Zalando bigs up loyalty club for boost in fashion lovers

Online fashion and lifestyle retailer Zalando has hailed the success of its customer loyalty programme for boosting the number of active customers to more than 51 million last year, despite the economic uncertainty ravaging the sector.

The German-based business was founded in 2008 in Berlin by co-CEOs Robert Gentz and David Schneider and operates in 25 European markets. It said its Plus loyalty scheme more than doubled its membership to over 2 million compared with a year earlier, while its active customer base grew by 6%.

The company is also working to further boost loyalty by encouraging customers to shop across its different fashion and lifestyle categories, as those who do, spend an average of three times more than those who only shop in one.

In January this year, Zalando consolidated its global media account into Dentsu-owned iProspect, following a competitive pitch. MSQ-owned studio Brave Spark handles most of the company’s creative activity, and picked up a raft of industry awards for the Zalando Greenhouse experience launched at Copenhagen Fashion Week in 2021.

Zalando’s key financial figures for the full year 2022 all came within the ranges of the company’s updated guidance, despite what it described as a challenging economic backdrop. Gross merchandise value grew 3% to €14.8bn (£13.2bn) while revenue was flat at €10.3bn (£9.2bn); adjusted EBIT came in at €184.6m (£164m).

Looking ahead, Zalando said GMV is expected to grow by between 1% and 7% this year, although revenue is expected to trail this within a range of -1% to 4% compared with the prior year. It expects adjusted EBIT to come in at between €280m and €350m in 2023.

Gentz said: “The fact that we were able to continue to grow our customer base in the current economic environment shows that our core strategy is working. We want our customers to love Zalando and that’s why we are deepening our relationships with them. Understanding their needs and likes is crucial. Then they’ll keep coming back to us and stay longer with us.

“Our long-term ambition remains unchanged. We remain confident that we will return to double-digit GMV growth in the mid-term, by further executing on our vision and strategy, and eventually serve 10% of the €450bn European fashion market.”

Schneider added: “There’s a lot of growth potential within our existing customer base. On top of that, we see further opportunity in increasing penetration across our markets, where huge potential lies ahead of us.”