Zalando’s latest report, The Economic Impact of Zalando in Europe, produced by the international research and advisory firm Oxford Economics, highlights the company’s substantial contributions to the European economy and society in 2023. The report reveals a total gross value added (GVA) of €9,521.6 million, with nearly 60% of this impact driven by the company’s supply chain.
This remarkable contribution highlights the central role ZEOS plays in Zalando’s operations and its broader economic footprint. As Europe’s leading online fashion and lifestyle platform, Zalando’s logistics strategy not only supports its growing customer base but also drives innovation in the e-commerce sector.
A logistics network that drives European growth
Zalando serves 25 European markets, with Germany, the Netherlands, Poland, Italy, and France benefiting most from the economic activity spurred by the company’s supply chain. As the company has expanded, it has gained valuable insights into the complexities of serving a diverse continent.
Although Europe might seem to be a single market, customer preferences and tastes vary widely across countries. Meeting these nuanced demands requires a logistics network that combines local relevance with global efficiency. This is achieved through advanced technologies and a customer-first approach.
We are a tech company whose success is powered by a physical logistics network and state-of-the-art automation. Through ZEOS and together with our brand partners, we will build a pan-European ecosystem for fashion and lifestyle e-commerce.
The backbone of Zalando’s business
Logistics is integral to Zalando’s operations, ensuring that almost 245 million orders placed by its 50 million active customers in 2023 are fulfilled efficiently. The company’s logistics capabilities also support its B2B business, enabling brands and retailers to leverage Zalando’s network for their own operations.
Delivering articles quickly is a core challenge. To achieve this, ZEOS strives to store products as close to customers as possible. For example, a French customer benefits from faster delivery if their order ships from a French logistics centre rather than from Sweden. However, this is not always feasible.
Advanced technology, such as machine learning and demand prediction algorithms, helps ZEOS allocate inventory to the most strategic fulfilment centres.
We aim to predict demand for specific products across Europe to keep transport distances as short as possible. To do so, we leverage several aspects and methods such as machine learning, pattern recognition, forecasts, and campaigns running on the Zalando shop.
This approach minimises transport distances, reduces emissions, and consolidates items into a single package whenever possible, which benefits both the environment and the company’s bottom line.
Warehouse operations are also supported by advanced tech, improving efficiency and reducing staff workloads. Tasks are optimised to minimise walking distances within logistics centres, enhancing productivity.
Tailoring logistics to diverse customer preferences
Understanding customer preferences is critical to ZEOS’s strategy. “Scandinavian customers prefer to pick up their deliveries at a pickup station, whereas Italian customers prefer packages to be delivered to their doorstep,” shares Marcus Daute, Director of Logistics Products & Strategy.
This regional insight shapes Zalando’s logistics network, ensuring customer satisfaction and convenience.
The overall goal of Zalando’s logistics operations is to optimise the user experience while ensuring efficient cost management.
How Kazar unlocked Europe with ZEOS
One notable example of how Zalando supports brands is the success story of Kazar, a Polish retailer specialising in shoes and accessories. Facing logistical challenges and a lack of expertise for international expansion, Kazar partnered with Zalando in 2021 to increase its online visibility and expand its reach.
Leveraging Zalando’s Partner Program and Logistics Solutions, Kazar gained access to millions of new customers in 22 markets across Europe. Kazar increased its net merchandise value by 148% compared to its first month of trading on Zalando, and expanded its assortment by 88%. By late 2023, Kazar exceeded 200,000 orders and achieved an 18% rate of returning customers—far above the industry average.
The turning point came with Kazar’s adoption of ZEOS. The localised fulfilment strategy significantly improved delivery times, enabling Dutch customers, for instance, to receive orders the next day. ZEOS’s multi-channel fulfilment solution also enabled Kazar to go live on other marketplaces, including About You.
The truth is that ZEOS’ offering is revolutionary. When we heard about the new multi-channel fulfilment solution, we knew we wanted to be a part of it and expand to new marketplaces.
A vision for the future
Zalando’s logistics and technology strategies underscore its commitment to delivering exceptional customer experiences while fostering sustainable growth. By integrating advanced tech and maintaining a focus on local relevance, Zalando is not just supporting Europe’s economy but redefining the standards of e-commerce logistics.
With its innovative approach and robust supply chain, Zalando is poised to remain a cornerstone of Europe’s fashion ecosystem, contributing to economic development and sustainability for years to come.
