The story of Zalando serves as an excellent illustration of how a novel idea, coupled with a well-executed strategy, can evolve into a groundbreaking business. Launched in 2008, Zalando has grown to become one of the leading online marketplaces for fashion in Europe, but its journey to success was paved with careful planning, strategic decisions, and a deep understanding of customer needs. If you are asking yourself how to create a website like Zalando, this article is for you.
The genesis of Zalando
Zalando’s origin story is an intriguing one. Its co-founders, Robert Gentz and David Schneider, were inspired by the success of US-based online shoe retailer Zappos, sparking an ambition to emulate its success in Europe. The initial idea was simple: create a marketplace selling footwear with exceptional customer service, including free shipping and returns. They launched the business from their Berlin apartment, leading to the birth of Zalando.
Zalando was founded in Berlin, Germany by Robert Gentz and David Schneider. Initially, the company was started under the name “Ifansho”. The company’s early days were characterized by rapid growth. With financial backing from Rocket Internet, an established startup incubator, Zalando managed to secure a strong footing in the German market and beyond. By 2010, Zalando had expanded to Austria and the Netherlands, followed by France, Italy, and the UK in 2011.
Zalando’s expansion was not merely geographical. They diversified their product range by including clothing, accessories, beauty products, and more. This transformation from a specialized shoe retailer to a comprehensive fashion platform was a strategic move. It allowed Zalando to cater to a wider demographic and increase its market share. In 2014, Zalando went public, marking a significant milestone in its journey. The Initial Public Offering (IPO) not only established Zalando as a trustworthy platform but also demonstrated the company’s financial stability and potential for future growth.
The company’s journey reflects the potential of the European digital economy and serves as a model for aspiring e-commerce entrepreneurs. As Zalando continues to evolve, it is poised to further shape the online retail landscape, maintaining its position as a leader in European e-commerce.
The Evolution of Zalando: A Journey Through the Online Marketplace
The evolution of Zalando, from a small Berlin-based startup to a leading online fashion retailer in Europe, is a compelling narrative of adaptability, customer-centric innovation, and strategic growth. Zalando has continually transformed its business model, technology, and product offerings to meet the ever-changing demands of the digital marketplace.
Initially inspired by US-based Zappos, Zalando was focused on the online sale of shoes. The founders soon identified a more significant opportunity beyond shoes and rebranded as Zalando. Expanding its product line to include clothing, accessories, and later beauty products, Zalando embraced a comprehensive fashion retail model. This strategic shift, coupled with partnerships with more than 2,000 international brands, fueled its growth and attracted a broader customer base.
The real revolution for Zalando, however, was in the realm of customer service. Understanding that the inability to try items before purchase was a significant barrier to online shopping, Zalando introduced a bold, customer-centric approach. The company offered free shipping and returns, allowing customers to try multiple sizes and styles at home, and return unwanted items without cost. This strategy, despite being costly for the company, proved crucial in building consumer trust and loyalty, as it provided a risk-free and convenient shopping experience.
The technical evolution of Zalando
On the technological front, Zalando underwent a massive transformation. The company invested heavily in building a robust technological infrastructure and logistics network capable of handling high volumes of orders and returns efficiently. Simultaneously, Zalando continuously improved its website and mobile application, enhancing their user-friendliness, and ensuring a seamless shopping experience.
Further evolving its business model, Zalando introduced the ‘Partner Program’ in 2015, allowing brands and retailers to sell directly on its platform. This strategy enriched its product assortment and offered customers more choice and flexibility. Around the same time, the company launched Zalando Lounge, a shopping club offering limited-time sales for its members, and Zalon, a personal styling service. These innovations further boosted Zalando’s value proposition, offering personalized and exclusive experiences to customers.
To ensure its future sustainability, Zalando also embraced corporate responsibility. The company committed to a more sustainable fashion industry through initiatives such as its ‘do.MORE’ strategy, which aimed to become a net-positive fashion platform.
In 2021, Zalando has grown exponentially, serving over 34 million active customers across 17 countries. However, the journey doesn’t stop there. As the digital marketplace continues to evolve, Zalando remains committed to adapting its strategies, exploring innovative technologies, and maintaining its customer-centric focus to sustain its growth.
Zalando: the reasons of success
Key to Zalando’s success was its focus on customer service and convenience, much like its American predecessor, Zappos. The founders realized that one of the major obstacles in online shopping, especially for items like shoes and clothes, was the inability of customers to try on items before purchasing. To overcome this hurdle, Zalando introduced free shipping and returns, a policy that allowed customers to order multiple sizes or styles, try them on at home, and return those that didn’t fit or meet their expectations. This return policy, although costly for the company, proved to be a game-changer, creating a risk-free shopping experience that drew in a multitude of customers.
In addition to its customer-centric approach, like Zillow, Zalando also focused on a robust technological infrastructure. The company built a powerful logistics network capable of handling high order and return volumes, allowing for quick delivery times and efficient processing. Simultaneously, Zalando developed its website and app to be user-friendly, ensuring a seamless browsing and shopping experience for its customers.
The third pillar of Zalando’s success was its broad and varied product range. The company started out selling shoes but soon expanded into clothing, accessories, and beauty products. Today, Zalando offers over 2,000 brands, catering to a wide range of styles, budgets, and demographics. Its inclusive approach to fashion attracted a broad customer base, enabling the company to grow exponentially.
Top 5 of E-commerce Platforms Similar to Zalando
When you create marketplace like Zalando you have to deal with a lot of concurrence. Based in the United Kingdom, ASOS has firmly positioned itself in the global e-commerce industry. Like Zalando, it offers a wide array of fashion products for men and women, including clothing, footwear, accessories, beauty products, and gifts. ASOS distinguishes itself by featuring both popular international brands and its in-house collection. ASOS DESIGN, their in-house brand, continually keeps its products up-to-date with the latest fashion trends, offering a fresh and trendy alternative for consumers. However, ASOS lacks the regional focus that Zalando practices, making their offerings broader yet less personalized.
Similar to Zalando, Farfetch offers a large variety of fashion items, but it mainly focuses on luxury and designer pieces. The platform’s appeal lies in its ability to connect consumers with unique luxury items from boutiques around the world. This contrasts with Zalando’s approach, which caters more to mainstream and affordable fashion segments.
YOOX, an Italian e-commerce platform, is part of the YOOX Net-a-Porter Group, a leader in the luxury fashion sector. It offers a similar wide range of clothing, accessories, and lifestyle items as Zalando but primarily focuses on end-of-season designer brands at accessible price points. Moreover, YOOX is committed to promoting sustainable fashion, similar to Zalando’s “do.MORE” strategy for sustainability, which sets them apart from other e-commerce platforms.
Like Zalando, Boohoo offers a wide selection of clothing and accessories but excels in delivering fast-fashion products at extremely competitive prices. Boohoo also operates a pure-play online business model, like Zalando, which eliminates physical storefronts and passes savings onto customers.
Lastly, the world’s largest e-commerce platform, Amazon Fashion also offers a vast array of products ranging from budget-friendly clothing to high-end designer pieces. Like Zalando, Amazon Fashion provides a comprehensive selection and a user-friendly interface. However, Amazon Fashion differs by incorporating customer reviews directly into product pages, offering potential buyers unique insights into product quality and fit. Amazon’s advanced logistics network also ensures rapid delivery times, increasing its appeal for customers needing quick turnarounds.
