The changes of the Spanish company Zara over time
Zara is a Spanish clothing sale company whose main headquarters are in the city of La Coruña, Galicia. The company was founded in 1975 by Amancio Ortega and Rosalía Mera. It is the main brand of the Inditex group and the world’s largest clothing retailer with more than 2200 stores and with a wide presence on all continents. It is popular due to its concept of "fast fashion", massive leading fashion to middle -class consumers worldwide. Amancio Ortega, the founder of Zara and his Inditex group, did not think he was going so far when he decided in 1975 to open his first store.
The fashion industry has been changing strongly over the years, and fashion companies are changing the way they do business, with faster purchase processes, reaching a greater volume of buyers, growing demand. They focus more more and more on consumers and what they are looking for at that time, the fashion of the middle classes, with dynamic collections that create trends and approach what consumers are looking for. The concept of fast and dynamic fashion is gaining ground in the industry, every day it is more important.
For Zara, consumers are the reason for their existence, they are permanently in contact with buyers identifying their wishes and needs, for which they always seek to segment the market seeking to differentiate themselves in each of the groups. Managing to differentiate itself in an agile and permanent way in time.
Zara is a success, where its main differential has been the rapid monitoring of fashion trends, always being one step ahead of its buyers.
Success has been to get and offer what the consumer asks and do it in the shortest possible time, at an accessible price and with good quality.
Its supply and strategy chain consists in controlling the entire process (design, manufacturing, distribution and sale) to permanently approach customer demand. This process allows them to make agile decisions on the assortment of garments, even in a matter of weeks, and not once per season, like the rest of manufacturers. Zara took that strategy to one end. The stores have the ability to decide the assortment of garments and their permanent adaptation to the tastes of their customers. The flexibility offered by Zara allows you to adapt your clothes to such unpredictable circumstances as unusual climate changes, so its brand value increases as a result of this competitive advantage.
Currently its positioning and business model, which can be summarized in three pillars:
- Very high rotation of products.
- Generation of an experience in physical stores.
- Adaptation of new technologies in their spaces.
Zara has so much information from its customers and its own network, that it captures the trends while being produced. To the rest of the companies this process costs between a minimum of 3 to 6 months, Zara is able to analyze all the information of their network, customers and trends, and in 15 days to have it in their stores. This "Just in Time" is the key to its success.
Efficiency and logistics is part of the secret
Zara established a distribution system capable of reacting quickly to changes in market trends, and have always been pending listening to their customers and offering them the fashions they want. For this, the group created an organizational structure that covers all stages of the fashion value chain. Much of its success falls to its logistics system, but the key really lies in a constant search for improvement to respond more quickly to the needs of its customers.
Therefore, Zara has begun to implement a unique and revolutionary model in retail: a robotic logistics in the store delivery stores through a touch screen that manages the consumer.
One of the keys of the Zara model is to have managed to adapt the offer, in the shortest possible time, to the desires of the customers, and, where the time factor is the most important, above the production costs. The first advantage is vertical integration, determining for a rapid response of supply to a very changing demand. In the Zara Group a perfect synchronization is carried out in the production and distribution processes, which can anticipate better conditions to its competence.
Productive flexibility lies in the speed of access to Zara’s garments market. While its competition needs an average of 6 months to design the product and another 3 months to manufacture and place it at the points of sale, the Galician firm does so, for the first case between 3 and 4 weeks and for the second in 7 days , that is, it reduces market access time by more than 80%. In this way, flexibility constitutes the greatest competitive advantage of Inditex, placing at a considerable distance from other companies in the sector.
Therefore it can be concluded that Zara’s supply chain made it possible for the brand to become the Fast Fashion, due to its ability to follow the new trends and respond to changes in demand. The original business idea was very simple. Link customer demand with manufacturing and link manufacturing with distribution. Zara stores have clothes for men and women, as well as children’s clothes in their dependence Zara Kids. The products are supplied based on consumer trends. Its highly receptive supply chain sends new products to stores twice a week. After designing the articles, of which about 450 million a year are made, it takes 10 to 15 days to culminate its entire realization process., which has led the brand to be a highly successful brand.
Bibliography
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