Bijal Chauhan brand report

ZARA Bijal Chauhan b5044166 Business of Fashion

CONTENTS 1. Contents page 2.Executive summary 5. Chosen brand 7. Brand identity 11.Brand consumer 13. Brand positioning 14. Communications mix 15. Social media 19. Bibliography Methodology In order to sufficiently provide information for this report, research has been undertaken through the forms of observation of stores, academic research, Mintel, books, websites and social media.

EXECUTIVE SUMMARY

T

he following report This is perhaps due to goes through the brand- their vertical integrated ing of Zara, from when operations, which allows they started to present Zara to have complete day, as well as comparcontrol over their garing them to other com- ment construction and petitors to see how they quality, which will be are able to further exdifferentiate. “ ara is the largest plained in Although brand within the world’s this report.

Zara do not biggest clothes retailer In- As a use high levfast-fashion ditex” (Ferrell and Hartline, 2010) els of advercompany, tising, they they are are able to grow and in- able to have store decrease their customer liveries twice a week-‘Z’ base. days, then the stock can disappear the next week, providing a sense of exclusiveness for the consumer.

Z

“At the end of 2014, Zara have 2,085 stores� and this continues to grow with stores in Austrailia (Anon,2015) and India (Malviya, 2015) ().

Zara is the largest brand within the world’s

CHOSEN BRAND

biggest clothes retailer Inditex (Ferrell and Hartline, 2010). Currently, they are number 58 in the Forbes listing of the world’s most valuable brand-$9.4 billion in May 2015(Anon, 2015). Zara originated in 1975 when a customer cancelled a large order of t-shirts, so Inditex decided to sell this stock and opened it’s first Zara shop in La Coruna, Spain- which would sell products from cancelled orders. In 1979, the company had six stores and retail operations were established in all the major Spanish cities during the 1980s. By 1990, stores opened in Portugal, New York and Paris (Ferrell and Hartline, 2010), now there are 2,085 stores (Inditex annual reports, 2014). Zara sells clothing, shoes and accessories for women, men and children.

Womenswear will be the focus of this report, as they appear to be the majority customer (London, 2015).

Furthermore, Zara online was launched for France, Spain, Italy, Portugal and the UK in 2010(Anon, 2010).

Currently, Zara is to open their second Queensland store in Brisbane, Australia, (Anon, 2015), which could suggest they have a growing customer base worldwide. They expect to open 420 to 480 stores this year globally, (Anon, 2015). Their biggest challenge is to keep up with online only fashion websites such as Zalando and Asos (Anon, 2015).

BRAND IDENTITY Z

ara’s brand identity (“the totality of brand associations including name and symbols that must be communicated.”)

(Chaffey, 2009), is an on trend, runway inspired brand known for its fast fashion (“production of clothing collections based on the most recent fashion trends.”)(Dillon, 2011) operations.

Zara references the latest runway looks from the Stella McCartney platform brogues to the Moschino cartoon accessories. However, Zara have a negative portrayal from high-end designers, as “some would say this is because they are copiers rather than designers.” (Hansen, 2012).

The price point of products is slightly higher than budget brands but lower than upmarket brands, so the company can reach out to customers from the lower and higher ends of disposable income- the budget customer sees the item as a ‘luxury’ and the luxury customer sees the item as ‘value’.

Usually the products are of a fair quality, which assures the customer they are getting what they paid for.

Furthermore the logo of the brand is a bold and capitalised font, which distinguishes Zara from other brands. I have also found that the font used is custom made which portrays an ‘exclusiveness’ of the brand.

As a fast fashion brand, this means that when customers go into the store they are more likely to purchase it instantly, rather than waiting as it may not be there next week. But Inditex, Zara’s parent company says that “an item requested by enough customers can be in their store to accommodate that request within ten days.” (KPMG, 2015). This may be due to the vertical integration (“degree to which a company owns, or has control over its suppliers”) (Dillon, 2011) of the company as Inditex designs and manufactures garments, so as it is done in-house, Zara is able to maintain the quality of their products. This can be supported by “the company closely monitors their operations to ensure quality, compliance with labour laws and adherence to the production schedule.” (Ferrell and Hartline,2010). Another advantage of this integrated process is that “clothes go from design studio to shop floor in two weeks.” (Anon,2008), so they are able to sell stock as soon as possible. However, when looking at the quality of garments, quality may be defined by the design or ‘look’ the customer wants to be perceived by, rather than the construction (Ferrell and Hartline,2010).

Zara is able to maintain their brand identity through their design centre, where there is a keen research atmosphere amongst the over 200 designers who seek inspiration from trade fairs, catwalks and magazines (Ferrell and Hartline, 2010). This is also developed with feedback from the stores on certain styles and market specialists (Ferrell and Hartline 2010). Zara uses social media (“use of web-based and mobile technologies to turn communication into interactive dialogue.”)(Dillon, 2011) to promote their brand identity, through websites such as Twitter (1.04 million followers), Facebook (23,378,973 likes) Pinterest (167,300 followers) and Instagram (7,300,000 followers).

‘Z’ DAYS

Zara stores have stock delivery twice a week, so consumers can make sure they have the latest clothing.

BRAND CONSUMER A

consumer is a person who identifies a need or desire and searches for a product to satisfy this need (Noel,2009).From observation Zara’s consumer appears to be a sociable young woman, interested in fashion and design, likes to look attractive and keep up with current fashion trends. This can be supported by the YouGov profiler, who looked at a sample of 699 Zara customers, in which are 68% female and 59% are aged between 18-39 years (Anon, 2015).

Disposable income a month varies, depending on which customer for example the student (aged 16-24, 30% of customers) that specifically shops from TRF may only have £20 a month to spend on clothing, whereas the older woman (aged 25-34 years, 45% of customers) that works may spend £20 and more.

Zara do not use celebrities within their promotional campaigns, so it could be said that their customers are low-key in that they want to look attractive but not for others.

Furthermore, the Zara consumer may not want to look like everyone else, therefore Zara’s products are produced in small batches so the customer knows once they see a product, to purchase it (Schermerhorn, 2010). This can be supported by the fact that, nearly 85% of Zara’s inventory sells at full price, compared to a retail average of 40% (Bliss, 2009). It has also been said that customers make an average of 17 annual store visits to Zara, compared to 4 visits for other retailers (Anon, 2008).

ara’s brand position (“a brand’s subjective attributes in relation to competing products.”) (Sengupta, 2004) is a mid-range high street store that offers cheaper runway designs (Zara’s USP) of good quality. They face competition from online only stores such as ASOS and Zalando which may be due to the larger customer market. As well as this, they also face competition from Topshop (London, 2015) who provides on trend fashions and has a strong online presence. Looking at the brand personality micro image (Mintel, 2015), Topshop and Zara can be seen to be stylish, exciting and trendsetting so Zara needs to distinguish themselves. However, Zara appears to have higher income customers, also customers have had a higher excellent experience in the stores and are likely to be recommended to others.

When looking at research Ted Baker (Mintel, 2015), could be seen as a competitor of Zara, due to the older aged customers that would have a higher disposable income. But in terms of pricing, it appears that Ted Baker has higher priced products. Also Ted Baker appears to have a brand image in that certain prints are recognisable to be Ted Baker, such as their floral designs. The ESP of Zara seems to be, being the most fashionable in terms having one of the first items and to be one of the few of owning that item as garments are produced in small batches, which keeps customers returning.

Below images; From Zara, shoes £29.99 and bag £29.99

Z

Above images; Stella McCartney shoes £580.00 and Moschino bag £897.00

BRAND POSITIONING

COMMUNICATIONS MIX Furthermore Zara have an Application which can be used on mobile and tablet ara uses personal selling devices, which increases the convenience of pur(“business to consumer, chasing an item. commercial transactions between an organisation and other organisations.”)

(Chaffey, 2009) in online and offline stores. It has been said that “Fashion retailers spend on average Zara also offers direct mar3.5% of revenue on adver- keting (“a communication tising their products, while between seller and buyer directly.”) (Mullin, 2001), in Zara’s parent companyInditex spends just 0.3%.” which users of the site can sign up to monthly e-mails, (Anon, 2001). The reason which would include new for this can be supportclothing and instant links ed by the founder, who said to advertise would be to the website. The use of cookies can also lead to a “pointless distraction” (Andrews and Wood, 2013). e-mails. For example, if a user was to be signed in The lack of advertising on to the Zara website and creates an exclusivity of has viewed products, the the brand. user may receive an e-mail related to their browsing Zara can be seen to have history, which may influeffective campaigns ence the consumer to pur(WGSN, 2015), which chase the products. As well feature online as part as this, consumers can reof a look book and webceive notifications when a site banners, but also on product is back in stock. screens and billboards in store. This creates an association between the wearer and the clothing, so the customer would feel fashionable. The visual merchandising of Zara stores can also be seen to be effective as they relate to current seasons and include best sellers which would attract customers.

Personal selling Z

Direct marketing

THE WEBSITE The Zara website is easy to find with

Zara being the second recommended option on Google when the letter ‘Z’ is typed.

When directed to the website, the lay-out is simple and reflects the classic style of the store. Once an item is selected a new page loads and different angles of the garment are shown on the model as well as a ‘match with’ image. On the right side of the screen, the price and sizes can be seen along with composition, shipping and return details.

Also there are links to Pinterest, Facebook and Twitter so the garment can be shared.

As well as this in store availability can be selected, which is useful if a size cannot be found online. Furthermore, Zara online offers free delivery over £50, which means the consumer may feel more inclined to buy additional products, in order to capitalise on the free service. Delivery to the nearest store is also offered at no additional cost.

INSTAGRAM

PINTEREST

Social media

It has been said that

“Zara shoppers are the most inclined to use social media to find out what’s happening with celebrities” (Mintel, 2015).

This can be supported as Kate Middleton was photographed wearing a necklace from Zara, which was later sold out in hours (Huffington Post, 2013). With this information provided, perhaps Zara should consider celebrity endorsement.

TWITTER

Zara has a successful on-

line presence with millions of consumers through Facebook, Pinterest Instagram and Twitter. But the content provided is similar on each network, which means the consumer isn’t receiving anything new as it is repeated. All these platforms allow users to show their interest through a like button, commenting and sharing images, which may influence them to purchase a product if others can also been seen to like them.

FACEBOOK However, on video sharing website YouTube ‘vloggers’ present shopping hauls in which Zara products are featured. Zara themselves could use this platform to extend their online audience, so there could be a behind the scenes of the next season look book, where consumers can keep up to date with the latest styles.

“Zara has a successful online presence with millions of consumers�

BIBLIOGRAPHY Andrews P and Wood F (2013) Uberpreneurs: How to Create Innovative Global Businesses and Transform Human Societies. Palgrave Macmillan.

Anon (2001). Zara, a Spanish success story CNN, http://edition.cnn.com/BUSINESS/programs/yourbusiness/stories2001/zara/ [Accessed November 15th 2015] Anon (2008). Zara is now bigger than Gap. Telegraph, http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/2794912/Zara-is-now-bigger-than-Gap.html [Accessed November 14th 2015] Anon (2013). Kate Middleton’s Zara Necklace Was Actually Worn By Princess Beatrice First. Huffington post, http://www.huffingtonpost.com/2013/12/11/kate-middleton-zara-necklace_n_4426276.html [Accessed on 15th November 2015] Anon (2015). Consumer profiler https://yougov.co.uk/opi/profileslite#/Zara/demographics [Accessed on 15th November 2015] Anon (2015). The World’s Most Valuable Brands. Forbes, http://www.forbes.com/companies/zara/ [Accessed November 15th 2015] Anon (2015). Zara Brisbane opening in December. Brisbane Times. http://www.brisbanetimes.com. au/lifestyle/material-girl/zara-brisbane-opening-in-december-20151007-gk3ty5.html [Accessed November 15th 2015] Anon (2015). Zara owner Inditex profits up 5% BBC News, http://www.bbc.co.uk/news/business-31939274 [Accessed November 15th 2015] Anon (2015). Zara’s TRF campaign lives the 1970s teenage years you never had WGSN (online) http:// www.wgsn.com.lcproxy.shu.ac.uk/news/?p=1215836 [Accessed November 15th 2015] Anon. http://www.moschino.com/gb/large-fabric-bag_cod45284308vo.html?season=main [Accessed on 10th November 2015] Anon. http://www.stellamccartney.com/gb/stella-mccartney/wedges_cod44780349qp.html [Accessed on 10th November 2015] Anon. http://www.zara.com/uk/ [Accessed on 10th November 2015] Badia E. (2009) Zara and Her Sisters: The Story of the World’s Largest Clothing Retailer. Palgrave Macmillan.

Bliss J. (2009) “I Love You More Than My Dog”: Five Decisions That Drive Extreme Customer Loyalty in Good Times and Bad’. Penguin group.

Caesar J (2010). Zara launches online retail store BBC News http://www.bbc.co.uk/news/business-11155437 [Accessed November 17th 2015] Chaffey D. (2009) E-business and e-commerce management strategy, implementation and practice.

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Dillon S. (2011) The Fundamentals of Fashion Management. AVA publishing.

Ferrell O and Hartline M. (2010) Marketing Strategy. 5th edition. South Western.

Hansen S (2012). How Zara Grew Into the World’s Largest Fashion Retailer Ny times http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashion-retailer.html [Accessed November 16th 2015] Hayden Noel (2009) Basics Marketing 01: Consumer Behaviour. AVA publishing.

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Schermerhorn Jr. (2010) Management. 11th edition. John Wiley & Sons Sengupta S. (2004) Brand Positioning: Strategies for Competitive Advantage. 2nd edition. McGrawHill Professional.

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