The profitability playbook: Customer insights in a changing market

The fashion and lifestyle industry is in constant flux. Tariffs, rising costs, and a new generation of discerning, price-conscious consumers are reshaping the market. We recently hosted an expert panel discussion featuring Zalando and ZEOS experts, to explore how brands can not only survive but thrive in this challenging environment. The key takeaway? It's all about understanding and delivering on what customers truly value. Watch the video or read the summary below to learn more.

The evolving customer: Value beyond just price

Today's consumers are rethinking their spending habits. It’s not just about finding the cheapest option; customers are now actively seeking true value, which encompasses quality, durability, and a compelling brand promise. As Damien Dutheil, VP of Strategy at Zalando, explained, it's critical for brands to communicate what customers are truly getting for their money, whether that's through higher quality, innovative materials, or compelling collaborations, emphasising that consumers are willing to invest in products that genuinely deliver on a promise.

Off-price: A strategic asset, not a last resort

Once perceived as a mere liquidation channel, off-price has strategically evolved into a crucial component of inventory management and customer acquisition. Kenneth Melchior, VP of Lounge by Zalando, highlighted that "Off-price is no longer a last resort, but a planned phase of inventory management," serving as a legitimate brand growth strategy. Modern off-price channels, often operating as "closed clubs" with limited-time campaigns, create an engaging "thrill of the hunt" experience that not only attracts customers but can also lead to full-price conversions, as evidenced by 55% of Lounge by Zalando customers eventually buying from Zalando.

The crucial role of logistics in customer satisfaction

Beyond product and pricing, logistics has become a fundamental driver of customer satisfaction and brand perception. ZEOS SVP Jan Bartels asserted that "Logistics is the new marketing," underscoring how an exceptional delivery and returns experience is now a basic expectation for 80% of shoppers, not a mere differentiator. Failed delivery expectations can significantly impact sales, with many customers abandoning their cart if their preferred delivery option isn't available, making efficient and reliable logistics a critical touchpoint that directly influences customer loyalty and conversion rates.

Crafting a flexible and profitable future

In today's complex market, a rigid "do-it-yourself" approach to logistics is becoming unsustainable. The panel stressed the importance of a strategic mix of sales channels and smart operational setups, advocating for fulfilling online demand from a single, virtual stock pool. This hybrid model, supported by advanced orchestration layers and "ringfencing" capabilities, allows brands to optimise inventory, minimise discounting, and ensure products are available precisely where and when customers desire them. As the panel’s moderator, Maria Villablanca, concluded, "Disruption isn’t something to brace against – it’s something to build for," emphasising that focusing on customer value and intelligent logistics is key to a flexible and profitable future.