Dear readers,

At Zalando, we strive to be a diverse and inclusive company because we are convinced that it will make us a more successful business in the long term. Embracing diversity and inclusivity will allow us to understand the broad and diverse customer base that we serve in a fuller, more holistic way. It will allow us to compose multi-talented, highly motivated teams and make better decisions by incorporating more viewpoints and reducing our individual blind spots. That’s why we see diversity and inclusion as an opportunity rather than a challenge.

Progress to Date

To create a more diverse and inclusive culture at Zalando, we are taking a holistic approach focused on our four core stakeholder groups: leadership, talent, customers, and partners. The following paragraphs show our standing as of August 31, 2020, and where we want to go.

Leadership

Diverse leadership teams are critical for making better decisions that serve all team members. As a leadership team, we have a responsibility to ensure we are upskilled and well-equipped so that we can foster a diverse and inclusive workplace. To increase the diversity of our senior leadership teams, we are tracking the share of men and women¹. In 2019, we set ourselves the target of achieving a balanced representation of both women and men, indicated by a share of *40-60% for both genders in each of our top six leadership levels, by the end of 2023. We are also focusing on increasing the share of internationals in our six top leadership levels. With these first steps, we aim to address pressing imbalances. We will continue to progress and update our diversity targets going forward.

Note: The * acknowledges and actively includes non-binary genders.

¹ share of (binary) men and women

Women in Leadership

We believe that having both men and women in decision-making roles is not only the right thing to do, it is also good for business, driving more innovation and more diverse modes of thinking. We aim to create equal opportunities across Zalando, including our leadership teams. We have already achieved our *40-60% target set for 2023 in our Supervisory Board, which is now composed of 56% women (+33 p.p.). We made further significant progress in our SVP cohort, where the representation of women has almost doubled in just one year to 30% women (+13 p.p.), and in our Vice Presidents’ cohort, now boasts a share of 22 % (+3 p.p). However, to achieve our goal at each level, we are accelerating our efforts in our Director and Head cohorts by hiring and promoting even more women into these positions.
We recognize that the Management Board has the lowest diversity, where currently no women are represented. As we communicated last year, we see this lack of diversity as untapped potential and are committed to reaching our diversity target within the Management Board by 2023.

International Leadership Teams

As a fast-growing European company, we want to have people from all backgrounds and cultures on our leadership teams. As Zalando was founded and is headquartered in Germany, we started out with a workforce composition of predominantly German nationals. As our business scope and our hiring activities became more international, we have been fortunate to progressively hire more international teams from year to year. It is within this context that we have begun to refer to employees who hold a citizenship other than German as “internationals”. Since 2019, the share of internationals in our top six leadership levels went up by 8 p.p, and is now at 45%. The Supervisory Board and the Director level are the most international groups, with more than half of the members possessing an international background. At the same time, our data shows that we need to focus more on attracting international colleagues to our Management Board and SVP group.

Talent

At Zalando, we aim to create an inclusive and diverse workforce by attracting, developing and retaining a diverse mix of talent. We actively shape every step of the employee journey to make it more inclusive, and become the employer of choice for diverse talent worldwide. We are currently focusing on improving our internal processes in areas that impact workforce diversity and inclusion at Zalando: attraction and hiring, career development, compensation, engagement, and retention.

Workforce Diversity

Zalando’s community of around 14,000 employees is diverse in many aspects. Across the company, the share of women is 47%. Our workforce includes citizens of 139 countries. 51% of our employees are from outside of Germany, with particularly high representation from Poland (7%), France (4%), and Italy (3%). Many generations work together at Zalando, with employees ranging in age from 18 to 69 years old, making the average employees’ age 37.
We strive to foster an inclusive environment for people of all genders, including beyond the binary. It is our objective to enable a de-gendered experience wherever we can, for example, by not using gender pronouns in contracts, asking for preferred names, and having non-gendered bathrooms. Currently, our research shows that fewer than 1% of colleagues identify as non-binary.

Hiring

In 2020, our new hires were more internationally diverse than those of the previous year. Of all new employees who have joined Zalando over the past 12 months, 48% are women (+-0 pp YoY) and 67% are internationals (+4pp YoY). Our recruiting teams continue to ensure that we attract a diverse pool of candidates.

Career Development

One of the trademarks of an organization that supports women’s career development is how many leadership roles are filled through internal promotion. In 2018, we observed that promotion rates tended to be higher for men than for women at our leadership levels. We have since trained our promotion committees on unconscious biases. Last year, a higher share of women (19%) than men (16%) received a promotion across all job grades. Similarly, a higher share of international employees (19%) than German nationals (16%) received a promotion. Within leadership roles, the share of women who have received a promotion is now 9%, compared to 5% of men. Our long-term goal is to achieve balanced promotion rates for women and men.

Mentoring

In 2018, we started a mentorship program with the initial goal of supporting career development for women. In its first instance, the program paired 239 women with 111 mentors. Due to the success of the first round, we opened the program to all Zalandos in office roles, and turned it into an ongoing, year-round benefit. Today, as a result of extending the program to all genders, the program pairs around 200 Zalandos with more than 190 internal mentors.

Diversity in Tech

Creating diversity in tech teams is a particularly difficult and important challenge, which is why we are especially focused on this subject. Overall, the tech industry employs a lower share of women than men, ranging from ~10% to ~30% globally, and ~17%² in Germany. At Zalando³, women make up 17% of our tech workforce, ranging from ~10% in software engineering to ~52% in product design. 75% of them are internationals.

In line with our gender diversity targets for leadership, we aspire to increase the share of women in tech to *40-60% by 2023. We recognize that we currently have more men building our products, which are then primarily used by women. There is thus a huge opportunity for Zalando to become more engaged in the talent market. Therefore, Zalando pledges to invest five million euros in dedicated initiatives to attract, develop and retain more women in tech roles. Those initiatives include for example the development of communities of women applicants, the sponsoring of learning programs, advocacy and mentoring, and the improvement of Zalando’s employer brand and marketing strategy. Additionally, we are identifying ways to strengthen internal pipelines within Zalando, giving women who sit in other areas of the business the opportunity to transfer and expand their skill sets in order to retrain our existing female talent and and bring more women into leadership positions.

² https://blog.honeypot.io/women-in-tech-germany/
³ This refers to our ~1,830 colleagues who work in software engineering (~72%), product management (~14%), applied sciences (~8%), and product design (~6%).

Gender Wage Gap

The average gender wage gap between women and men working in similar positions (with comparable roles, working hours, education, and work experience) in Germany is ~6%. At Zalando, the wage gap is only 1%. This is thanks to a clearly structured compensation promise that we have made to our employees. It was developed through external benchmarking regarding employee roles and internal adjustments based on career advancement. This allowed us to drive a high degree of fairness in outcomes and mitigate some of our potential biases. With a gender wage gap of only 1%, women earn 0.99 euro for every one euro earned by men for a similar job.
 
When comparing women and men independent of their roles, the wage gap amounts to ~22% (vs ~21% in Germany), which is largely explained by the fact that Zalando currently employs more men than women in senior positions and tech job families, which receive higher compensation. We have set ourselves clear goals to further close that gap in the future.

Employee Engagement

Zalando’s company culture is rooted in a set of guiding principles: Our Founding Mindset. One of these principle values is to share as much information as possible, unless doing so will do more harm than good. We take the same approach when it comes to our D&I efforts.
 
We are pioneering an extensive, company-wide D&I survey to better understand our employees’ needs and experiences, as well as their perception of inclusion at Zalando. As a data-driven company, we hope to better understand the D&I status quo through quantifiable measurements, such as the representation of ethnic minorities, the number of colleagues who are (single) parents, and the size of our LGBTQI+ community, to name a few. For legal and cultural reasons, there are limits when it comes to collecting data on individuals and their experiences in Europe, and Germany in particular. In an effort to create more transparency, we are working with external experts and aim to launch a voluntary anonymous survey in early 2021 that will help us gain more insight.
 
Meanwhile, we are gleaning learnings from zBeat, our quarterly internal employee survey. Our overall score in the latest round in Q2 2020 suggests an engaged workforce, meaning most employees feel good about working at Zalando. Here are some insights from that survey:

On average, 75% of our employees agreed with the statement that Zalando is a great place to work.
Notably, teams with higher international diversity are more likely to rate Zalando as a great place to work. 76% of employees recommend Zalando as an employer in teams with at least 50% internationals, 73.1% in teams with under 50% internationals, and 71% in teams with no international diversity.
 
A positive attitude towards making mistakes suggests a basis of mutual trust and psychological safety within teams. 84% of our employees feel like they are allowed to make mistakes in their team.
 
To feel included, employees need to feel that they are being heard and valued, and that they are making an impact with their work. 78% of employees agreed that when they voiced their opinion, it was taken into account.

Our Employee Resource Groups

Zalando’s Diversity Guild was formed in 2015 as a grassroots initiative to build a diversity-driven community of support at Zalando. We formally rolled out our employee resource group (ERG) program in 2019 to support more communities organized around shared identity or experience at Zalando. ERGs create safe spaces where colleagues come together, foster awareness and support, and amplify employee voices to inform leadership about the needs of their communities. We currently have nine ERGs.

Disability Inclusion: Accessible Offices and Workplace Adjustments

One of the areas we are currently investing in is the accessibility of our offices. While public and state-owned buildings are held to high accessibility standards, privately owned buildings, like the office spaces we lease, are not. We conducted an independent audit of our headquarters in fall 2019 to identify opportunities to make our offices more accessible and inclusive for all current and future employees and visitors. With the support of experts, we developed the Zalando Design for All accessibility guidelines in February 2020. We have begun implementing these standards, such as more accessible bathrooms and automatic doors in our existing buildings, and are applying them to the plans for all future buildings.

In January 2020, Zalando joined the Valuable 500, a global group of businesses publicly committing to address disability inclusion.

The Zalando Code of Ethics

Zalando’s Compliance team is responsible for ensuring that we all work together in an environment that is safe, professional and inclusive for everyone. Our Code of Ethics sets expectations and guides our behavior towards each other, our customers, brands and other parties. We have several measures in place to support anyone who believes the Code of Ethics has been violated, and to administer consequences to react to such violations. As of this year, our Code of Ethics is referenced in all new employee contracts, and introduced during the onboarding process of all new starters. We have improved the guidance on our Whistleblowing tool to explicitly encourage the reporting of discriminatory incidents or microaggressions. We see an opportunity to encourage a culture where speaking up is regarded as a positive behavior for making Zalando a better and more inclusive place for everyone.

Support for Parents and Caregivers

In Germany, parental leave is paid by the government and covers 65%-67% of the caretakers’ average income over the last 12 months, but no more than 1800 euros, for the first twelve months of the child’s life. Parents have the legal right to take up to three years off per child without their job being in jeopardy. Additional support depends on company policies. At Zalando, we are constantly working on improving our support for parents. Acknowledging that the COVID-19 pandemic has made adhering to regular working hours even more challenging for caregivers, we have increased flexibility in regard to our working hours and developed additional offers in collaboration with the Zalando Parents ERG. Those include a solidarity fund to compensate for COVID-19-related additional financial liabilities for care activities, a revert sabbatical where employees can take time off now and reduce their salary at a later date, and a private childcare sharing program. Caregivers have also been able to take extra time-off to organize their set-up at home and to adjust their working time. Our standard company benefits include parent-child rooms in several of our buildings, and onsite daycare for kids at several of our locations in Berlin, Ludwigsfelde, Potsdam and Hamburg. Zalando grants three fully paid child sick days per parent per calendar year⁴. We also offer counseling services with external partners, and personal consulting with our Family Friendliness-Team.

⁴ Parents in Germany have a legal right to stay at home when their child is ill. However, whether those days are paid depends on the employer’s engagement.

Parental Leave

We review our parental leave data frequently. Between January 2019 and August 2020, 820 of our employees took parental leave, 330 of them men and 490 women. Looking at our entire workforce, 3% of all men and 5% of all women working at Zalando went on parental leave during this time period. Men generally take less time off, per employee 59 days of parental leave on average. Women on average took 351 days of leave. 41% of women who returned from their parental leave came back on a part-time basis, compared to only 10% of men. According to our data, 23% of women and 5% of men who returned from parental leave were already working part time before their parental leave. We recognize that this has an impact on the gender wage gap.

Mental Health

At Zalando, we live by the motto “high challenge, high support”, and that includes promoting the mental health of our employees with accessible offers for everyone. This year's global COVID-19 pandemic has put an extra strain on many employees’ mental health, especially on groups who might be more vulnerable during crisis, such as parents, caregivers or employees with pre-existing health conditions. To widen the scope and capacity of our existing confidential counseling offer, the Employee Assistance Service, we launched our Employee Assistance Program in July 2020. This 24/7 service offers free psychological support and guidance to all employees and members of their household. Additionally, we offer free meditation training and other classes, apps and services that promote mindfulness and wellbeing.

Diversity covers seen and unseen characteristics and experiences that make us unique. Inclusion creates an environment in which everyone is respected and connected.

Customer

Our customers are at the core of everything we do at Zalando, and we want to ensure that all of them have an inclusive shopping experience on our platform. We have committed ourselves to offering a flawless assortment for every style and occasion, allowing everyone to fully and freely express themselves. We also promise an experience of trust and respect on our platform. In the past year, we have accelerated our efforts and implemented several changes to improve our products and services for all customers.

Our guidelines for booking and styling models, retouching photos, and working with influencers have been critically reviewed and updated to contain more transparent and consistent process descriptions and guidance for diverse booking and inclusive content creation, aiming to ensure that all of our customers feel represented in our customer apps. We have also made our communication and user engagement more diverse by leading with stories about real people and by showing the diversity of our customers.

We are making our entire assortment more diverse, and are closing gaps in our beauty category, where we are focusing on offering a broader and more inclusive assortment for all skin tones.

One key project for our tech teams is the de-gendering of our websites and apps. As a first milestone, customers can now register on the Zalando online shop without inputting their binary gender information, selecting their fashion preference instead. We also stopped using gender pronouns in the titles of our promotional emails and now use customers’ names instead.
 
Another focus area is the overall improvement of the accessibility of our websites and apps for customers with impairments or disabilities. Since April 2020, the core customer journey on the Zalando web platform is AA complaint according to WCAG Accessibility Standards, meaning any user can access it without barriers or discrimination, for example, by using assistive technologies like screen readers. This is applicable to all the 17 markets where the Zalando shop is live. As part of our ongoing redesign, we are also making continuous improvements in the general usability on all our platforms, for example, for users with color vision deficiency (CVD).

We aim to be inclusive in all of our internal and external communications and have rolled out company-wide communication principles, glossaries, and guidelines for inclusive language, including visuals and tech languages, to enable and educate all of our employees to become more inclusive communicators.

In our consumer-facing marketing initiatives, we are striving to show our support for diversity and inclusion in all areas of life, address societal problems, openly stand with minority communities, and speak up against injustice and inequality. Recent examples were our Instagram initiatives on BLM, campaigns like ‘TogetherlamStrong,’ ‘RealLifeLuxury,’or ‘#ChangeNeverends, and our weekly fashion inspiration Instagram format #StyledayFriday, all of which embrace and celebrate diversity.

Being size-inclusive is essential in today's fashion industry, and at Zalando, we want to incorporate this into our company’s DNA. Rather than separating plus sizes as a different category, we are photographing our products on models of all sizes. We are also exploring how we can move away from the customer choosing between women, men and kids in the navigation of our online shop, making these categories just one of many ways for customers to browse our assortment. In our customer communications, we ensure that size inclusivity is communicated throughout the shopping experience.

Partner

As Europe’s leading online platform for fashion, we are in a strong position to shape the fashion industry for the better. We aim to build a new approach where we can engage with our partners and facilitate an open dialogue to drive positive social change together. To diversify our assortment and have it reflect our prospective and existing customers, we have initiated a plan to onboard at least 70 Black-owned brands by 2022. We are building strong partnerships with underrepresented communities, giving individuals the opportunity to gain work experience in the fashion industry and partnering with other brands so that they can experience working with a variety of companies in the industry.

We continue to refine and expand our standards and expectations for onsite content and product features so that our customers' experiences on the Zalando platform are fully consistent with our values. We ensure the prevention of offensive content across our platform, and will take appropriate action when a partner violates these standards. Our standards promote inclusive language, design, and representation so that we can be as diverse as the customers we serve. We share our content guidelines with customers and continuously review our standards for and classification of offensive content. We also put measures in place to screen and prevent this type of content from appearing on the platform based on our customer reviews.

What's next?

We are proud of the progress we have made over the last year, namely, increasing the representation of women at senior levels and creating tougher standards to ensure a more diverse and inclusive platform. At the same time, we know that we are still at the beginning of our journey, and that we need to intensify our efforts in order to achieve the targets we have set ourselves. Our ambition is to become a thought and practice leader in the fashion industry by putting resources, expertise, and a bold approach in place across our four focus pillars: leadership, talent, customers and partners.

To bring all Zalando colleagues together behind this effort, creating strong executive sponsorship and support is critical. Building on our continued progress, we want to accelerate our momentum and work towards creating a more diverse and inclusive place to work for our teams, and a more inclusive platform to customers and brands. Looking forward, we have made a number of flagship commitments across each of the four pillars.

Our Commitments for Leadership, Talent, Customer and Partner