Fashion e-tail giant Zalando’s recent expert panel discussion offered up some interesting insights as to how brands can not only survive but thrive in the current challenging environment.
Zalando
The key takeaway was that it’s all about “understanding and delivering on what customers truly value”.
It was a joint Zalando-Zeos discussion (Zeos is the firm’s fulfilment service) and it said that the fashion and lifestyle industry is in constant flux: “Tariffs, rising costs, and a new generation of discerning, price-conscious consumers are reshaping the market.”
And with today’s consumers rethinking their spending habits, “it’s not just about finding the cheapest option; customers are now actively seeking true value, which encompasses quality, durability, and a compelling brand promise”. As Damien Dutheil, VP of Strategy at Zalando, explained that “it’s critical for brands to communicate what customers are truly getting for their money, whether that’s through higher quality, innovative materials, or compelling collaborations, emphasising that consumers are willing to invest in products that genuinely deliver on a promise”.
The experts also agreed that off-price is now “a strategic asset, not a last resort”.
Kenneth Melchior, VP of Lounge by Zalando, highlighted that off-price isn’t just a liquidation channel but has strategically evolved into a crucial component of inventory management and customer acquisition.
“Off-price is no longer a last resort, but a planned phase of inventory management,” he said, emphasising its place as “a legitimate brand growth strategy”.
The experts also agreed that modern off-price channels, often operating as ‘closed clubs’ with limited-time campaigns, “create an engaging ‘thrill of the hunt’ experience that not only attracts customers but can also lead to full-price conversions, as evidenced by 55% of Lounge by Zalando customers eventually buying from Zalando”.
They also focused on the importance of logistics in customer satisfaction. Beyond product and pricing, “logistics has become a fundamental driver of customer satisfaction and brand perception. And Zeos SVP Jan Bartels said that “logistics is the new marketing”, underscoring how “an exceptional delivery and returns experience is now a basic expectation for 80% of shoppers, not a mere differentiator. Failed delivery expectations can significantly impact sales, with many customers abandoning their cart if their preferred delivery option isn’t available, making efficient and reliable logistics a critical touchpoint that directly influences customer loyalty and conversion rates”.
Another key point was the importance of flexibility as “in today’s complex market, a rigid ‘do-it-yourself’ approach to logistics is becoming unsustainable”.
That means the importance of a strategic mix of sales channels and smart operational set-ups, advocating for fulfilling online demand from a single, virtual stock pool.
“This hybrid model, supported by advanced orchestration layers and ‘ring-fencing’ capabilities, allows brands to optimise inventory, minimise discounting, and ensure products are available precisely where and when customers desire them,” Zalando said.
Panel moderator, Maria Villablanca, stressed that “disruption isn’t something to brace against – it’s something to build for,” emphasising that focusing on customer value and intelligent logistics “is key to a flexible and profitable future”.
