According to Data Monitor*, the average growth rate for the retail apparel industry in Singapore is 6.3% as of 2008. We then used this figure as a yardstick to estimate the growth rates for the respective customer segments of Zara.

 

Forecasted growth rates for respective customer segments:
Fashion chasers: 6%
Opinion Seekers: 4.5%
Rational Shoppers: 5%
Value buyers: 3%

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We decided that for all our customer segments, the forecasted growth rates should be below the industry average of 6.3% as Zara is an established brand at the mature stage of its business cycle. Thus, it is not expected to experience rapid growth similar to that of the numerous new apparel brands appearing in Singapore. In addition, Zara is not expected to open new stores in Singapore in the next few years and a conservative approach would seem more precise.

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The segment, Fashion Chasers, has the highest predicted growth rate since they form the core of Zara’s customer base. Given Zara’s brand positioning as a fashion-forward and sophisticated apparel business, this group of customers is the one that is most attracted to the brand and has the greatest potential to grow.

 

From our survey results, Value Buyers tend to be more price-conscious and find Zara’s apparels out of their comfortable spending range. They are likely to find Zara’s apparels less value for money, and thus have the smallest growth rate since they do not form the prime target market of the company.

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Rational Shoppers and Opinion Seekers have growth rates that follow closely behind fashion chasers. Rational Shoppers tend to make purchase decisions based on their consideration of a variety of factors such as quality, design, service and price.  While prices of Zara’s apparels are slightly on the higher end, this group of consumers are able to reason it out with the brand's good quality and trendy designs. 

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Opinion Seekers value a sense of affirmation and are likely to experience social and emotional value with the brand, hence the growth rate is similar.