Sustainability at Zalando: Future Focused Retail

Sustainability at Zalando is one of the key business principles which looks to align economic goals with social and environmental goals. We spoke with the Zalando team to discuss their sustainability journey to date, and how they see sustainability evolving within the eCommerce industry.

Sustainability at Zalando is one of the fundamental pillars of this leading eCommerce retailer. By 2023, the Zalando sustainability strategy aims to drive the business to become the leading platform for sustainable fashion in Europe.

With a transparent and honest approach, the Zalando sustainability journey offers excellent insight and tips for other retailers when building their sustainability strategy.

The Ecobahn caught up with the Zalando team to discuss their sustainability journey to date, and how they see sustainability evolving within the eCommerce industry.

Zalando 'do MORE' Sustainability conference signs
Zalando ‘do.MORE’ Sustainability Strategy

How did Zalando begin its sustainability journey?

Our approach to sustainability has evolved over-time. In our early years, our highest priorities were to overcome the fundamental challenges faced by every startup and prove we had a profitable business model.

Our perception of sustainability changed over the following years. In 2015, we defined our first sustainability strategy to govern the way we address social and environmental issues and align our economic goals with our social and environmental goals.

What are the fundamentals behind the ‘do. MORE’ strategy and how does this affect sustainability at Zalando?

Our vision is to be a sustainable fashion platform with a net-positive impact for people and the planet. And we’ve made very specific commitments for how we want to take fast action to tackle the most pressing sustainability challenges we face in our business.

Zalando CEO Rubin Ritter Presents do More Sustainable Strategy
Zalando CEO Rubin Ritter presents the ‘do.MORE’ Sustainable Strategy

Improving our own operations is one part of how we achieve our vision, but it also means reaching further; across the entire industry and value chain. Having a net-positive impact means that we run our business in a way that gives back more to society and the environment than we take.

From beginning to end, we recognize our influence on how brand partners source and make their products, and how our customers buy and care for them later. We’ve thought carefully about how we will get there. Our plan consists of three pillars.

  1. It starts by taking a stand on the most critical issues today. The planet is suffering from the effects of climate change, human rights and working standards are under threat, and resources are used in unsustainable ways. We’re raising the bar, acting first and bringing our partners on the journey with us.
  2. Secondly, we are going further to style with care, making it easy for people to shop the brands they want to, big and small, sustainably. And we’ll ensure our customers have the inspiration and information they are looking for, all in one place.
  3. Third, we want to shape our future. We’re experimenting and collaborating across the industry to create a more circular fashion system. And we’ll make sure the people in the workforce have the skills they need to thrive in a rapidly changing world.  
Zalando 'do MORE' Sustainability Mission Statement Sign
Zalando ‘do.MORE’ Sustainability Mission Statement

What advice would you give to other online retailers starting their sustainability journey?

We can’t change the fashion industry alone – we need to work hand-in-hand. We want to confront the fashion industry’s biggest challenges, and that means making sure our own house is in order first.

We intend to lead by example, so we’ll never ask our customers or partners to do anything we’re not already committed to ourselves. However, we see great potential in partnering up and bringing our partners on the journey to address today’s most critical issues – climate change, use of resources and worker rights.

One example would be joining the Sustainable Apparel Coalition. We use their independent tools to assess our ethical standards. Our advice is to partner up, exchange on ideas and seek out opportunities that have an impact on the whole industry. 

As an industry driven by technology, what future technological advances in eCommerce do you feel will have the most significant impact on sustainability at Zalando?

Technology enables us to make sustainability visible to customers, help them make more informed choices and optimize our processes. We invest to scale innovative digital solutions to increase supply chain transparency.

We believe that greater transparency is an important way to drive change, enabling companies and consumers to turn information into informed choices and in turn, creating a better fashion industry for all.

For example, to discover our sustainability assortment, customers can currently browse through the catalogue, use our sustainability filter or search for more sustainable products in the search bar. Zalando highlights products with the Sustainability Flag when they meet one of our sustainability criteria, which cover social, environmental and animal welfare standards. 

Zalando Online Sustainability PLP Filters
Zalando Online Sustainability Filters

Gaining transparency throughout our supply chain is an important focus, and we see technology as an enabler. We invested in seven solutions through Humanity United Working Capital Fund and supported two ventures ( & trustrace). 

Can you explain the zImpact scheme and how this is used to further sustainability at Zalando?

In 2018, we launched zImpact, our accelerator program, to scale innovative digital solutions to increase supply chain transparency. We believe that greater transparency is a crucial way to drive change, enabling companies and consumers to turn information into informed choices and in turn, creating a better fashion industry for all.

Since the beginning of the program, we have built a pipeline of around 90 for-profit and non-profit organizations that use technology to increase supply chain transparency. Among these, we have supported more than 30 startups, initiatives and NGOs with visibility, funding and the expertise of our employees. 

Zalando has always been a leader in sustainability ‘hackathon’ type events, bringing together people to solve a common goal. How important has this been in the technological advances you have made?

We ran another hackathon series in 2019 on supply chain transparency, thus building on our experience from last year and supporting 15 participating ventures. Beyond that, we ran a pilot with the venture Sustainabill to identify the barriers to suppliers sharing data in the supply chain.

Zalando Sustainable Technology Hackathon
Zalando Technology Hackathon: Sustainability Developments

Furthermore, we are participating in the Organic Cotton Traceability Pilot, which is about tracing organic cotton from farms to the gin where it’s processed for textile use. For 2020 we plan to share our findings with the industry through events and reports. 

eCommerce growth and over-consumption. How do you balance driving sales with sustainability at Zalando?

We see a clear link between sustainability and continued commercial success. That’s why it’s central to our group strategy and our overarching company vision to become the Starting Point for Fashion. 

Our sustainability ambitions will help us stay ahead of customer demand. Both our current and future customer base are calling for more sustainable choices in fashion.

Nine out of 10 Generation Z consumers believe companies have a responsibility to address environmental and social issues.

“This year, online searches for sustainable fashion, or related keywords, increased by 66% compared to 2018. So with customers increasingly searching for sustainable alternatives, the commercial opportunity is vast.”

By committing to sustainability, we can secure our long-term growth, stay relevant to our customers, and establish market-leading differentiation against our competitors.

How do you see global eCommerce evolving and how do you feel logistics will play a part in sustainability at Zalando?

Sustainability is an essential driver of our future business success, and that’s why we committed to tackling climate change head-on by reducing the carbon footprint of all our operations and working with brand partners to do the same.

Zalando Sustainable Last Mile Delivery
Zalando Sustainable Last-Mile Delivery Ideas

We are aware that transportation plays a crucial role in that. We are always on the lookout for innovative ideas that we can test, for example, when it comes to delivery on the last mile.

Since this summer, for example, the Swiss company, “notime” has been delivering Zalando packages to customers in the Zurich area with CO2-neutral cargo bikes and e-vehicles. This is not only flexible in terms of time and ensures delivery on the same evening, but is also a sustainable logistics approach.

Eco-Friendly Last-Mile Delivery Bikes
Zalando Sustainable Last-Mile Delivery Bikes

Another way how we reduce CO2 emissions is through Zalando fulfilment solutions, where Zalando takes over customer fulfilment for its fashion partners, from inbound to returns processing. ZFS bundles multi-brand orders together in Zalando’s logistics centres, which means one order, one parcel, one delivery. That minimizes packaging material, the number of parcels and therefore fewer deliveries.

These are two of many promising initiatives and pilots in logistics that we are looking into at the moment.

How does Zalando approach eCommerce packaging?

Packaging is a complex and challenging topic because, on the one hand, we want to use less material and choose more sustainable options, and on the other hand, we need to make sure that products are not damaged on their way to the customer – a damaged product is the least sustainable. 

Zalando Sustainable eCommerce Packaging Box
Zalando Sustainable eCommerce Packaging Box

We are experimenting with new packaging materials and solutions, intending to reduce the volume of packaging we use and switch to more sustainable materials.

From talking to our customers, we know that they share our sustainability values. In an online survey from March 2019, 85% of our customers agreed that environmentally-friendly packaging should be a significant dimension of sustainability for Zalando.

This is why our boxes are made from 100% recycled materials and why we switched our shipping bags to 80% recycled plastic and are converting our beauty bags from plastic to 100% recycled paper or other more sustainable materials. In addition to these changes, we are piloting reusable packaging.

Renewable Packaging Strategy Infographic
Zalando Sustainable Packaging Strategy Infographic

All recent shifts to more sustainable materials will reduce this year’s consumption of non-recycled plastic by about 625 tonnes. We’re going further to reduce our environmental impact by keeping materials in use for longer and designing out waste from our packaging.

We’ll start by becoming 100% single-use plastic-free by 2023. 

Can you explain the background and future for Zalando Wardrobe? How do you see circular fashion evolving at Zalando?

A linear fashion system is not sustainable, and we all need to make better use of the planet’s scarce resources. With our do.MORE strategy we commit to the principles of circularity and by 2023 we want to extend the life of at least 50 million fashion products.

Zalando Wardrobe Recommerce Strategy
Zalando Wardrobe Recommerce Strategy

One solution Zalando has today that ties into a more circular approach to fashion is Wardrobe. The free digital application makes selling pre-owned clothes as easy as buying new ones and helps fashion-lovers get the most out of their clothes.

Wardrobe Recommerce strategy explanation
Zalando Wardrobe Recommerce Strategy Infographic

Users can digitize their wardrobe to get an overview of everything they own, find and share inspiration, pick tomorrow’s outfit and easily buy or sell clothes within the app. By acquiring pre-owned clothes that otherwise might not have found a buyer to extend its life, Zalando ensures that more items get resold or repurposed. In our forecast for 2019, we will extend the life of more than one million fashion items with Wardrobe.

Further Reading: Zalando Sustainability- Company Profile. Read More