While most online retailers aspire no end to cash in on products under their own private label, and others like Amazon are actually pushing up the sales of their store brands, German e-tailer Zalando are ending their private label business.
The fashion eCommerce site announced that they’re shutting down zLabels on 1st April as part of their complementary strategy, which aims to create an assortment of products that will support their partner brands.
According to David Schneider, co-CEO at Zalando, zLabels was meant to provide their customers with products which their partner brands didn’t offer. He further added:
“In the last 10 years, our business has become more attractive to both customers and brands. Since we are committed to our platform strategy, and as we continuously onboard new brands and verticals, we decided to refine our assortment including our own labels.”
The 11 private label brands under zLabels will be kept for the time being and reviewed at some point. Starting in spring or summer 2020, the retailer said their clothing brands will target customers’ everyday essentials while they continue to provide a range of focused footwear and accessories.
A strategic direction to becoming the starting point for fashion
The restructuring of Zalando’s business won’t displace or affect any of zLabels’s employees in a negative way as all 550 of them will be absorbed into the Zalando Fashion Store, and offered comparable positions within the company.
Schneider is confident that using this approach will lead to the realization of the company’s goal, which is to become the starting point for fashion. While not everyone will agree to this, the company’s head honcho is positive that their “strong customer focus and platform strategy are the right path to success”.
Would you have done the same thing with your own private-label goods? We hope to hear from you in the comments below.
As always, to your continued success,
Dave & Matt