This is where Zara test how everything should look and feel, from lighting to displays. They are aiming to reach zero waste in store - all packaging is made from recyclable cardboard and plastic. Recycling is a big theme for the clothes too. They have been working with the renowned US university MIT to develop ways of making fabric from recycled plastics.
I take the opportunity to feel the texture of some of the latest recycled plastic clothes from their sustainable line. The cloth feels silky to the touch.
Sarah Ditty from Fashion Revolution says that while it is great to see Zara taking steps to incorporate more sustainable material into its ranges, it is essential action that all brands should be taking. However, she highlights that the real issue is all about the sheer volume of clothes they make. Inditex reported putting over 1. Even with more environmentally-friendly materials, producing that many items each year is unsustainable for our living planet. How much clothing we buy is a marker of just how much the industry has grown and changed in a short space of time.
The UK has the highest rate of consumption in Europe, at Indeed, Zara has an enormous turnaround, fashion influencer Jasmine Jonas tells me. But across the board, demand for eco-conscience clothing is rising. It's not just Fashion Revolution - many campaigners say the only way to truly tackle sustainability in fashion is to make and sell less.
But how can that be a solution for Zara and Inditex if they want to keep those record-breaking sales? Each customer, each person, is free to decide how much would he or she like to buy at any point in time, if this person wants to spend money going to a restaurant or buying clothes In the meantime, Zara says it will do what it can to keep the environmental conundrum for customers to a minimum. What to do when everyone's wearing the same as you. Zara's strategy is to offer a higher number of available products than its competitors.
While most clothing retailers manufacture and offer to the public for sale 2, to 4, different articles of clothing, Zara's production has been markedly higher, at over 10, pieces produced per year. This unique feature of the company's strategy has allowed Zara to appeal to a broader number of customers with unique tastes. Uniqlo was purchased by Fast Retailing Co.
Its business model is based on that of The Gap. Uniqlo has opened 2, stores in over 25 markets worldwide. Uniqlo's introduction into the U. Uniqlo's distribution channels are concentrated in its country of origin; Uniqlo store locations are in Japan.
Uniqlo's distribution strategy has centered on the timing of its products' introductions into stores, with new products created as a function not of quantity, but of demand.
Uniqlo responds to changing trends in Japanese fashion and specifically caters its designs to mimic the minimalistic style that is popular in Japan. This affects the appeal that Uniqlo may have for western distribution channels , and may be the determining reason behind its low number of store locations in the U. Alternatively, Monki sells clothing pieces that are half the price of those sold by Collection of Style and features designs that are comparably youthful.
Zara divides the products sold within its stores into lower garments and upper garments, with price points being higher for the upper garments. Zara hopes to be perceived as a high-end retailer with affordable prices. Its flagship stores are strategically opened in key traffic points worldwide that have high real estate costs, such as its Fifth Avenue location in New York City. Zara does not stress advertising as a part of its branding strategy , differing from Uniqlo; the company instead funnels the dollars that would have gone toward advertising into new store openings.
The adapted strategy from The Gap that Uniqlo employs is to position its brand as private-label apparel; the company creates its own clothing, and Uniqlo only sells it within the confines of its brick-and-mortar stores and on its website. The company also uses sporting events to appeal to the general population.
To transport its goods from factories to stores, the retailer relies on rail and sea as a means to promote efficiency within its internal logistics. Zara is able to design, manufacture, and sell its products in stores quickly because the company owns many of the vertical factors of production.
Zara's approach to fashion differs from Uniqlo's in that it attempts to predict customer needs rather than follow current fashion trends. The turnover of products within the store is very high, with an average article of clothing remaining on the shelf for only a month.
Uniqlo manufactures its clothing within Japan. It began using cheap labor in China when Japan experienced a recession in the s. The company has contracts with 84 fabric mills. Uniqlo has also forged a partnership with the Japanese denim manufacturer Kaihara Denim. Fast Retailing. Accessed April 27, Pomona College. Company Profiles. Top Stocks.
Dividend Stocks. How did such lightning fast stocking of pink scarves happen? Customer insights are the holy grail of modern business, and the more companies know about their customers, the better they can innovate and compete.
But it can prove challenging to have the right insights, at the right time, and have access to them consistently over time. The brand uses cutting-edge systems to track the location of garments instantly and makes those most in demand rapidly available to customers.
Additionally, it helps to reduce inventory costs, provides greater flexibility to launch new designs, and allows fulfillment of online orders with stock from stores nearest to the delivery location thereby reducing delivery costs.
Zara empowers its sales associates and store managers to be at the forefront of customer research — they intently listen and note down customer comments, ideas for cuts, fabrics or a new line, and keenly observe new styles that its customers are wearing that have the potential to be converted into unique Zara styles. In comparison, traditional daily sales reports can hardly provide such a dynamic updated picture of the market.
In the fashion world, a trend starts small, but develops fast. Zara employees are trained to listen, watch and be attentive to even the smallest seismographic signals from their customers, which can be an initial sign that a new trend is taking shape. Zara knows that the quicker it can respond, the more likely it is to succeed in supplying the right fashion merchandise at the right time across its global retail chain.
Zara has set up sophisticated technology driven systems, which enable information to travel quickly from the stores back to its headquarters in Arteixo in Spain, enabling decision makers to act fast and respond effectively to a developing trend. Its design teams regularly visit university campuses; nightclubs and other venues to observe what young fashion leaders are wearing. In its headquarters, the design team uses flat-screen monitors linked by webcam to offices in Shanghai, Tokyo and New York the leading cities for fashion trends , which act as trend spotters.
Specialist teams receive constant feedback on the decisions its customers are making at every Zara store, which continuously inspires the Zara creative team. After products are designed, they take around 10 to 15 days to reach the stores. All clothing items are processed through the distribution center in Spain, where new items are inspected, sorted, tagged, and loaded into trucks. In most cases, clothing items are delivered to stores within 48 hours. This vertical integration allows Zara to retain control over areas like dyeing and processing and have fabric-processing capacity available on-demand to provide the correct fabrics for new styles according to customer preferences.
It also eliminates the need for warehouses and helps reduce the impact of demand fluctuations. Zara produces over million items and launches around 12, new designs annually, so the efficiency of the supply chain is critical to ensure that this constant refreshment of store level collections goes off smoothly and efficiently. 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 standardised product information with common definitions, allowing quick and accurate preparation of designs with clear manufacturing instructions. Product information and inventory management: By effectively managing thousands of fabric, trim and design specifications and their physical inventory, Zara is capable of designing a garment with available stock of required raw materials. Procurement strategy: Around two-thirds of fabrics are undyed and are purchased before designs are finalized so as to obtain savings through demand aggregation.
The more fashionable and riskier items which are around half of its merchandise are manufactured at a dozen company-owned factories in Spain Galicia , northern Portugal and Turkey. Clothes with longer shelf life i. Even when manufacturing in Europe, Zara manages to keep its costs down by outsourcing the assembly workshops and leveraging the informal economy of mothers and grandmothers.
Optical reading devices sort out and distribute more than 60, items of clothing an hour. In addition to these supply chain efficiencies, Zara 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 does not sell well within a week, it is withdrawn from shops, further orders are canceled and a new design is pursued.
Zara closely monitors changes in customer preferences towards fashion. It has a range of basic designs that are carried over from year to year, but some in-vogue, high fashion, inspired by latest trends items can stay on the shelves for less than four weeks, which encourages Zara fans to make repeat visits.
An average high-street store in Spain expects customers to visit thrice a year, but for Zara, the expectation is that customers should visit around 17 times in a year. In reality, Zara is also helping in giving birth to new trends through its stores or even helping in extending the longevity of some seasonal styles by offering affordable lines.
Sustainability has been a hot topic in business for the last decade and is now quickly becoming a must-have hygiene factor for companies that want to resonate with and win the loyalty of its global customers. For Inditex, this means having a commitment to people and the environment. Commitment to people: Inditex ensures that its employees have a shared vision of value built on sustainability through professional development, equality and diversity and volunteering.
It also ensures that its suppliers have fundamental rights at work and by initiating continuous improvement programs for them. Inditex also spends over USD 50 million annually on social and community programmes and initiatives. Commitment to 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 United Nations Sustainable Developmental Goals.
Inditex has pledged to only sell sustainable clothes by and that all cotton, linen and polyester sold will be organic, sustainable or recycled.
The company also runs Join Life, a scheme which helps consumers identify clothes made with more environmentally friendly materials like organic cotton and recycled polyester. Additionally, Inditex takes wide-ranging measures to protect biodiversity, reduce its consumption of water, energy and other resources, avoid waste, and combat climate change. For example, it has outlined a Global Water Management Strategy, specifically committing to zero discharge of hazardous chemicals.
It has also been expanding its waste reduction programme through which customers can drop off their used clothing, footwear and accessories at collection points in 2, stores in 46 markets today. Zara has a very entrepreneurial culture, and employs lots of young talent who quickly climb through the ranks of the company.
Zara promotes approximately two-thirds of its store managers from within and generally experiences low turnover.
The brand has no fear in giving responsibility to young people and the culture encourages risk-taking as long as learning happens and fast implementation the mantra of fashion. The variable component amounts to up to half of the total compensation — making store level employees heavily incentive-driven. The organizational structure is also flat with only a few managerial layers. Customers are the most important source of information for Zara, but like any other fashion brand, Zara also employs trend analysts, customer insights experts, and retains some of the best talents in the fashion world.
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