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The secrets of Zalando’s success

Zalando is now considered to be one of Europe’s most popular online shops for shoes and fashion, offering customers a broad selection of international and local brands at affordable prices and with the best customer care. The company was originally inspired by the success of online retailer Zappos.com, a US founded business which expanded rapidly to become the largest online shoe store. Zalando’s founders saw a gap in the European market for such a venture and in just 3 short years, the young, dynamic team have seen the company become one of Europe’s biggest online success stories.

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History

Zalando was founded in Germany in 2008, and its headquarters are still based in the heart of Berlin. It was founded by David Schneider, Robert Gentz and Rubin Ritter, three university friends who set their project in motion in their mid-twenties, originally under the name of Ifansho. The company started to expand internationally in 2009 when it began operating in Austria and has since then started delivering to a total of fourteen European countries.
When it all started in 2008, Zalando.de only offered a small range of shoes, from carefully selected brands. As a small company, the shoes were packed and sent to customers from the office basement. However in just a few short months the company enjoyed such success that it was necessary to find warehouse space to enable them to start shipping from the day customers placed their order. Fast and free shipping and returns were a great hit with customers, ending the chore that shoe shopping can be!
The online retail business is, by nature, a rapidly expanding one and it was no different for Zalando. Less than a year after launching the business, the team moved to a new office, four times the size of their first one. The same year, they began developing their first television commercial, branding the company as fresh, funny and fashionable.
2010 was a big year for Zalando. After initially just selling shoes, the company now extended its product range to include women’s, men’s and children’s fashion with a huge choice of brands. Later in the year, Zalando Sports was announced, offering customers a great range of sports shoes, clothes and equipment. In June, the company also launched the Zalando Beauty Section, making it a one stop shop for customers.
The company continued developing its marketing campaigns with television commercials and distribution of its self-titled magazine to each of its European markets. They have expanded into Austria, Switzerland, France, the Netherlands, the UK, Italy, Belgium, Spain, Sweden, Denmark, Finland, Norway and Poland.

Success

The rapidly expanding business owes its success to its dynamic and creative teams across Europe who work tirelessly to bring customers the latest fashion trends with a unique service approach. Such development requires a great deal of investment, and Zalando has done this right from the start, using revenue gained from their first online stores to invest in new markets both nationally and internationally.
In the tough economic climate that we have been experiencing in Europe in recent years, reporting growth and an increase in sales is no mean feat. However in 2012, in its most established region in Europe, which includes Germany, Switzerland and Austria (DACH), Zalando reached break-even (EBIT) while continuing to grow at high rates. At the same time, the company continued to invest in new markets to further bolster its leading position in Europe. Consequently, 2012 saw Zalando close with an improved overall EBIT margin of -7% of sales. A significant improvement on 2011 where they had an overall EBIT margin of -12%.
In the first quarter of 2013 Zalando continued to grow within Europe, mainly due to the overall trend towards online shopping and the company’s great reputation and leading market position. Operational excellence continues to be the driving force behind Zalando’s success, focussing on key areas including logistics and marketing and on its current geographical and environmental footprint.

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