The Changing Role of Physical Retail

FOR THOSE WHO MAY be unaware, Zalando is a Berlin-headquartered online fashion retailer that trades in more than 20 European countries. Founded in 2008, the company is claimed to be Europe’s biggest online-only fashion retailer, and since its establishment in the last decade it has certainly been massively successful. It also has a smattering of physical shops, all of them in Germany.

It started down this road in 2018, with a beauty store in Berlin. Since that time, it has opened more branches and while there are still fewer than 20 outposts across the country (all of them in major cities), what makes it particularly interesting is that most of these are outlet stores. The largest opened in March, has four floors, and unless you knew that its parent was digital, it would be perfectly possible to walk into this one as you would any other physical store and to shop it in the same manner.

The stores are, of course, clearance vehicles and the pull of the newly opened Berlin flagship is a price-conscious one, which puts it in sharp contrast with its mass market and label-led neighbors in the ritzy Kurfürstendamm area of the city. The real point about this store and the other Zalando outlet branches, however, is that the retailer has deemed it useful to have a physical estate in order to get shot of its excess inventory.

It is also worth noting that this is very definitely not a “showroom” for an online proposition, but a physical store in its own right. It just happens to have stock that has previously been available via a virtual shop. As such it shows, perhaps, what increasingly looks to be the case – online retailers view the physical environment as an opportunity and this can be realized in a number of different ways. The idea of the store as an advert for online doesn’t have to be uppermost.

That the death of the high street is an exaggeration has become something of a cliché, but like all clichés it holds good because at its heart there is an essential truth. Physical stores are changing, but they remain.