ZARA

Zara SA is a Spanish apparel retailer based in Arteixo, A Coruña, Galicia, Spain. The company specializes in fast fashion, and products include clothing, accessories, shoes, swimwear, beauty, and perfumes. It is the largest company in the Inditex group, the world's largest apparel retailer. The brand was founded by Amancio Ortega in 1975. Zara stores have men's and women's clothing as well as children's clothing (Zara Kids). Zara Home designs are located in European stores.

Zara is famous for its fast fashion. The company can design a new product and have finished goods in its stores in four to five weeks. It can also modify existing items in as little as two weeks. Shortening the product life cycle means greater success in meeting consumer preferences. If a design is not sold well within a week, it will be withdrawn from shops, further orders are canceled and a new design is pursued. Zara monitors customers' fashion changes.

The media often quotes that the brand produces “freshly baked clothes”, which survive fashion trends for less than a month or two. Zara concentrates on three areas to effectively “bake” its fresh fashions:

• Shorter lead times (and more fashionable clothes): Shorter lead times allow Zara to ensure that its stores stock clothes that customers want at that time (e.g. specific spring/ summer or autumn/ winter collections, a recent trend that is catching up, the sudden popularity of an item worn by a celebrity/ socialite/ actor/ actress, the latest collection of a top designer, etc.). While many retailers try to forecast what customers might buy months in the future, Zara moves in step with its customers and offers them what they want to buy at a given point in time.
• Lower quantities (through scarce supply): By reducing the quantity manufactured for a particular style, Zara not only reduces its exposure to any single product but also creates artificial scarcity. Similar to the principle that applies to all fashion items (and more specifically luxury), the lesser the availability, the more desirable an object becomes. Another benefit of producing lower quantities is that if a style does not generate traction and suffers from poor sales, there is not a high volume to be disposed of. Zara only has two time-bound sales a year rather than constant markdowns, and it discounts a very small proportion of its products, approximately half compared to its competitors, which is a very impressive feat.
• More styles: Rather than producing more quantities per style, Zara produces more styles, roughly 12,000 a year. Even if a style sells out very quickly, there are new styles waiting to take up the space. This means more choices and a higher chance of getting it right with the consumer.

Some outstanding positive points of the brand:

• Customer co-creation: Zara’s unrelenting focus on the customer is at the core of the brand’s success and the position it has achieved today
• Super-efficient supply chain: Zara’s highly responsive, vertically integrated supply chain enables the export of garments 24 hours, 365 days of the year, resulting in the shipping of new products to stores twice a week.
• Frequency of customer insights collection: Trend information flows daily into a database at head office, which is used by designers to create new lines and modify existing ones.
• Standardization of product information: Zara warehouses have standardized product information with common definitions, allowing quick and accurate preparation of designs with clear manufacturing instructions.
• Commitment to the environment: Being in a business where it taps on natural resources to create its products, Inditex makes efforts to ensure that the environmental impact of its business complies with UNSDGs.

Brand origin: Spain

Website: https://www.zara.com/

Revenue: $13,156M (2021), $14,582M (2020)

Photo origin: Google.com