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“ZARA”- The TRENDING FASHION KING

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INTRODUCTION

  • “ZARA”- The Trending Fashion King which has changed the rules of fashion industry, making it expensive but still successful and leading with a unique and different business model.

BACKGROUND

  • Zara is a Spanish based clothing and accessory brand.
  • Founded by Amancio Ortega and Rosalia Mera in 1975.
  • It is the owned by the Inditex group, which incidentally is the world’s largest fashion retailer with more than 840 million annually through 6300 stores distributed across 85 countries across the globe.
  • First Zara store was set in Spain in 1975 which comprises of low-cost look alike products of high-end clothing fashion brands. After this, more stores were opened in Spain.
  • During the 1980s, Ortega changed the design and distribution model to reduce lead times and react to new trends in a quicker way, which he called “instant fashions.”
  • In 1988, the company began its international expansion.
  • Launches 12,000 new designs every year.
  • ZARA is the market leaders in creating and distributing new designs in just 1-2 weeks.

FACTS AND FIGURES

  • Approximately 2,109 stores in 88 countries.
  • In 2014 they used Radiofrequency identification technology (RFID) in its stores.
  • In 2015, Zara was placed on 30th number, on Interbrand’s list of best global brands.
  • In 2019 the Global Fashion Business Journal declared that while the textile commerce of the world had gone down by 2.38%, in case of Zara it had risen by 2.17%.
  • In 2020, Zara signed a Greenpeace Zero-Discharge commitment to eliminate hazardous chemicals.

LOGO

  • Combination of four Latin letters, which is known worldwide.
  • The brand founder firmly rejected the idea of creating a highly meaningful symbol or logo.
  • The four letters were to encode the new brand’s ultimate policy of making trendy products as simple and available as themselves.

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EVALUATION OF THE CASE STUDY.

1. External factors – PESTEL ANALYSIS ( Political, Economic, Legal, Social, Environmental, Legal )

               P  – Favourable political conditions in Spain and allow smooth business transaction.

               E –  Gets Market share, dealt in single currency.

               S –  Spain has a rich artistic and designing heritage, Peaceful social environment and vibrant cultural events and tourism.

               T –  Environment friendly technological approaches, Eco friendly stores and craftsmanship.

               E –  Spanish government support the industrial development of the country.

               L –  New ways to adopt more eco-friendly business process.

2. Internal factors – SWOT ANALYSIS ( Strength, Weakness, Opportunities, Threats) 

              S –  Motivated and committed employees, Setting of attainable objectives, Competitive edge.

             W – Absence of new marketing approaches and promotional efforts and Communication gap between the consumers and the                        company.

             O – Multiple untapped potential markets and expanding in new markets segmenting their product line into specialized range.

             T – Oversaturation of the market because of the different companies fluctuating exchange rates.

From the above SWOT Analysis we can clearly convert the challenges into strengths. The solutions are listed below :-

SOLUTIONS :-

  • ZARA can hire a team of digital marketing which will help them to advertise as well as doing promotion by getting in contact with the influencers of Instagram, Facebook or YouTube. ZARA should outsource more to have availability in each and every place to conquer the global market.
  • Increase Communication between the stores with designers through customer feedback or digital assistance can be provided for better communication to address the market needs.

WHY ZARA IS SUCCESSFUL?

  • FAST FASHION – They can move a catwalk floor within 2 weeks.
  • VARIETY AND PACKAGING – Trendy and affordable products displayed in beautiful stores.
  • LIMITED PRODUCTION – Limited quantity to retain its exclusivity. and reduces the risk of pilling up stock.

WHY IS IT SO EXPENSIVE ?

  • ZARA works more on quality and new fashion trend but and not quantity, so they invest a good amount on fabric, designers and supply chain. And they don’t compromise on that because that is their USP.
  • ZARA knows it’s target audience very well. So they know, no matter, what is the market situation, people who loves the product will definitely buy it.
  • According to them those who love quality, they won’t compromise on prize and that’s why they don’t prefer sale.

What makes it different from other brands.

  • ZARA’s Supply Chain Management helps in standing out designers of the crowd.
  • JUST IN TIME PRODUCTION

1) 80-85% In house production

2) 40-45% apparels are designed and manufactured in the middle of season

3) 80% stock is sold at full price and only limited stick.

  • LEAN INVENTORY MANAGEMENT

1) Stock delivered is limited and store only receives what they want.

2) Brand image of exclusivity.

  • CENTRALIZATION OF ORDER FULFILLMENT

1) ZARA make rapid delivery with the centralized order fulfilment to maintain efficient workflow from initial design right                                 through to delivery to stores and customers in a coordinated manner whereas other companies follow G-centralization.

  • STRONG DISTRIBUTION NETWORK

1) Strong network both online and offline helped ZARA to ensure that customers can get experience in both online and                                   offline.

CONCLUSION :-

  • Zara is one of the leading companies which is developing and providing fast-fashion, which is one of the world’s largest clothing retailers.
  • It provides trendy clothes in every 15 days.
  • It follows it’s own model of providing limited clothes to stores with the help excellent supply chain Management with no advertising.

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