Hello. A warm welcome to our Capital Markets Day in 2021. My name is Patrick Kofler. I am heading the IR office here at Zalando. I am your host today. We would have loved, of course, host you personally here in Berlin today. Of course, health and safety remain the first priority to us. The good news is, as always, we have been a digital company since day one. We are delighted to fully host you on Investor Day today. Most of the content based on health and safety has been pre-recorded. Of course, we will be live with our Q&A sessions after each of the sessions. Let me shortly show you today's agenda. We kick off the day with our strategic update by our three co-CEOs, Rubin, Robert, and David. After a small break, our senior leadership team will present deep dives on customers, so how to build great customer experience, and then also on brands. At 2:00 P.M., our CFO, David Schröder, will conclude today's CMD with their financial section, and we'll also have some closing remarks at the end. First, let me start with some housekeeping. The day will be streamed on our platform. You have the possibility to directly type in your questions on the screen on the right-hand side. The tool is already live and open for your questions from the beginning of each section. It's time to let our three Co-CEOs take the stage and give a strategic update. Good morning. Welcome to our Capital Markets Day. Preparing these events is always a ton of work, but it's also really exciting because we get to look back, and you will see this company is in a remarkable position, maybe stronger than ever before. We get to talk about our path forward, and you will see we can lay that out with quite a lot of clarity. We get to discuss about our goals and ambitions for the future. You will see, once again, we have set targets that would be truly remarkable achievements. That's what we want to talk about today. After today, the team will go back to make all of that reality. As you know, I will only be part of this management team for a few more months, but I'll continue to be a supporter and shareholder of the company. You can believe me, I'm just as excited as always about the future of this business. This is the agenda for today. We'll start looking back, then we will talk strategy, and then we'll talk about our targets. I would just like to make three points up front. The first one is that during COVID, this team has shown that we can lead the company through uncertain times. When the pandemic hit us, it was a surprise to all of us, so we had to act fast and decisively. We prioritized securing the safety of our employees to make sure that we can actually continue to operate our business during the pandemic and keep everybody safe. Secondly, we worked to safeguard the financial security of our company, especially at a time when it was still unclear if this would become a headwind or tailwind to the company. Thirdly, we tried to be part of the solution, and that's maybe most important because the fashion industry, our industry, was hit hard. We had the strategy and the tools to be helpful to many. That's what we tried to do, and I think it has changed our standing in the industry quite significantly. The second thing I would like to point out is that over the last years, Zalando has become a true European company. In 2020, more than half of our GMV came from outside the DACH region. Also in markets outside of our home market, we have established clear number one positions. For example, in the Nordics, where we passed EUR 1 billion GMV in 2020. At the same time, our fastest active customer growth has come from the Southern European markets. The third point I would like to make is really to highlight the incredible track record that this team has when it comes to grow the company. Looking back to our IPO in 2014, since then we have quadrupled the scale of the business, which corresponds to a CAGR of more than 26%, which is north of the already ambitious corridor that we guided to, 20%-25%. It also means we have outgrown the European online fashion market by a factor of two to three. We have delivered on our goals consistently, not only on our annual guidance, but also on the long-term targets. In 2017, we told you our goal is to cross the EUR 10 billion mark by 2020, which we have reached. In 2019, we told you we aim for EUR 20 billion by 2023, 2024. We are not quite there yet, but we are on a clear trajectory to meet and exceed also that target. During all of that time, we also have been consistently profitable. Why am I saying this? Firstly, yes, COVID has been an economic tailwind to the company, but it's important to understand that the roots of our success go much deeper than that. Secondly, when we come to talk about the future, about our goal to double and triple the company once again, I think we can have confidence because this team has already shown that it can do it. With this, I hand over to Robert to kick off the strategy section. Yes. At the heart of the presentation of the Capital Markets Day 2019 was our vision to be the starting point for fashion. As an outcome, the idea is pretty simple. It's to be people's one and only choice for fashion. In the digital consumer space, this is really the ultimate prize to win. The starting points, they earn their consumers' attention through a very holistic and almighty proposition, and they don't have to pay Facebook and Google to send traffic. The people really come directly, as they know that it covers all their needs and wants. Starting points, they don't compete left and right with services that just offer a subset of the service they do. For example, Spotify is a starting point for music, or Booking is a starting point for hotels. Even Google itself is a starting point for search. For example, if you search something on Google and you don't find it, you don't go to Yahoo because you want to look what they have to offer. You just assume that you have not searched well enough. This is our ambition for fashion. Where do you go when you think of fashion, no matter what you want or need? It is Zalando. Our answer how to claim this position is very simple. We need to have the most extensive assortment. Ultimately, we need customers to think when a brand or a product or a size is not available on Zalando, it probably does not exist at all. There's really no point in looking somewhere else. It's the most convenient way to get an item. There's no option to get an item faster, easier, or better anywhere else. The experience needs to be tailored exactly to you. It is your personal gateway to the entire world of fashion. It covers all your needs and wants. In bottom line, there is no point in really having any other app for fashion. You just need Zalando. Here you can start your journey, here you can end your journey. There is no need for anything else. We have come a long way since the last Capital Markets Day, and we have a really strong position already today. Our visits have grown by 72% since 2018. 5.4 billion visits last year. We are the most visited fashion destination across Europe by far. Zalando is the most downloaded fashion app across Europe, and 57% of our orders are already done via app. We are a true app business, we are the leading app business across Europe with big distance. We served about 39 million people across Europe as customers of Zalando. That's about 10% of the population in the markets that we serve. They order 4.8x with Zalando. All these numbers have gone up. 47% more customers. They buy more often with us. They spend more with us. All this is a great testament that we have made great progress to be the indispensable starting point for fashion for the European population. Looking at 2020, this was an exceptional tough year for the fashion industry. Within fashion, what it produced a step change in the online penetration from 17% in 2019 to 24% in 2020. When we look ahead, we expect the online penetration to rise from this very higher level. It won't go back anywhere to pre-COVID levels. When we look at our cohort data in some more detail, this gives evidence for that. Customers that we acquired during lockdowns last year, they consistently performed stronger than all the cohorts. Irrespective if any stores opened in summer. You see here on the chart on the right-hand side with the orange line, the purchase activity of the cohort March, April 2020 versus the March, April 2019 cohort in gray. Even in summer when stores reopened, they bought more frequently with us than the 2019 cohort. The orange line is consistently above the gray one. COVID really produced a step change in online shift. It's not a ping pong that goes back. It's really the baseline for the new growth to come. Speaking of growth, we have a substantial leeway for further growth now, both in our existing markets, but as well now by expanding our footprint. Let's look at the population penetration for a moment. That's the percentage of the population in a market that shopped with us last year. We see the big potential when we look one level deeper of the 10% average that we have. In the top five markets, where we already have a very strong local position, among them some Nordic countries or the Benelux, already more than 20% of the population is an active customer of Zalando. The markets where we are investing now strongly in the local proposition, our penetration is far lower, for example, in Italy or in France, but it's growing much, much faster. 70% since 2018. The catch-up potential is still huge. In these markets, we have a 6% penetration versus 21% penetration in our top markets. The local investments into our proposition really pays off, and the potential is huge because we know we can already achieve 21%. Additionally, we are now expanding our footprint and reach. There's about 100 million people living in Europe that don't yet have access to our starting point. We're going to change this now by expanding our footprint. Our first step is now to launch in six new markets, and two more are going to be launched. There's plenty of growth ahead of us, both in our existing footprint and as well by expanding our footprint. We capture our growth potential by continuously investing into our customer proposition. That is the basis, really, for claiming us as the holistic starting point for fashion and creating thereby very deep customer relationships. We particularly believe that the investments in innovation and in our digital experience is an accelerator for our growth to be really your personal gateway to the fashion universe with all your potential wants and needs. Particularly, we see now already how our innovation in the core experience pays really well off. We pivoted from a transactional experience now towards being more engaging and more entertaining and more personal. This is really a catalyst for the increase in traffic that we observe of the 72% since 2018. For example, a recent feature we launched is allowing our customers to follow brands they like on Zalando and brands to engage with their fans on our platform with their content and with their stories. Since launch five months ago, there are already 7 million people that follow a brand, and they visit Zalando 2.3x more often. Another highlight where we invest is elevating our distinct propositions we offer in the fashion universe, like beauty, like pre-owned, designer, or Lounge. We innovate in these propositions very deeply and catering to the needs and wants of customers within this proposition. At the same time, we as well invest in making these propositions more accessible for our customers in the core app. The payoff of that is huge. For example, when customers shop at fashion store and shop at Zalando Lounge, they order 2.6x more often with us. Jim and his team will capture this in much more detail in our exciting customer proposition deep dive today, and I encourage you to really watch this presentation. With that, I would like to hand over to David. Yeah, now we come to the second part of our strategy. In order to achieve the starting point for fashion, we need to transition to being a true platform business. Let me quickly recap why the platform model is so important for our vision. Through the platform approach, we create strong benefits for our customers, partners, and Zalando. Customers get access to an almost unlimited assortment, way beyond what we decided to buy or what we physically have on stock. A customer should get all the brands she loves, all the styles that are relevant to her, and of course, her size should be available. If a customer fell in love with this special edition outdoor jacket, we want to be able to tell her that the last piece is available in the store in Hamburg and ship it to her next day. Our partners, on the other side, get access to 39 million active customers and counting. We connect partners to their specific audience throughout Europe. Partners can leverage our capabilities and infrastructure. For example, a brand wants to succeed in Switzerland. They can use our fulfillment capabilities to ship there, use our marketing capabilities to build a brand in a new market. Finally, Zalando benefits as the platform at scale. We do not have to think about inventory risk, but rather focus on improving the customer offer and experience all the time. Also invest into further capabilities. This, again, makes it more attractive for customers and partners, and that is the virtual circle we're aiming for, to create this true win-win-win. Let us have a look of how far we've come with our platform. Since we met for our last CMD in 2019, we made quite some leaps forward. Of course, we've also received some additional acceleration through the COVID dynamics. Our Partner Program has made a big step. We have grown Partner Program share from 10%- 24%. In Germany, it's even 34%. Our Zalando Fulfillment Solutions have grown from 25%- 51% item share. That means that more than half of our Partner Program items are fulfilled through the Zalando infrastructure. Also, our Zalando Marketing Services have more than doubled from 0.7%- 1.5% of the total GMV. We expect ZMS to grow even stronger in future as brands engage more and more with the direct-to-consumer model. I think this strong progress along all those dimensions shows that we're very well on our way to reach our longer term expectations. Now let's have a look at the dynamics on the partner side. As customers rush to digital channels, so do brands and retailers. While this process started a long time ago, the past 12 months have for sure created more and more need to speed up for many partners, I think we had the solutions for them in place to do so. We saw tremendous progress in two dimensions. First of all, more and more partners are coming to our platform. We saw a record level in partner interest, signing more than three times as many contracts as we did in 2019. And at the same time, we retained 100% of our top 50 partners. The results for our customers, in the past two years, we doubled the number of brands to 4,000 brands available on our platform, we grew our assortment to around 900,000 articles. Ultimate goal remains, if you cannot find it on Zalando, it doesn't exist. The second dimension, partners engage more and more with our platform. Our top 50 partners increased the number of articles they offer by 23%, making a larger and larger share of their assortment available. Also the number of market launches doubled since last year. That means partners accelerate going international through our platform. This deep engagement of partners and also the trusted relationships behind show how we complement partners and can really play a core role in their own digital strategy. Even more impressive is the development of Connected Retail. Connected Retail is our path for stores, to connect their inventory to our platform, to connect to a digital audience, and to sell directly to them. We have expanded that network to almost fivefold to 2,400 stores by the end of 2020. If we look only at this year, we added another 1,000 on top just by the end of February. At the same time, the GMV generated by store has increased over proportionally by a factor of over 12. That means that the average GMV per store has almost tripled since 2019. In Germany, our by far most developed market, Connected Retail contributed 12% of the fashion store GMV in Q4. Yes, of course, lockdowns have accelerated this engagement as we are able to provide opportunities to stores that have basically lost customers coming in. We don't expect these numbers to continue at this very same pace, but we also receive a lot of feedback and see that this is not only a short-term relief in times of need. The combination of offline and online is very powerful and also very actionable for stores as a path forward. We work hard on providing the right tools and services for stores to make onboarding and steering business on our platform as easy as possible, and also bring really long-term value add to the stores. If we think Connected Retail further, you can imagine a huge potential. There are 300,000 stores across Europe that represent over 75% of the fashion revenue. We're tapping into a merged market between offline and online, and we're just at the beginning of that. Until the end of this year alone, we aim to expand to 13 markets and triple the number of stores. The reason why our platform approach is successful is that we support our partners' own strategies. There are hugely diverse brands, retailers, stores out there, but all of them have in common that they want and they need to be successful with a digital audience. They need capabilities and the customer reach that is almost impossible to reach only with their own e-com. We solve three major challenges for them. The first challenge, they have to be online where the customer is. We enable them to go direct to consumer. Our Partner Program and Connected Retail are our way to put them out there, and we see this deeply rooted in our partner strategy. So far, we expected 40% of our GMV coming from Partner Program by 2023. Actually seeing such strong engagement, we upgrade this to 50% by 2025. As a second step, we offer partners to leverage our infrastructure and to reach all markets. Zalando Fulfillment Solutions is a great lever to boost reach without having to invest in your own infrastructure for the brands. We expect 75% of Partner Program items shipped by ZFS in the long run. Then as a next level, we enable partners to speak to their audience and leverage our data, our reach, to drive their business, but also to position their brand. The long-term target here is 3%-4% of our GMV will come from Zalando Marketing Services. We'll dive deeper into this and also what it means from a partner perspective in the partner session later on. With that, I would hand over back to Rubin. Thank you. Well, the third element of our strategy is that in order to win the hearts and minds of our consumers, we want to build a truly sustainable platform. Currently, COVID is dominating the public debate, and that's for a good reason. All of us know the planet has another problem which might turn out to be just as deadly. Science tells us that until the end of the century, temperatures might rise by up to 4.8 degrees. All of you know that anything above 1.5 degrees already is a big problem and might lead to drastic consequences. Now, the fashion industry is part of this problem because it accounts for about 4% of global emissions. To put that into context, that's the same as Germany, France, and the U.K. combined, and it's also twice as much as the sector of global aviation. If the fashion industry is part of the problem, we are as well, and more and more our consumers demand to see a change because customers want to shop at brands where they trust that they can help them to align with their values. We are convinced if we want to build the starting point for consumers, if we really want to win their hearts and minds, we have to become part of the solution. Also, the talent that we look to hire expects us to be part of the solution, and also we ourselves want to build a company that is part of the solution to the sustainability challenge that all of us face jointly. This is why already in 2019, we formulated our sustainability vision to be a sustainable platform with a net positive impact on people and the planet. In this, we highlight platform because we want to emphasize that we have the opportunity to design mechanisms and set incentives that encourage both customers and brands to make more sustainable choices. We find that exciting because it means we can have impact beyond the boundaries of our own company. We highlight the target to be net positive, which means we want to give back more than we take out of society and the environment. This is a truly high ambition, but we think we cannot really aim lower if we want to leave a lasting impact and want to make a sizable contribution. This vision already has proven to be a big source of motivation to everyone in the team because it leads us to really apply our capabilities to a problem that truly matters. In order to make it more specific, we have also added six focus areas, climate change, packaging, sustainable fashion, circularity, human rights in our supply chain, and upskilling. You can read about all of those and our progress in the sustainability report that we published today. In this presentation, I will talk about three examples of our work. To start with climate, our climate aspiration is to be carbon neutral in our own operations and contribute to a 1.5 degrees pathway in line with the Paris Agreement. Our work has two areas. The first one is our own operations, where we are driving with force for fast and significant reduction. Since 2017, we have reduced our own emissions by 64%, which means if you think about it, during that time, we have doubled our business and cut our emissions in half. We have effectively decoupled our own growth from the growth of our emissions. Our goal by 2025 is to reduce by 80% compared to 2017. Everything that we cannot yet reduce, we are already offsetting, which means that already today we are climate neutral from our own operations plus delivery and returns. I think this is remarkable and exciting progress. Let's look at the second area, which is our supply chain. This includes the production of merchandise, services we acquire, and also our customers wearing and washing the merchandise. You can see this is really a broad scope, so it is more challenging because we can only influence it indirectly. It's also exciting because it shows you how broad our influence actually might be. Our target is that 90% of our suppliers, measured by emissions, set science-based targets by 2025. From our own discussions about our own science-based targets, we know that is something that is difficult to do. It is a tough commitment to make, and that's why we will be focused on helping our partners setting the right incentives because we think ultimately having a science-based target will become a requirement to do business on our platform. The second example I want to talk about is our sustainable products aspiration, which is to enable customers to make more sustainable choices. I think it is a great example of how powerful incentives can be. We have introduced the sustainability flag, which we use to highlight products that meet clearly defined and transparent criteria, for example, by using recycled input factors. By that, we make these products more attractive to our customers and set an incentive for brands to meet these requirements with more and more products. We work closely with our partners, the large brands that are shifting their assortment towards more sustainable, for example, Adidas, but also onboarding smaller brands that are incredibly focused on sustainability, brands like Ecoalf from Spain. With that, we have been able to triple our assortment in this area to more than 80,000 products that we have online today. As a result of this, we also grew our GMV from these products. In 2020, they made up 16% of our business, which is EUR 1.7 billion. That is up significantly from 7% in the year before. This fast progress has encouraged us to further increase our target for 2023 from 20% - 25% of our GMV. It is important to highlight, though, that at the same time, we are committed to continue to raise the bar on the criteria. For example, this year, we are raising the bar on the content requirement of recycled products from 20%- 30%. The third example I want to talk about is circularity. Our aspiration is to move the industry from a linear to a circular pattern. Today, our industry is almost completely linear. We take resources, we produce a product, and then it goes to waste. Only 1% of fashion is recycled into fashion again. Let me give you one example of what this could look like already today, and I will talk about one sweatshirt from our circularity collection from our private label ZIGN, which, by the way, also commercially, was a great success. In the design and manufacture phase, we try to make sure that this product is designed to be durable and to be ultimately recycled. For example, by using a very simple design and only one organic input material. When the product arrives at the customer, it carries a QR code, which the customer can scan and get to a microsite, where they will receive information on how they can get the most use out of this product and how they can take good care of the product and repair it even. You might ask, who would use this QR code? It turns out actually 50% of customers went to this microsite, which is huge engagement. When the customer doesn't want to use the item anymore, we come to reuse, where we offer our customers to conveniently trade them in via Zircle and make them available for other customers to buy and to continue to use. Ultimately, when the product life comes to an end, we intend to close the loop. We commit to take back this product and make sure it gets recycled into new fashion. We are at the very beginning of this, but we think we have a great position to help the industry on that journey. We can take a role in every step along the entire supply chain and along the entire loop. We have relevant infrastructure, for example, our return logistics, and we also see it as a great opportunity to interact more deeply with our customers and to create meaningful touchpoints and engagement. Our commitment is that by 2023, we extend the life of more than 50 million products by using one or more of the mechanisms I have talked about. I hope it comes across that we see sustainability not as an additional cost, but as a true investment, an investment to bring our customer proposition to the next level, to truly reach our starting point vision, to change the industry for the better because we are convinced that's the right thing for us to do. Let me quickly sum up the strategy section. First of all, we said our vision is to be the starting point for fashion in Europe. Secondly, we said to achieve this vision, we are transitioning into a true platform business. Thirdly, in order to win the hearts and minds of our customers, we want to build a truly sustainable platform. Now, let me hand back over to Robert to talk about our targets. Yeah. Thank you, Rubin. How do we translate all this, what we have set into our long-term opportunity? Well, in 2017, when we had a market share of the European fashion market of about 1%, we talked for the first time of our long-term ambition. We said, in the very long term, we're going to achieve a 5% market share of the overall fashion market as we assumed the online market share to eventually become 25%. That was at the time, 2017, that was quite a tricky feeling for us, and it felt very ambitious, and it felt very steep. Now, four years later, we look back, and there's a lot of things that have happened. We continuously executed on our growth strategy and essentially doubled the company. Now in 2021, we are about to approach a 3% market share already now. Now 2020 has showed us two very strong insights. First, that the COVID pandemic was really an acceleration of a long-term trend and has really blurred as well the boundaries that happened between offline and online. For example, bricks and mortar stores invest in capturing online demand, by delivering as well out of their stores. Customers connect digitally with bricks and mortar stores or click and collect many, many things more. It's not anymore about offline or online. It's really about how they interact with each other. The second insight is that our platform strategy was exactly the right move to anticipate this, what now happens. Our platform is equipped to play a role in the entire fashion industry, both offline and online. Enabling brands and retailers, e-com or their stores to connect with customers on our starting point. This all makes us reconsider our potential. We know we can execute on our targets. We know we can scale our organization and our capabilities, and we have the right strategy that captures where industry trends and where the history is essentially going. When we now look at the future, it is eventually not anymore about offline or online. It's about the entire fashion market. Our potential is that we can serve more than 10% of the overall fashion market in the very long term. It feels tricky again, but we know we can do it, and we will do it. I'd like to highlight some of the more important milestones on this way towards our long-term ambition, and I would like to talk specifically about our path to 2025. While we previously aimed to double our business to EUR 20 billion by 2023/2024, we now essentially aim to triple our business to more than EUR 30 billion in GMV by 2025. We essentially make an outlook one year later and we add EUR 10 billion on top, which essentially is the size of Zalando today. Throughout this time, we expect to grow at a CAGR of 20%-25% between the years of 2020 and 2025. That's essentially two or three times faster than the online fashion market overall. By 2025, this would mean there will be equivalent of around a 7% market share of the overall fashion market. That makes us the biggest player in fashion in Europe, both offline and online. What does it mean for the margin trajectory? As mentioned, our primary focus is on capturing this immense growth opportunity ahead of us. And to do so, we'll continue to make growth investments into our business, into our propositions. In long term, we can reach a double-digit profitability that we have explained as well in the past. However, this will now happen at a much higher scale than we've explained in the past. David Schröder, our CFO, will go much more into detail on the updated guidance session later today. We have a strong balance sheet, and we are in a great position to invest into the tripling of our business in the years to come. Our advantages are unique, they're highly scalable, they're very powerful. On the customer side, we have a tremendous reach with being the most visited fashion destination in Europe, and we have the most downloaded app in fashion, serving already 39 million people across Europe. We'll continue to drive further investments in here, adding new customers to our platform and deepening the relationships with the existing ones by investing into our proposition in the new markets and as well in the existing markets. On the partner side, we have an unmatched scale of access from fashion choice, from global fashion choice, from our brands, from retailers, and from stores. These choices, they ultimately build upon our trust-based relationships we have built in the past, and we continue to invest in here. The base of our platform scaling is our underlying capabilities and the infrastructure. Our own logistics network is the biggest purpose-built logistics network for fashion with 10 sites across five countries. We've already invested in here about EUR 1 billion into this network, and we're adding two new fulfillment centers now in Madrid and Rotterdam throughout this year. Last but not least, our technology and data assets. We have a team of more than 2,000 software engineers and data scientists, and they only focus on the challenges within the fashion and lifestyle space. They are manifold, ranging from size and fit challenges to building buy now, pay later propositions and payment. In summary, our advantages, they are powerful, they're unique, they're highly scalable, and we have a great track record to invest into them, into these assets. While we focus on organic growth, we as well seek the support of selective M&A, such as our recent acquisition of Fision. To execute our growth ambitions and following Rubin's announcement to leave us after the next AGM, we'll now introduce a new management board set up going forward. David Schneider and myself will continue to lead the [audio distortion] as Co-CEOs. David continues to set a strategy towards our brand partners, and we'll focus more on sustainability and as well on D&I strategy. I will be responsible for strategy and corporate affairs and communication, and we jointly continue to lead the management board going forward. We welcome Astrid Arndt to the newly created position as Chief People Officer. The role of work in society is changing, and the past year especially highlighted that Zalando has a unique culture and an entrepreneurial approach that are key assets for us. For tripling our company going forward, we need to retain our best and key talent. We need to find the best ways of working, and we need to continue to attract key talent at scale. Astrid has proven that she has a deep understanding of our people and culture with a great business acumen. We are as well creating a new role of the Chief Business and Product Officer. Jim has done an amazing job as a CTO, and we look forward to him leading now our efforts to develop and grow and market our consumer offerings and innovation. David Schröder continues to oversee the financial development of the group as Chief Financial Officer and at the same time the best-in-class capabilities as our logistics and as well our payment infrastructure. David has done an amazing job as CFO and being your primary point of contact, especially throughout these very uncertain times in the pandemic. This setup is not going to change. Until the AGM in May, we're very happy and grateful that Rubin continues to support us in this transition until his departure. We have a strong management board team in place that has a very strong track record in our continuous execution. This new setup enables us both to go very deep, but as well to focus on the long-term horizon, being the starting point for fashion in Europe and eventually serving more than 10% of the European fashion market. Summing up now and coming to the key takeaways of our note. What are the key takeaways? Number one, we have a very clear strategy, and our number one priority is growth. The starting point, that's the ultimate prize to win, and we continue to invest here. Second, over the last couple of years, we've done tremendous progress, and we consistently delivered on all our targets that we set ourself. Three, the opportunity for Zalando is immense, so making us very confident that we can reach more than EUR 30 billion by 2025, and in the long term, even capture and serve more than 10% of the entire fashion market. Number four, we continue to drive investments that will catalyze exactly this long-term growth for our business. Thank you very much for listening. Now we would like to go towards the Q&A. Welcome back here, live in Berlin. I'm with our three Co-CEOs, David, Rubin, and Robert. All tested this morning, so all fine, and we can therefore directly jump in our Q&A. I already got the first question asked by Damon Holtz of Bank of America. It goes to you, Robert. What gives you the confidence that 10% market share is achievable in the long term, and are there markets where you already have this market share? Yeah. Thank you for your question. As we said in the keynote, I think looking back, we have always achieved our targets, and we've always performed very well on the growth side. Now when we're looking into the situation, especially how it last year developed, we now even more see how it actually has accelerated and has provided a step change in online penetration, how actually online, offline come together. As a platform, we are in the right place to really capture on all these potentials. When we look in towards our business, our platform, we see basically a unique asset and potential everywhere on the customer side, on the partners with many thousands of brands that we continue to onboard. In the logistics side by just improving and adding, and increasing our footprint in logistics and on a data technology side. There's opportunities everywhere that we feel very clearly about, that we can and should execute on them going forward. I think when we look at the market share data, we already see that in DACH region, we are at a 5% market share and seeing heavy growth and seeing heavy potential. That makes us very confident that we can achieve a 10%+ market share in the long term. Thanks, Robert. A next question coming from Marco Barresi from Lombard Odier. It goes to you, David. When we listen to Adidas and Nike's B2C strategy, it seems they are pushing even harder to sell directly to their clients. How do you manage the potential assortment conflict of interest between the key partners here? We don't really see a strong conflict here. I think it goes even the other way around. Because we encourage brands a lot to go direct to consumer. I mean, that's what our whole platform really targets at. We give them that platform to connect all their inventory. They can even connect stores. We open up our logistics infrastructure. We provide data services. We allow them to target their audience with messages. We even go into brand followerships to really build longer lasting relationships to customers. Actually, we think we are pretty close to the core of the brands' strategies if they want to go more direct to consumer. I'm also pretty sure that, if they raise out as ambition levels, that we are like what we do in our platform through Partner Program, that's very much included in their ambitions. I think it goes rather into now the discussion on how do we actually serve the customers jointly in the very best way. How do we make it more seamless, as they also know that we address customers in the multi-brand environment? We have this very broad reach. Customers buy 18 brands per year on average. I think it's a different way of targeting customers, than in a mono label environment. I think that's what we're working on, and then rather thinking about how to add the capabilities to make this even better in the future. Thanks, David. We already got the next question, from Sherri Malek, RBC. I think that goes to Robert again. Could you please explain the further geographical expansion opportunity, the timing of the decision to expand to those eight markets, and how much is expected to contribute to overall growth? Also, where do you see the highest growth opportunity in your existing markets? Yeah, sure. Maybe first in terms of timing. It's always an execution question, and we feel like we have now the execution capacity to enlarge now towards these markets. Based on the results that we have also seen in Poland and in Czech Republic, that we know we will achieve there this similar starting point claim as we do in the existing footprint. That's in terms of the timing. How it contributes to the overall growth, the biggest growth is obviously still coming from the existing footprint. We expect as well, a sizable share of growth coming from these markets. Where we see the biggest growth potentials in our existing markets is, as I highlighted in the keynote, is in markets where we have the lower penetration percentage of our customers, which are markets such as in Southern Europe, such as France, Italy. These are markets where we see particularly a lot of traction with regards to our investments into the local proposition, local assortment, and communication. Cool. Thanks. There's a question on sustainability to Rubin from José Rito from CaixaBank. It goes on sustainable products. Is the sales evolution higher on products with the sustainability, and can you give any further color in general on your sustainability assortment? Sure. On our sustainable assortment, we have seen a number of factors driving growth. I would say the most important one is that we have worked together with brands, to make sure that we can offer even more products in this category, for different reasons, because they are produced with sustainable materials, because they are produced from recycled materials. Really the focus has been to reach out to brands and grow that assortment. On the customer side, we have seen huge interest in this category, and from the data that we see, that has even been enhanced during COVID. Even though the pandemic obviously takes a high share of mind from all of us. I think it also emphasizes this idea that we have to take care of our planet, and we have to think about the future and take the right decisions. We have seen a high demand for these products. We also see conversion rates of these products being very healthy and very positive. That really emphasized this idea that in order to be the starting point, we need to drive the sustainability idea, and we need to be credible in this regard. I think it has been very encouraging to see the interest in these products. The next question is on Connected Retail. David, what's the typical profile of the stores you're connected through Connected Retail, and what GMV contribution do you assume from Connected Retail? Okay. I'll start with the second part of the question. In Q4 last year, we were 12% GMV share in Germany. I think that was a very extraordinary number. We do not expect that to grow at the same pace now. Of course, it's a special situation that we had a very strong demand online. Stores of course, were closed down and had that inventory. We do not expect that at the same pace. On the other hand, we also see so much more potential. We really see how each of those stores also increases GMV and is very engaged. We are now at 3,500 stores, there are like 300,000 stores across Europe. That's why we definitely see a very big potential. To the typical store, I think there is not such thing as a very typical store, because it is a very diverse set and we can be open to many of them. I think maybe one category is brands that connect to our platform, and we work very closely with. I think for them it makes a lot of sense to connect their stores additionally to provide more value add. I think we have very strong retailers that have a special niche or are specialists in certain areas, have great assortments, great stories to tell, great curation to customers. I think that is great. We also have local players and can just add, of course, just assortment access and, in the long run, a super speedy delivery. I think over time, we'll build on more of these additional customer benefits out and, therefore engage also with those partners on different levels. Cool. The next question comes from Nizla Naizer. It goes on about M&A. It goes to you, Robert. There has been media reports on Zalando being interested party in Flaconi, which belongs to ProSieben at the moment. What are your thoughts on this, and how do you view M&A as a target your EUR 30 billion in GMV? How important are other verticals such as beauty in this EUR 30 billion target? Thank you. In terms of the media reports or rumors, I think we don't comment on rumors. Our view on M&A is not a preconceived one. We see it as one tool of how we execute on our plans. Our first preference is mostly on organic. If we actually see there's some capabilities that we can achieve through M&A, then we consider M&A as one way of our toolbox. I think Fision is such a great example where it actually nicely adds technology capability that we would have otherwise had to build up by ourself. What was the last piece on the question? Sorry. Beauty and how much of. On the beauty. Beauty as a category, I think it's one of the newer categories. We're very happy with the progress that we've seen. Three-digit percentage growth last year. There's, I believe, 400 brands now that we are engaged with on the beauty category. We're very happy with the progress that we see, and we particularly, as you will hear later today as well, will invest into the customer proposition to make the beauty assortment even more attractive to our customers to see even more potential from the beauty category going forward. Cool. Thanks. There's another question from Olivia Townsend, I think that also goes to Robert, regarding the geographic expansion strategy over the next few years. Specifically, also including increasing our market share more meaningfully in the U.K., and what do you think needs to change if you want to make any marketing ranging fulfillments in order to do this in the U.K. here? Yeah, I think when it comes specifically to the U.K., I think the plan that we are executing on is mostly geared towards our existing footprint where we serve U.K., but our focus is very much on continental Europe. For the U.K., the plans have not changed, so we continue to be active in the U.K. We continue to make progress. The big proportion of our growth is obviously coming from continental Europe. Thanks. I think we have time for one more question, which comes from Simon Irwin, Credit Suisse. It goes to Rubin about our logistic footprint. The question, can you explain why you are no longer announcing your logistic footprint as you have done so in the past? Announcing our logistics footprint. Our logistics footprint continues to be a big part of our strategy because the whole platform idea builds on the theme of providing infrastructure to an entire industry, and that consists of data and technology, of capabilities like payment, and also, importantly, logistics. I don't think that any single brand could invest into such a vast logistics footprint as we have. We operate about 10 sites in five different markets, which goes way beyond the e-commerce footprint that any individual brand could build. It's the second largest logistics footprint after Amazon in Europe, and it's something we are really proud of. We just took live a new site in Spain. We will take live a new site end of this year, beginning of next year in Netherlands. We continue to look for new lots to really invest into our footprint. In the past years, we have invested about EUR 1 billion in CapEx. Going forward, given all the growth we are planning and given how important Fulfillment Solutions have become for the Partner Program, for sure that will continue to be a big investment theme of the future as well. I think also a big differentiator in what we are trying to achieve. Thanks, Rubin. Thanks, Robert. Thanks, David. That concludes the Q&A session, and please stay tuned for the next deep dive session on customer with Jim, Anne, and Martin, and we'll continue with our agenda at 12:30 P.M. CET. Thanks, and see you soon. Welcome back. Let me first share what you have learned so far. We have been sharing our new growth ambition until 2025 to reach EUR 30 billion in GMV. We learned that partners as well as customer are an essential part of this journey. We currently have 39 million active customers, which is the population of the state of California. Let's now see how we build a great customer experience for all of them, and I therefore now hand over to Jim, Martin, and Anne. With that said, please, Jim, go ahead. Welcome to the customer deep dive. Today, we want to talk to you about our vision for building a great customer experience. I'm joined by Anne Pascual, Head of Design, and Martin Rost, who leads Offprice. Together, we're going to share with you our ideas about building a great customer experience. We also want to share with you some of the progress we've made since the last Capital Markets Day, but also the progress we want to make before the next one. As Robert mentioned, our vision is to be the starting point for fashion. As an idea, that's pretty simple. We want to be customers' first choice whenever they consider or purchase fashion. What does it really mean, and what do we need to do? That's the question we hope to answer with you today. First and foremost, we believe we have to continuously improve the experience we already offer, as customer expectations are constantly rising. We also have to anticipate and innovate by understanding what future needs and wants from our customers will be and meeting those. Let's take a deeper look. Improving the core experience. This includes endless choice, seamless convenience, and a tailored experience for fashion. Innovating to address future customer needs means we also need to introduce our customers to new ideas, to new propositions, a customer proposition being something that has distinct benefits that we can market to our customers and introduce to them. On that side, we have our work around pre-owned, beauty, Zalando Lounge, designer, and Zalando Plus today, and we'll have many more ideas coming in the future. Turning to endless choice, we're offering our customers more and more choice and a fresher and fresher assortment. As you can see, over the last two years, we've made significant progress on both dimensions. First of all, we've grown the total SKUs to 890,000, which is a huge increase over the 530,000 we had two years ago, 68% growth. In addition, we've also accelerated the freshness of the assortment, going from 1,500 per day on average to 2,300 per day on average. A 53% growth. This is a really important aspect of our experience. On the other hand, we're also focusing on specific categories. We're super excited to have added many special brands over the last year. I would call out ARKET and New In on the fashion side. We've also onboarded Ralph Lauren and Jil Sander on the beauty side. Through one of our retail partnerships, we've also been able to add Vichy. We're diving deep into specific areas, and we're really building out credible and compelling assortment, but we're also growing the overall assortment. Convenience has long been a hallmark of the Zalando experience, and the last two years have been no different. We have really focused on making payments, delivery, and returns all easier and better. In 2020, we continued on this journey despite the significant hurdles that we faced, as did all other e-commerce companies. For example, we were able to extend the offering rate of our buy now, pay later experience by 5 percentage points to 70%. This is one of the most loved experiences on Zalando, and the reason is clear. Customers find what they want online, they receive them in the comfort of their own home, try them on, and only then decide what to keep and what to pay for. You can see from the NPS value of over 90 that customers love how we offer payments that really are fit for fashion. We've increased convenience from a pickup and returns perspective by growing the number of pickup points we have. This is an experience customers really love and value. Having those 153,000 pickup points, which we've grown by 84% over the last two years, these are the kinds of things that make it much easier for our customers to shop apparel online and also creates a lot of loyalty since it's such a great and seamless experience. We can't talk about convenience without acknowledging what a significant challenge 2020 was for all e-commerce companies, including us. We've been working hard to make our network more scalable and more resilient. We've onboarded over 40 last-mile service providers to introduce flexibility and resilience there. We've also worked super hard to introduce the right safety measures for our staff. We did over 40,000 COVID tests in Q4 alone. To me, it's truly amazing the work that has been done in this area and all the collaboration and cooperation and problem-solving that has gone into ensuring Zalando can ship more parcels than ever at the same great service level as always before, and thereby preserving one of the truly foundational elements of our brand, that we're a great way for customers to experience fashion due to this seamless convenience. I want to thank all of our frontline employees for the tremendous impact they've made for us in 2020. When it comes to the digital experience, you're going to hear a lot more later. I'll just say that we've been introducing improvements there as well and also seeing them pay off. Over the last two years, we've seen a 6 percentage point increase in a metric we feel is very important, which is what percentage of our customers visit us five times or more per month. That's what we're shooting for, that highly engaged customer. We've also invested a lot in our app experience. Our app experience is where customers engage with us the most deeply, and we've been able to continue adoption of this 15 percentage point increase over the last two years in visits on our app. Really great progress there. How does it all come together? Our customer base is growing. They're visiting us more often, and they're happier than ever before. I think this is truly amazing, 46% increase in active customers, 72% increase in site visits. This is some really accelerated development. To see that that's also resulting in an all-time high on NPS is really great to see. This has been a tremendous effort from all our teams under really difficult circumstances, and I personally want to thank them all. We've been able to improve the fundamentals of our experience quite a lot when it comes to endless selection, when it comes to seamless convenience, and when it comes to that digital experience tailored for fashion. Many improvements and quite great outcome when it comes to our customer engagement. Now what I'd like to do is ask Martin and Anne to tell you a little bit more about how we deepen customer relationships by innovating in the core, but also in elevating distinct customer proposition. Thank you, Jim, for the introduction and for summarizing the progress we made in 2020. I'm very excited to share with you what we have been working on in 2020 and share also how we're going to evolve and innovate our experience in 2021 and beyond. We want customers to open the Zalando app whenever they think about fashion and beauty and come back again and again. That's why we want to create a truly exciting destination that they love. The two dimensions we're going to talk to you about is on one hand, how we've been improving our core experience, and second, how we plan to elevate distinct propositions that answer specific customer needs. In 2020, we've been repositioning our mainly transactional experience to become a lot more engaging and differentiating by delivering four core marketable benefits we want to be known for and customers associate Zalando with. They are on one hand, how to discover your brands, how to make the Zalando experience your own, how you change for the better, and how you get the plus treatment. Let me now introduce you to each of these benefits and improvements in more detail and how they answer specific customer needs. Jim mentioned earlier the increase of our selection, which can be quite overwhelming to some of our customers and also boring to scroll through a grid of products. As of today, 65% of the time spent of our customers are actually on catalog pages, which is obviously not a small problem to solve and improve. That's why we're going to introduce a whole new way to explore the entire assortment of Zalando in a more visual, intuitive, and enjoyable way. We're going to go beyond offering a category tree and search by providing visual entry points to fashion-specific dimensions. What you can see here on the visual, little cards that introduce customers to specific aspects. Let's pick an example like dresses, which if I go to Zalando today, I get 20,000 results, which I would have to go through. Instead, with these new entry points, I can pick distinct elements of dresses and drill down into the assortment, reducing the amount of items to down to 1,000, 600, or sometimes 50 items that are a lot more relevant to my needs. For fashion savvy customers, we provide more distinct dimensions and ways to browse the assortment. For less fashion savvy customers, we provide a more diverse set of products. We're very excited to launch these improvements for all our customers in all markets on all devices later this year. Customers are not only browsing for individual products, they also seek inspiration coming from brands that match their style and values. This is why in 2020, we introduced a new way to showcase individual brands, let them tell their stories and celebrate the products they offer in exciting ways across the entire customer experience. Customers can now also start following the brand, like here, New Balance, for instance, or The North Face, where they get notified about new products and offerings as they come in. Active followers visit our site 2.3x more often than active customers that don't follow brands, which is clearly an indicator for an increase in engagement. Once you have found a product or brand you love, you obviously want to find clothes that fit you. That's not totally easy. In this case here, some of us end up buying the same pair of jeans for the last five years because they simply fit perfectly. We have been investing a lot over the last couple of years to solve the size and fit problem by providing algorithmic solutions that provide size advice on individual products. As of today, 50% of all items ordered include size advice. This has been driving down size-related returns significantly and has been avoiding unnecessary returns for customers, the environment, and Zalando. In 2021, we want to allow new and returning customers to submit their size preference, increase the availability of advice across the assortment so that every customer will have their unique version of Zalando. No tedious actions to be repeated, no need to re-enter information again and again. We're going to also add personal preferences for brands so that customers can discover and surface products from brands they love and follow. This tailored experience is relevant beyond a single visit. It welcomes customers repeatedly and makes Zalando truly their own. Zooming out, we want to offer more and mean more to our customers. We want to build on the strengths of our core experience and elevate on top a set of distinct propositions that respond to specific customer needs in a marketable way. Let me show you some concrete examples and propositions in more detail. There's a growing interest in pre-owned fashion across Europe. It matches our commitment to sustainability that we want to have the net positive impact we seek to make, as Rubin pointed out in the keynote. Pre-owned has been the category that attracted the largest number of first-time shoppers since restrictions on public life were put into effect. This is especially true for the younger audiences, Gen Z and millennials, that are seeking for affordable and sustainable fashion, yet also expect flawless quality and best-in-class e-commerce convenience. Today, customers can easily discover pre-owned items in our experience and also get to upload products they no longer want to wear and want to trade in. We see a 25% category repurchase rate, which is significantly higher than in other categories. There's though another example of a distinct proposition we want to offer, which is beauty. Beauty is a very personal topic. Like this customer here from Italy who mentions that putting up a beauty product is a moment of joy and self-care, which particularly in the pandemic became more important and helped also to accelerate the general transition to online shopping by the Gen Z audience and we believe opens up the opportunities providing a distinct beauty experience. If you think about it, beauty is really a multi-sensory experience, given the different textures, the color shades, individual skin types, and fragrances that products have and that customers want to know more about. That's why buying a beauty product requires inspiration, guidance, assurance, and testing before a purchase decision is made. We want to showcase the different subcategories of beauty products by providing the right kind of information and storytelling, drawing customers in so that they understand what does a product contain? "How will my skin react? Will the color fit my dress?" T is also the space where more and different forms of advice are much appreciated. We aim to provide a tailored experience and level of advice, allowing customers to assess their skin profile. Looking at these visuals, you see how we're going to have experts and enthusiasts sharing what they can't live without, and also share their tips and routines, which relates to everything from ratings, reviews, to tutorials. Could be about bedtime face time routines, easy three-step skin time routines, or how to combat dryness of your skin. From then on, customers don't need to go to two stores. It's as easy and pleasant as taking the escalator in a department store and go from one floor to another. As described here, a beauty-focused experience entails differentiated functionality and communication, but really customers can benefit from seamlessly transitioning between them. Both pre-owned and beauty show us how creating a more distinct and marketable proposition to our customers, they become more engaged and loyal to Zalando overall. We offer more reasons to come back to Zalando beyond individual purchases, and through this, Zalando becomes the first choice for apparel, pre-owned, and beauty. When it comes to engaging customers more deeply and frequently across propositions, we can learn from and build from the great success of Lounge, Zalando's shopping club experience. Lounge has seen phenomenal growth in 2020, proving how its unique engagement model deepens customer relationships. I'm very excited to have Martin now talk to you more about Lounge. Thank you, Anne. Let's recap here. To deepen customer relationships, we can make each proposition better, and we can also get our customers to engage with multiple propositions. As you're probably aware, fashion is a very diverse space. It supports many different ways of engagement, and we can create specific propositions for our customers. One of these propositions is Zalando Lounge, our shopping club. What we do at Zalando Lounge, well, we offer fashion products at a discount up to 75% in daily sales campaigns. It's that special offer that creates a special kind of love from our customers. The thing about the engagement is we launch these sales campaigns at 7:00 A.M. in the morning, and our customers really love the fun of checking out the new offering and finding great deals. In fact, what they oftentimes tell us is, "I just bought an amazing piece that 10 minutes ago I didn't even know I actually wanted to buy." Because we have these campaigns up for 72 hours, our assortment is constantly refreshed, and that lets our customers come back often. It's not only an amazing opportunity for our customers, but equally also for our partners who really love Lounge. It's a great way for them to manage their inventory in a way that protects their brand equity. Let's look a bit deeper into the specific engagement model that we have with Zalando Lounge. As explained, we launch these campaigns at 7:00 A.M. in the morning. What we clearly see here on the slide, the peak of engagement is between 7:00 A.M. And 8:00 A.M. in the morning. Our customers are really keen to not miss out on the new offer as soon as they get out of their bed. What's the easiest way of checking out the new offer? It's our distinct Lounge app that customers can download and use to access our newest offer on a specific day. For our most loyal customers in Lounge, the app becomes their starting point for fashion in the morning. What we see is that this service, the distinct proposition that Lounge is, it is extra popular in price-sensitive markets. For instance, in Poland, which is our second biggest market already today at Zalando Lounge. What we can say is the combination of value add for our partners and the joyful fashion discovery for our customers turns into a great business, that business has contributed EUR 1 billion of GMV last year to our platform. Mind you, Lounge is not just a shopping club. It's actually one of these propositions that Jim and Anne have been talking about, it's an exciting proposition for our most loyal fashion store customers. Combined, we can create a flywheel of engagement. What we do for the fashion store customers is we serve their need for exciting fashion deals with daily touch points. What we see is, if we manage to get customers excited about Lounge, we get a level of engagement that is far deeper than what any traditional measure could achieve. We actually have a proof point here on the slide. As you see, customers who ordered on both fashion store and Lounge last year placed on average 12.3 orders. That represents a very significant uplift compared to the 4.8 orders per active customer on average on our platform. Naturally, this improves value contribution, but more importantly, it deepens the relationship and it minimizes churn. The good news here is Lounge is not the only distinct proposition that allows us to do this and that helps us deepen the relationship with our customer. Let's talk about Zalando Plus. What is Zalando Plus? Well, it's our subscription model that gives customers the best service and the best experience we have to offer in exchange for an annual fee. Internally at Zalando, we tend to refer to this as "they get the Plus treatment." So far, the main benefit has been prioritized shipping, which naturally has been a highly appreciated benefit during the pandemic last year. If you wonder how that materializes, last year, Plus members, three quarters of our Plus customers, received their parcel within two days of placing the order, which compares to only one third of non-Plus customers receiving their parcel. It's therefore no surprise that we see a significant uplift in customer loyalty. As you can see here, we are happy to report a double-digit increase of 10 points in NPS for these customers. It's clearly a sign of their love for our service and experience, and that actually also shows financially. Plus customers, they visit us twice as often and they spend three times as much as a non-Plus customer. It really deepens the relationship with our most valued customers. You might wonder how significant is Zalando Plus already today. Well, we have 500,000 paying members in Germany. Last year, we have seen them contribute 9% of GMV in fashion store in Germany, which is twice the share compared to 2019. That gives us the confidence to expand benefits and scale it internationally this year. What we're going to do is, as you can see here on the slide, we're going to launch an assortment benefit that lets our Zalando Plus customers shop Zalando's hottest assortment before anyone else. We are going to bring that service also to other markets, starting with Netherlands and France, and a third market later this year. There's even more good news about Zalando Plus. We are actually turning Plus into a cross-proposition experience by introducing it on Lounge, also with an assortment-related benefit. The thing here is, it's not just about creating a better experience for our Plus customers on Lounge. It's actually about turning Plus into a marketing flywheel that lets customers discover other propositions. Imagine, once a customer is on Plus, we have an amazing opportunity to highlight the benefits she has on other propositions. Let's sum it up here. We constantly innovate and improve our core experience, as we have heard from Anne before. We have distinct propositions. We have pre-owned, we have Lounge, Plus, beauty, and designer, and they create value for our customers, and they complement each other. If we get our customers to engage across multiple propositions, there is significant upside in terms of engagement, loyalty, and ultimately, customer lifetime value. In a nutshell, Zalando is the starting point for fashion for our customers. Before Jim closes our presentation and opens up to your questions, let's see how it all comes together. As we've said, our ambition is to be the starting point for fashion for our customers, to be their number one choice whenever they consider or purchase fashion. How are we going to get there? Two ways. First, continue to improve the core experience we offer today, and two, introduce our customers to new, elevated propositions that drive deeper engagement and longer-term loyalty. We launched pre-owned last year. This was much more successful than we had predicted, and we're rapidly scaling pre-owned. We also have had continuous effort into beauty and designer, building out our brands, our portfolio of assortment, and we're also now focusing on how to elevate those customer experiences and solve for distinct customer needs in those areas, as Anne mentioned. Further, as Martin mentioned, we feel like we have a formula with Lounge that drives daily engagement, something that we can build upon and extend further. Plus really brings it all together. Plus is an area where we elevate each of our different customer propositions and offer our customers more in exchange for a subscription. We're really just getting started with most of these. As we're illustrating in the chart, we can grow our business by expanding internationally, acquiring net new customers in existing territories all through our core customer proposition. We can also deepen those customer relationships by having these new elevated propositions, driving awareness and adoption of these new areas. We feel like we're well on track to exceed our ambitions for 2025, and that we have a lot of room to grow, both with existing and new customers. Thank you very much. Welcome back here in Berlin, live again with our three presenter, Jim, Anne, and Martin. We directly can jump into Q&A. Let me start with the first question. It's about size advice, Jim. This question comes from Marco Barresi. How do you reduce the impact of high return rates with smart fit advices? Thank you. As you know, we acquired Fision last year. This was based on the strength of the team's computer vision algorithms, that allow us to build on one half of the equation for reducing size-related returns. Reducing size-related returns really involves both article or product intelligence, as well as customer intelligence. We're excited about the potential impact for computer vision and what improved smartphone cameras can do in terms of the customer intelligence dimension. We think this will help us much more quickly get to know the customer's proper sizing and make those size advice recommendations much faster. Today, customers are already helping us get that customer intelligence through telling us about articles that fit well from their wardrobe, but this will just really help us speed this along. Thanks, Jim. There's a question coming on brand followership, Anne. The question is coming now. I'm still looking for it. From Rocco Strauss from Arete Research. With people following brands coming to Zalando two to three times more often, do they tend to buy more than 18 brands on average, and do the higher site visits translate into higher GMV for those followers? Yes. Indeed, customers who come visit Zalando more often, hence open the app more often, get to see more products, explore brands more regularly, spend more time with us, and hence also purchase more over time. Indeed, we see this positive effect. Cool, thanks. There's a question on Zalando Plus for Martin, and it's about a clarification on the Plus memberships. In Plus, we mentioned 500,000 in Germany standing for 9% of the GMV. Is Plus the 9% of total GMV, or is it just the German market figure? Yeah. Thank you. Happy to clarify. Right now, we offer Plus only in Germany, and hence the 500,000 paying customers or Plus members are in Germany, and accordingly, the 9% of GMV is the contribution to the fashion store GMV in Germany. As we mentioned, we have plans to expand internationally, go into additional territories. We expect over the course of this year to change the GMV contribution from Plus customers substantially. Thanks. There's just a follow-up on Plus, we stick with you, Martin. Does the incremental GMV generated from that Plus customers more than outweigh the more expensive fulfillment cost? Do you need to further improve the fulfillment proposition to make next day standard? You mentioned three or four customers getting delivering within two days. Question is coming from Adam Cochrane, Bank of America. Yeah. Thank you. Good question. Maybe to touch on the last point first. Naturally, last year it was all about reliability and resilience of our fulfillment network, as Jim explained. We're proud to report here that especially our Plus customers had the benefit of a consistent and reliable fulfillment experience. Far, as explained, Plus has a convenience benefit at its core, and we're continuously reviewing that. While we also, as explained, start to add additional benefits around assortment this year. We are doing continuous research there to understand what do fashion shoppers really want, and how can we make their experience on Zalando, on the platform, even better. We see the investment, speaking of the cost that are mentioned here in the question, that expense, we see that as an investment into the customer relationship. It's our initial contribution to create a deeper customer relationship, and we see that this pays off, as we have seen last year with three times as high a GMV contribution. Thanks, Martin. There's next question on Beauty, and I think that goes to you, is on like what proportion of Beauty purchases are combined with other categories, were asked by Olivia Townsend from UBS. We do see an overlap of Beauty and Fashion customers. 40% of all Beauty purchases also contain a fashion item, which really provides evidence that there's this overlap and complementary need that we're answering for our customers. There's another question from Charlie Muir-Sands, Exane BNP. It goes to Martin again. This time, it's on Lounge. How much of the Zalando Lounge supply comes from Zalando Fashion Store surplus inventory versus brand partner campaigns? Sure. The good thing is here, we do both. We consume stocks that are provided internally via the platform, coming from the Fashion Store, from the wholesale program that we have in Fashion Store, but also from partners. Obviously, over the course of the season, this varies. Towards the end of the season, typically, we have a relatively higher share of stock coming internally. I think what's really exciting about the platform opportunity for us is we have services for merchants such as ZFS, for instance, where we have just started to build an offer where these ZFS partners can also manage their inventory using Lounge campaigns. It varies, and we're happy to report that we tap into both supply pools. Thanks, Martin. There is another question for Anne on size advice. This time, Rocco Strauss from Arete again. Did size advice meaningfully affect lower returns in 2020, aside from the product mix? Is this something offsetting the normalization of return rates in 2021 to a certain extent? Yeah. What Jim mentioned earlier is the continuous positive development we're seeing by providing size advice for our customers, with a wide range and availability, really driving down size-related returns. When it comes to offsetting the normalization of return rates, no, because this is actually really driven by the category mix. Again, by combining the size advice also with brand preferences, the advice gets better and better, and has this positive impact on lowering return rates overall. Thanks, Anne. There's a question on pre-owned, I think particularly to Jim. Jim, how has the pre-owned business progressed so far? Yeah. Thank you. It's progressed surprisingly well. We started out in October, and from October to February, we've already almost tripled the amount of articles available online. We definitely see a situation where demand outstrips supply, in terms of where we are right now. We see some amazing stats. For example, about 25% of the articles we list are sold within two days. We're very focused on continuing to scale this. We think that customers really love the convenience and the trust factor in how we've approached pre-owned on the fashion store. Cool, thanks. Thanks on that one. There's also a follow-up just on pre-owned, is like how do you assess the value of the items the customers would like to trade in? If I understand the question, this is about the trade-in credits that we provide. We do a combination of things there to assess the value. For one thing, we basically look at the brands and the historical sales price in the secondhand market for these articles, and there are different, essentially, pricing curves for different brands, different category types, and so forth. Certain articles hold up value much more than other articles. If we feel an article is not something that we could offer a good price to the customer in return for that article, then we won't offer to buy the article. We also pay attention to how much value we're creating for the customer. In addition, though, I would say the way we look at it as a company is we see that this expenditure on these trade-in credits is also an alternative form of marketing spend for us, where we can engage with our customers in channels outside of paid marketing channels. For us, we're excited to provide that service to the customer. We're excited to provide them some value, and we see additional reasons to invest in the value of the articles themselves. Well, thanks, Jim. I think we have a quick one for Martin from Aneesha coming from Bernstein. How do brand partners view Lounge versus their own off-price business? Well, for them, it's their access to online off-price as a category, as a segment, I should say. What we actually see is that brands collaborate, especially last year, we saw a strong inbound interest from brands to collaborate with us, specifically to manage the inventory as they had challenges to engage with customers offline. From a platform perspective, our idea is ultimately we want to create a portfolio of services that we can provide to any brand that is out there and that is looking to collaborate with us. Off-price as an opportunity is just one of the many services we have in that portfolio. Thanks, Martin. Thanks, Anne. Thanks, Jim. That concludes the session on our customers. Please stay tuned for the next deep dive on partners, which will start shortly. Back again, after hearing how we're going to treat our customers and what a great experience we are building for our customers, we also want to dive deeper now into what we're going to do for our partners. We are building a platform that provides a scalable solution for the brands, retailers, and store. We have currently more than 4,000 brands on our platform, offering around 900,000 SKUs, which is an increase of roughly 70% compared to two years ago. Let's take now a look on how we build a platform that is relevant for all of our partners. Video on. Welcome, everybody, to our partner deep dive. I'm excited to host this session for two reasons. Number one, I always get excited when we talk about our platform approach and how it's supposed to create this virtuous circle between customers and partners. It's even more exciting if we can actually show how it actually is working and is accelerating. The second reason, this time, we dedicate most of the time looking at it from a partner perspective. I brought some voices from our partners. I'm delighted to have Christoph from TB International here for Q&A. We have some partners sharing their view per video, and it's also great to have Diana here, who is collaborating a lot with our partners, as she's responsible for our Zalando Marketing Services. I think it's really great to take the partner perspective, as we're really proud of the relationships we built. We think they're really inspiring, and they have brought us quite far. Let's start with a really short summary of why our platform approach is so important for our ultimate goal to be the starting point for fashion. We talk a lot about endless choice, and having this endless choice in fashion is the winning argument for all customers. Endless choice means, for me, having all brands, almost endless choice of styles, and a great availability. Our platform model enabled us to make really big leaps forward along all these dimensions. We increased our assortment from 2,000 to 4,000 brands within the past two years. We increased the styles we offer. Here the ultimate goal is that you can say, "If it's not on Zalando, it doesn't exist." We also increase the availability through our partners tremendously. Be it from brands, retailers, and stores that connect additional inventory. EUR 690 million GMV just coming from backfilling existing styles through our partners. It's very clear to me that we cannot get all this access on our own. If we buy in wholesale and manage it ourselves, that limits us in terms of management attention, inventory risk, and also processes. Instead, what we do is we build out capabilities and propositions that are highly attractive for partners and incentivize them to bring the best what they can offer to the Zalando customers. Of course, partners get something in return that makes the partnership a win-win and really builds trusted relationships. First of all, we give partners the key to a huge and very relevant audience. I mean, 39 million active customers, very interested ones, and the customer range is growing more and more. All of them are there for fashion and discovering new things. Second, partners seek complementary capabilities. Being successful digitally requires capabilities around tech, data, logistics, marketing, et cetera. Partners can tap into all of our investments and leverage our capabilities that complement them. It's really a kit of tools and business models partners can integrate to focus on their own core strengths and their own strategy. Thirdly, partners can easily use our tooling to improve the offer to their customers. We provide tools to steer performance. Tools that generate unique insights and help partners getting better and better for their customers. Finally, our business models and service mixes are highly flexible. Partners can leverage our offers according to their own strategies and capabilities. Let's say a Nordic brand wants to win over a large female audience across Europe. They can choose a high mix of Partner Program to drive their offer. They can even connect stores. They can leverage our logistics capabilities to ship internationally. They can decide to invest in ZMS to build out their brand and tell all their stories. That is just a very rough view of what we do, and it goes a lot deeper. We developed what we offer to partners very much in collaboration with them. We appreciate very highly the strong relationship we have built up with partners and believe in the power of bringing different capabilities together. I think we can truly boost each other and are quite proud of what we've built jointly. Now it's really time for me to hand over the mic to our partners and let them tell their view. I can tell you we have such a diverse set of partners, which is very inspiring. What they all have in common is that they want and need to be successful online. There are three major challenges for partners to do that. Number one is selling direct to consumer. Number two is driving internationalization, which requires capabilities. Number three, it's deepening the relationship to your very specific audience. Before we dive into these challenges, let's turn it over to some of our partners that have gained the experience of how to leverage our platform. We work with a diverse set of partners across Europe, from specialized brick-and-mortar stores to large global brands. My name is Thomas Weckerlein. I am the Chairman of the Board of Directors of Rudolf Wöhrl SE. [Non-English content] I'm Jacqueline Smith-Dubendorfer, Vice President of Digital Partner Commerce at Adidas. Partner Program has evolved to become a really critical part of the business. We've seen exponential growth over the last five years. We've invested in the partnership together in order to innovate and launch new concepts like same-day delivery from urban city areas, ship from store, from our Adidas stores. Really, I think our goal is to keep pitching ideas to each other and see where we can take this together. I'd also say that in times of crisis, which we all know we've experienced in the last year, the program has enabled us to step in and help one another when we've seen inbounding or outbounding challenges and ensure we can always serve the consumer, because that is, at the end of the day, the most important thing that we both jointly share. Hi, I'm Roger Gray. I'm the head of e-commerce for Mango. Our experience with the full Partner Program with Zalando has been very successfully, because it helps us to reach millions of customers across Europe with our brand that without them would be challenging to capture. Zalando fulfillment services bring us the opportunity to drastically reduce the logistics costs and then improve the customer experience at the same time, which is quite a win-win situation, and it helps us to leverage our offer on Zalando to offer more products and to cover better the customer experience of customers. My name is Lars Elmegard. My name is Kuno Kallentoft Madsen. I'm the CEO of Borgen. Started as a wholesale business, moved into what I would call the drop shipment model back in 2018, and now moving on track to become more or less a pure ZFS model. With the ZFS, we have obviously managed to get into a larger geography, meeting new customers in new countries, which is, of course, a huge opportunity for us because we wouldn't otherwise be able to enter into new markets with that pace as we have been doing over the last 12 months. My name is Amanda Calder-McLaren. I'm the senior director of brand and comms for The North Face, EMEA region. I just wanted to mention how phenomenal we're finding ZMS as a partner. We've actually worked with you since the inception, slowly but surely, we have realized the benefits and the services that ZMS can offer, we have grown and grown and grown. More importantly, we've grown with you. One of our key challenges was that we underindex in terms of the women's business and lifestyle compared to the normal Zalando portfolio. We came to you guys with this challenge, what was wonderful is with your help, with C-Lab, with some of your other partners, we created this campaign that you actually helped with the creative. A full consultancy. Yep. Full collaborative approach to it, and it was actually one of our most, and it is to this day, our most successful campaign we've ever run with you. My name is Christoph Dorsch. I'm the sales director at TB International. The role for DTC has changed from being nonexistent to very important for us. Just last year, the DTC turnover alone has tripled, and the change to go more into the DTC part also has proven very effective for us. I think for us it has been a very good partnership over the past years. It kind of feels like that we built this together more or less from the very beginning with just one or two contact persons and some data which was hard to use, and nowadays it's so professional, and it also helped our company a lot in order to be ready for this change in the business in general. We are very happy to be part of it for now for more than six years. I have to say, it's very motivating for us to see our partners speaking about our platform and also to see how all the ideas we have become reality, and how those relationships really boost each other on both sides. With that, I would love to hand over to Diana, who can walk us through the key challenges and tell us how partners actually overcome them. Thank you, David. Very exciting indeed to see those testimonials from our partners. As David said before, Zalando Platform helps our partners overcome their main business challenges. In the next section, I will walk you through how we support them and illustrate it with a couple of examples. Let me start with the challenge number 1, with enabling them to actually sell online, enabling direct to consumer, or actually, in most cases as well, accelerate their online business. As consumers shift towards online more and more, it becomes increasingly important and also, at the same time, expensive for our partners to acquire and retain new customers in an owned direct-to-consumer model. The Zalando Platform business model enable direct to consumer at scale, and it actually offer our partners four main advantages. The first one is that they get access to the number one fashion destination in Europe with 1.5x more daily users than competition. The second is that those customers they get access to, they actually buy multi-brand. More than 50% of the orders already contain more than one brand. Also those customers like to have choice, and they actually buy around about 18 different brands on average per year. These customers also have Zalando at their fingertips with a usage of the app of more than 57%. How does the platform business model look like? We offer two major direct and consumer business models to our partners. They can complement their own channel mix. It's Partner Program and Connected Retail. Partner Program is designed to support brands and large multi-brand retailers, who in most cases have their own e-commerce solutions and operations, where Zalando also can complement with Zalando Fulfillment Solutions. Connected Retail is tailored for the challenges of brick-and-mortar stores, independents, franchise, brands, and both of our models help our partners to increase their online footprint, ultimately give more choice also to customers. Let me walk you through the great example of Wöhrl, a traditional German retailer with 29 stores in Germany that accelerated its business through Zalando platform and Connected Retail. You've heard it in the video from his enthusiastic CEO. Actually, the picture over there is the store in Nürnberg that I really like and know quite well. Since Wöhrl started and enabled their business through the Zalando platform via Connected Retail, they tremendously did boost their top line. They have shipped more than 4,000 parcels to customers all over Germany. In Q1 2021, they already reach a year-over-year growth of almost 90%. This is quite impressive. Additionally to this, they are also partnering with us very closely to develop the future interfaces of, and use case of retailers that we would offer in the future. With that, Wöhrl has joined a network of more than 3,400 connected stores to date. Now our partners are live on the platform through Partner Program or Connected Retail. Naturally comes the next challenge, or maybe I shall say the next opportunity for them, which is to expand and internationalize their footprint across Europe. Opening up new countries comes at times with expensive operation, complicated processes, long lead times for our partners. Zalando offers a turnkey solution for alleviating these problems and really allow them to sell in more countries and capture this opportunity. Our Zalando Fulfillment Solutions allow exactly this, an easy plug-and-play solution for our partners and brands to access more countries. The main benefits are fast and easy internationalization in just one contract, so no more complicated paperwork for them. Major savings in bundling multi-brand orders in one parcel, so you actually share the cost of shipping on more shoulders. Last but not least, a seamless customer experience. One fast delivery and convenience for return for our customers. To best illustrate the benefits of ZFS, I'd like to highlight the Mango case, a vertically integrated fashion brand from Spain, having already a strong footprint across Europe, who was onboarded into Partner Program in 2018 with initially their own operations. Mango actually did overcome the main challenges of internationalization since they had a strong footprint across Europe. However, they still face two major challenges with their own operations. One was unfavorable drop shipment fulfillment costs, and also difficulties to reach the standards of the Zalando convenience proposition. ZFS allowed Mango to sustain a more profitable growth in improving efficiencies and convenience, which led to improving customer satisfaction. I think, David, you have good memories about that case. Yeah, I really think Mango is a phenomenal case. I remember very well that two years ago at the CMD, we presented the case and we gave you the outlook for 2019 back then. Around the same time, we sat down together with Roger, you saw in the video, and we discussed how would it look like if we really went all in with all assortment across all price points and also almost all markets. I think that's exactly what we did afterwards, yeah, and where you can see in the graph how they leverage actually ZFS to do so. Since then, we actually tripled the business with them, which I think is very impressive. Absolutely. Great case. Beyond Mango, actually, we have more than half of our partners already in Partner Program using ZFS to a certain extent to fulfill their orders. In fact, 51% of Partner Program's items today are shipped via Zalando Fulfillment Solutions. This ranges from different profiles of partners, from entry price level type of brands, like Bershka, for instance, but also the brands with higher, more expensive price points, like for instance, a French brand, The Kooples. Looking at the map, you can see in the darker orange, the countries that are, at the time, most favored for our partners to internationalize. Now that we helped our partners to sell online with Partner Program or Connected Retail, we allow them to capture the opportunity to internationalize their business and conquer new markets. Now comes the last challenge, which is for them to deepen the customer relationship. For this, our Zalando Marketing Services help them to actually overcome that challenge. Zalando Marketing Services enables our partners to connect their brand to 39 million customers, the largest fashion audience in Europe. We consult partners on their marketing strategy and offer the wide range of marketing services. Let me start with insights. If there is one lesson that marketers have learned from the COVID situation, is that listening to data and understanding customer is key, and the starting point for their marketing and business strategies. Zalando Marketing Services enables them to exactly do that, providing them with insights from purchase behavior, demographics, up to understand how consumer would react to a new launch of certain product. Based on data and insight, we offer the possibility to create inspiring content and stories. For our partners to drive business growth and secure product visibility in the catalog, we also offer performance-driven campaign solution, like Sponsored Products. We also allow our partners to go for wider brand marketing type of campaigns, further engaging with the customer on Zalando and beyond Zalando. Let me show you the great example of The North Face. You've heard it from Amanda. The North Face is one of our partner for a very long time. The North Face is a well-known performance outdoor brand from the U.S.-based VF Corporation. It's quite interesting in the sense that it showcase how a partner can leverage the different services for solving their marketing challenges. The North Face wanted to convey completely new brand story to an entirely new brand audience. They had the challenge to acquire new customer, but also deepen that relationship with them. In fact, they wanted to attract this younger female customer, where they had lower brand consideration for purchase. Additionally, in times of COVID, they also had the challenge to produce content. We helped them exactly to do that. First, we started to help them understand who is the consumer behind, what expectation does the young female customer have, and really to help them sharpen their positioning. Based on these insights, we also ideated and produce a marketing campaign tailored for that specific audience. Finally, we reach the audience through a 360 marketing activation along the consumer journey. With this, I'd like to hand over back to David for closing the session. Thanks, Diana, for these great examples. I think they show very well how partners leverage our platform to tackle all those challenges of going direct to consumer. For each partner, we actually see great progress. The more the partners use our services, the more they can go in with all their assortment. It's a wider range of assortment. Also, the more markets go live, and the more inspirational content we have for customers to engage with. When we see this traction with all the partners that come to the platform and establish themselves. There are so many more partners that are coming online, and that are onboarding and also go through the adoption of these services. We're quite excited to see this kind of acceleration and very much looking forward for the years to come. We very strongly believe in building these strong complementary partnerships. Where both sides really want to invest, as we jointly create this very best place for fashion online. With that, we can close the session and switch to Q&A. Welcome back. Here live, I have David and Diana with me. In this Q&A section, we are also joined by one of the partners you have seen earlier in the video, TB International, represented by Christoph Dorsch today. Hello, Christoph, and a warm welcome here from Berlin, into the middle of Germany. Why don't you start off and tell you first about your company and how you leverage the Zalando platform. Of course, for the remainder of the time, you can also ask questions directly to Christoph afterwards. Christoph, the word over to you. Hi. Thanks for having me. As mentioned, I'm Christoph Dorsch, sales director of TB International. We are a B2B wholesaler which was founded in 2005. We, at the moment, carry around 10 different brands. We are a so-called never-out-of-stock supplier. All the products can be ordered at any time from us and are being kept alive as long as they sell well. We started doing business with Zalando probably in 2012, 2013, and at this time, purely on the wholesale side. Once we heard about the Partner Program, which was in 2014, we decided to give it a try. At that time, having in mind the possibility to make additional sales to show the end consumer a wider range of products, simply by putting up SKUs which have not been bought by the Zalando buyers. It became a success quite early, to be honest, just being able to test additional products, launch products in between seasons, or simply having more products online. We were always using this hybrid model consisting of wholesale on the one part and Partner Program on the other hand, and it complemented perfectly for us. An easy example would be having a top seller, which was being bought by Zalando team in the wholesale department, and we were just adding extra colors to Partner Program. Due to the success, we decided around two years ago, jointly with Zalando, to make a switch to be a 100% partner. That means we are using Partner Program and Zalando Fulfillment Solutions exclusively, basically. We are not having a wholesale business with Zalando anymore. Due to this new hybrid model, it became an instant success. Actually, we have tripled our turnover on Zalando the last year. This was mainly due to Zalando Fulfillment Solutions, because we were now able to have this wide range of products, which we only could show on partner before. Now we can show it to all the different countries because Zalando Fulfillment Solutions offer us to ship to more countries Europe-wide. Also with the addition of Zalando Marketing Services, we are able to steer the product or allocate the money that we spend there to different products. That's really great for us because we can highlight the product that we want to highlight at whatever kind of season we're having now. Thanks, Christoph, for the introduction, and we can directly jump into Q&A. I think the first question goes to David. Can you achieve the goal of being the starting point of fashion, and the EUR 30 billion in GMV even without getting H&M and Zara core brand to your platform? Okay. We never miss that question. I actually even get that question at home from my daughter frequently. I think one thing is clear, we want to be a starting point for fashion. Yes, in the long run, we would love to host all brands that are relevant, and of course, H&M and Zara are highly relevant to customers. I think that, of course, we'd like to get there at some point. Can also say, I think also without that, we can get quite far. I think we have established a pretty big assortment with the 4,000 brands and around 900,000 styles, and we can offer a lot of things that are very relevant for customers, and of course, continue working on that. When it comes to those big partnerships, I think one thing for us is very important to really build trusted, long-lasting relationships. I think with those, with Inditex and with H&M, I think we have built up a pretty strong business. We're working on several brands. With the Inditex brands, it's quite a few brands we work with. H&M as well. We just launched ARKET, for example. I think that collaboration is going very successfully. Even beyond that, we even work on other topics. For example, with H&M, we discuss a lot about joint ambition levels around sustainability, or exchange of thoughts on diversity and inclusion. I think that for us, it's more really driving strong partnerships. I think over time, I think we can more and more collaboratively join and rather think about how do we add together those different capabilities we have. Just a follow-up on the EUR 30 billion target we gave out this morning. Does this also include newer categories such as the beauty and home or just fashion? In the EUR 30 billion, yes, this also includes expanding throughout different categories. I think the nice thing is all categories, they all contribute nicely to the growth. I think we don't see for any category any ceiling. We're growing very strong on the men's side. We are going super strong on be it sports or kids or premium luxury. Beauty, of course, coming from a lower base, but triple-digit growth. We see all of them contributing very well to that target. Thanks, David. There's a question on ZMS, Diana. Could you share your expectation for ZMS in terms of what share of campaign money will be spent on either platform, video, sponsored listing ads, versus off-platform ads, Instagram or Pinterest, et cetera? Thank you for the question. That's a very precise question. Let me answer in a nutshell. Overall, we see roughly 50% coming more from the performance-driven type of products, and another 50% that will become more from the branding, so engagement with our consumers. A quick follow-up, how do we price the ZMS service for these services you just mentioned? From a pricing perspective, we follow industry standards. Depending, as said, on the objective of the campaigns, we may have different ways to price. Overall, we will follow a cost per click, cost per view, and also our performance campaigns will be targeted with a return on advertising spend. I think there's another question on our split between wholesale and Partner Program, a question on the split of volume. I think also the second question goes then to Christoph, on how do economics compare for brands across both channels? Perhaps David starts off and then hands over to Christoph here. The question is how the shares- Exactly how the shares developing? Yeah. The long-term expectation is that we have around 50% coming from Partner Program and Connected Retail. I think it's also important to know that this is not like a strict target, we have, but it's more like an expectation where we think will come out. It's not that we dictate this or we really tell brands, "Okay, that's the share you have to do." It's rather jointly discussing with the brands, how do we actually get to the very best customer offer? We don't want to limit any partner. When it comes to how do those different models, how do they work out for the partner? From our end, I can say again, we care most about really creating that customer benefit and value. Of course, if you look at the economics, it's more of like an overall picture because we look at, of course, how they also invest into those different services, be it ZFS or ZMS. It's more of like when we talk about customer lifetime value, it's a similar principle. We say, "Okay, how does it actually work with partners?" Maybe Christoph, you experienced both wholesale and Partner Program. Maybe you want to comment on how that works out from your perspective. Well, in the end, you want to be profitable. This is something we could definitely achieve both ways. This is, at the very beginning, what we did our calculations on, is seeing, okay, what kind of different parameters we now have to look at. This is something we had to learn from the very beginning, because being a B2B wholesaler, we do have to look at different metrics now supplying end consumers through the Partner Program, for example, and having to deal with things like parcel share, which were unknown for us. Once you figure it out, you can be very profitable on the platform. This is what makes it actually quite easy for us to use the platform, whether it being wholesale, what we did before, or now being a partner. Cool. Thanks. I think we still have room for one question. That goes to David again, on Connected Retail with regard to ZFS. Do we plan to make ZFS available to Connected Retail partners as well? If so, when could that become reality? It's an interesting question, because I do think we can add a lot of capabilities when it comes to logistics. Overall, I think that it's one of those big assets and one of those big advantages that we can invest so much into this network here, and actually have partners leverage that. On the Partner Program, also as Christoph explained, for example, I think that also proves very helpful. When it comes to stores, we started offering return solutions or shipment solutions then. That it's actually easy to get out and also return packages. I think we can also think that further and further, to have them actually tap into what we can offer in terms of logistics, and also allow them therefore to have a broader reach, maybe even go international and so on. Cool. Super. Thanks, David, thanks, Diana, and special thank you to Christoph for answering the questions. We will continue with our next session at 2:00 P.M. CET. We'll conclude today's CMD with our financial section and with our CFO, David Schröder. Until then, please stay tuned, and be back in around 10 minutes. Welcome back to our last session of today's Capital Markets Day. To keep your awareness high, again, we decided to host our financial section at the end of that CMD. Before we start, let me shortly remind you that we also initiated a small poll on our platform, and would be appreciated if you could chip in there and make some marks. That will also help us going forward. With that now said, I will now hand over to David, who will explain you how our strategic plan will unfold in our financial. With that one, I move on to David. The floor is yours. Welcome to the last session of our Capital Markets Day 2021. In our keynote today, we shared again our vision to be the starting point for fashion. We also explained to you that the transition to a truly sustainable platform business model will act as its key enabler. In the customer and partner sessions that followed, we provided you with more insights on our key strategic initiatives to improve and innovate our customer propositions and our partner services. Now I'm going to explain to you how our strategic plans and key initiatives will drive financial value creation going forward. Before we talk about the future, let's take a moment to briefly reflect and recap the targets that we set at the Capital Markets Day 2019, and the achievements that we have delivered since then. Two years ago, we shared mainly three things with you. First, we talked about the immense market opportunity. The European fashion market was forecasted to grow to EUR 450 billion in size, and the secular demand shift from offline to online was supposed to increase online penetration to more than 25%, from just 15% in 2018. Secondly, we reiterated our long-term ambition to serve more than 5% of the European fashion market long term, an ambition that we had first communicated at our Capital Markets Day 2017. Last, we shared our mid-term growth ambition to reach EUR 20 billion in GMV by 2023, 2024, signaling that we are still at the very beginning of our journey and that we'll continue to stay focused on driving strong and profitable growth. As you already heard in our earnings call this morning, we've consistently delivered on our mid-term targets since. Back then, we expected 20%-25% GMV growth, and we delivered close to 24% growth in 2019 and more than 30% growth in 2020. We also expected flat margin development driven by the ongoing platform transition and continued growth investments. We consistently delivered around the upper end of this range, even when adjusted for the temporary return rate benefits that we have seen last year. Lastly, we expected negative cash flow driven by continued growth investments in logistics and technology, and we were actually able to deliver positive free cash flow throughout the period. All in all, we are very happy with this extraordinary performance, both pre- and post-COVID. Based on our starting point vision, our platform strategy, and our strong track record so far, we approach the coming years with even more conviction. Looking ahead, we are convinced that we can further accelerate our strategy and continue to deliver strong and profitable growth. We previously communicated to achieve EUR 20 billion GMV by 2023, 2024, and we now aim to triple our business again to more than EUR 30 billion by 2025. This means we extend the timeframe of our midterm targets by just one year, but we add more than EUR 10 billion of additional GMV. This also implies a CAGR of 20%-25%, meaning that we would continue to outgrow the European online fashion market by a factor of two to three. By 2025, this would get us to a market share of close to 7%, making us the biggest fashion player in Europe, both offline and online. Our upgraded GMV ambition also translates into a higher revenue target, we now aim for EUR 20 billion in revenue by 2025, implying a 20% CAGR for the five-year period. This continued strong growth will be driven by focusing on three key strategic priorities. First, growing our active customer base by increasing the penetration in existing markets and expanding our footprint to more countries in Europe. Second, deepening customer relationships by further improving our core experience by elevating distinct propositions and by working towards becoming truly sustainable for people and planet. Third, driving the platform transition by enabling the DTC business of our partners, by supporting them to internationalize, and by providing them with the right tools to engage with customers across Europe. As a result of these efforts, Zalando will become even more relevant for a broader audience of customers, but we also expect to forge even stronger partnerships with fashion brands, retailers, and stores. We've seen an increasing adoption of Partner Program and a tremendous acceleration of the Connected Retail Program in 2020. More importantly, we see an immense potential going forward, and therefore, we now aim at 50% partner share by 2025, 10 percentage points more than previously targeted for 2023, 2024. To enable this ambitious growth trajectory, we'll continue to leverage and invest into the core infrastructure and the key capabilities that power our platform. Let's start with our unique access to fashion supply. Already today, we are able to connect to all relevant inventory sources across the whole fashion industry. We can source directly from brands with our wholesale model. We can tap into the brand stock sitting in their regional warehouses with the Partner Program. We can also leverage offline fashion inventory via our Connected Retail program. 2020 has shown us how valuable it can be to rely on multiple ways to access supply, particularly in times of disruption. Therefore, we'll continue to further strengthen and leverage this unique capability going forward to offer endless choice to consumers and to scale our business in a more flexible and efficient manner. Great products alone won't do the trick. We'll also need to be able to deliver these products to customers. That's where our European logistics network comes into play. It's the key enabler of our superior convenience experience that we offer to customers. Over the past decade, we've invested more than EUR 1 billion to build the leading fulfillment infrastructure for fashion e-commerce in Europe. We did that having two goals in mind. First, we wanted to offer better convenience for our customers. Second, we wanted to enable the continued fast growth of our business. Today, we operate 10 different sites across five countries in Europe. This year, we'll add another two sites in Madrid and in Rotterdam to get closer to our customers in Spain and Benelux, and to further increase our fulfillment capacity to EUR 14 billion worth of GMV. However, enabling our upgraded midterm growth ambition will require us to build even more warehouse capacity. Our midterm growth ambition is to reach more than EUR 30 billion GMV by 2025. We expect that 75% of that volume will be fulfilled by Zalando and roughly 25% of that volume will be drop-shipped by partners. Therefore, we plan to invest another EUR 1 billion of CapEx to add seven more warehouses by 2025. Next to the physical infrastructure that powers our platform, our company's success equally rests on our digital infrastructure, i.e., our technology and data platform. As already mentioned in our keynote, we've made significant investments in building a scalable, proprietary, cloud-based technology platform that really covers the whole value chain of fashion commerce for us and our partners. This platform also enables us to drive database value creation, for example, by offering superior size and fit advice to our customers or very targeted marketing services for our partners. Another key, yet often overlooked element of this technology platform is our payments platform. Payments has been a key driver of Zalando's customer satisfaction, growth, and profitability since the very beginning. When we combined free delivery with free returns and a buy now, pay later solution, we created a dressing room at home experience for customers across Europe. We started building our payments platform back in 2010. Today that platform combines a best-in-class buy now, pay later offering in 11 countries, which by now enable more than 70% of all orders on our platform with a portfolio of more than 20 local payment methods. In 2020 alone, our payments platform processed EUR 20 billion for our customers and partners. Let's now talk about how all this translates into our financial trajectory over the next five years. Our new midterm guidance until 2025 reflects continued strong and profitable growth. For growth, we plan to continue to grow our GMV two to three times faster than the European online fashion market, targeting a CAGR of 20%-25% over the next five years. This is in line with the level of growth that we've consistently delivered ever since our IPO in 2014. We even expect to significantly exceed this level of growth in 2021, targeting GMV growth of 27%-32%, which would mean that we would grow at the same accelerated pace as in 2020, driven by an ongoing strong consumer demand, especially in the first half of this year. For profitability, we made a promise to you back in 2019 when we said the platform transition and the increasing scale of our business will result in an increasing profitability over time. Today, I would like to come back to this promise and tell you that we target 3%-6% adjusted EBIT margin for the time period 2021-2025. We will continue to reinvest a major portion of our platform benefits and our increasing economies of scale to drive growth. We start at 3.5%-4.1% adjusted EBIT margin in 2021, we aim to approach the higher end of the corridor by 2025. On cash related items, we will continue to invest into our technology and logistics infrastructure to enable growth. We also remain committed to scale the business in the most capital efficient manner. Therefore, we aim for neutral free cash flow, negative net working capital, and CapEx in the range of 3.5%-4.5% of revenue. We remain laser focused on driving the platform transition to enable the starting point vision and deliver continued strong and profitable growth. Let's now take a closer look at the immense long-term value creation opportunity we have ahead of us. Back in 2017, when we held our Capital Markets Day, we had a market share of around 1% of the European fashion market. We told you about our aspiration to reach more than 5% market share long term. Thanks to our continued strong growth, we've already reached around 3% market share by the end of 2020. Now, based on the recent step change in online consumer demand and the increasing focus of the whole industry on going digital, our platform strategy sets us up for an even bigger aspiration. Therefore, we upgrade our long-term market share ambition to more than 10% of the total European fashion market. You might ask how we plan to get there. To achieve this, we'll continue to focus on growth, aiming to significantly outperform the European fashion online market. We will reinvest our increasing economies of scale and platform benefits to further innovate and improve our customer propositions and partner services. Quite frankly, we would be more than happy to continue to grow our business at a fast pace indefinitely, way beyond 10% market share. I guess it's also true that no matter how long we can stretch it, eventually our growth rate will approach online fashion market-level growth. When that happens, we will see our platform business model deliver double-digit margins and strong cash generation. Let's now take a look at our target margin profile in more detail. This slide may look very familiar to you, since we already showed it to you back at our Capital Markets Day 2019. It creates transparency on the profitability potential of our business model in the long term. We reiterate our long-term profitability ambition today, but on a higher level of scale. In the long term, we continue to expect 10%-13% adjusted EBIT margin in percent of revenue. Our wholesale business is expected to contribute 6%-8% margin. Our Partner Program business will be significantly more profitable at 20%-25% margin. Since the overall target margin is significantly higher than the margin we deliver today, let me briefly walk you through the key drivers to get there. We expect our gross margin to increase compared to 2020, driven by the ongoing platform transition and increasing economies of scale. I'm more than happy to provide you with more details on the different platform services and their margin impact on the next slide. Before we go there, let us briefly talk about the other cost lines first. Fulfillment costs are expected to increase compared to 2020 levels, mainly driven by two factors. First, we expect the reversal of the positive but temporary return rate benefit that we observed in 2020. Second, we want to make continued investments into our convenience experience to enable premium next and same-day delivery for Plus customers and to offer more sustainable logistics services and packaging solutions for all our customers. Marketing investments will decrease in relation to revenue over time as our starting point vision unfolds and the share of existing customers increases, reducing the need for costly new customer acquisition or existing customer retention measures. Admin expenses will further decrease as we continue to create overhead efficiencies and will benefit from increasing economies of scale. As promised, let me now spend a bit more time to discuss the margin impact of our platform business. The transition to a platform business model is the key lever for our long-term value creation, since it drives the overall growth and scale on the consumer side, but it also creates high-margin revenue streams on the partner side. Our partner business consists of three distinct revenue streams. Partner Program and Connected Retail are our core partner services, enabling partners to list and sell on our platform. The pricing of these programs is based on a standardized commission table ranging from five to 25%, depending on the specific category and price point. By definition, such a model has relatively high gross margins. In the long term, we aim to serve 50% of the fashion store GMV through either Partner Program or Connected Retail. ZFS is an optional service on top of Partner Program, giving partners access to our European logistics network. Pricing there follows a cost-plus approach. As a result, ZFS standalone represents a relatively low-margin business. Let's not forget that it acts as an important enabler of the Partner Program. It drives superior wholesale order economics, it also improves the customer experience. Therefore, we aim to fulfill 75% of all Partner Program items via ZFS in the long term. ZMS is an optional marketing service for wholesale Partner Program and Connected Retail brands. With ZMS, we mostly monetize the existing traffic on our platform through a campaign-based auction model. ZMS represents a highly profitable advertising revenue stream driven by a high gross margin as evidenced by major global e-commerce platforms. We aim to generate ZMS revenues of about 3%-4% of group GMV long term, and we thus expect it to represent a significant share of overall platform profitability in the future. Please note one thing, though. The different partner services can scale in parallel, but they are typically adopted by partners in a certain sequence, as you've heard in our partner deep dive earlier. Partners typically first onboard via Partner Program or Connected Retail. Once they see early success in these programs, they leverage ZFS to internationalize and create an even bigger growth opportunity for them. Sooner or later, these same partners will look for mechanisms to promote their products or build their brand on our platform via ZMS. Therefore, it does not come as a big surprise that we see Partner Program, Connected Retail, and ZFS scaling much faster initially, while ZMS will follow as more GMV on our platform gets generated by an increasing number of partners. To conclude this presentation, let me once again summarize the key messages of this financial section for you. We have a very strong track record in executing our platform strategy and delivering strong and profitable growth. This is making us even more confident about what we can achieve as a team going forward, and we therefore significantly upgrade our growth ambition and now aim to reach more than EUR 30 billion worth of GMV in 2025, and to serve more than 10% of the total fashion market in the long term. We also reiterate that at scale, our platform strategy will result in an attractive financial profile characterized by double-digit margins and strong cash generation. We are convinced that this path is the right one as it maximizes value creation for customers, partners, and shareholders. Thanks for listening. With that, I would now like to turn it over to Q&A. Welcome back to our last Q&A session. With me is not only David, but also our co-CEO, Robert. We already have the first question, so we can directly start into the question, and I would hand the first question to Robert, and that goes about long-term EBIT margins. Are previous references still in place, namely the 6%-8% for wholesale and 20%-25% for our Partner Program? Yes. Our view has not changed. In the long term, we believe in the 10%-30% margin that we can achieve at scale, and the 6%-8% for wholesale and 20%-25% for Partner Program still holds in place as David as well has outlined in the financial section. Thanks, Robert. The next question goes directly to David on warehousing. At a GMV of EUR 30 billion, how many warehouses do you think you need? Is there a change in the hub-and-spoke strategy? As briefly outlined in the presentation, we think the EUR 30 billion GMV target will roughly mean that we need to process 75% of that, EUR 23 billion roughly in our own logistics network. In order to get to that level of scale, we will need to build another seven warehouses, and expect an investment of roughly EUR 1 billion in CapEx to build that network. When we look at the topology of the network, hub-and-spoke, our plan is actually to build more hubs in the future because we think that also at this level of scale, that's the most efficient way to scale our footprint going forward. Thank you. There is the next question on margins. How do you think about margins and about sacrificing them in order to drive the growth you are targeting, David? Yeah, maybe on that question, I can try to offer a different frame to think about what we are doing. On the one hand, you can say we are sacrificing margin short term, but you can also see it in a way that we are actually prioritizing growth, and are prioritizing to get to a certain level of scale. By doing that, we can actually create the long-term margin potential that Robert just reiterated. I think in a platform model, it's clear that such a strong margin will only materialize once we reach a certain scale. On the consumer side, that's true because only with a certain scale, we can actually then fully call ourselves the starting point for fashion for customers and be less dependent on companies like Google and Facebook and therefore reduce our marketing investments significantly. On the partner side, this scale of the platform really opens up high-margin revenue streams that significantly contribute to our long-term margin trajectory. I would argue, we're not really sacrificing margin. We are rather doing everything we can to create a very attractive model long term. The next question goes on the split between Partner Program and wholesale regarding the 2025 split of 50 to 50%. Can you break down what you expect the wholesale and the Partner Program divisional margins to be at this point, please, given that you only expect a margin of around 6% by this point? Maybe the two data points that I can provide is that very long term, as you've heard, we target 6%-8% margin for wholesale and 20%-25% for the Partner Program or the partner business. That already today, our platform business is margin accretive on a group level. Obviously as we move further along and we achieve a higher share of the Partner Program and Connected Retail program, a higher ZFS penetration, and also more revenue in ZMS, we'll move closer and closer to the 20%-25% target margin. We're sticking with profitability. Profitability in 2022 until 2025 is the 3%-6% target, assuming the same level of returns when compared to 2019. Are you factoring in any improvements and any details you may have? Highly appreciate it. Yeah. When we look at the next few years, obviously we do not take 2020 as a baseline, because you know that we've seen temporary return rate benefits that also, to some extent, are in place until today. Also in Q1, we said this morning in the earnings call that we continue to see some return rate benefits. The further we look out, we think we are going to return to the more structural trend that had been in place before 2020. Overall, a return rate around 50% for the group, but on a positive trend, i.e., reducing return rates over time, mainly driven also by our expansion into geographies outside of DACH and by our category mix, which now includes beauty, which typically shows lower return rate than fashion. Last but not least, also driven by our deliberate investments into size and fit, which we think actually will prove the most valuable structural driver long term and also really sets us apart compared to our competitors. Thanks. There's another question on Connected Retail and our long-term targets. Why are we sticking to our initial 50% long-term targets for GMV coming from Marketplace, while we also recently launched Connected Retail? I think first it's important to note that when we set that target two years ago, we already had Connected Retail in place. It was just not at the level or at the stage yet where it could really scale, and we are really happy that happened last year. We saw some tremendous growth in the program, and also expect to see continued strong potential going forward. What we also did today is, I think, we actually increased our ambition for the partner share by 2025. Previously, we targeted 40% for 2023, 2024. Now we target 50% by 2025, actually paying tribute to that acceleration that we've recently seen and also the potential that we see in Connected Retail. The last point I would like to make, again, is that we don't really think about the 50% as an exact target. We don't need to reach exactly that number for our model to work. We definitely think we have the potential to get there, but it doesn't need to stop there. Ultimately, we want to work with our brand partners in the best possible way, and also in the way that works best for them. I think we've heard in the partner session that that can be the case equally for wholesale, but also for Partner Program and Connected Retail, depending on the partner. Thank you. We're moving on to payments. Opportunity to use our Buy Now, Pay Later technology as a service to brands in the Partner Program. Could that be a source of monetization going forward? How do KPIs of our buy now, pay later technology compare to other solutions in Europe? Yeah, in general, we are really excited about our payments platform. I shared a bit of more color in the presentation and especially emphasized that we are already today processing EUR 20 billion worth of transaction volume for customers and partners on our platform. That also means that all partners, by definition, get access to our buy now, pay later solution when they try to sell to customers across Europe. I think it's actually also helping them to drive sales and satisfaction on our platform, the same way it helped our own business in the past. If we think further ahead, I think we can definitely also see potential to develop that capability further and, at some point, maybe even externalize that capability so that we can also help them power their business outside of the Zalando platform. We are moving back to warehouses. David, another question for you. What about the marginal units of economics of the next seven sites you just mentioned? Are they either located in cheaper countries and/or higher automation, making these better return on investment than the current 10+ 2 sites? First of all, the question sort of insinuates that we don't have a good return on investment on the ones we already have, which I clearly reject. I think also these investments made a lot of sense for Zalando. They enabled our growth, they increased customer satisfaction in many countries. I think they also actually helped us to grow efficiently when we look at our fulfillment cost development over the past decade. If we look further ahead, I think the seven new warehouses, they will definitely help us to even more leverage the advantages that we've seen in automation technology. Every new generation of warehouses is more advanced and allows us to go to a different level when it comes to productivity. Therefore, actually, by now we have more flexibility in choosing our next location for a warehouse, because whereas in the past there might have been some good reasoning to also build some more capacity in the eastern parts of Europe to benefit from lower cost structures there. I think by now, thanks to the increasing automation, we are also very comfortable to go and build new sites in Western Europe, as also evidenced by our site in Rotterdam, which will open over the course of this year and which will feature the latest generation of automation. Thanks, David. I have one more for Robert before we conclude today's CMD. It's about the target model behind the EUR 30 billion figure we pre-released today. How is this stacking up from the two main dimensions? Dimension number one, geographic mix. Is there any additional expansion factor in also ex-Europe? Secondly, what's the category mix behind your ambition on the EUR 30 billion? Yeah. Thank you for this question. There is no big magic in this number. We see actually this potential in existing footprint of the markets that we have launched, or that we are about to launch. There's no big magic as well on U.K. It's currently in Europe. It's the new market that we launch. From category mix, it's the categories that we have talked about, fashion, premium, beauty. That's it. The rest would then come on top in case we do it. Thanks, Robert. Thanks, David. That concludes the Q&A session for now, and I would now like hand over back to Robert for his closing remarks on today's session. Yeah. Thank you very much. As this Capital Markets Day is now coming to an end, we would very much like to reiterate on the main kind of key takeaways and the main kind of messages that we wanted to send today. Number one, we have a very clear vision and we have a great working strategy and our key priority is really growth. The second, I think you have heard us all over today, we have made tremendous progress in the past, and we've consistently delivered on our targets since the IPO, all through this year, and as well the last two years. Our opportunity for Zalando is immense. It makes us very confident that we can reach more than EUR 30 billion of GMV by 2025, and in the long term, even serve more than 10% of the fashion market as total Zalando. Number four, in order to do so, we continue to drive investments that will propel this growth, that will drive us in this growth going forward. At scale, our financial profile is highly attractive, characterized by a double-digit margin and as well a strong cash generation. With that said, thank you very much for listening, for tuning in. Thank you very much for these great questions. See all of you probably in virtual roadshows coming soon. Thank you very much.