Zalando pledges carbon-neutral logistics as Q3 business booms

Zalando, boosted by strong quarterly sales growth, is putting ‘green logistics’, including CO2-neutral deliveries, at the centre of a new sustainability strategy aimed at making the online fashion retailer “part of the solution, not the problem”.

The German-based online fashion and lifestyle platform announced yesterday that it was committing to carbon neutrality in its own operations as well as for all packaging, transportation, deliveries and returns with immediate effect.

The pledge is part of Zalando’s new sustainability strategy ‘do.MORE’, which aims for a net-positive impact for people and the planet. With this, the company claims it will meet the goals of the Paris climate agreement for its own operations ahead of the agreement’s schedule.

Co-CEO Rubin Ritter declared: “The fashion industry is facing sustainability challenges and we know we have been part of the problem. Going forward, our aspiration is to be part of the solution. We see a clear link between acting sustainably and continued commercial success. 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.”

Zalando is aiming to sell more sustainable products, and now offers 20,000 articles labelled as ‘sustainable’ for meeting one of seven different criteria. In addition, its private label ZIGN, which offers shoes, clothes and accessories, has committed to full sustainability by spring/summer 2020 and will become the company’s own sustainable flagship label.

At an operational level, this year Zalando has already switched to over 90% renewable energy across all its locations. Carbon emissions that are not eliminated by operational improvements, such as renewable energy, order bundling or green delivery options, are offset. 

In terms of packaging, the company aims to minimise waste, re-use materials and eliminate single-use plastics by 2023. Already its boxes are made from 100% recycled materials, shipping bags from 80% recycled plastics and beauty bags switched to 100% recycled paper. 

In a reusable packaging test, Zalando is currently working with Finnish start-up RePack to deliver orders to some 10,000 customers in Finland, Norway, Sweden and Denmark with reusable shipping bags that can be used repeatedly for shipping and returns. After taking out their order, customers can attach an enclosed return label to the empty bag and post it back to a central collection location from where it is transported back to Zalando’s fulfilment centre near Stockholm to be re-used.

On the logistics front, the company last week launched a three-month test of same-day (evening) deliveries of several hundred parcels daily to Zalando Plus customers in Hamburg with 24 electric vehicles. The climate-friendly fleet consists of four different e-vehicle models from Mercedes, Nissan, Renault and a micro delivery vehicle from the manufacturer ARI Motors.

For the project, Zalando is working with various logistics partners whose drivers will take over the parcel delivery in the city area. The e-commerce retailer is responsible for planning and providing the charging infrastructure, enabling the partners to test various models and operational processes for the use of e-mobility over the last mile. 

"Zalando is working on developing sustainable solutions for logistics. The new pilot in Hamburg is another important step along this path and we are delighted to be able to offer customers in Hamburg climate-friendly services. With over 600 charging stations in the city area, the Hanseatic city is an ideal place to test climate-friendly logistics concepts with our logistics partners," said Christian Scheffler, Director Zalando Premium Logistics.

In a separate logistics move, Zalando’s dedicated shopping club Zalando Lounge officially opened its first international fulfillment center in Olsztynek, Poland, earlier this month. With a size of 130,000 sqm, the site, which is managed by Fiege e-Com North, will serve the growing customer base of Zalando Lounge, which currently has more than 15 million members across 13 European markets.

Meanwhile, Zalando today released strong results for the July – September 2019 quarter, showing revenue growth of nearly 27% to €1.5 billion as the active customer base increased by 17.5% to 29.5 million, total site visits topped one billion for the first time, and the number of orders increased by 25% to 34.7 million. Top growth markets included German-speaking countries, Spain, the Nordics and the Czech Republic.

Overall, the Berlin-based company made a small operating profit of €6.3 million compared to a €38.9 million loss last year, and the net loss was reduced substantially to €13.6 million.

CFO David Schröder said: “2019 has been a very successful year for us so far. We had a strong third quarter with more active customers who more and more frequently look for inspiration on Zalando. We are growing at a high pace across all regions. We want to maintain the momentum for a strong finish to the year and look forward to celebrating together with our customers the upcoming Cyber Week and the festive season.”