Zalando, Europe's biggest online retailer for shoes and fashion, is on its way to reaching a global turnover of €1.3 billion this year, according to a report that is not being denied by company executives. After successful entries into Germany, Austria, Switzerland, the Netherlands, France and the U.K., the German online retailer has decided to expand further. It opened its Swedish store on April 11 and its Belgian online store on April 25.
However, the growth path has not come to an end: Zalando expanded to Spain in May. All foreign websites are managed by sales teams of native speakers directly from Zalando's headquarters in Berlin. Clients from outside Germany can return their purchases as well, but instead of the 100-day time frame allowed in Germany, it is only possible within 30 days outside the domestic market. Shipping and return are free of charge in every market.
After expanding to Spain last month, Zalando is now organizing its next expansion moves – this time to Turkey and Poland. On its website, it is already searching for native speakers to assume several positions in order to build up its presence on the Turkish and Polish markets. The Polish market is interesting due to its geographical proximity to Germany and the Turkish market due to its historical connection to Germany.
Zalando is the market leader in the German online retail market and the brand reached an awareness level of about 95 percent among the German population. In the Netherlands, the brand has reached an awareness level of 92 percent and is the biggest online retailer in the fashion segment.
Zalando offers about 100,000 products and more than 1,400 brands. The product range now includes exclusive accessories, beauty products and sporting goods next to its biggest product segments, shoes and apparel. Its unexpectedly strong growth has led it to invest an additional €70 million to add two more halls, for an additional 48,000 square meters, to its new logistic center in Erfurt, whose first hall is due to open this summer with an initial surface of 78,000 square meters.
While Zalando concentrated on only shoes at the beginning, the company diversified its product range soon after, offering apparel, sporting goods and, from March this year, also home equipment and accessories. The company also sells products of its own private label, called Zalando Essentials. A team of six designed at its head office in Berlin are further developing Zalando's collection of men's apparel. Future plans include a collection of clothing for kids.
At the same time, Zalando is attracting other strong brands to its retail concept, such as Ralph Lauren, which is now also on offer on Zalando's online stores, as well as a big kid's brand.
In April, Zalando opened its first permanent brick-and-mortar store in Berlin, offering surplus merchandise from previous seasons. The 1,000-square-meter outlet store offers shoes, clothing and accessories from previous seasons at prices between 30 and 70 percent below those posted on its website. Clients who wish to enter the store need to register online for their free “outlet card,” which allows them access to the store. Zalando is now planning to open additional outlet stores in other markets.
A new Zalando TV spot will be launched in September this year, focusing more on apparel. Radio commercials will be supporting the TV spot.
Its aggressive advertising on prime time TV has helped Zalando to reach a high penetration in France, where about 9 million visitors check out its website now each month, making it one of the five most visited online stores in the country. According to a report, which has not been denied by the company, Zalando achieved a turnover of more than €120 million in 2011 in France, pulling it ahead of strong local players such as Sarenza and Spartoo..