Upon wrapping up the Supermart by ZALORA x adidas pop-up space at Bugis Junction early this month, the brand has been making headlines everywhere with its latest e-commerce partnership with Swedish fashion label, & Other Stories. The partnership signifies & Other Stories’ focus on the SEA market by tapping into ZALORA’s extensive network across Singapore, Malaysia and The Philippines.
Headquartered in Singapore, ZALORA positions itself as the one-stop destination to an ever-expanding range of products – from the most coveted international big names to emerging local brands. No stranger to driving strategic marketing campaigns, ZALORA further strengthens its online presence by successfully launching the Community Influencer Program early last year. Riding on the power of social media, ZALORA has built its own community among the younger generation.
On top of connecting with Generation Z, ZALORA is also bridging its relationship with the next luxury consumers, millennials, and rightfully so. “Millennials are moving through their prime earning and spending years right now. As the largest adult cohort today, they are arguably the most important consumer group for brands,” suggested by Priyanka Gargav, Head of Commercial, SEA & Hong Kong of Adyen in an interview published earlier.
First introduced in September 2020, ZALORA Luxury quickly became one of ZALORA’s fastest-growing segments, targeting mostly millennial females; it has outperformed other categories by ten times in the last few years. Retail in Asia had the opportunity to talk to ZALORA’s Luxury Category Lead, Mariella Merlino, together we discussed the key sales figures of ZALORA’s Luxury Festival that has just concluded last month, the brand’s post-pandemic measures, and what ZALORA Luxury means to the company.
RiA: Congratulations on the huge success for ZALORA’s Luxury Festival! Can you share with us some key sales figures for this year?
Merlino: This was indeed a phenomenal year for the Luxury Festival where we’ve seen over 110 percent uplift in orders YoY including a 70 percent increase in product views YoY and 80 percent traffic uplift to the Luxury segment page vs the weekly average.
Our top 3 subcategories are Sling Bags, T-Shirts and Sneakers, and our top 5 performing brands are Coach, Michael Kors, Tory Burch, Kate Spade New York and Gucci. Our bestsellers are the Common Projects Achilles Sneaker in White, Michael Kors Jet Set Girls M Carryall Tote Bag, Gucci Embossed Handbag, Tory Burch Kira Chevron Shoulder Bag and the HABIB Rose Love Ball Bolo Bracelet.
RiA: How is the performance for ZALORA Luxury in Asia? Have you noticed any interesting spending patterns for consumers in different countries?
Merlino: Based on data from H1 2022, ZALORA Luxury saw a 30 percent YoY growth. Not only do women dominate the purchases but are also inclined to buy men’s items as well, possibly for their partners or family and friends. We have noticed that the core group of consumers are 25-35 years old, indicating a more mature audience. Malaysia, Singapore and Hong Kong are currently our biggest markets for Luxury with The Philippines also experiencing an uplift.
Buy Now Pay Later installment plans gain usage traction thanks to extensive partnerships with the likes of Atome, Hoola, Grab PayLater, Pace and more.
Accessories top the table as our most popular category with consumer favourites such as Coach, Michael Kors, Kate Spade New York, Tory Burch, Marc Jacobs, Longchamp, Gucci, Burberry. We also see an increased interest in sneakers, featuring brands like Common Projects, Alexander McQueen, Balenciaga, Burberry and Apparel with brands like CK Calvin Klein, Karl Lagerfeld, Michael Kors, DKNY, Fred Perry and the latest addition MAJE.
We have also been adding to our ever-expanding repertoire of brands by welcoming new rising star brands Rabeanco and Strathberry, as well as Tissot and Hamilton for the watches assortment. Fine Jewellery, just under a year old, is not only our latest subcategory under Luxury but also the most promising one.
RiA: COVID has heavily impacted global logistics and consumer’s shopping patterns. As a cross-country ecommerce platform, how is ZALORA adjusting to the post-covid environment?
Merlino: ZALORA continues to take an agile omnichannel approach and remain customer centric in all strategic decisions to keep up with the post-pandemic acceleration of digitisation. The e-Conomy SEA 2021 report found that 60 million digital consumers were added to the region and the Internet economy; 20 million becoming digital consumers in H1 2021 alone. As a cross-country ecommerce retailer, we value-add to our brands by reaching markets where they do not have any presence in the markets we operate in.
We’ve also been working hard to expand the assortment, allowing customers to browse an extensive portfolio of brands, have their luxury purchases delivered to their doorstep the next working day with express shipping subscription – ZALORA Now, and even enjoy free returns within 30 days.
Understanding shoppers’ needs with data backed insight led the way for ZALORA through the next normal. From focusing on workwear and sports apparel, to luxury and local modest wear – we listened to consumers in the region and took their lead.
RiA: What does establishing ZALORA Luxury mean to the brand? Will it have an impact on the main line in the future? What can we expect from ZALORA Luxury in 5 years time?
Merlino: The ZALORA Luxury segment is 2 years old and we can see the extraordinary growth years where consumers are embracing quality over quantity. In a 2020 report by iPrice Group, Southeast Asians have increased Google search interests for French luxury retailers, with Louis Vuitton leading the way with a 555 percent uptick in July 2020, followed by Saint Laurent at 306 percent and Chanel at 274 percent. This trend was also seen in the luxury watch sector, and ZALORA Luxury intends on leveraging this by providing an elevated shopping experience through adding to the assortment of brands to fulfil consumers’ desires for the leading names on our platform, providing luxe packaging and exclusive services like the Luxury Personal Shopper.
RiA: Consumers are looking for deeper and more meaningful ways to connect with luxury brands. How is ZALORA Luxury going to fulfil the desire of consumers in that sense?
Merlino: We are data driven and customer-centric in understanding the needs of our luxury consumers who expect a more exclusive purchase experience with more targeted communication, campaigns and product recommendations in line with their preferences. The moment the customer opens the app, personalised targeting communications and private campaign access are crafted for him/her to drive the purchase desire. We are also building strong partnerships with brands and bringing in exclusive collections dedicated to our ZALORA Luxury customers.
We are also value-adding as the best partner for international brands that are looking to strengthen their presence in SEA and tap into our pool of (60M) monthly visitors giving them the opportunity to discover new brands and latest arrivals.
RiA: For this year’s Luxury Festival, the theme was ‘A Midsummer Rendezvous’. Can you tell us how Zalora brought this concept forward through the campaign?
Merlino: With international borders opening post-pandemic, the increased interest in travel inspired the theme for this year’s Luxury Festival, ‘A Midsummer Rendezvous’. It captures the essence of summer opulence dressed in the latest designer pieces. Check out the campaign video here.
We wanted to highlight all the new colourful summer arrivals and to entice our customers to purchase more vacation essentials. From accessories and apparel, to shoes and fine jewellery pieces, the campaign shoot at luxury resort Anantara was exclusive to the segment and we had 2 models showcase our brands, including Layla Ong who was part of Asia’s Next Top Model Cycle 5 and the first Singaporean model to walk for Gucci on the international fashion week circuit.
RiA: Riding on the success of the Luxury Festival, is ZALORA planning on other sales campaigns targeting the luxury sector?
Merlino: Next up, we will be focusing on Fine Jewellery in September with an entire week dedicated to Habib and the other fine jewellery suppliers like Tomei, Litz, Smiling Rocks, Poh Kong, Chow Tai Fook. We are expanding the gold and diamond assortment with more bracelets and rings as the bestsellers for this subcategory. We find our customers interested in fine jewellery as everyday staples. Offering a breadth of our assortment to their investment pieces, shoppers remain the decision makers for our jewellery buys.
Moreover, with the addition of new pre-loved suppliers and items, we are strengthening our focus on sustainability. This rapidly growing subcategory now has more than 3,000 pieces including the most sought-after handbags from Louis Vuitton, Chanel, Bottega Veneta, Celine, Gucci, Burberry etc in partnership with Japanese luxury consignment app Reclo.