BACKGROUND
Hard to believe: The Berlin online shop Zalando has been part of the fashion world since 2008. Many will remember Zalando’s beginnings thanks to the television campaign ‘Schrei vor Glück’, in which a woman screams with joy as she greets the deliverer of her Zalando parcel. Over the years, Zalando has steadily expanded its offering. And now the platform is working on not only being an online shop, but the point of contact
for ‘new luxury’, streetwear and fashion inspiration.
On Monday evening, Zalando SE announced that it had acquired a majority stake in the lifestyle and fashion news platform and creative consultancy Highsnobiety. The price of the transaction was not disclosed.
The acquisition is in line with the ambition that Zalando has highlighted in recent years: to become the destination for ‘new luxury’, while increasingly embracing diversity and inclusion. With the acquisition of Highsnobiety, Zalando is gaining a lot of knowledge – and new followers – in streetwear in a very short space of time, which fits with the recently launched campaign that is all about streetwear.
Zalando’s journey is a journey with many steps, as a glance at the archives makes clear once again. There are a few moments in the company’s history that are worth highlighting in light of the announcement of the acquisition of Highsnobiety.
How Zalando has been expanding its expertise for years – a look at the archives
In 2010, Zalando, who was then two years old, announced that it was opening a French and a Dutch web shop. Zalando is still a relatively unknown player at this point. At the time, Zalando said that in the future it would respond more to the wishes of customers. One thing is for sure – the ad will not be forgotten anytime soon. The introduction to Scandinavia, Belgium, and Spain follows shortly thereafter.
Today, Zalando is much more than just an e-commerce company, it has a real platform business model. The basics of this can already be seen in 2011. At this point, Zalando opens a marketplace. By building partnerships, the offer of the German web shop can be significantly expanded. Cooperation with other parties has become increasingly important over the years – which is why Zalando keeps introducing new partner programs later on.
The first steps into the luxury segment were already taken in 2013, just not under the Zalando name. At this point, the company is launching a new project: the luxury fashion platform Emeza. The public can log in to the new platform with their Zalando data, but otherwise the luxury fashion platform does not give the impression that it is a subsidiary of Zalando. A little later, Kiomi is announced as Zalando’s first own brand. The brand caters to both men and women and mainly sells ‘fashion classics’. However, Emeza and Kiomi are not very long-lived; after just nine months of launch, the platforms and private label will be discontinued again. The development of the two projects took too much time, according to the then co-CEO David Schneider. Schneider points out that the luxury segment remains interesting for the platform. In May 2014, the renewed premium segment will therefore be launched at Zalando.
With the acquisition of Highsnobiety, Zalando continues to build on the goal of ‘Destination for new luxury’
That Zalando continues to surprise is shown in 2015, when the e-commerce company turned out to be a major new investor in the Berlin fashion fair Bread & Butter. It means the end of the fair as it was previously known and the launch of a new, consumer-focused fashion festival. The aim is to bring brands and people together at the event. Bread & Butter therefore returns as a three-day fashion festival (Bread &Butter by Zalando) where brands can present and sell their new collections directly to the public. The target group the first edition therefore differs drastically from the previous fashion fairs. Not fashion professionals, but fashion lovers between twenty and forty. Big names like Google and Marni are represented at the new event and part of special collaborations that Zalando is setting up. After the first edition, the ‘Bread & Butter by Zalando’ was supposed to return annually, but in 2018 it turns out that the event will not return. “Everything that we invest in and try should be strategic for us as a company and at the same time be scalable. With Bread & Butter we reached our natural limits,” was the announcement at the time.
With today’s knowledge, another chapter in Zalando’s history stands out: the acquisition of basketball and streetwear shop Kickz in early 2017. At that time, Zalando is already more focused on selling streetwear. The target group that belongs to Kickz is also a major reason for the acquisition. However, Kickz will not stay in Zalando’s portfolio for long. In December 2019, the online shop sold Kickz again because the product range of the two now overlapped significantly.
That Zalando the In June 2017, during the Zalando PlayDay in Berlin, the company reaffirmed its desire to become a fashion destination in Europe. The e-commerce company will expand its business model and offer B2B services. “We want to become the operating system for the fashion world,” it said at the time. From then on, fashion brands that offer their collections via Zalando can also transfer delivery to Zalando. The final platform strategy that the company is now pursuing is gradually taking shape.
.
Fashion alone is no longer enough. To complement its portfolio, Zalando introduces the 2019 beauty segment on his platform. The company is also beginning trials of a physical thrift clothing store called Circle this year. This step into the second-hand sector turns out to be a harbinger a year later, because Zalando is adding a category for used goods to the platform in 2020. This category features a selection of curated second-hand clothing. At the same time, Zalando announces that it will add luxury fashion brands to its range. With this step, the company underlines its mission to be the starting point for fashion. “Young people in particular like to combine high street fashion brands with sports and designer items. Premium has been our fastest growing category in recent months and we see unprecedented potential in this space,” said Zalando co-CEO at the time, David Schneider.
Return: How Zalando has been building and refining the platform for years
However, it does not stop at fashion, luxury items and beauty. Zalando wants more diverse and inclusive the e-commerce platform announced at the end of 2020. The product range is to become more diverse and comprehensive. In the announcement, the company says it offers beauty products for all skin tones and aims to partner with at least seventy brands led by people of color by 2022. The company also plans to start de-gendering its websites and apps in 2020. People should be able to register without having to provide information about their gender, and gender-specific pronouns are no longer used in communication.
If you look at Zalando’s steps over the past few years, it’s clear that the company isn’t striving for the look of an ordinary online shop. The e-commerce company has been working for years to find its own niche in the online fashion world. In the last financial year, Zalando SE exceeded the sales threshold of 10 billion euros thanks to growth of 29.7 percent. The net profit for the financial year amounted to 234.5 million euros. The company had a total of 48.5 million active customers in 25 markets in 2021 and 252.2 million orders were placed.
In the world of online retail, Zalando has to compete with various competitors such as About You, Otto or Net-a-Porter. It is therefore not surprising that Zalando wants to create its own niche. The company has been expanding its strengths for years, which earned it ninth place among the top 100 cross-border marketplaces Europe in 2021. The conclusion: Zalando is “the strongest European cross-border fashion marketplace” according to the report. How and if the acquisition of Highsnobiety will ultimately contribute to Zalando’s journey remains to be seen. One thing is certain: it won’t be the last surprising move of the fashion company.
This item was previously on FashionUnited.nl
released. Translation and editing: Barbara Russ