Have you ever found yourself scrolling for hours through Zalando or another e-commerce platform, trying to find something that feels just right? Well, you’re not the only one. With over a million products and 6,000 brands, Zalando gives shoppers endless options, and sometimes too many. This diverse range of products makes it overwhelming, leading to hesitation, abandoned carts, and an industry-leading return rate of almost 50%. It’s a problem that costs money and time, and even creates unnecessary emissions through reverse logistics.
We wanted to rethink this experience. How can Zalando preserve its massive product range while making shopping convenient, personalized, and environmentally friendly? The answer: Generative AI.
Our Concept: The AI Style Assistant
We developed an AI-powered Style Assistant that acts like a personal stylist embedded within Zalando. Instead of filtering through thousands of products, customers can upload a picture of themselves or an outfit that inspires them, and inform us of the occasion or mood they seek, as well as their budget.
The assistant then creates customized mood boards and complete outfit suggestions based on what’s available at Zalando right now, in a matter of seconds. Picture a stylist who knows your closet, your aesthetic, and your budget, in your face.
Changes in Zalando’s Business
It isn’t just a fabulous feature; it changes the nature of Zalando’s business. The platform shifts from a massive online marketplace to a personalized fashion site.
– Customers are given styled looks, not endless results.
– Automated exposure and cross-selling (“complete the look”) generate profit for bands.
– Zalando gains from greater efficiency, higher loyalty, and a more sustainable strategy through reduced returns.
The Impact
We expect the impact to be considerable. Conversion rates could increase from 2–3% to up to 25%, session lengths could increase by 30%, and repeat rates could decrease by about 20%. All these improvements add up to happier customers, lower emissions, and improved returns for Zalando.
Why It Matters
There are other fashion competitors like Amazon and Shein already using AI, but not nearly as transparently. Zalando can lead in different ways by combining personalisation with privacy, sustainability, and creativity.
Our business idea shows how GenAI can help turn the shopping experience from overwhelming to relaxing. With the right technology and trust, Zalando can transition from Europe’s largest marketplace to its most personal and sustainable one.
References
Deloitte. (2024). The state of AI in retail and consumer products 2024. Deloitte Insights. https://www.deloitte.com
Euronews. (2023, March 9). Fast fashion retailer Zalando claims its returns are climate neutral—is it true? https://www.euronews.com/green/2023/03/09/fast-fashion-retailer-zalando-claims-its-returns-are-climate-neutral-is-it-true
Iyengar, S. S., & Lepper, M. R. (2000). When choice is demotivating: Can one desire too much of a good thing? Journal of Personality and Social Psychology, 79(6), 995–1006. https://doi.org/10.1037/0022-3514.79.6.995
Landmark Global. (n.d.). Returns done right: Lessons from five standout brands. https://landmarkglobal.com/eu/en/news-insights/returns-done-right-lessons-from-5-standout-brands/
