Home » Zalando wants to revolutionize the trade in second-hand fashion

Zalando wants to revolutionize the trade in second-hand fashion

by archyw

Düsseldorf As of today, customers in Germany and Spain can regularly muck out their wardrobes via Zalando – and even earn money with it. You can simply send your dresses, pants or skirts that have proven to be bad purchases or wrongly selected gifts or simply no longer fit but still look like new to Zalando.

The fashion ecommerce company with more than 34 million customers across Europe takes care of everything else: pricing, photos, delivery and also ensuring that the money is credited to the customer account or donated to aid organizations such as the Red Cross or Weforest. From October the service will also be offered in France, Poland, Belgium and the Netherlands.

With this, Zalando is picking up on a trend that has continued to develop. In the second-hand business, also known as recommerce, platforms from the Kleiderkreisel group or Ubup from Momox Fashion are already successful. Many used textiles are also sold on Ebay. Zalando now also wants to bring people to the second-hand fashion business for whom it was previously too time-consuming to take care of the process themselves.

An indication that Zalando could be right can also be found online. The Otto subsidiary About You recently launched an offer for second-hand fashion. The company does not currently want to comment on the new line of business, it is a so-called silent launch and communication has not yet started.

Second-hand fashion has so far been particularly popular among younger buyer groups, explains Saskia Hedrich, Senior Knowledge Expert for Sustainability and the Fashion Industry at McKinsey. “Our survey of consumers from Germany shows a clear generation difference,” says the expert.

While 40 percent of Generation Z (18 to 23 year olds) and 47 percent of Millennials (24 to 39 year olds) intended to buy more second-hand fashion, interest declines with age. That could change with the convenient service from Zalando.

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Torben Hansen, Vice President Recommerce at Zalando, knows that it will take time for the new business to generate profit. Just like at the start, when Zalando quickly and steadily captured market share because the free delivery and returns convinced customers and, thanks to venture capital, it was factored in that it took a long time for the business model to work.

Trend topic also for reasons of climate protection

But, says Hansen, Zalando has already made its first experiences in the past two years. Since then, the Wardrobe app has been around in Germany, where buying and exchanging new, used fashion with Zalando was already possible, but the customer base is still small. From today on, all Zalando customers can use the functions of the Wardrobe app. However, as Hansen also makes clear, at Zalando it is actually about goods that are as good as new: “They can already be washed and worn, but still have to be as good as new.”

In any case, Zalando has identified the topic of pre-owned, Hansen prefers to use this term as secondhand, as one that is currently growing steadily. The need is clearly there.

But whether Zalando will also be popular with millennials, who deliberately buy used clothing so that they themselves conserve resources, is still open. Student Zoe J. (name known to the editors) from Regensburg also confirms that many customers of the existing recommerce retailers buy used clothing for reasons of climate protection. She has been buying second-hand clothing for a long time and avoids “fast fashion”. So far, she has mainly bought her pants and shirts through clothing circles and also appreciates the stationary second-hand shops.

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According to Hansen from Zalando, this customer group is not so much in the foreground. “I see the interest in a large number of target groups, including customers who have never made second-hand transactions before.”

Achim Berg, head of the global Apparel, Fashion & Luxury Practice at McKinsey, has observed that more and more large retailers and brands are testing second-hand models. These new business models for second-hand fashion are just one aspect of the companies’ efforts to achieve their climate goals. In the industry-wide analysis by Mc Kinsey “Fashion on Climate” it turned out that “an expansion of the entire re-commerce market would not only have positive climate effects but also result in considerable cost savings.” Zalando wants 80 percent of the in the next five years Save carbon emissions from your own operations and 40 percent from private label production.

Zalando wants to offer more customer service

In fact, it has so far been a lot of work, especially for customers, when they sell items of clothing on the Internet. You need good photos, you have to pack the goods in a customer-friendly manner and take them to the post office, and hope that money and goods will change hands without any disruption.

If Zalando now takes on a lot, the cost of a second-hand item will also be higher than that of branded clothing. Every single part has to be examined and photographed, the sellers expect immediate processing. This means that Zalando has more work, while buyers of pre-owned jeans and clothes pay less than they would for a new item of clothing.
In order to make the process transparent, customers willing to sell can now see everything they have previously bought and kept from Zalando in a separate area of ​​the wish list, and the amount they can exchange for pre-owned items. Anything not bought from Zalando can also be uploaded. A price is then given based on pictures and your own information. There is no negotiation – always on the condition that the product is as good as new.

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With its new offer, Zalando has again exercised the platform concept. Because what attracts customers is not just the price or the large selection, but the convenience, Hansen speaks of convenience.

The company Vinted, founded in 2008 by Milda Mitkute ​​and Justas Janauskas in Lithuania, is convinced that the trend is towards full-service platforms where security, payment and shipping have to be guaranteed, and all of this integrated with just a few Clicks. Vinted operates the Kleiderkreisel and Mamikreisel platforms in this country with around 7.5 million users.

Vinted has installed buyer protection for around 30 million users in Europe and the USA. Personal bank details are not passed on to the seller. At the same time, the buyer can follow the shipment in the chat.

The start-up clearly shows the potential of the second-hand fashion business: The company is now financed by five investors and is the first Lithuanian unicorn, with a valuation of more than one billion euros.

More: Zalando Management Board: “You have come to the wrong address when it comes to dividends”

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