Despite slow performance expectations for Black Friday 2022, retailers and marketplaces around the globe proved once again how well a shopping event like Black Friday can do - even in the face of record-breaking inflation, energy and food costs. The small and medium tech and domestic products categories, such as TVs, toasters and headphones, showed the largest price drops while consumers wanting to make good use of the discounts arrived in full force with their wallets in hand. Results in the US showed a 2.3% increase in online sales compared to 2021. In the Netherlands, data from credit card translations and online sales showed a 12% increase in purchases while spending increased overall by 30% in the week leading up to Black Friday. 

As an event, the most successful retailers and online marketplaces like Zalando have learned how to get the most out of consumers and their vendors using competitive pricing strategies. As Omnia works to provide critical data and information to our clients to better serve their pricing approach and to increase their knowledge of online marketplaces, we’ve taken a look at how Zalando, one of Europe’s biggest online marketplaces, managed its pricing on Black Friday 2022, as well as before and after. 

Zalando’s pricing before, during, and after Black Friday

Our team analysed 10,000 product prices on Zalando across multiple vendors within various categories, however, with a specific date range surrounding Black Friday, which took place on 25 November. As shown below, Zalando’s prices increased by 8% in the three weeks leading up to Black Friday, starting on 25 October. Then, there is a significant price drop by 18% on the 17th, signalling the start of Black Friday week. The decrease in prices reached its highest amount with a drop to an average price level of 85.5 % on Sunday, 27 November. This means that prices have fallen by 23% (compared to a pre-Black Friday level of 108%) in just one week. After Cyber Monday, prices returned to pre-Black Friday numbers which were still higher than prices in October.

Price Level on over time, Source: Omnia Retail Data 

Price Level on For the analysis, the prices on the first day of the observation on 25 October mark the reference point (100%). From there our data shows that the price level (on average for all observed products) is increasing until 16 November. A turning point is 17 November: From a price level of 108%, the average price level dropped to 85.5%, which marks a relative drop of 23%.

To win the Buy Box, price became the top driver for vendors

We have observed additional dynamics in the price-change frequency over the Black Friday period which leads us to believe that Zalando implemented repricing strategies to create a stronger sense of competition for the Buy Box:

  • In our methodology, a price-change ratio of 0% means that the price never changes
  • A price-change ratio of 100% means that a price always changed at any observation time stamp (which was every 15 minutes).
  • A price-change ratio of 1.5% meant that a price would change once per day.
  • Over the Black Friday period, this ratio climbed to 7% on average, meaning that the price would not only change once every 24 hours, but it would change once every 5 hours.

Price Level on over time 

Source: Omnia Retail Data 

Usually, to win the Buy Box, the top driver has never been about price: Over the same observation period, 25% of products had a maximum of one vendor change in the Buy Box and 7.4% of products had no change at all despite 56% of these products showing price increases. Even in the three weeks leading up to Black Friday, the Buy Box owner never changed for 28% of all products.

This shows that, historically, price is likely not the main driver for winning the Buy Box, however, during Black Friday, Zalando’s pricing strategies brought pricing to the forefront as a top factor, instigating lower prices and stiffer competition.

In the graph below, one can see Zalando’s Black Friday pricing strategy at play:

Source: Omnia Retail Data 

Outside of competition scenarios, the Buy Box is less about price and more about convenience

If price is usually not the determining factor for winning the Buy Box, regardless of competition scenarios, what is? 

Speed of Delivery

Our data suggest that delivery times are vital to remaining in the Buy Box. To win the Buy Box, a vendor must have a maximum delivery time period of four days, which becomes even less when the number of vendors per product increases. In other words, the more competition there is for a certain product, the more important convenience becomes for the vendor and ultimately the customer.

Availability of Stock

As seen below, the Buy Box change ratio when all products are available is at 2.1%. However, when products are unavailable up to 24 hours, the change ratio doubles to 4.09%, showing just how vital availability of stock is to winning the Buy Box. As a vendor, it is essential to have consistent levels of stock, otherwise your chances of losing the Buy Box is much higher.

Source: Omnia Retail Data 

Unlike Amazon, Zalando leaves competitors wondering about their Buy Box strategy

As an online marketplace, Zalando’s focus remains within the fashion market, attracting 48.5 million active customers across 25 European countries, earning a revenue of €10.5 billion in 2020. Zalando claims not to have a Buy Box like Amazon in an attempt to distance itself from the image of a platform where prices change within minutes due to the high competition among vendors:

“We do not want to enable a price war. Therefore, only one vendor offers a product. If more vendors offer the same product, convenience decides who is listed on the platform. This is calculated by an algorithm on the basis of factors such as shipment speed, trustworthiness and return speed. There is no pressure on price to win any kind of Buy Box,” says Zalando’s VP of Direct to Consumer Carsten Keller.

Nevertheless, as a marketplace, Zalando opens its platform to third-party sellers just like Amazon does. According to their website, 800+ partners are active in their partnership model entitled “Zalando Fulfilment Solutions”. This means that, in some cases, more than one retailer, including Zalando itself, is offering a product on the platform. And this, as the above statement indicates, leads to a situation where the platform has to decide which offer is listed and shown to the end consumer. Finally, this is where we can speak of a Buy Box offer similar to Amazon’s, as the principle of a product being offered by multiple vendors on the same platform is the same.

If Zalando is not open about its Buy Box strategy, how can vendors benefit from Omnia’s services?

A vendor selling on Zalando is able to retrieve all available data from the platform into Omnia’s software as a direct scraping source. As the website does not show competitor prices, the data will nevertheless be useful to run an internal data analysis shedding light on what pricing strategies can be useful on Zalando. With Zalando as data source, the retrieved data can be used within different sets of pricing rules.

Vendors need to have a robust pricing strategy for Zalando

In times of high spendings, such as over Black Friday and the Christmas festive season, vendors need to prioritise a number of factors, from stock levels to delivery times, as well as competitive-based pricing to make the best of their real estate on Zalando. As seen from the above data, price is not historically the most important factor for Zalando’s Buy Box, however, Black Friday 2022 proved that the marketplace is willing to adjust its commercial values to create an environment where lower prices will result in more spending.