Following today’s release of Zalando’s figures for the three months ending 30th June 2024; Louise Deglise-Favre, Apparel Analyst at GlobalData, a leading data and analytics company, offers her view: “Zalando’s revenue returned to growth in Q2 FY2024, rising 3.4% to €2.6bn, driven by its improved product selection, notably within sportswear and beauty, resonating well with consumers. This improvement made up for the decline in Q1, allowing H1 sales to rise 1.5% to €4.9bn. Zalando’s profits also improved in Q2, up 18.5% to €171.6m thanks to an improvement in inventory management and lower fulfilment costs. These encouraging results have led the retailer to confirm its full year guidance, expecting revenue to grow between 0% and 5% and profits to reach between €380m to €450m.
“Business-to-Consumer (B2C) sales rose 2.8% in Q2, as Zalando’s efforts to become more of a lifestyle destination by improving its sportswear, premium fashion and beauty offering started to pay off. The retailer launched a sportswear campaign in early June, aiming to capitalise on the 2024 Paris Olympics, featuring various athletes and celebrities such as Polish footballer Robert Lewandowski, German influencer Caro Daur and American rapper Pusha T. This helped the retailer achieve its best performing month ever for the sportswear category in June. Zalando also continued to strengthen its beauty offering, introducing brands Sol De Janeiro and GHD to its offering in late June, taking advantage of the high demand for these brands due in part to their social media popularity. The retailer also revamped its Beauty space on its website in early spring to feature more inspiring content such as “K-Beauty” and “Hot on Socials” edits.
“In May, the retailer added the brand Helmut Lang to its premium offering, releasing an exclusive editorial photoshoot for the occasion featuring its Designer Ambassador Rina Sawayama. By continuing to focus on the premium and sportswear segments of the apparel market, Zalando continues to differentiate itself from other online fashion retailers such as Shein and About You, allowing it to target a different consumer base away from young shoppers looking for affordable fast fashion. The retailer also continued to distinguish itself from its competitors with the use of technology, with plans to expand its AI-powered shopping assistant to more markets in the future following positive feedback from users in Germany, Austria, the UK and Ireland. The company also launched a weekly trend spotter feature, which allows shoppers to see emerging trends across six European fashion capitals such as Berlin, Paris and Milan, based on the items other shoppers have searched for, liked or added to their carts.
“Zalando’s Business-to-Business (B2B) segment rose 10.3% in Q2, as it continued to attract new retailers thanks to its comprehensive offering which allows its partners to leverage the platform’s expertise in logistics, software technology and services. While this division is still in its infancy, representing a minor share of Zalando’s revenue, it has the potential to be highly lucrative as more retailers look to strengthen their online propositions but lack the skills and resources to do so.”
