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Zalando’s online sales continue to soar as it expands physical presence

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Zalando saw visits to its website hit 734.3 million in the three months to the end of June, as the German etailer prepared to launch its first physical beauty store.

The figure is up from 595.2 million in the same period of 2017, a rise of 23.4 percent.

Active customers, defined as those who had made a purchase within the last 12 months, rose 16 percent year-on-year to 24.6 million.

Of particular note is the growing share of traffic on mobile, which was used by 78.4 percent of site visitors in the quarter compared to 69.7 percent last year.

Overall, group revenue grew 20.9 percent to €1.33 billion.

Figures from InternetRetailing’s research arm RetailX show growth in the brand’s web traffic consistently outpacing others in the IREU Top500 over the last two years. For example, from Q1 2017 to Q1 2018, Zalando’s web traffic in the DACH (Germany, Austria and Switzerland) region rose 9.4 percent compared to a 0.2 percent fall across all IREU Top500 retailers.

The results come as Zalando continues to pursue its strategy of investing to grow, as outlined by co-CEO Rubin Ritter in January. The company has predicted that it will grow revenues by up to 25 percent over the whole year, adding around €1 billion in revenues.

Recent highlights for Zalando have included the launch of local websites in Ireland and the Czech Republic in the second quarter, extending its presence to 17 European countries. It also launched an English language version of Zalando in Germany and an Italian version in Switzerland.

The retailer has also been steadily building its physical presence, adding two new physical fashion outlets in Leipzig and Hamburg this year. Along with the existing stores in Berlin, Frankfurt am Main and Cologne, this brings the total up to five.

At the end of July, Zalando launched its first bricks-and-mortar beauty store, the “Beauty Station” in Berlin’s Mitte district, in partnership with Estée Lauder.

It has also made important organisational changes. At the beginning of the year, Zalando changed its internal management structure to focus on sales channels rather than geographical regions. The change was designed to increase the level of responsibility and decision making within the channels.

In March Zalando announced it would cut 250 people from its marketing department, in what it said was an effort to bring the personalisation techniques from its online shop into its marketing approach.

The retailer created a dedicated Personalised Marketing department combining product managers, marketing domain experts, software engineers, data and AI scientists.

It has also brought together its creation and production teams under its Zalando Studios content arm and establishing a new Creative Lab unit to focus on collaborations and other marketing initiatives.

Meanwhile, teams in local markets were given direct responsibility for engaging local customers.

“The strong development in customer KPIs shows that our engine is running extremely well,” said co-CEO Ritter of the company’s latest results. “We’re excited to see that our customer-centric focus is paying off, despite a continued challenging fashion market environment.”

Image credit: Zalando

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