CONTENTS Executive summary History The brand Mission statement Market position The customer Market position Competition Swot Pestle The future
I am researching into one of the leading fast fashion retailers ‘zara.’ I HAVE analyzed what makes zara a successful brand and its strategies which have helped to achieve this. Using my research and own opinions I HAVE LOOKED AT where zara stands in market , creating a swot analysis in order to identify how the retailer could reposition the brand against competitor In the future. I have chosen to look at this brand as I am a regular customer and I believe as a company it has a big impact on the retail industry and its competitors. ZARA’S MISSIOM STATEMENT IS “Through Zara’s business model, we aim to contribute to the sustainable development of society and that of the environment with which we interacts.” THIS STATEMENT EXPLAINS THE BRANDS’ CORE PASSIONS WHEN IT COMES TO MAKING FAST FASHION AS ENVIRONMENTALLY SAFE AS POSSIBLE. ZARA’S TARGET DEMOGRAPHIC TENDS TO BE PEOPLE OF AGES 18-40, WHO HAVE A MID-RANGE INCOME. FOCUSING ON FEMALE CUSTOMERS. THE RETAILER HAS SEVERAL ATTRIBUTES, FACTORS THAT MAKE IT DISCTINCTIVE AND A FEW NOVELTY CHARACTERISTICS. They have a strong supply chain which enables the brand to produce new articles at a very quick rate compared to competitors. Its current inventory strategy allows the business to thrive due to the involvement with their customer base – the company move in step with consumers keeping up with trends and providing product when needed.
DWVYR HANNAH ELIZABETH DWYER
HISTORY Zara is a Spanish clothing retailer founded by amancio Ortega in 1975. it belongs inditex, one of the world’s biggest fashion retailers who also own pull&bear, Massimo dutti, bershka, Stradivarius, zara home, oysho and uterque. Zara began in it’s initial store by featuring lookalike pieces of high-end sought after clothing. The original name of the brand was ‘zorba’ however Ortega realised this was already taken, turning to ‘zara’ instead. during the next decade, zara expanded to 9 new stores in the biggest cities of Spain before joining holding company inditex. Amancio Ortega created a unique process for the design, manufacturing and distribution of fashion, reducing lead times (‘instant fashion.’) in the upcoming years, zara then began expanding globally into markets such as new York, Paris, Mexico, Portugal, Belgium, Sweden, Norway and Israel. Immediately zara found a sufficient gap in the market that not many brands had explored – keeping up with trends, with a combination of high quality, but affordable priced pieces. Ortega believed that clothing items shouldn’t be re-worn a lot and wardrobes refreshed regularly, therefore zara ensured they had a scarce supply of items to motivate their customers to shop frequently, eliminating the need for discount sales. The limited production meant consumers felt their fashion was unique. Zara was the start of fast fashion and continued to develop the fashion industry completely. Zara now has over 2,250 stores world-wide, located in cities over 96 countries. Many clothing brands try to forecast the future trends customers might buy, zara moves in step with consumers, this made easy by owning their own supply chain – this is one of the many reasons zara is so popular as a clothing brand.
Core competencies Rapid & responsive design team, working with the customer in mind. No advertising costs, instead they modify and merchandise the store frequently creating a marketing impact. The majority of production is located in Spain which is close to main market. Minimal inventory – producing a lot of product however low quantities of each style – average article only on shelf in store for one month
Core values “beauty, clarity, functionality and sustainability” zara stands out against its competitors due its stylish response to customers needs. High quality pieces for an affordable price
brand essence Creating fast fashion, designed to suit large customer base. A sustainable retailer, focusing on current trends as well as classic designs.
Core passions Zara aims to be as sustainable as possible, saving energy in their eco-friendly stores, and recycling hangers, alarms and any plastic used for packaging. The main passion is an intimate relationship with its customers to form a base for increase in sales
ZARA’S MISSION STATEMENT
“Through Zara’s business model, we aim to contribute to the sustainable development of society and that of the environment with which we interacts.”
SLOGAN/ Strap line ideas
‘SUSTAINABLY STYLISH’ ‘sustainable style’
Market position
High quality
M&s
whistles
High price
Low price
Zara
Topshop
Primark
Low quality
CUSTOMER PROFILE ZARA’S TARGET DEMOGRAPHIC TENDS TO BE PEOPLE OF AGES 18-40, WHO HAVE A MID-RANGE INCOME. FOCUSING ON FEMALE CUSTOMERS, THE ZARA WOMAN IS A FASHION FORWARD CHARACTER, ALWAYS KEEPING WITH NEW TRENDS - HAVING A HECTIC LIFESTYLE AND OCCUPATION DOESN’T STOP HER FITTING IN A SHOPPING TRIP OR AN ONLINE SHOP SESSION. In my opinion, zara succeeds with its high end looking designs and frequent stock updates – there is always new product when I enter each zara store even on a regular basis. I like that zara doesn’t follow every fashion trend, for instance when the neon movement arrived, you didn’t see a store completely full of vivid colours like other high-street brands. There were an amount of articles they included that are of a bold hue which sold, due to quick lead times and lower quantities of each item, however this neon trend wouldn’t serve the entire of zara’s demographic.
MY CUSTOMER IS 29 YEAR OLD MILLIE, WHO WORKS IN EVENTS MANAGEMENT. SHE IS ENGAGED AND IN THE MIDDLE OF PLANNING HER OWN WEDDING. MILLIE EARNS AROUND $50,000 ANNUALLY PLANNING SUPERIOR EVENTS FOR COMPANIES AND CERTAIN CELEBRITIES – SHE WORKS ALONGSIDE A FEW OTHERS AND HER BUSINESS IS BOOMING. ON THE SIDE, MILLIE ALSO TAKES PRIDE IN HER SOCIAL MEDIAS, POSTING FASHION CONTENT ON HER INSTAGRAM AND YOUTUBE PAGE, EARNING A SECOND VARIABLE INCOME FROM THIS. SHE ENJOYS SHOPPING AT ZARA AND OTHER HIGH-STREET STORES AS WELL AS INDULGING IN DESIGNER GOODS FROM TIME TO TIME. MILLIE LIVES IN NOTTINGHAM WITH HER FIANCE JOHN IN A RENTED HOUSE UNTIL THEY MOVE INTO THEIR OWN HOME AFTER THEY GET MARRIED. SHE COMMUTES ALL OVER FOR EVENTS INCLUDING TO OTHER COUNTRIES SO IT IS IMPORTANT TO HER TO ALWAYS HAVE A WARDROBE FULL OF OPTIONS FOR EACH EVENT AND SEASON. PINTEREST OFTEN INSPIRES MILLIE’S FASHION AND HER WORK, ALONG WITH KEEPING UP WITH THE TRENDS ON INSTAGRAM AND READING SEVERAL PUBLICATIONS. MILLIE TOOK ALEVELS BEFORE GETTING A BA HONS DEGREE IN EVENTS MANAGEMENT (LEEDS BECKET.) MILLIE HAS MANY FRIENDS, A SHOPPING TRIP OR COCKTAIL DATE IS NEVER TIOO FAR AWAY ON THE CALENDAR. EVENTUALLY MILLIE WOULD LIKE TO EXPAND HER BUSINESS AND HAVE SEVERAL CO WORKERS HELPING HER TEAM ACHIEVE THE GOALS THEY HAVE COLLECTIVELY. SHE WANTS TO TRAVEL MORE AFTER HER WEDDING BEFORE HER AND JOHN SETTLE PROPERLY INTO MARRIED LIFE AND HAVE CHILDREN. ANOTHER ASPIRATION OF HERS IS TO EXPLORE MORE INTO HER FASHION PROFILES ONLINE, AIMING FOR BRAND COLLABORATIONS AND DEALS – IN THE END MILLIE WOULD LIKE TO DO THE MAJORITY OF HER WORK FROM HOME BUT STILL BE HANDS-ON WITH HER JOINT BUSINESS TO ENABLE HER FAMILY LIFE TO THRIVE. CREATING MORE FASHION CONTENT FOR HER YOUTUBE CHANNEL IS A GOAL OF HERS AND THIS WOULD BE EASIER TO ACHIEVE IF SHE HAD MORE TIME SPENT AWAY FROM THE OFFICES AND TRAVELLING TO EVENTS.
PHYSIQUE AFFORDABLE, HIGH QUALITY FASHION
RELATIONSHIP GOOD PRICES FOR QUALITY , CHOICE
REFLECTION BRINGING CATWALK TO HIGHSTREET, STYLE
PERSONALITY ”BEAUTY, CLARITY, FUNCTIONALITY AND SUSTAINABILITY”
CULTURE SIMPLICITY, UP TO DATE, CLASSIC
SELF-IMAGE
TRENDY, UNIQUE, STYLISH
BRAND ONION
action
personality
values
essence
• Short lead times • Limited number of items • Focus on customer service
• High quality for reasonable price • Scarce supply – exclusive • Feminine • Classic • Fashion forward
• Successful • Forwardthinking • Experimental • Sustainable • Customer is • priority
Zara focus on current trends whilst creating classic designs. • Stylish • Trendy • fashionable
Political
pestle
BREXIT EURPOEAN TRADE AGREEMENTS LOW COST OF LABOR RELATIVE AFFORDABILITY
TECHNOLOGICAL IMPACT OF NEW MEDIA USE OF DATA
ECONOMIC INFLATION RATE INTEREST
SOCIAL DEMOGRAPHICS BUYING TRENDS SEASONAL BEHAVIOURS FASHIONABLE REPUTATION ONLINE SHOPPING TREND
LEGAL TRADE BARRIERS CONSUMER LAWS COPYRIGHT ISSUES
ENVIRONMENTAL Geographical location FAST FASHION IMPACT SUSTAINABILITY PLEDGE
INTERNAL EXTERNAL
STRENGTHS
WEAKWEAKNESSES
Zara use minimal advertising, therefore reducing costs and money can be used elsewhere – new stores in top locations. This means they have an advantage compared to competitors who have a higher advertising expenditure needed to expose their brands. Experience replaces product for zara in terms of customer service. Strong presence, quick supply chain, low cost & high profits, investment in technology, fast increasing sales.
zara doesn’t have an immediate focus, and because of this consumers may look for competitors if they’re focused on the desired product. Lack of advertisement benefits the brand but perhaps advertising their collections would boost profits and exposure. Due to the company’s scarce supply of styles, there is no safety stock if an item is popular with consumers – therefore may not reach potential.
OPPORTUNITIES
THREATS
invest in marketing and advertisement, to increase their sales and consumer base. This could help when competitors place pressure on the brand. Market expansion could be an opportunity in creating more business – discovering where consumers are spending money could benefit the brand. Global expansion in Africa and Asia may bring opportunities. More stores to satisfy the needs of growing consumer base.
One of main threats to zara is their competitors, globally as well as local. Zara has no collaborations with international designers unlike its competitors. Collaborations bring exposure to the companies due to the desire for designer labels. Zara advertise their campaign videos on platforms such as YouTube for free, if this was to change they are at risk of having to increase marketing funds as a brand.
swot
The future
Brand repositioning If I was to reposition Zara as a brand I would initially look into improving the quality of the products. I feel that if the quality improved, consumers would be happier paying the price of the items. Possibly even higher prices.
High quality
M&s
Zara’s top competitors are h&m, Uniqlo, gap and reformation. Some other competitors In my opinion on the high street would be stores such as Topshop, mango, Oasis, Wallis, next and m&S. Even Primark seem to be invading zara’s space.
whistles
Zara
Low price
Topshop H&m
Primark
Low quality
High price
To test how advertising would work for zara I feel experimenting with social media posts & frequency – maybe promotion posts would be useful. testing how tv advertisements could also be an idea to reposition the brand – some of the campaign films on YouTube don’t get much exposure. Social media influencers wear a lot of zara, this has a big impact with targeting the younger to mid range of the demographic.
Highstreet store, diffusion line to make it cheaper, high end companies do it, same brand different image, TRF younger market, separated within unit References 1. https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-successa-culture-of-customer-co-creation/ 2. https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-successa-culture-of-customer-co-creation/