Covid-19: Zalando enjoys serious boost as shoppers flock online

Fashion and lifestyle retailer Zalando has announced it expects to significantly outperform forecasts for both sales and profits in the second quarter as consumers increasingly flock online for fashion.

The unexpected statement highlights how the company is seriously benefiting from the changing shopping patterns of consumers as a result of Covid-19. Zalando stated: “Expects a significant increase in sales and EBIT in the second quarter, which is significantly above market expectations. The reasons are the changing consumer behavior, in particular a strongly increasing preference for digital offerings.”

The company is also enjoying an uplift in revenues from greater participation of brands in its partner programme that enables them to use the Zalando infrastructure to target customers on a commission basis.

Aneesha Sherman of brokers Bernstein, said: “Zalando has been ramping up its Partner Program (commission model) sales, moving away from its traditional Wholesale platform model. The company is seeing increased interest in its Partner Program this year on the back of Coronavirus.”

There has also been an increased uptake in brands using Zalando’s additional revenue streams of fulfilment and marketing services that can be added on to the basic service and comes with the benefit to Zalando of higher margins. According to Bernstein, Zalando has been experiencing growth of 20% in GMV (gross merchandise volume) in its partner programme since Covid-19.

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