Rising inflation and increasing costs for households in Europe has contributed to a more cautious consumer sentiment, while an eased pandemic environment prompted changes in consumer preferences, according to Zalando. Customers are shopping for more seasonal and trend-based items and veering towards either high-end assortment or shifting from mid-market towards entry prices.

The first quarter of this year was impacted by macroeconomic factors, following strong growth from last year for the leading European online platform. The company’s gross merchandise volume rose slightly by 1 per cent to €3.2 billion, compared to extraordinarily strong growth in the first quarter of 2021. Revenue fell by 1.5 per cent to €2.2 billion, mainly due to the transition of the business to a platform model, Zalando said in a media release.

Robert Gentz, Zalando co-CEO, said: “Our business fundamentals are strong, and we are taking steps to improve our results. We are managing Zalando for the long term and have always used our business agility and adaptability to successfully respond to short-term challenges and consumer demand to emerge better and stronger. We remain confident that we will achieve our ambition to reach more than €30 billion GMV by 2025.”

Despite a challenging quarter, the company made substantial progress to deepen customer relationships and transform the business to a platform model. Customer engagement continues to grow as more customers visit Zalando more often and engage more frequently with Zalando’s increasing range of propositions. Similarly, Zalando’s platform services saw strong engagement as partners continued to leverage Zalando Marketing Services to increase their visibility on the platform and drive sales.

While macroeconomic uncertainty continues, Zalando is managing its short-term challenges by refining its offering to adjust to the changing spending patterns of its customers; improving order economics and implementing cost efficient solutions; and continuing to invest to provide best in-class customer experience, partner services and e-commerce capabilities.

In order to offer customers faster delivery times, Zalando is adding more fulfilment centres to further strengthen its logistics network. Construction has already begun in Frankfurt, Germany and Bydgoszcz, Poland, and, most recently, in the Paris region in France. Also, following successful market launches in six countries in 2021, Zalando will be launching in two new markets, Hungary and Romania, in May.

Fibre2Fashion News Desk (KD)

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