ZMET
Stage 4
Brand Strength
Internal
Clarity-6/10
The brand believes in fast fashion and exclusivity. Zara changes their in-store apparels once every 2 weeks and to ensure exclusivity of the items, Zara keeps very low inventory levels of each product. Hence, customers know that if they like an item, they have to get it quick. Due to the fact that the store layouts in Singapore are very similar to that of overseas, it is very likely that the parent company has communicated its positioning, target market and values to its franchisee, Royal Sporting House. Alike to Zara stores globally, Zara stores in Singapore are situated in prime retail areas near luxury brands. It is mentioned by the RSH representative that these values are clearly communicated across the organization to ensure that all employees are familiar with them.However, since Zara is under Royal Sporting House in Singapore, the practices of its parent company do not follow through in Singapore. Hence, our team rates Zara Singapore 6 out of 10 for clarity.
Commitment-7/10
According to the team’s research, Zara trains their store managers to pick up on consumers’ preferences through informal in-store conversations. This will help them understand and hence choose items that consumers desire. Training resources are invested in the front line staff mostly on product knowledge and customer service. It is, however, reflected in our survey results and focus group that Zara’s sales staffs are not initiative and active enough although they are friendly and helpful only when approached. In addition, the store layout across Zara stores globally is generally simple with neutral colours as its central themes. This is similar to the ones Singapore where the minimalistic concept is retained.
Responsiveness-6/10
Our team rated Zara as having a moderate level of responsiveness. They have responded well to localized conditions where clothes suitable for Singapore’s climate and market needs are sent over. Zara has responded to opportunities in Singapore’s market by advertising seasonal sales in newspapers. However, Zara has not responded to using its marketing tools more effectively to communicate its brand values, mission and style. This factor rates only a 6 out of 10 as the brand does show internal leadership to respond to market changes, challenges and opportunities but lacks the ability to constantly evolve and renew itself in aspects that are lacking.
Protection-4/10
As Zara Singapore is under a franchise agreement under Inditex, they have strict policies to follow. The merchandise stocks are imported directly from Spain and it uses Zara’s corporate logo and font on its signs as well as paper bags. However, a potential rising problem is counterfeit items as Zara’s designs are easy to copy as can be seen from many Zara inspired items available on Singapore’s blogshops which are sold at much more affordable prices. On top of this, Inditex regulates Zara’s geographical spread through its strict partnership and franchise agreements. Therefore, though Zara Singapore is reflective of its parent brand, Inditex, they still rank low on protection due to the low legal protection on its designs.
External
Relevance-3/10
Zara is rated low on relevance. Through our research, the team found that Zara differs its offerings across countries and outlets depending on customers’ demands. Store managers are able to vary their orders depending on the outlet’s needs instead of what is available. In Singapore’s context, this is not the case. The company uses a push model strategy where the parent company decides on the apparels before sending them over. As much as clothes are chosen to fit Singapore’s climate, the lack of feedback limits their level of relevance, as officials in the foreign headquarters may be unfamiliar with the needs and wants of local consumers.
Authenticity-3/10
Due to the lack of marketing efforts from Zara, most consumers do not understand Zara’s value set; neither do they believe that the brand has a story to tell. However, more than 90% of our survey respondents shop at Zara at least once a month, with 94% of respondents purchasing an item 25% of the time they visit a Zara store. This behavioural loyalty may likely be due to the brand delivering beyond consumers’ expectations. The lack of a rich heritage and story surrounding the brand restricts the formation of strong relationships between the customers and the brand.
Differentiation-2/10
Zara does not differentiate itself much from its competitors simply due to the lack of marketing communications in Singapore. This is evident during our focus group where participants are unable to recall any advertisements from Zara. Zara attempts to differentiate itself from its competitors using its in-store display to market its products. This method is consistent with the parent company in Spain but this is ineffective in Singapore’s context, as most consumers do not consciously take notice of the in-store display since it normally fades into the background. Despite Zara having a social mission, this was once again not communicated to the public as reflected by the low level of awareness (11%) amongst our survey respondents.
Consistency-9/10
Zara Singapore rates high on consistency as it manages to deliver the Zara brand experience by keeping to the minimalistic approach of Zara in Spain. This ranges from the minimal use of print advertisements, instead, advertising is done through its in-store display to the store locations in prime retail areas of Singapore. Alike to the outlets in Spain, Zara Singapore has also continuously employ fast moving fashion, with new designs in stores every 2 weeks. These clothes are also in limited quantities to build on the exclusivity that Zara has pride itself on. To portray a consistent image, Zara’s customer service staffs are well groomed and have a standard ‘uniform’ for work to pull off a professional and sophisticated look.
Presence-8/10
Zara’s physical presence is felt strongly by their consumers as can be seen from its network of stores in prime retail areas. On top of this, our focus group participants and survey respondents have a high recall of Zara and quite a number of them have a good impression of Zara. However, Zara Singapore does not have a strong presence for both traditional and social media in Singapore. This could be one aspect that they could improve on to build up a relationship with its target audience. With this in mind, we have rated Zara Singapore 8 on a scale of 10.
Understanding-2/10
From our focus group and survey results, most consumers consider Zara to represent quality and fast fashion. Consumers do not view Zara as exclusive in their eyes despite this being one of Zara’s main appeals. Zara’s commitment towards the environment has not been communicated to its consumers. Furthermore, the meaningfulness behind the company’s environmentally friendly practices has been ‘lost in translation’ in the midst of the emphasis on fast fashion and quality. Therefore, we have rated Zara Singapore 2 out of 10 for understanding, as its consumers do not have an in-depth knowledge and understanding of the brand’s distinctive qualities and characteristics.
With this, we conclude that the discount rate will be 10%, which is relatively high due to this brand risk profile identified.
The brand strength analysis is divided into two sections – internal and external. We determine the internal factor ratings through an informal conversation with the RSH representatives and our secondary research. The external factors on the other hand were rated based on our focus group findings, survey findings and ZMET.
