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Online Retailer Zalando Grows Marketplace, Customer Numbers Fall

FILED - 03 March 2021, Berlin: The logo of online retailer Zalando is pictured on the Zalando Campus at Mercedes-Platz in Berlin. Photo: Jens Kalaene/ZB/dpa
FILED - 03 March 2021, Berlin: The logo of online retailer Zalando is pictured on the Zalando Campus at Mercedes-Platz in Berlin. Photo: Jens Kalaene/ZB/dpa
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Online Retailer Zalando Grows Marketplace, Customer Numbers Fall

FILED - 03 March 2021, Berlin: The logo of online retailer Zalando is pictured on the Zalando Campus at Mercedes-Platz in Berlin. Photo: Jens Kalaene/ZB/dpa
FILED - 03 March 2021, Berlin: The logo of online retailer Zalando is pictured on the Zalando Campus at Mercedes-Platz in Berlin. Photo: Jens Kalaene/ZB/dpa

Zalando swung to growth in the first quarter after three consecutive declines in gross merchandise volume, the online retailer said on Tuesday, but a decline in active customers and orders dampened the online retailer's results.
Quarterly gross merchandise volume (GMV) - a key revenue metric measuring the total value of all goods sold - rose 1.3% to 3.27 billion euros ($3.52 billion) from 3.23 billion in the year-earlier period, the German online fashion retailer said.
But analysts focused on a decline in active customers to 49.5 million from 51.2 million a year prior, and a 0.6% dip in quarterly revenue, Reuters reported.
As inflation has dented consumers' appetite to buy clothes, Zalando has sought new revenue drivers and started offering its platform and logistics network as a service to other retailers and brands. Revenue from this business-to-business (B2B) service was up 13% at 215 million euros.
"As we are executing our ecosystem strategy, we are excited by the positive response from customers and partners in the first quarter. We are returning to growth," said Dr. Sandra Dembeck, Zalando's chief financial officer.
Along with weaker demand, increased competition by fast fashion rivals such as Shein have weighed on Zalando's revenue. In response, Zalando is adding more premium brands to pursue a bigger share of customers' wallets, rather than trying to compete on price with Shein, which sells $5 T-shirts and $10 shoes.
Zalando said its average basket size increased to 60.4 euros, from 57.3 euros a year earlier.
Zalando has also developed a tool to predict sizing based on photos submitted by customers, and said it launched the service in Spain, France and Italy in the first quarter. The tool aims to ensure customers order items in the correct size, to reduce the amount of returns, a key threat to profit for Zalando and other online retailers.
Adjusted earnings before interest and tax (EBIT) swung to a profit of 28.3 million euros from a loss of 0.7 million euros a year earlier.
The company confirmed its outlook for GMV and revenue to grow as much as 5% in 2024, and adjusted EBIT to be 380 million to 450 million euros.

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Fashion

80-year-old LL Bean Staple Finds New Audience as Trendy Bag

Gracie Wiener poses with some of her tote bags in Washington Square Park in New York, Wednesday, July 17, 2024, (AP Photo/Pamela Smith)
Gracie Wiener poses with some of her tote bags in Washington Square Park in New York, Wednesday, July 17, 2024, (AP Photo/Pamela Smith)
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80-year-old LL Bean Staple Finds New Audience as Trendy Bag

Gracie Wiener poses with some of her tote bags in Washington Square Park in New York, Wednesday, July 17, 2024, (AP Photo/Pamela Smith)
Gracie Wiener poses with some of her tote bags in Washington Square Park in New York, Wednesday, July 17, 2024, (AP Photo/Pamela Smith)

L.L. Bean created it 80 years ago to haul heavy blocks of ice. Now it's a must-have summer fashion accessory, The Associated Press reported.

The simple, sturdy canvas bag called the Boat and Tote is having an extended moment 80 years after its introduction, thanks to a social media trend in which they're monogrammed with ironic or flashy phrases.

New Yorker Gracie Wiener helped get it started by ordering her humble bags from L.L. Bean monogrammed with “Psycho” and then “Prada,” the pricey Italian luxury brand, instead of just her name or initials, and posting about them on Instagram. Then others began showcasing their own unique bags on TikTok.

Soon, it wasn’t enough to have a bag monogrammed with “Schlepper,” “HOT MESS,” “slayyyy” or “cool mom.” Customers began testing the limits of the human censors in L.L. Bean’s monogram department, which bans profanity “or other objectionable words or phrases,” with more provocative wording like “Bite me,” “Dum Blonde” and “Ambitchous.”

Social media fueled the surge, just as it did for Stanley’s tumblers and Trader Joe’s $2.99 canvas bags, which were once selling on eBay for $200, said Beth Goldstein, an analyst at Circana, which tracks consumer spending and trends.
The tote’s revival came at a time when price-conscious consumers were forgoing expensive handbags, sales of which have weakened, and L.L. Bean’s bag fit the bill as a functional item that’s trendy precisely because it’s not trendy, she said. L.L. Bean's regular bags top out at about $55, though some fancier versions cost upward of $100.
“There’s a trend toward the utilitarian, the simple things and more accessible price points,” she said, and the customization added to the appeal: “Status items don’t have to be designer price points.”

L.L. Bean’s tote was first advertised in a catalog as Bean’s Ice Carrier in 1944 during World War II, when ice chests were common. Then they disappeared before being reintroduced in 1965 as the Boat and Tote.

These days, they’re still made in Maine and are still capable of hauling 500 pounds of ice, but they are far more likely to carry laptops, headphones, groceries, books, beach gear, travel essentials and other common items.

Those snarky, pop-oriented phrases transformed them into a sassy essential and helped them spread beyond Maine, Massachusetts’ Cape Cod and other New England enclaves to places like Los Angeles and New York City, where fashionistas like Gwyneth Paltrow, Reese Witherspoon and Sarah Jessica Parker are toting them — but not necessarily brandished with ironic phrases.

“It’s just one of those things that makes people smile and makes people laugh, and it’s unexpected,” said Wiener, who got it all started with her @ironicboatandtote Instagram page, which she started as a fun side hustle from her job as social media manager for Air Mail, a digital publication launched by former Vanity Fair Editor-in-Chief Graydon Carter.

The folks at L.L. Bean were both stunned and pleased by the continuing growth. For the past two years, the Boat and Tote has been L.L. Bean’s No. 1 contributor to luring in new customers, and sales grew 64% from fiscal years 2021 to 2023, spokesperson Amanda Hannah said.

The surge in popularity is reminiscent of L.L. Bean’s traditional hunting shoe, the iconic staple for trudging through rain and muck, which enjoyed its own moment a few years back, driven by college students.