Will a sustainability push drive sales growth for Europe’s largest fashion e-tailer?
Zalando has launched a new sustainability strategy, “do.MORE,” that includes an immediate commitment to carbon neutrality. While driven in part by corporate social responsibility, Europe’s largest online fashion retailer also sees a major “business opportunity,” hoping growth stemming from the do-good initiatives offsets extra costs.
“We see a clear link between acting sustainably and continued commercial success,” said co-CEO Rubin Ritter in a statement. “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.”
The do.MORE program’s goals also include:
- Plans to eliminate single-use plastics by 2023;
- Applying principles of circularity to extend the life of at least 50 million fashion products by 2023;
- Zign, Zalando’s own sustainable flagship label, will feature a flag by spring/summer 2020 to indicate that it’s met one of the company’s sustainability criteria, which cover social, environmental and animal welfare standards.
In 2019, the German company switched to over 90 percent renewable energy across all locations. Carbon emissions that are not eliminated by operational improvements, such as renewable energy, order bundling or green delivery options, are offset.
The new program comes as online selling is being increasingly called out for the excessive packaging and carbon footprint impact that results from deliveries. A recent survey of European consumers from not-for-profit global movement Fashion Revolution found one in three consider the environmental impact when shopping.
Asked by analysts about the cost implications of the sustainability push, David Schröder, Zalando’s CFO, cautioned that the e-tailer wanted to advance targets around growth, profitability, customer satisfaction and sustainability “in parallel, and we are obviously not going to sacrifice customer satisfaction growth or profitability just to reach our sustainability targets even faster.”
Yet the sustainability emphasis is expected to drive sizeable top-line growth. Said Schröder, “We see that more and more customers take this topic seriously and also expect from destinations like Zalando, that we do more on this. And that’s why we also call our strategy do.MORE, actually.”
- Zalando Goes Carbon Neutral Starting Today – Zalando
- Zalando SE (ZLDSF) Management on Q3 2019 Results – Earnings Call Transcript – Seeking Alpha
- Zalando to push ‘sustainable’ fashion, cut emissions – Reuters
- Online Retailer Zalando Goes Green to Ward Off Amazon – Bloomberg
- Consumer Survey Report – Fashion Revolution
- Can we break our addiction to plastic? The future of packaging – Financial Times
DISCUSSION QUESTIONS: Do you see excessive packaging, the carbon footprint of deliveries or online’s other eco-challenges becoming increasingly important as a purchasing driver for consumers? Will Zalando benefit enough from a first-mover advantage with its commitment to sustainability to offset costs?