Zara: The Technology Giant of the Fashion World
Zara: The Technology Giant of the Fashion World
Synopsis
Zara is a company that defines what the fashion industry has termed “fast fashion.” The flagship specialty chain of Spain-based clothing conglomerate, Inditex, Zara has built an information and distribution system that allows it to put the latest runway fashions in its stores in a matter of weeks at a fraction of what the big-name designers charge.
In addition to fast, Zara is prolific. In a typical year, Zara launches about 20,000 new items. Compare that to the 2,000 to 4,000 items introduced by both H&M and Gap. Zara stores receive new merchandise two to three times each week, compared to six to eight times per year for most clothing retailers. More and smaller batches of items translates into fashion exclusivity. This in turn results in fewer mark-downs and higher profits.
Zara controls a true vertical marketing system. A good portion of the channel participants are centralized geographically around its corporate headquarters in a remote corner of Northeast Spain, rather than spread out around the globe. This and its IT system are what allow it to achieve the speed and responsiveness that it does.
Questions
Would Zara’s model work for other retailers? Why or why not?
How is Zara going to expand successfully all over the world with the same level of speed and instant fashion?
Course
Professor
Zara Company
There is a probability of Zara's model working for other retailers. Nevertheless, it would be exceedingly challenging to replicate. This is because the company follows strategies such as JIT manufacturing, which can take a lot of time to learn. Additionally, it has a central distribution system that would be hard to imitate for firms to outsource production. The effective supply chain tends to allow the firm to cater to the fast-fashion fanatics. In case other retailers were willing to establish such a supply chain, they would use a lot of money and time. However, if they succeeded in setting it up, it would be extremely effective for them.
Zara will expand effectively on the entire globe with the same speed level and instant...