Zalando: Making Fashion Inclusive

Case Code: HROB270 Case Length: 22 Pages Period: 2024 Pub Date: 2024 Teaching Note: Available

Price: Rs.400 Organization: Zalando SE Industry: e-commerce Countries: Germany Themes: Organizational Behaviour, Diversity and Inclusion Workplace Diversity

Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

D&I in the Fashion Industry

During the mid-2000s, fashion brands were exclusive, catering to only a select group of people. They were prejudiced against bulkier bodies as they launched products with certain levels of bias. According to the BodyLabs Apparel & Footwear Retail Survey Report, in 2015, more than US$62 billion worth of clothing and footwear styles were returned by customers due to ill-fitting or incorrect sizing. Moreover, the survey revealed that plus-size people found it incredibly hard to find clothes that fitted perfectly, even though they represented over 60% of shoppers. The Lesbian, Gay, Bisexual, and Transgender (LGBT) community also found itself excluded in the fashion industry as its members were unable to find clothing representing their gender expression. According to the World Report on Disability 2011, released jointly by the World Health Organization (WHO) and the World Bank, about one billion people worldwide (approximately 15% of the world’s population) had some form of physical disability. Despite making up a significant percentage of the global population, people with disabilities were largely overlooked by the fashion industry as there was a lack of choice for such customers in mainstream fashion..

Setting the tone for D&I

At Zalando, employee participation was seen as the foundation of its work culture. The retailer’s success was partly attributed to its action-oriented culture built on trust, feedback, and empowerment that encouraged employees to strive for excellence at work. Zalando encouraged employee participation and engagement by fostering a culture of transparency and shared responsibility. The retailer formulated a set of principles called Our Founding Mindset (OFM) that helped in decision-making and empowered its employees to work in the interest of its customers and partners. Zalando’s OFM reflected four core values: customer focus, entrepreneurial thinking, speed, and team spirit..

Inclusive Assortment

Zalando committed to offering a truly diverse assortment for underrepresented customers by 2025 by stocking products choices in every category across price, style, and size. Its inclusive assortment included Adaptive Fashion, Modest Fashion , and Genderless Fashion , as well as Inclusive Beauty..

Inclusive Customer Experience

As part of the do.BETTER strategy, Zalando committed to providing an accessible, relevant, and welcoming digital experience for customers. To build inclusion into the shopping experience, the platform ensured navigation and product curation was accessible to all users. Zalando offered an accessible digital experience to customers, including better readability, easier navigation, and a more intuitive design of its corporate website. The retailer improved accessibility of its website to enable disabled customers to find, choose, and purchase products more easily. It asked experts to audit its customer digital experience against Web Content Accessibility Guidelines (WCAG)..

Inclusive Content

Zalando celebrated the diversity of its customers in its content, campaigns, and storytelling. The retailer wanted to make its customers feel included and celebrated through the customer experiences and communications it created. It created authentic, representative, and inclusive content that included marketing campaigns, media partnerships, and events. Zalando Marketing Services created campaigns centered on diversity, helping brands craft messages to directly connect to the Zalando customers. In November 2021, the company launched a holistic holiday campaign, “Joy is ours”, to spread joy across Europe during the holiday season..

Diverse Partnerships

As part of its diversity commitment, Zalando wanted, together with its partners, to offer a truly diverse assortment, to underrepresented groups by offering them product choices in every category. By 2025, it aimed to become a central collaboration point in fashion, bringing together brands, retailers, NGOs, academia, community thought-leaders, and media to empower and amplify underrepresented voices in the fashion industry. Zalando partnered with over 7,000 globally popular, locally relevant, and emerging brands to offer customers a broad assortment and create significant benefits for its partners. About 1.8 million product choices were listed on the platform with the most curated brands and items..

Empowering Black-Owned Brands

The needs of black customers were not adequately met by the beauty industry. In the mid-2010s, the products available in the market for black men were neither easily accessible nor of high quality. While many big brands had expanded their product ranges to offer darker shades of makeup as well as haircare products designed for tighter curl patterns, there were not many choices and access was limited. Mirroring the “Fifteen Percent Pledge” initiated by Black fashion designer Aurora James after the resurgence of the Black Lives Matter movement, Zalando decided to onboard more Black-owned brands and other minority groups to the Zalando Fashion Store..

Inclusive Workplace

As of 2023, Zalando employed more than 15,000 people from over 140 nationalities worldwide. Open communication and participation were pivotal elements of its corporate culture. In May 2022, Zalando conducted its very first anonymous and voluntary D&I survey to understand employee experiences, the company’s strengths, and what gaps still needed to be addressed to improve the culture of inclusion and community at the company. The survey had a 45.5% participation rate, representing 7,876 Zalando employees from across the business. The overall Zalando Inclusion Index was 69%..

Inclusive Leadership

According to Zalando, inclusive leadership was necessary to create safer workplaces in which employees felt valued. The company aimed for balanced gender representation in its senior management. In October 2019, Zalando revised its targets for diversity in its senior leadership in order to level the representation of women and men on its top six management levels by the end of 2023. The new target was set at 40% to 60% of women in leadership level roles by 2023. As of 2023, about 37.5% of the top-five leadership level roles at Zalando were occupied by women compared to 35.2% in 2021..

Challenges Ahead

Though Zalando remained committed to its diversity goals, challenges remained for the company. One of these was plunging sales within the core German market and in the Rest of Europe. In Q3 2023, sales on the Zalando platform were down 2.4 % compared to the corresponding period of the previous year. While Group revenues fell 3.2 % to 2.2 billion, GMV dropped to €3.2 billion. The retailer attributed the drop to a challenging macroeconomic environment. Some analysts were concerned that due to economic pressure and limited budgets, D&I initiatives might take a backseat in the future at Zalando..

Exhibits

Exhibit I: Zalando Group: Key Figures (2019-2023)
Exhibit II: % of Businesses with a Coordinated D&I Strategy (By Industry) (2022)
Exhibit III: of Senior Roles Occupied By Women
Exhibit IV: Zalando: Diversity & Inclusion (D&I) Commitments
Exhibit V: Zalando Inclusion Index
Exhibit VI: Zalando Employee Resource Groups (ERGs) (As of 2023)
Exhibit VII: The Disability Inclusion Action Plan
Exhibit VIII: Zalando : Women in Tech
Exhibit IX: Zalando : Women in Leadership

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