Zalando Unveils AI Shopping Agent Amid Margin Squeeze and Agentic Commerce Concerns

Zalando Introduces AI Shopping Agent Despite Margin Pressures

Zalando, Europe's largest European online fashion retailer, launched its inaugural AI shopping agent on Tuesday, marking a strategic pivot as the company grapples with intensifying competition from agentic commerce. The German retailer unveiled Zalando Extended, an AI-powered feature that enables customers to purchase products from other online retailers directly through Zalando's app using AI agents1

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. Home retailer Westwing has signed on as the first pilot partner, with the platform initially focusing on larger home goods before expanding3

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. Starting in 2027, Zalando's AI agent will complete purchases autonomously on customers' behalf without redirecting them to external websites1

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Despite this innovation, investors reacted negatively to squeezed margins, sending shares down approximately 5% in early trading2

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. The company reported a gross profit margin of 38.7% for the third quarter, falling short of analyst expectations of 39.9%1

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. Zalando attributed the 0.9 percentage point decline to targeted price investments, effective discounts, and the growing contribution of its lower-margin business-to-business division1

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Strong Revenue Growth Masks Profitability Concerns

Zalando's third-quarter revenue climbed 5.1% year-over-year to €3.17 billion, slightly exceeding the €3.15 billion analysts had forecast1

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. Gross merchandise value increased 7.5% to €4.54 billion, while the platform reached a record 63.2 million active customers1

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. Quarterly adjusted operating profit rose 10.6% to €106.5 million1

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The company's platform business model is gaining traction. Revenue from business services, encompassing logistics and software for other brands, surged 27.9% to €354 million1

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. B2B revenue jumped almost 28%, while profit in this division more than doubled1

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. In contrast, consumer revenue grew just 2.8%1

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. CFO Anna Dimitrova stated, "Our shift to a platform business model is accelerating, with our partner business and retail media growing at a double-digit rate and B2B revenue up almost 28%. This puts us in a strong position to create long-term value for customers, partners and shareholders"1

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However, the group reported a net loss of €18 million, compared with a €12.5 million profit a year earlier1

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. Zalando maintained its full-year guidance, projecting adjusted operating profit between €680 million and €720 million1

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Agentic Commerce Presents Structural Risks for Online Retailers

The launch of Zalando Extended reflects broader industry concerns about AI-driven retail disruption. Agentic commerce, where autonomous AI agents execute the complete purchase cycle—from price comparison across multiple retailers to payment—threatens to upend traditional online shopping platforms2

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. JPMorgan warned that Zalando's stock "could drift lower in the coming days" due to "ongoing structural risk from agentic commerce development"1

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As shoppers increasingly rely on AI-driven commerce to compare prices, check product availability, and receive recommendations, online retailers face mounting pressure to adopt AI agents and expand product ranges2

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. Zalando's strategy positions the company to remain part of transactions even when products originate from other retailers, potentially mitigating the risk of disintermediation1

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. The company reported that customers using its Zalando Assistant are twice as likely to complete a purchase3

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Integration Progress and Inventory Management Improvements

Zalando completed its acquisition of German rival About You in July 2025, generating synergies worth tens of millions of euros in the mid-teens during the third quarter1

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. Anna Dimitrova noted that "the ABOUT YOU integration is progressing well and we kept our momentum in delivering synergies"1

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Analysts at Jefferies highlighted Zalando's sneaker clearance programme, which reduced inventory to 18.4% of sales, down from 21.8% a year earlier1

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. This inventory optimization, combined with the company's expansion into selling clothes, shoes, and accessories from thousands of brands including Nike, Hugo Boss, and Coach, demonstrates operational discipline amid margin pressures2

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. Management characterized the margin dip as temporary and expects improvement in the fourth quarter3

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