with a year ago.
“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,” said Robert Gentz, co-CEO at Zalando. “We want our customers to love Zalando and that’s why we are deepening our relationships with them. Understanding their needs and likes is crucial. Then they’ll keep coming back to us and stay longer with us.”
The customer growth shows that Zalando is making progress to be the Starting Point for Fashion, the destination people choose for all their fashion and lifestyle needs, especially in a year when e-commerce tailwinds turned into economic headwinds. As consumers went back to in-store shopping post pandemic, e-commerce adoption reversed more than initially expected, albeit at higher levels than pre-pandemic. Low consumer sentiment resulted in elevated inventory levels across the market.
“The challenges of 2022 demanded us to be laser-focused on profitable growth and we acted quickly and decisively with measures that improved margins such as the introduction of minimum order values,” said CFO Dr. Sandra Dembeck. “Our healthy balance sheet allows us to continue investing in our strategic priorities whether that’s driving customer excitement around relevant brands and assortment or helping partners to drive their direct-to-consumer business across a variety of channels.”
To ensure profitable growth in 2023 and beyond, the company will continue to work on improving its margin, simplifying the organization and investing selectively through the cycle to take advantage of growth opportunities. The company started a program in February 2023 to reduce complexity and embrace simplicity, pragmatism and frugality. This involves removing several hundred overhead roles across many of Zalando’s teams.
To earn and retain the attention of customers, the company is improving the relevance of and curating its assortment. With the help of Highsnobiety, which the company acquired last year, it is highlighting fashion through storytelling, launching a fashion discovery experience that strengthens the emotional bond with customers. Zalando has done more than 80 curated product drops since the start of the collaboration. These drops were viewed by over 7 million unique users, who showed increased engagement with much higher click rates.
To boost customer loyalty, Zalando is encouraging customers to shop across the different fashion and lifestyle categories, such as Fashion, Beauty, Designer and Lounge by Zalando. The proportion of customers that shop in more than one product category, or proposition, is close to 20% and growing. On average these customers' spend is more than three times that of customers who only shop in one category. Similarly, Plus customers, members of the loyalty program, typically spend about three times that of non-plus members.
“There’s a lot of growth potential within our existing customer base,” said David Schneider, co-CEO at Zalando. “On top of that, we see further opportunity in increasing penetration across our markets, where huge potential lies ahead of us.”
Another long-term growth opportunity for Zalando is to productize its e-commerce infrastructure in order to enable other digital businesses across Europe. In October 2022, Zalando launched a pilot of its new offering for fashion and lifestyle brands called Multi-Channel Fulfillment. Up until this date, the company only offered logistics services to brands selling on the Zalando platform. Now it is extending its logistics solutions for brands selling via other platforms as well as through their own online shops. The offering has generated a lot of interest and partners such as Pepe Jeans, a brand of AWWG Group, are already on board.
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. GMV is expected to grow between 1% and 7% this year. In line with the platform transition and the increasing share of the partner business, revenue growth will trail GMV growth. Revenue is expected to develop in the range of -1% to 4% compared with last year.
In this environment, Zalando will continue its focus on profitable growth delivering margin progression while continuing to invest through the cycle for future growth. It expects adjusted EBIT to be between 280 million euros and 350 million euros in 2023. The company expects to approach the higher end of its 3-6% adjusted EBIT margin goal by 2025 and reach double-digit margins in the long term.
“Our long-term ambition remains unchanged,” said Gentz. “We remain confident that we will return to double-digit GMV growth in the mid term, by further executing on our vision and strategy, and eventually serve 10% of the 450 billion-euro European fashion market.”
Zalando hosts its virtual Annual Press Conference today. The Annual Report 2022 is available on the Zalando corporate website. Zalando will report the results for the first quarter 2023 on May 4, 2023.
Zalando group – key figures (in EUR million)
Zalando group – key performance indicators
Definitions are available in the Annual Report.
Zalando is a leading European online platform for fashion and lifestyle. Founded in Berlin in 2008, we bring head-to-toe fashion to over 50 million active customers in 25 markets, offering clothing, footwear, accessories, and beauty. The assortment of international brands ranges from world famous names to local labels. Our platform is a one-stop fashion destination for inspiration, innovation, interaction and shopping. As Europe’s most fashionable tech company, we work hard to find digital solutions for every aspect of the fashion journey: for our customers, partners and every valuable player in the Zalando story. Our vision is to be the Starting Point for Fashion and a sustainable platform with a net-positive impact for people and the planet.
07.03.2023 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID:
End of News
EQS News Service