Pre-owned and premium: That’s new at Zalando
/At the occasion of presenting its 2019 business numbers fashion E-commerce company Zalando also unveils its plans to strengthen the premium segment and to launch pre-owned fashion business.
1. Premium segment
In order to gain more market share in the for premium fashion, Zalando plans to double its premium and luxury assortment before year-end 2023. The company has recently added Moschino Couture, Proenza Schouler White Label and Alberta Ferretti, and will further expand the category.
As of today, Zalando’s premium assortment consists of over 260 brands including names like Victoria Victoria Beckham, Vivienne Westwood, and MM6. Individual brand stores allow brand partners to individually adapt their presentation in the Zalando Fashion Store. Presently, the premium experience is elevated through dedicated content and exclusive onsite campaigns. In the future, Zalando plans to improve the customer experience on site and with a new unpacking experience.
“Especially younger customers like to mix and match high-street fashion brands with sports and designer pieces. Premium has been our fastest-growing category in the past months, and we see a huge potential to build on that,” says David Schneider, Zalando co-CEO.
2. Pre-owned fashion The company will scale its pre-owned fashion pilot and launch “Pre-Owned” as a new category. Starting in the third quarter of 2020, customers will be able to buy curated pre-owned fashion, as well as sell their pre-owned fashion items to Zalando.
“As with any other category like ’Sport,’ ’Shoes’ or ’Accessories,’ Zalando customers will now be able to shop unique items that previously belonged to other Zalando customers. [...] Customers will also be able to sell their items to Zalando where, after a quality check, they will become available on the fashion store,“ says Torben Hansen, VP Recommerce, Zalando. “What’s so special about the pre-owned category is that customers will experience the same convenience proposition as they would shopping any other category on the store,” he adds.
3. The numbers
31 million customers (2018: 26.4 million), 145 million orders, more than 4 billion site visits and 4.6 million additional active customers: according to its data released yesterday Zalando has grown its business in 2019.
GMV (Gross Merchandise Volume) grew by 23.6% to $10.5 billion (2018: $8.4 bn), its revenues by 20.3% to $8.3 billion (2018: $6.9 bn).
Growth was especially pronounced in the fourth quarter with GMV up 24.3% to $2.8 billion and revenue up 19.5% to $2.2 billion at an adjusted EBIT of $123.4 million, pushed by record-breaking results during Cyber Week, Zalando states.
In line with its growth strategy for 2023/24, Zalando expects to grow its GMV between 20 and 25% and revenues to grow between 15 and 20% in 2020. The company expects continued profitable growth and an adjusted EBIT between $225 and 275 million, as well as capital expenditure of around $330 million. These expectations exclude a potential negative impact caused by the Coronavirus.
