POINTS OF DIFFERENCE
Understanding and delivering customers’ needs
Most fashion companies are proud of their fast forward fashion where they attempt to predict the next season’s trends via fashion shows or similar channels of influence. Zara, on the other hand, focuses its attention on understanding the fashion items favoured by its consumers and delivers designs according to consumers’ wants and needs. Store managers are trained to obtain such valuable information through informal conversations with customers. These valuable feedback are then passed on back to the creative teams.
Exclusivity
Zara creates the sense of exclusivity in its apparels through minimal production for each style. This creates scarcity and hence desirability especially in the fashion industry. Furthermore, this lowers the risk of uncleared stocks that may have to be sold with a discount. As a result of the strategy used by Zara, there is not much to be disposed of when the season ends, evident in the slight discount of 18% during sales period as opposed to the industry average of 36%. This heightens the value of Zara’s goods in the consumer’s eyes, creating intangible value for Zara’s items. Zara has also effectively conveyed to its customers the scarcity in its stocks. Hence resulting in higher shoppers’ desirability, so if a customer likes something, he/she has to buy the item fast as it may not be available the following week. Zara has been successful in creating a climate of scarcity and opportunity.
High Velocity fashion
Production takes place in small batches, with vertical integration into the manufacture of the most time-sensitive items. Products are shipped directly from Zara’s central distribution centre to well-located and attractive stores twice a week thereby eliminating the need for warehouses and keeping inventories low. Even more importantly, Zara is able to originate a design and have finished goods in stores within two to four weeks in the case of entirely new designs, and two weeks for modifications (or restocking) of existing products.
In contrast, the traditional industry model might involve cycles of up to six months for design and three months for manufacturing. With a closely knitted supply chain, it is no surprise that Zara stores changes its display twice a month, giving customers a pleasant surprise each time they walk past or step into the stores. This gives consumers a reason to visit stores often and purchase the items as soon as they see it because the items may not be there the next time they visit the store.
