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Zalando’s Sustainable Makeover Has the Fashion Firm Seeing Green

Berlin-based Zalando is firing on all cylinders as it aims to make sustainability a part of its overall company ethos.

The European fashion and lifestyle platform has enacted a series of product and supply chain improvements in recent weeks, ranging from delivering packages via electric vehicles to an augmented selection of sustainably designed products.

The popular e-commerce website announced on Oct. 23 plans to offer same-day delivery to its Zalando Plus members via a three-month test run with a fleet of 24 electric vehicles in Hamburg, Germany. Using a fleet of electric-powered vehicles from Mercedes, Nissan and Renault—along with a micro delivery vehicle from ARI Motors—the company is working with various logistics partners whose drivers will take over delivery services in the area.

Zalando is responsible for both planning operations and providing the 600-station charging infrastructure for the service, though the company is empowering its partners to test “various models and operational processes for the use of e-mobility over the last mile.”

The aim is to deliver several hundred packages a day between 7 p.m. and 9 p.m., the company said in a statement. During the three-month pilot, Zalando also plans to surprise non-rewards members with silent upgrades on shipping to drum up support for the effort.

The move follows the company’s June partnership with Swiss Post and notime, the technology company for same-day and time-window-based deliveries, to deliver Zalando packages in the evening when Zurich-area customers are more likely to be home to receive them. Couriers fulfill same-evening deliveries using carbon-friendly bicycles and e-vehicles “optimized for urban logistics,” Zalando said.

In late October, Zalando also launched its first ever sustainable fashion campaign, entitled “Small Steps. Big Impact,” featuring an array of sustainable pieces from its collection of more than 20,000 products from 240 different brands. In 2016, the company began flagging sustainable designs on its site, making it easier for consumers to filter their selections through criteria ranging from organic cotton to vegan leather.

Now, seven new sustainability labels have been added to Zalando’s on-site Fashion Store, allowing consumers to shop selections based on environmentally friendly materials and processes, as well as third-party certifications like the Responsible Down Standard, the Responsible Wool Standard and the Leather Working Group.

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Because many of Zalando’s smaller brand partners have not yet been certified (sometimes due to the expense associated with product testing, or the complexity of their supply chains), the company has also implemented “Zalando labels” in addition to third-party standards. These distinctions highlight products using more environmentally friendly materials or processes that are less water-, energy- or chemical-intensive than standard approaches.

A Zalando label for “Eco Material” features products made up of at least 50 percent sustainable materials like Tencel, Lyocell or hemp, for example.

“Sustainability has been a part of our shop since 2016, but with this campaign we wanted to make sustainable fashion more easily accessible for our customers,” Jonny Ng, Zalando’s director of marketing strategy and campaigns, said.

“They told us it’s such a big topic it can feel overwhelming,” he added.

To promote the campaign, Zalando partnered with influencers who share an interest in sustainable fashion to create a series of short “Sustainable Style Edit” videos. Popular online figures like Sissi Pohle, Wilson Oryema and Pernille Rosenkilde presented curated looks from Zalando and explained their favorite brands’ environmental missions and product features.

“We’re exploring ways to make sustainability information accessible, meaningful and comparable, so that our customers can easily understand, spot and shop more sustainable fashion,” explained Sara Diez, the company’s vice president of women’s wear.

“In the past five months, we have managed to grow the number of flagged articles by 65 percent to now over 20,000 items and on-boarded seven new sustainability labels and third-party certifications,” she added.

In addition to product selection, Zalando has also committed to total carbon neutrality in all of its operations—including deliveries and returns. The company announced revamped processes around its self-operated properties, parcel transportation and packaging that would allow it to meet the goals of the Paris climate agreement ahead of schedule.

Earlier this year, Zalando made the switch to 90 percent renewable energy across all of its locations, and any carbon emissions that were not eliminated by these operational improvements are now being mitigated through carbon offsets. The company also plans to re-design its packaging by 2023, eliminating single-use plastics and minimizing other non-reusable elements. Currently, Zalando’s shipping boxes are 100 percent recycled, while shipping bags are made from 80 percent recycled plastics and beauty bags from 100 percent recycled paper.

With its private label, Zign, Zalando has committed to full sustainability by spring of next year. The brand’s own sustainable flagship label will include an assortment of shoes and apparel, focusing on quality and durability as well as revamped environmental supply chain processes.

“The fashion industry is facing sustainability challenges and we know we have been part of the problem. Going forward, our aspiration is to be part of the solution,” Zalando co-CEO Rubin Ritter said in a statement. “We see a clear link between acting sustainably and continued commercial success.

“Only those who incorporate sustainability into their business strategy will stay relevant for their customers and we believe that it will be a competitive advantage in the future,” he added.

Zalando’s increased focus on sustainability and its targeted marketing campaigns appear to be paying off quickly. The company announced a record-breaking number of site visits during the third quarter, surpassing more than one billion for the first time in history for an increase of 37.3 percent year over year. Since 2018, the company’s active consumer base has risen to 29.5 million, growing 17.5 percent.

The company’s orders also grew by more than a quarter (25.4 percent) from 2018, reaching 34.7 million. Revenue skyrocketed 26.7 percent to 1.5 billion euros ($1.68 billion), with the gross merchandise volume (GMV) increasing by 24.6 percent to 1.9 billion euros ($2.13 billion).

Speaking to the company’s robust financial growth, chief financial officer David Schröder said, “We had a strong third quarter with more active customers who more and more frequently look for inspiration on Zalando.”

The company will be working hard to maintain the momentum of high-pace growth through the holiday season and the end of the year, he added.