ZARA
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MELISSA PENDLEBURY
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Company overview Zara is a successful Spanish clothing and accessories retailer based in Arteixo, Galicia, which was founded in 1975 by Amancio Ortega. He is now known to be the 4th richest man in the world. Zara is the main brand of the Inditex group which parents other brand such as Zara home, Pull and Bear and Bershka. In 1988, the company started its international expansion, which started in Portugal and the following year it entered the United States. There are now over 2,100 stores across the world and you will find one on almost every high street of a city center. Zara sells women’s, men’s and children’s clothing and their products are the latest trends and affordable fashion. Zara launches around 12,000 new designs each year to sell in store and online. Zara’s designs can be in stores within fifteen days from the design process, this shows that Zara is fast-paced and constantly designing things with current trend influence. They always have new stock in week from week which helps Zara as the customers are always buying from there because there are new products in all the time rather than the customer seeing the same products each week.
Stores Zara has over 2,100 stores worldwide and is very particular where they locate them. They have stores in over 88 countries, which includes flagship stores on Fifth Avenue in New York, Oxford street in London, Calle Serrano in Madrid, Ginza districts in Tokyo amongst others around the world. There are 68 stores in the UK, 438 in Spain and 100 in Japan. Currently 50% of Zara’s stores are already eco-efficient as the day to day running of their stores are designed to reduce environmental impact. They save up to 20% on energy and 50% on water. Their goal is for all of their stores to be eco-efficient by 2020.
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Target customer Zara’s target customer ranges from 20-40, which targets a varied age range who have a mid-range income. This helps attracting their customers because it is not just for young people or older people they have something that suits all ages. 60% of their sales are from the women’s clothing, 25% for their men’s line and 15% from their children’s department. Their main custom comes from women and this is probably because they don’t advertise for the men’s clothing like they do with the women’s, which probably needs to change slightly to get the sales higher for the men’s department.
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Products The first Zara store featured low-priced lookalike products of high-end clothing trends whereas now it’s classy, on trend fashions. Zara sells women’s and men’s and children’s clothing and accessories as well as having a home section. The designer’s produce on-trend, quality clothing and the stores constantly have new designs in. Their designs take fifteen days from the design stage to the store rather than six months like most other fashion retailers which does offer more to their target customers as they can get the latest fashion quick. Zara attracts many different consumers for the reasons their products are on trend, fashionable, classic and affordable.
Price Zara’s price point is reasonable and affordable. They are not designers so it can’t be too expensive due to their target market but their items are good quality so they are mid-ranged priced. The average for a women’s top is roughly £20 and a pair of women’s jeans £30.
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Zara’s men’s collection is slightly cheaper as their t-shirts are around £10-£20 which will attract their male consumers to buy more essentials like t-shirts as they are good quality and very affordable for the typical Zara customer. They do have more expensive things such as leather jackets, coats and bags as these are more statement pieces. Zara compared to their competitors is quite cheap, for example Topshop is one of their competitors and they are slightly more expensive.
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Promotion Zara is known for not advertising as much as other clothing brands, as their name will do it for them. They have become a very successful fast fashion brand and don’t need to advertise to gain custom. Zara gives you the opportunity on their website to sign up to their newsletter if you enter your email address which will help them keep up that rapport to their consumers by letting them know when they are in sale or when new items are available. Through their website you can find links at the bottom of their page which has their social media accounts linked to such as Twitter, Instagram, Facebook, Pinterest and Youtube. This is probably because online and social media is at it’s high at the moment and almost everything is accessible online. This helps Zara keep up to date with what their consumers want and how to get them to shop with them. The only advertisement I see for Zara is a campaign video for their spring/summer or autumn/ winter collections so it is not very often at all. The brand speaks for itself and doesn’t need to be promoting all the time, as it is constantly a busy store. USING THE WEBSITES BELOW YOU CAN VIEW THEIR LATEST CAMPAIGN (SPRING SUMMER 2017): Men’s - https://www.youtube.com/watch?v=ZVKXnnKb0q0
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Women’s - https://www.youtube.com/
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Process Zara’s process is very quick from where the designers design garments to it getting into stores. The reason being they are a successful retailer whose consumers want the latest trends right now, therefor they have to provide that service to keep their custom. This is a good way of attracting their customers as nothing is in the store for a long time where you don’t notice change, as there is always new stock in store. The stock takes fifteen days from the designing to be in store, which is very fast compared to other stores, which mostly take six months.
The company ensure their product is of good quality by designing their own products rather than relying on somebody else’s designs. They have almost 300 people working in their headquarters in Spain to help with this process. These talented people include designers and specialists who all help with this design process and together they produce designs for around 40,000 items per year and 12,000 are selected for production. 50% of the products that are sold are manufactured in Spain, 26% in the rest of Europe and 24% in Asia and African countries. For stores to order the products they have to place their orders at pre-designated times and they receive shipments twice per week.
Zara buys fabric in only 4 different colours which is saving their money. They also design and cut their fabric in-house. Their suppliers are all close to their factories so that Zara can order as soon as they need it as it’s a quick service.
FIGURE 7 The clothing is ironed in advance and packed on hangers with security and price tags already fitted which makes it quicker and easier for it to be put onto the shop floor. Overnight trucks are used to deliver to european stores and airfreight is used to ship to other countries.
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Physical Environment The overall look when you walk into a Zara store is monochrome, clean and spacious. Most of their collections have black, white and grey pallets in, which make their look very monochrome, which portrays the brand as classy and expensive looking. The women’s department is always on the bottom floor and the men’s is always up stairs, which is what I have seen through the stores I have visited, this is probably because the women’s line sells more items than the menswear or childrenswear. Zara’s store fixtures are quite spread out and it is not crammed too much which makes the customer feel more relaxed and they can browse more. They have mannequins free standing around the store showing items of clothing from their latest collections as well as having the mannequins and displays in the window which is created to invite the customer inside. Zara play music in their store which sets a certain atmosphere and they use Zara satellite radio channel which ensures all of the stores are in sync for that particular season. Bright lighting is used around the store to highlights certain aspects of products such as colour, detailing or fabrics and it will work by making it stand out to the shopper. Point-of-sale areas are usually located at the back of the store close to the till point as this will boost their units per transactions. Products in this place are small accessories such as earrings, necklaces, bracelets, sunglass etc. These items are lower priced than products closer to the front so they are placed near the till point intentionally to gain more impulse buying from customers who just see something and it’s not too expensive.
Place in the market Right now Zara is well positioned in the market all over the world. They give their customers quick choices in their fashion collections and their products are of a high quality for their value and current fashion trends are seen through these items. At a similar level of quality V price, their main competition are the other high street fashion brands such as H&M, Mango and Topshop/Topman. H&M are different from Zara because they outsource all of their production and spend more money on advertisement. The key similarities between H&M and Zara are that they are both European based companies, fashion forward and sell their products at a low price. They have both also had a strong international 11
People Designers – The designers for Zara are based in their headquarters in Spain where there are around 200 of them designing for the latest collections. Manufacturers – Manufacturers for Zara are based near to where the Zara offices are around the world as it is easier and quick for them to be able to have products fast. Also they are close by to check on how it is running (e.g no slave labour) Customer service – Zara has a customer service section on their website where you can view your options on how to get in touch with the team. They do have a different section for customer service either about the store or online. You can contact them through telephone, online chat or social media, which is quite good for the customer as there is not just one point of contact. The role of the customer service team is to deal with any queries or complaints by customers. Sales Assistants – Zara have over 10,000 employees and most of them are the sales assistants and management in the retail stores. This is the most important job as they are the ones who are selling the products and helping the consumers to want to buy the products. Each role behind the scenes for this brand plays a vital role in helping with the brand’s success. They need the designers to design items suitable for their target customer, they need manufacturers to be able to create the products, the sales assistants are needed to be able to sell the products.
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Strengths and weaknesses Strengths; Affordable fashion Popular brand New trends/fashions New stock every week Good quality product Easy to shop – online & app Good location of stores
Weaknesses; No advertisement – missing people who don’t like going to store A lot of competition Sometimes it’s hard to find the products from the window in store Products wouldn’t last a long time
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Social media Social media is at its high right now with everybody active on different sites and blogs such as Instagram, Twitter, Facebook, Pinterest. Zara has links from their websites to their own social media accounts which targets a wider audience and connects to many different people. I have found statistics on how many people are talking about Zara on Facebook each day from the end of January until now.
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Bibliography
Illustrations
(No Date) Available at: http://www.zara.com/uk/en/ join-life/our-stores-c841544.html (Accessed: 10 February 2017).
FIGURE 1 – http://www.zara.com/uk/en/campaign/ woman-%7C-campaign-c566145.html
Zara report (no date) Available at: https://issuu.com/ kathcpy/docs/zara_report (Accessed: 13 February 2017). Zara (2017) ‘Zara (retailer)’, in Wikipedia. Available at: https://en.wikipedia.org/wiki/Zara_(retailer) (Accessed: 7 February 2017). Zara (2016) Zara | discover Zara’s company page | the business of fashion. Available at: https://www. businessoffashion.com/community/companies/zara (Accessed: 13 February 2017).
FIGURE 2 – http://www.zara.com/uk/en/campaign/ woman-%7C-campaign-c566145.html FIGURE 3 – http://www.zara.com/uk/en/man/t-shirts/ plain/relaxed-fit-t-shirt-c583033p4348095.html FIGURE 4 – http://www.zara.com/uk/en/woman/tops/ view-all/frilled-sleeve-polka-dot-top-c719021p4373053. html FIGURE 5 – http://www.zara.com/uk/en/campaign/ woman-%7C-campaign-c566145.html FIGURE 6 – http://www.zara.com/uk/en/campaign/ woman-%7C-campaign-c566145.html
The secret behind Zara and Uniqlo’s supply chain models (2016) Available at: https://theleadershipnetwork.com/article/supply-chain-management/zarauniqlo-supply-chain (Accessed: 13 February 2017). Successstory (2017) Zara success story. Available at: https://successstory.com/companies/zara (Accessed: 8 February 2017).
FIGURE 7 – https://www.linkedin.com/pulse/predictive-analytics-supply-chain-chris-cook FIGURE 8 – http://www.zara.com/uk/en/campaign/ man-%7C-campaign-c566147.html FIGURE 9 – http://www.zara.com/uk/en/campaign/ man-%7C-campaign-c566147.html
Puri, C. (2014) Souvik das. Available at: http://www.slideshare.net/cpuri/group-12azara-scm?qid=1023e959-6770-49cd-9af80022c465ff0f&v=&b=&from_search=11 (Accessed: 13 February 2017).
FIGURE 10 - https://www.retail-week.com/home/oracleretail-week-awards-fashion-giant-zara-powers-aheadglobally/5047269.article
Madden, A. and Fashion, P. (2015) 19 things you never knew about Zara. Available at: http://www.businessinsider.com/19-things-you-never-knew-aboutzara-2015-3?IR=T (Accessed: 7 February 2017).
FIGURE 12 – http://www.fashionbeans.com/2017/zaraman-ss-2017-advertising-campaign/
Laura, Harbott, A. and says, L. (2011) Blog. Available at: http://www.harbott.com/2011/03/03/analysing-zaras-business-model/ (Accessed: 12 February 2017).
FIGURE 11 – http://www.zara.com/uk/en/campaign/ woman-%7C-campaign-c566145.html
FIGURE 13 – graph designed by myself Melissa Pendlebury http://retail.economictimes.indiatimes.com/ social-analytics/fashion/zara/494 FIGURE 14 - http://www.zara.com/uk/en/campaign/ man-%7C-campaign-c566147.html
Chettupalli, S.P. (2013) Rajender Verma. Available at: http://www.slideshare.net/chspravin/supply-chainmanagement-of-zara-28247084 (Accessed: 13 February 2017).
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