The brand accomplished by tailors

by wgyuvs8a on 2012-02-20 20:04:48

The brand achieved by tailors

Some people say that globally, the only brands daring to open stores next to Versace, LV, and GUCCI are ZARA, H&M, and Uniqlo. This means that for the same customer base, they may use LV bags, wear VERSACE shoes, but they will still go shopping at ZARA.

Spain is located in the southwestern part of Europe. The Pyrenees Mountains isolate Spain in a corner. In most people's minds, Spain has beauties, beaches, bullfighting, and football. La Coruña is a typical Spanish town.

Ortega started working as a delivery boy for a shirt manufacturer at the age of 13. Later, he opened his own tailor shop making nightgowns. In 1963, when he was still in his twenties, he opened a garment factory in the town, specializing in producing women's nightgowns, which were sold directly to clothing wholesalers.

In 1975, a German customer canceled a large order at the last minute. To sell off the already produced nightgowns, Ortega opened the first ZARA retail store in this small city. It was precisely this accidental experience that made Ortega realize the importance of the "marriage" between production and the market. During the subsequent development process, this "marriage" has always been the golden rule followed by the company. As Inditex senior marketing staff member Diaz emphasized in 2001: "For us, it is often about using five fingers to touch the factory's production situation, while simultaneously, the other five fingers perceive the needs of consumers."

Currently, Inditex, the parent company of ZARA, is ranked first in Spain and third globally among clothing brands. Its founder, Amancio Ortega, became Spain's richest man with assets exceeding $30 billion.

ZARA's success lies in its unique market positioning and marketing strategy. ZARA combines luxurious and ever-changing fashion with quality and affordable prices for the masses, redefining the concept of fashion and achieving the selling of "fashion" like hamburgers. It has abandoned the traditional mindset of industrialized clothing production and has not chosen to venture into luxury brands. Instead, it transforms the haute couture showcased on the runway into "affordable fashion." Therefore, ZARA is also known as the "most creative and destructive retailer globally."

Winning Formula

Unlike H&M’s development of catalog sales and online sales, ZARA consistently adheres to its "direct operation" strategy. They firmly believe that allowing customers to enter the store, directly interact with the products, and experience them is the best way to operate. ZARA's store image is high-end, with luxurious decoration. The displays are designed and coordinated by top designers from Milan and Paris according to the latest fashion trends, creating a pleasant shopping experience for customers. Store locations are always in the core commercial bustling areas of each city, with an average single-store area of over 1000 square meters, and some can reach tens of thousands of square meters, providing tens of thousands of varieties of clothing, satisfying the desire of customers to purchase everything in one stop. The excellent image created enhances the shopping experience, making visiting ZARA stores a must-do activity when shopping.

Shortening lead time is one of the key winning strategies in the apparel industry. ZARA's lead time is only 12 days, far below the industry average of 3 to 6 months. This rapid response system is the most critical factor in ZARA's success. In today's interdependent market, the most practical issue for operators is not how to control, formulate, and implement plans, but how to timely listen to the hopes, desires, and needs of customers from their perspective and promptly respond and swiftly react to meet the demands of customers.

The biggest feature of fashion is its constant change. A movie or an album can alter people's perception of fashion, and the most appealing aspect of fashion is its ability to closely follow trends. When new fashion elements appear in film media or print magazines, ZARA can complete the imitation of celebrities' outfits or the creative works of top fashion masters within just a few days. Some of the latest designs from top brands are quickly followed by very similar fashions released by ZARA. This design method ensures that ZARA stays ahead of fashion trends. It is reported that in Europe, ZARA pays tens of millions of euros in infringement fines to those top brands every year.

4R Marketing

The unique styles launched each season are indeed crucial to the success of the ZARA brand. However, many people might not have noticed that behind the quick trend leadership and new launches, the supply chain system runs through the entire process: from the design of each piece of clothing to its distribution to each branch store. Inditex offers 12,000 different product items annually for customers to choose from, and it takes only a few weeks from the design concept to the finished product being placed on shelves. All this can be attributed to ZARA's unique supply chain management: a powerful supply chain management system supported by IT systems, making it a benchmark enterprise in the global apparel industry for response speed and flexible management.

4R marketing is a new marketing theory centered on relationship marketing and oriented towards competition. It focuses its marketing efforts on building and enhancing customer loyalty, emphasizing conducting marketing activities from a systemic perspective. The 4R theory outlines four new marketing mix elements: Relevance (Relativity), Reaction, Relationship, and Return (Retribution). However, in practical application, the 4R theory requires companies to have a perfect organizational function support system to effectively implement it, and ZARA has perfectly achieved this.

Frontline staff carefully collect consumer suggestions on products every day, from color, style to price, which are aggregated through the IT system back to the headquarters in Spain. The design department immediately conducts searches and discussions and arranges procurement and production. Two weeks later, newly designed products based on customer suggestions can be seen in stores. Moreover, ZARA frequently holds fashion shows to convey the latest fashion trends to customers in real-time and continuously communicate bidirectionally with customers, meeting their personalized and differentiated needs.

ZARA's design team also regularly holds teleconferences with store managers around the world. By understanding the sales status and customer feedback in various regions, they flexibly adjust the direction of product design to adapt to changing customer preferences. Furthermore, while customers are purchasing, store staff already input product features and customer information into computers, transmitting data back to ZARA headquarters via the internet. The design team can grasp precise sales analysis and customer preferences, combined with their professional fashion sensitivity, to decide the design direction and quantity of the next batch of products. In this way, products can achieve maximum sales efficiency, meaning that inventory appearance rates can be effectively reduced.

Fashion "Quick Response"

In the UK, people now own four times as many clothes as they did 30 years ago. On average, each person spends £625 per year on clothing (approximately £1 = $1.61), purchasing 28 kilograms of new clothes annually, with the country consuming 17.2 million tons of fashion products each year. Notably, an equal weight of clothing is thrown into garbage bins annually, even though they are far from being old clothes.