AD6606 FMP - Zara Research File

How Zara appropriated the language of luxury

And hacked the fast fashion formula

All possible evil has been said about fast fashion in recent years: that it is unsustainable, that it exploits workers in countries with emerging economies, that it copies the work of fashion houses, that it is the worst fruit of consumerism. Now there's a new one, provided by @_whereisthecool_magazine via their Instagram stories: fast fashion is beginning to appropriate the visual and verbal language of luxury fashion. A few days ago, in fact, Zara published the new womanswear campaign called "après-vacances", a pastiche term that seems to follow the terminology of intermediate fashion collections such as Pre-Fall, Resort, Cruise, Après-Ski and so on.

The campaign, present on the brand's Instagram account, which shows the models coming out of a plane in a series of smart-chic outfits, recalls both the famous airport looks of the 90s stars, as well as famous airport-themed shows such as the Resort 2020 collection and the Pre-Fall 2021 by Louis Vuitton, the SS16 collection by Chanel and the FW21 by Balmain but also campaigns by Fendi and Michael Kors. Scrolling through Zara's Instagram page you can also see lookalikes of various Bottega Veneta campaigns, a shooting in the Dolomites that seems to be taken up from The North Face x Gucci lookbook as well as a campaign in Amalfi that recalls a mood halfway between Dolce & Gabbana and Jacquemus and a campaign for cosmetics that follows the dark VHS aesthetic of the new Givenchy.

How to look like fashion

What is striking is not so much the imitation of the campaigns themselves, which in themselves are also well made, but the note how slowly but apparently unstoppable Zara is going up the metaphorical slope of the market, distancing itself from fast fashion and approaching that high street represented on the market by COS. This process takes place precisely through the appropriation of the language of luxury and therefore, for example, the brand's collections are cataloged by seasons, with the FallWinter 2021 currently present on the Italian website and the photographic campaigns that become increasingly sophisticated, including the SS21 campaign last March that was taken by Steven Meisel or the one for beauty signed David Sims.

The imitation of the fashion world also passes through the web. After 2020, e-commerce has become a very important category for Zara, which has also closed many of its stores, and which plans to make its site the source of 25% of global sales by 2022, as reported by Pambianco. A shift of importance that is reflected by the site that is white, minimalistic, very elegant and clearly wants to evoke the same hyper-glossy look of sites such as that of Jil Sander, Bottega Veneta or Celine with its white background, the sober lettering, the large photos that tell capsules and collaborations and the immaculate stills of the products with disclaimers that speak of their sustainable production. An aesthetic very different from the boisterous one of other fast fashion brands such as Bershka, ASOS, BoohooMan, Forever21 or Primark. More minimalist pages instead are COS and H&M but which, like Uniqlo, evoke with their photos familiar and everyday atmospheres, far from the editorial style that Zara has.

Escape from fast fashion

Zara's business model is a winning business model. And it is logical

that the brand has repositioned itself, also aesthetically, on the level of the high street considering the international flowering of other fast fashion brands that have saturated the segments of the market previously occupied by Zara – which now wants to propose itself as an intermediate alternative between the evident cheapness of brands like Shein and the costs of a luxury industry that, after the lockdown, it has become if possible even more exoseal and unattainable. Thanks to trend forecasting, to an ingenious organization of inventory and above all thanks to the renewed care taken in the care of aesthetics and image, Zara has in fact come to hack the fast fashion formula, filling that gap in the medium-high range of consumption and differentiating itself decisively from its competitors.

At the same time, if Zara imitates the exteriority of luxury fashion, luxury fashion imitates Zara's logistical and distribution organization with a shift towards direct-to-consumer commerce, an abandonment of the seasons broken up into various monthly drops and a growing attention to the taste of the mass. Luxury fashion is in a phase of "zarification" in which, even under the banner of design, each brand must produce a bit of everything, a very evident phenomenon in the footwear sector that has seen an avalanche of branded rubber slippers pour into the markets and that, on the pages of Business of Fashion, Liroy Choufan defined last year the "Stan Smith syndrome":

«Renowned brands and designers have flooded their collections with almost identical versions of market hits like Adidas’ famous Stan Smith sneaker [...] The same goes for many other styles — from Palladium look-a-likes to parkas […]. The business that began 150 years ago as haute couture, and which was later reborn as ready-to-wear, has been remade to deliver luxury fast fashion for the masses».

My Notes:

Page 1

appropriate the visual and verbal language of luxury fashion "après-vacances", a pastiche term that seems to follow the terminology of intermediate fashion collections such as Pre-Fall, Resort, Cruise, Après-Ski recalls both the famous airport looks of the 90s stars, as well as famous airportthemed shows such as the Resort 2020 collection and the Pre-Fall 2021 by Louis Vuitton

Not only copying luxury/catwalk show clothing, but also copying the SHOWS!!!

lookalikes of various Bottega Veneta campaigns shooting in the Dolomites that seems to be taken up from The North Face x Gucci lookbook campaign in Amalfi that recalls a mood halfway between Dolce & Gabbana and Jacquemus campaign for cosmetics that follows the dark VHS aesthetic of the new Givenchy.

Page 2

imitation of the campaigns

Zara is going up the metaphorical slope of the market appropriation of the language of luxury brand's collections are cataloged by seasons photographic campaigns that become increasingly sophisticated site that is white, minimalistic, very elegant and clearly wants to evoke the same hyper-glossy look of sites such as that of Jil Sander, Bottega Veneta or Celine white background, the sober lettering, the large photos

immaculate stills

editorial style

intermediate alternative between the evident cheapness of brands like Shein and the costs of a luxury industry trend forecasting ingenious organization of inventory differentiating itself decisively from its competitors.

Zara imitates the exteriority of luxury fashion

Is Zara The Newest Luxury Fashion Competitor?

by Sophie Doran| June 19, 2014

Call me crazy, but I think luxury fashion brands should be concerned about the increasingly sophisticated activities of Zara.

Call me crazy, but I think luxury fashion brands should be concerned about the increasingly sophisticated activities of Zara.

I can already hear brand executives laughing that the Céline client and the Zara client are two completely di!erent beasts, and that a fast-fashion retailer like Zara is never going to be a threat to luxury market share. But I am going to have to politely disagree.

In this day and age, I’m not sure success should always be measured by market share against competitors, but instead, by total share of wallet by individual. For the new generation of consumers, luxury is a totally di!erent beast, free of oldmoney clichés, centred on relevance and convenience. The competitor to a

beautiful handbag is just as likely to be an iPhone with this crowd.

When we talk about the UHNW consumer, I agree that they are perhaps not shopping at Zara, or H&M; or Topshop. But when we talk about the millennial consumer or the emerging middle class consumer – two segments thought to fuel the future of luxury consumption – I think that luxury brands should be less cavalier. There are a few reasons.

“

For the next generation of consumers, luxury means convenience and relevance ”

Product Product

It’s no secret that the products in Zara take ‘inspiration’ from the runways. From a design perspective there is often little (perceivable) di!erence between the jumpsuit sashaying down the catwalk at Stella McCartney, to the ‘inspired’ garment that will retail for €59.95 in one of Zara’s 5,900 stores in 85 countries.

Luxury brands will argue that the fit won’t be as good (which really depends if you are built like a ‘normal’ human or a catwalk favourite). They will also argue the value of their in-house developed fabrics and technology, their savoir-faire, the superior quality of their goods, their ‘investment pieces’.

And they would be right. Luxury brands will always win on quality, as they should always be better than Zara. But where the competition gets a little hotter, is within the value proposition, the price-to-quality ratio, the willingness of consumers to spend their money when it comes to Zara versus spending with luxury brands.

Zara notoriously makes clothes that will stay intact for little more than one season, though quality is thought to be on the rise. Improvements or not, consumers seem at ease with its price-to-value proposition. The Inditex group made sales of €16.7 billion in 2013, a rise of 5% (or 8% in local currencies), registering core annual profit of €3.9 billion.

Sure, Zara products are made in Spain, Portugal, Turkey and Poland. But then again so are many of the garments made by luxury brands, a quick tour of the racks at any leading department store will confirm this. And yes designers know the di!erence between the fabric quality and construction, but one Made in Turkey label looks just the same on the retail floor as another.

And Zara is working hard to make its value proposition even more appealing to the aspirational luxury consumer, or the lover of Jil Sander without the budget. Just as in the greater industry, branded products have all but disappeared; Zara logos erased from the arm of Tom Ford inspired sunglasses, gone from the

Left: Zara TRF Fall Winter 2013/2014, Right: Yves Saint Laurent Fall Winter 2013/2014

Source: Intothefashion

Céline-looking cabas totes made of real leather.

“ Zara customers seem to be at ease with its price-tovalue proposition ”

Then there is the availability of the products themselves. Coats are available when temperatures turn frosty, espadrilles and bikinis hit the floor ahead of summer vacation period – something many luxury brands have as-yet failed to do. Instead we have cruise and resort collections, and staggered delivery of main-season merchandise, which often means bikinis in autumn and scarves in spring.

Zara, conversely, can turn around garments in just six-weeks, matching market demand, emerging trends and climatic relevancy with a sense of immediacy. Most of their stores receive new deliveries of stock twice-per-week, and products are made in limited quantity to further enforce this sense of purchase urgency.

In short, the product is relevant, delivered often, without any outwardly-facing evidence that the product came from Zara. If the outside world thinks that the customer is wearing Céline, where is the incentive for the customer to spend their money on the real deal? On the retail floor, what makes the consumer understand why the Céline blouse costs five times more?

“ Zara is working hard to make its value proposition even more appealing to the luxury consumer ”

Place Place

In most major shopping cities, Zara can be found in close proximity to the retail stores of luxury brands. Their favourite type of marketing is creating exceptional stores, according to the NYTimes]. The company invests heavily in the beauty, historical appeal and location of its shops, like the $324 million invested to buy space at 666 Fifth Avenue in New York, within the famed Tishman building.

In Paris, Zara can be found on Rue-Saint Honoré between Rue Cambon and Place Vendome, surrounded by Hugo Boss, Zegna & Jimmy Choo. It shares Champs Elysees real estate with Louis Vuitton, Ti!any & Co, Guerlain and Cartier, walking distance from Tom Ford, Givenchy and Céline on Rue François 1er.

The NYC Fifth Avenue flagship sits next to The Museum of Modern Art (MoMA), across from Salvatore Ferragamo, Versace & Fendi. “Prada wants to be next to Gucci, Gucci wants to be next to Prada,” explained Masoud Golsorkhi, editor of Tank. “The retail strategy for luxury brands is to try to keep as far away from the likes of Zara. Zara’s strategy is to get as close to them as possible.”

Zara, Oxford Street, London UK

Then there is the global design concept, which debuted in New York in 2012, based on four principles: beauty, clarity, functionality and sustainability. “The store design’s primary emphasizes simplicity as part of the retailer’s on-going mission to facilitate direct contact with customers” (Dexigner). The design also intends to minimise environmental impact.

The concept takes all its cues from luxury boutiques: shiny sparse surfaces, faceless white mannequins, minimal mirrors and a monochrome colour palette. Merchandise is displayed ‘by collection’, as sales assistants move through the room in smart black uniforms. Zara branding is kept to a minimum, large campaign images are displayed on digital screens.

It’s a commendable homage, just with millions more people than you would ever find in a luxury brand flagship. But Zara has addressed this with eCommerce. No longer does the high-street consumer need to brave the crowds that make a

carefully designed retail experience unbearable.

“ No longer does the high-street consumer need to brave the crowds ”

The addition of South Korea and Mexico in late 2014 will take Zara’s total number of e-commerce markets to 27. Based on functionality, Zara’s eCommerce portal and mobile shopping application is comparable to that of luxury market leader Net-a-Porter, with similarly convenient customer service policies.

Admittedly, the experience, packaging and personal shopping options are nowhere near as luxurious, but when it comes to functionality and delivery, Zara is a formidable competitor. Items are shipped between 3-5 days, either for free or for €3.95 (no matter the volume), or within 48 hours for just €9.95. Delivery prices that are unlikely to hinder a transaction.

Returns can be executed in-store or one can arrange a (free) pickup. Packaging is basic but agreeable and the whole process is simple and convenient. Notably, the services o!ered by Zara when it comes to eCommerce are generally far superior to the majority currently o!ered by luxury fashion brands. As is the overall design and function of the website.

Whether or not luxury brands deem eCommerce as an appropriate strategy is one thing, but the luxury consumer is undoubtedly purchasing online – Net-a-Porter proved this better than anyone. And future consumers – millennials and digital natives – as their wealth grows and they move into consuming luxury products, they will expect the same, if not superior, online experiences from luxury brands.

TaylorTomasiHillforPictures:Edit4

Promotion Promotion

This is where strategic di!erences become particularly interesting. Zara doesn’t advertise, in the paid sense of the word. “It hardly even has a marketing department,” revealed the NYTimes in 2012. “It doesn’t engage in flashy campaigns, as its competitors do, teaming up with fashion designers like Stella McCartney, Karl Lagerfeld, Martin Margiela and Marni.”

The brand still doesn’t advertise, absent from the glossy pages of Vogue and the bus-shelters of Paris. But it does produce campaigns each season, occasionally casting big name models such as Freja Beha Erichsen and Stella Tennant; the very same faces seen in campaigns for Chanel, Harry Winston, Versace, Valentino and Saint Laurent Paris.

The company relies largely on word of mouth and a high-lustre website to create

a hunger for its wares (NYTimes). Its growing web presence suggests that there is an executive somewhere at Zara thinking about content creation. The brand is now on Instagram, Facebook, Twitter, Pinterest and YouTube, with Mobile Apps for iPhone, iPad, Blackberry, Android & Windows.

“

Zara doesn’t advertise, in the paid sense of the word ”

And said content seems to be ‘taking inspiration’ from the luxury fashion realm, fuelled by a recent wave of approval from influential members of the Internet fashion council. The NY Times recently ran an exposé confirming that magazine editors, stylists, bloggers and street-style divas tap Zara “routinely, and repeatedly, for timely, decently priced approximations of the runways’ greatest hits”.

Street-style darlings Taylor Tomasi Hill (former creative director of Moda Operandi) and Amanda Brooks (former fashion director of Barneys New York) have publicly committed to the cause, modelling in self-styled campaigns for the brand entitled ‘Pictures’. A loud stamp of approval from two women more-often photographed wearing Proenza Schouler, Balenciaga and the likes.

The founders of Albright Fashion Library, a supplier of fresh-from-the-runway looks to stylists, socialites and film companies, revealed that they are often ‘turned out top to toe in Zara’, despite having direct access to brands such as Balenciaga, Givenchy or Céline. Essentially, the stigma of wearing Zara in lieu of luxury items is fading fast. Trendsetters are even embracing it.

Price Price

The price paradigm is also an interesting one. Zara will always win on price in the sense that it is less expensive, but we all know that being expensive can be an important marketing tool when it comes to building a luxury brand.

Chanel, Hermès, Gucci and Louis Vuitton continue to raise the price of their accessories, in a bid to make their products – and therefore brands – more exclusive after a period of overconsumption and exposure. Consumers continue to buy their ‘iconic’ handbags, knowing full well that what they pay is enormously distorted when it comes to price-to-value ratio.

Here is where I think Zara has a real competitive advantage. Their pricing is not only a!ordable to a wide range of consumers, but the value proposition is evident – if not favourable – to the consumer. And if luxury brands agree that they should be competing for share of wallet, rather than share of market against competitors, this is where they could be set to loose.

“

Their pricing is not only a!ordable to a wide range of consumers, but the value proposition is evident ”

The upper age bracket of millennials either experienced or witnessed the global financial crisis. Perhaps they previously purchased some of the ‘entry-level’ luxury goods during the time that credit leaked in abundance. Post-GFC, their perception of value changed. They learnt that buying one Céline handbag does not a luxury lifestyle make and that just because something is expensive, it doesn’t necessarily mean that it is valuable.

Today, that aspirational consumer is much more wary when it comes to allocating disposable income. Recent research by the Intelligence Group suggests that Generations Y and Z are interested in everything surrounding shopping, minus “exchanging currency for goods” (The Cut). “They will only bite the bullet (and spend) if they feel something is absolutely essential.”

And these days consumers are going to weigh up their options, compare pricing, search for promotions. They will think about return & exchange policies, ease of return, the most convenient physical place to purchase this product or have it delivered. They are going to think about the value the €2,000 product will bring them over the €100 product. And with these concerns, Zara often has the advantage.

The Future The Future

Some will continue to believe that Zara poses no threat to the luxury industry, that I am comparing apples with oranges. For high-net-worth and ultra-high-networth consumer segments, I would agree. But with demanding millennial consumers, or value-conscious aspirational consumers, Zara has built itself into a formidable alternative to luxury brands.

At the end of the day, Zara has similar looking products in similar looking stores in similar locations. The eCommerce experience eclipses that of most luxury brands, with the convenience and e$ciency expected from the premium players, all at a lower price.

Zara Woman Spring Summer 2014 Campaign

And the fast fashion chain is delivering a new type of luxury – convenience, flexibility, purchasing power and choice. At the end of the day, Zara listens to the millennial, aspirational customer and delivers them the experience – and products – that they crave. Which is something that just a handful of luxury brands have committed to.

I’m not by any means suggesting that luxury brands take strategic cues from Zara, they must continue to follow the marketing strategies that protect their position as a luxury brand.

But if Zara can deliver all the promises of a luxury brand, compromising quality but compensating on price and delivery, I strongly believe that brands that fail to innovate or di!erentiate risk losing millennial business to Zara and the high street.

To further investigate luxury fashion on Luxury Society, we invite your to explore the related materials as follows:

– Are Fashion Blogs E!ective Marketing Tools For Luxury Brands?

– Do We Really Need The Fashion Show?

– Luxury Brand High Street Collaborations

My Notes:

June 19, 2014

Reference date is 10yrs old.

sophisticated activities

Page 1

Page 2

Luxury brands will argue that the fit won’t be as good

Luxury brands will always win on quality,

But where the competition gets a little hotter, is within the value proposition, the price-to-quality ratio, the willingness of consumers to spend their money when it comes to Zara versus spending with luxury brands. Page 3

Zara notoriously makes clothes that will stay intact for little more than one season,

consumers seem at ease with its price-to-value proposition.

branded products have all but disappeared; Zara logos erased from the arm of Tom Ford inspired sunglasses, Page 4

staggered delivery of main-season merchandise, which often means bikinis in autumn and scarves in spring.

product is relevant, delivered often, without any outwardly-facing evidence that the product came from Zara

If the outside world thinks that the customer is wearing Céline, where is the incentive for the customer to spend their money on the real deal?

In most major shopping cities, Zara can be found in close proximity to the retail stores of luxury brands

The company invests heavily in the beauty, historical appeal and location of its shops, like the $324 million invested to buy space at 666 Fifth Avenue in New York, within the famed Tishman building.

In Paris, Zara can be found on Rue-Saint Honoré between Rue Cambon and Place Vendome, surrounded by Hugo Boss, Zegna & Jimmy Choo

Page 5

“The retail strategy for luxury brands is to try to keep as far away from the likes of Zara. Zara’s strategy is to get as close to them as possible.”

“The store design’s primary emphasizes simplicity as part of the retailer’s ongoing mission to facilitate direct contact with customers”

shiny sparse surfaces, faceless white mannequins, minimal mirrors and a monochrome colour palette.

Merchandise is displayed ‘by collection’, smart black uniforms.

branding is kept to a minimum, large campaign images are displayed on digital screens.

Page 6

Packaging is basic

simple and convenient.

Page 7

Zara doesn’t advertise

“It hardly even has a marketing department,” produce campaigns each season

casting big name models such as Freja Beha Erichsen and Stella Tennant; the very same faces seen in campaigns for Chanel, Harry Winston, Versace, Valentino and Saint Laurent Paris.

elies largely on word of mouth

Page 8

The founders of Albright Fashion Library, a supplier of fresh-from-the-runway looks to stylists, socialites and film companies, revealed that they are often ‘turned out top to toe in Zara’, despite having direct access to brands such as Balenciaga, Givenchy or Céline.

Their pricing is not only a!ordable to a wide range of consumers, but the value proposition is evident

ompeting for share of wallet, rather than share of market

just because something is expensive, it doesn’t necessarily mean that it is valuable.

Page 10

Zara has built itself into a formidable alternative to luxury brands.

Zara has similar looking products in similar looking stores in similar locations.

Page 11

fast fashion chain is delivering a new type of luxury – convenience, flexibility, purchasing power and choice.

Source: Referral Candy

The Spanish retail giant's meteoric rise to become the world's largest clothing retailer is not just a result of trendy designs but a carefully crafted marketing strategy that sets it apart. In this article, we delve into the intricate layers of Zara's marketing, uncovering the secrets behind its success. Before dissecting Zara's marketing strategy, it's crucial to understand the brand's roots. Founded in

1975 by Amancio Ortega and Rosalía Mera, Zara

started as a small family business in Galicia, Spain.

Its initial claim to fame was offering affordable lookalikes of high-end brands. However, the turning point came in 1985, when Zara became part of Inditex, adopting the "instant fashion" model. With the help of investments in information technology and designer groups, this revolutionary approach sought to shorten lead times and quickly adapt to changing fashion trends.

Zara's marketing strategy revolves around a modern approach to fashion, with a keen focus on the younger demographic, especially millennials.

Understanding the need for trendy yet affordable fashion, Zara delivers the

latest styles at competitive prices. Unlike traditional retailers, Zara boasts a vast assortment of over 450 million products annually. The brand's responsive supply chain ensures a constant influx of new items into stores twice a week, catering to the ever-changing preferences of its target market.

The 4P's Marketing Strategy

To comprehend Zara's marketing strategy comprehensively, we turn to the classical 4P's framework: product, place, price, and promotion. Each element plays a pivotal role in shaping Zara's success and distinguishing it in the highly competitive

1.Products

Zara, known as an "instant fashion" brand, swiftly identifies and incorporates the latest trends into its designs. The core strength of Zara's product strategy lies in its agility to adapt swiftly to emerging fashion trends. Unlike traditional retailers with lengthy production cycles, Zara's "fast fashion" model enables it to identify and integrate the latest styles into its collections rapidly. This approach not only aligns with the dynamic nature of consumer preferences but also positions Zara as a trendsetting brand, consistently offering fresh and relevant designs. Products are tailored to suit local cultures and tastes,

maintaining a balance between affordability and quality. Zara's commitment to catering to diverse markets is reflected in its localized approach to product offerings. Recognizing the importance of cultural nuances, Zara tailors its designs to suit the tastes and preferences of specific regions. This localization strategy not only enhances customer relevance but also contributes to the brand's global appeal. Furthermore, Zara strikes a delicate balance between affordability and quality, ensuring that its products are accessible without compromising on craftsmanship.

2.Place

Zara's global footprint

includes nearly 3000 stores strategically located in high-street retail areas of major cities. Zara's emphasis on physical retail locations is a fundamental aspect of its place strategy. With a presence in nearly 3000 strategically chosen stores, Zara ensures maximum visibility and accessibility. Placing stores in high-street retail areas of major cities positions the brand at the forefront of fashion hubs, attracting the target demographic—the young and fashion-conscious.

This strategic placement contributes to the brand's identity as a trendsetting and aspirational choice for consumers. A vertically integrated retailer, Zara handles design, manufacturing, and distribution in-house, ensuring a consistent brand experience worldwide. Zara's vertical

integration is a distinctive feature that sets it apart from many competitors.

By handling design, manufacturing, and distribution in-house, Zara maintains meticulous control over its supply chain. This vertical integration not only accelerates the production cycle but also ensures a consistent brand experience worldwide. From the design studio to the store shelves, Zara's in-house approach fosters agility, quality control, and a seamless brand image.

3.Price Zara's pricing strategy targets price-sensitive buyers seeking the latest fashion items. Zara's pricing strategy is strategically aligned with the preferences of its

target audience: pricesensitive buyers with a penchant for the latest fashion trends. By offering affordable yet stylish products, Zara caters to a broad demographic, making fashion accessible to a larger consumer base. This pricing approach also complements Zara's fast-fashion model, encouraging frequent purchases and brand loyalty among costconscious consumers. The pricing structure varies based on locations and customer demographics, maintaining a balance between affordability and quality. Zara's flexibility in pricing extends beyond a onesize-fits-all approach.

Recognizing the diversity in consumer demographics and economic conditions across regions, Zara

adjusts its pricing structure accordingly.

This tailored approach ensures that Zara products are not only affordable but also perceived as valuable, striking a harmonious balance between accessible pricing and the brand's commitment to quality.

Source: Zara

4.Promotion

Unconventional in its approach, Zara spends minimally on traditional promotion campaigns. Zara's promotional strategy defies conventional norms by minimizing expenditure

on traditional advertising. Instead of splurging on billboards or TV commercials, Zara relies on alternative methods to create brand buzz. This unconventional approach aligns with the brand's ethos of letting the products and customer experience speak for themselves. By diverting resources from traditional promotions, Zara maintains a costefficient model, allowing the focus to shift towards other impactful aspects of the marketing mix. The focus lies on word of mouth, store experience, and the power of social media channels for effective brand building. Word of mouth, augmented by a remarkable in-store experience and the influential reach of social media, constitutes the heart of Zara's promotional strategy.

Satisfied customers become brand ambassadors, sharing their experiences and fashion finds within their social circles. Zara's investment in creating aesthetically pleasing and experiential stores serves as a powerful promotional tool. Moreover, the brand harnesses the potential of social media platforms, leveraging its millions of followers to organically amplify its brand message. Through engaging content, trend showcases, and interactive communication, Zara cultivates a community of loyal customers who actively contribute to the brand's promotion. In essence, Zara's mastery of the 4P's demonstrates a holistic and adaptive approach to marketing, where each element is intricately woven into the

brand's DNA.

Marketing Tactics that Define Zara's Success

In a landscape where consumer preferences are ever-evolving, Zara employs distinct marketing tactics that set it apart, solidifying its position as a trailblazer in the fashion industry.

1. CustomerExperience

Focus: Zara has astutely recognized that, in the new economy, customer experience reigns supreme, often overshadowing the product itself. The brand's fast-fashion formula is meticulously crafted to provide a frictionless shopping experience. This strategy goes beyond

merely selling products; it creates an atmosphere of uniqueness and trendiness, resonating with buyers who seek not just items but an immersive shopping journey.

2. Value for the Price: While Zara may not be the cheapest player in the fast-fashion industry, it consistently delivers trend-right products at prices that appeal to its target demographic. The brand's pricing strategy reflects a deep understanding of customer values, acknowledging that value is measured beyond the mere transactional aspect of price. This nuanced approach contributes significantly to Zara's strong brand value and resonance with its audience.

3. The Power of Brand Loyalty: Zara has

mastered the art of transforming frequent buyers into brand evangelists. The meaningful experiences and values associated with the brand inspire a sense of loyalty among customers. Social media channels serve as dynamic platforms for engagement, with Zara boasting millions of followers across various platforms. This digital presence not only amplifies the brand's reach but also nurtures a community of loyal enthusiasts who willingly become advocates for Zara.

4. ConvenientPhysical Store Locations: Zara places a strategic emphasis on physical store locations, investing heavily in flagship stores positioned strategically in major metropolitan areas. The brand understands the

importance of a physical presence and the impact of in-store appearances on customer perception. Moreover, Zara's integration of technology and mobile connectivity enhances the overall shopping experience, allowing customers seamless access to inventory and blurring the lines between online and offline retail.

5. DataAnalysis: Zara doesn't just follow trends; it actively shapes them through a sophisticated data infrastructure. Realtime analysis of market trends and customer insights empowers the brand to stay ahead of the curve. This datadriven approach encourages two-way communication, which ensures a continuous feedback loop and facilitates the improvement of

services and goods. Zara's commitment to leveraging data underscores its agility and responsiveness to meet and exceed customer expectations in a rapidly changing fashion landscape.

Source: Zara

Noteworthy Campaigns and Examples

While Zara may not engage in extensive traditional marketing campaigns, its strategic communication initiatives are nothing short of

impactful, showcasing the brand's agility and attentiveness to its customer base.

1. Customer-Driven Product Creation:

One notable instance of Zara's responsiveness to customer needs occurred when a simple request for a pink scarf went beyond individual preferences. Zara, true to its "fast fashion" ethos, swiftly transformed this customer request into a global product launch within a mere seven days. This instance underscores Zara's ability to not only listen to its customers but to act on their preferences promptly, turning a singular request into a worldwide fashion phenomenon.

2. Customization for ParticularBuyers:

The active participation of store managers and employees in gathering customer insights is an example of Zara's commitment to understanding its customers. This engagement goes beyond the transactional aspect, influencing product customization to align with specific needs. Whether it's considering cultural preferences, climatic conditions, or other personalized requirements, Zara's approach to tailoring its offerings based on individual insights showcases a level of customization that transcends the conventional retail experience.

3. Innovations in Products: The launch of the "Edited" collection represents Zara's foray into online sales and customercentric offerings. This

innovative approach allows buyers to personalize their clothes online, providing a unique and engaging shopping experience. The "Edited" collection not only aligns with the broader trend of personalized shopping but also reflects Zara's commitment to staying at the forefront of technological advancements and evolving consumer expectations. It represents a strategic move towards not just selling products but curating an interactive and personalized fashion journey for each customer.

Zara, often lauded for its exceptional campaigns and lookbooks, stands shoulder to shoulder with luxury brands, showcasing an unparalleled knack for

turning simple ideas into powerful, visually stunning images.

Employing brilliant casting, meticulous set designs, and collaborations with renowned photographers like Steven Meisel, Zara's campaigns have become iconic moments in the fashion industry. Let's explore some of the brand's standout campaigns that have left an indelible mark.

Zara Women’s FW20

Campaign: Empowering Elegance

Zara's dedication to empowering elegance is best exemplified by the FW20 campaign, which Steven Meisel shot.

Models like Rianne Van Rompaey and Mona

Tougaard showcase the new collection through a series of black-and-white images. The campaign not only highlights the traditional tailoring codes but reinterprets them in a contemporary context, sending a powerful message of female empowerment. Tailored suits, Oxford shirts paired with vests, cozy coats, and punk-inspired brooches blend seamlessly to create a visual narrative that resonates with Zara's democratic style.

Zara Women’s SS20 Campaign: A PandemicDefying Experiment

Amid the challenges of the pandemic, Zara demonstrated its

adaptability with the SS20 campaign. Unable to conduct traditional shoots, the brand turned to its models, including Malgosia Bela and Anja Rubik, to capture themselves at home. The result was a unique and intimate portrayal of models in their own environments, showcasing SS20 items. However, the experimental approach sparked both interest and controversy, with some criticizing the unconventional poses for hindering a clear view of the garments. This campaign not only addressed the constraints of the time but also raised questions about the balance between artistry and practicality in fashion marketing.

Zara TRF SS19

Lookbook: Roman Holiday

Remixed

Source: Fashion Gone Rogue

Matteo Montanari's lens takes us on a playful journey through Zara TRF's SS19 lookbook, titled "Bella Roma." Reminiscent of the classic film "Roman Holiday," models Elibeidy Dani and Laurijn Bijnen infuse the Eternal City with modern charm. The lookbook captures the essence of Vacanze Romane with silverfringed dresses, sequins, metallic finishes, and bows. While not a

traditional campaign, these images form a captivating lookbook that breathes life into the eternal allure of Rome.

Zara Women’s FW19

Campaign: Opulence Redefined

Steven Meisel and Fabien Baron collaborated to create opulent visuals for Zara's FW19 campaign. Through sophisticated and overlapping images, models like Julia Nobis and Adut Akech exude regal elegance. The campaign features printed dresses, Prince of Wales coats, and chunky golden jewels, all with an '80s aesthetic. Meisel's shots celebrate beauty, art, and fashion, elevating Zara's commitment to offering accessible yet

luxurious styles.

Zara Women’s FW18 Campaign: Languid Luxury

The Steven Meisel-shot FW18 campaign immerses viewers in a world of extravagant luxury. Models like Lexi Boling and Fei Fei Sun recline on sofas and soft pillows, draped in longsleeved dresses, velvet vests, and scarves. The images evoke the spirit of Yves Saint Laurent's 1976 Haute Couture winter collection, drawing inspiration from czarist Russia, Ballet Russes, and orientalist designs. Meisel's lens captures a nostalgic yet contemporary fusion of fashion influences.

FW16

Campaign: Disco Forest Dream

Source: Fashion Gone Rogue

Mario Sorrenti brings to life a Disco Forest for Zara's FW16 campaign, creating a dreamlike atmosphere. Amid sequins, white horses, swings, and river canoes, the campaign offers a boho-chic party in nature.

Zara presents a modern interpretation of Sir John Everett Millais' works, inviting customers into a realm of fantasy and freespirited celebration.

Zara TRF FW13 Campaign: British Punk Revival

Source: Nitrolicious

Drawing inspiration from British punk-rock essentials, Zara TRF's FW13 campaign transports viewers to London. Featuring mini floral dresses, checkered shirts, and animalier coats, the campaign exudes the cool essence of British punk rock. The imagery recalls the rebellious collections crafted by Hedi Slimane for Louis Vuitton,

portraying a group of effortlessly cool teenagers.

These examples highlight Zara's knack for turning customer interactions into meaningful campaigns. By incorporating customer requests into global product launches, tailoring products based on specific insights, and embracing innovations like personalized online collections, Zara's communicative strategies are not just about broadcasting a message but actively engaging with its audience to shape the brand's narrative. In essence, Zara's campaigns transcend the traditional and embrace a dynamic, customercentric approach that resonates with the everevolving expectations of today's fashion

My Notes:

MAR 19, 2024

Page 1

Page 3

1985, when Zara became part of Inditex, keen focus on the younger demographic trendy yet affordable fashion,

Page 4 competitive prices.

constant influx of new items into stores twice a week, catering to the ever-changing preferences of its target market.

Page 5

swiftly identifies and incorporates the latest trends into its designs. adapt swiftly

Products are tailored to suit local cultures and tastes

Page 6

balance between affordability and quality commitment to catering to diverse markets

Zara tailors its designs to suit the tastes and preferences of specific regions. localization strategy not only enhances customer relevance but also contributes to the brand's global appeal.

Page 7

nearly 3000 stores strategically located in high-street retail areas of major cities

Zara ensures maximum visibility and accessibility.

forefront of fashion hubs

Page 8

By handling design, manufacturing, and distribution in-house, Zara maintains meticulous control over its supply chain

agility, quality control, and a seamless brand image

Page 9

By offering affordable yet stylish products, Zara caters to a broad demographic frequent purchases and brand loyalty among cost- conscious consumers.

The pricing structure varies based on locations and customer demographics

Page 10

Zara products are not only affordable but also perceived as valuable, Zara spends minimally on traditional promotion campaigns.

Zara's promotional strategy defies conventional norms by minimizing expenditure

Page 11

unconventional approach

letting the products and customer experience speak for themselves

word of mouth, store experience, and the power of social media channels for effective brand building

Page 12

Satisfied customers become brand ambassadors, sharing their experiences and fashion finds within their social circles.

engaging content, trend showcases, and interactive communication

Page 13

Customer Experience Focus:

Page 14

Value for the Price:

Page 15

mastered the art of transforming frequent buyers into brand evangelists.

Social media channels serve as dynamic platforms for engagement,

digital presence not only amplifies the brand's reach but also nurtures a community of loyal enthusiasts who willingly become advocates for Zara.

Convenient Physical Store Locations:

Page 16

Real- time analysis of market trends and customer insights empowers the brand to stay ahead of the curve.

Page 18

Customer-Driven Product Creation: transformed this customer request into a global product launch within a mere seven days.

Zara's ability to not only listen to its customers but to act on their preferences promptly

Page 19 influencing product customization to align with specific needs.

Zara's approach to tailoring its offerings based on individual insights showcases a level of customization that transcends the conventional retail experience

Page 20 allows buyers to personalize their clothes online, providing a unique and engaging shopping experience.

commitment to staying at the forefront of technological advancements and evolving consumer expectations.

curating an interactive and personalized fashion journey

Page 21

turning simple ideas into powerful, visually stunning images. collaborations with renowned photographers like Steven Meisel,

Page 22

black-and-white images.

highlights the traditional tailoring codes but reinterprets them in a contemporary context, sending a powerful message of female empowerment.

Page 23

adaptability

Unable to conduct traditional shoots, the brand turned to its models, including Malgosia Bela and Anja Rubik, to capture themselves at home. The result was a unique and intimate portrayal of models in their own environments,

unconventional poses

Page 24

captures the essence of Vacanze Romane

Page 25

opulent visuals

sophisticated and overlapping images, regal elegance

Page 26

orientalist designs.

nostalgic yet contemporary fusion of fashion influences.

Page 27

Zara presents a modern interpretation

Page 29

These examples highlight Zara's knack for turning customer interactions into meaningful campaigns actively engaging with its audience to shape the brand's narrative.

Zara's campaigns transcend the traditional dynamic, customer- centric approach

Zara and the fast-fashion that plays luxury

Suspended between two worlds, the fastfashion giant is a brand that doesn't want to be one

After a 2020 to forget, the fast-fashion sector has reappeared in the new year more determined than ever to gain again that slice of the market lost between pandemic and closed stores. Among them all, of course, is the Inditex group, parent company of Zara, Bershka, Massimo Dutti, Pull&Bear and Stradivarius, ready to close 2021 in clear growth with a revenue of about 12 billion in the first half of the year and an increase in sales of 49% over the previous year. It's no secret that the Spanish group's turnover is driven by Zara, which over time has become the leading player in the fast-fashion sector thanks to its sectoral balancing act, capable of making the company live in limbo between low-cost fashion and the promise of a world of values in stark contrast to that of its competitors.

At the heart of Zara's success is first of all the ability to be a mirror of the trends of the moment, no longer bringing to the store knockoffs of looks seen a few weeks earlier during fashion weeks, but instead looking through the trends of TikTok and Instagram in an attempt to intercept the tastes and desires of users. The latest example in chronological order is the pleated collection of Zara, revised and corrected version of the Homme Plissé by Issey Miyake, which has become a fixed presence in fit-pics or in the "get dressed with me" that clog the feeds of social networks. What for many might seem to be just a disrespect to the Japanese designer, is actually only the practice of a business model that has its main

strength in speed. A concept that starts from the choice of producing more than 50% of the products in countries close to Spain (Portugal, Turkey and Morocco) to reduce delivery times, up to that of creating collections in small quantities, reducing inventory and giving a continuous idea of what's new inside its stores. In this perfectly functioning machine, capable of creating and producing a collection in five weeks, the leading role is that of communication, where Zara has managed to distance itself from H&M or Uniqlo, creating a middle ground between two distinct levels. From the website to the in-store display, the brand has gradually absorbed the language of luxury fashion, making it its own until it has become the paradox of a brand that doesn't want to be.

With twenty collections a year, Zara seems to be closer to the rhythms of a true fashion brand rather than the seasonality of fastfashion, anchored in many ways to the idea of a fashion that is sharply divided and accessible from a single doorway. As Ana Andjelic wrote in her newsletter, in its growth Zara has decided to adopt a Galaxy model, where multiple realities are held together by the history and weight of the brand itself, capable of keeping consistent the sub-brands that gravitate to the microcosm. Some examples in this sense are those of Ralph Lauren and Armani, while in the case of Zara are part of the same galaxy collections Origins, Studio and Athleticz together with the lines Zara Kids, Zara Home and Zara Beauty in a model whose main strength is to provide more entry points within the philosophy of the brand. A communication in which Steven Meisel photographs Marisa Berenson, Sasha Pivovarova, Chiharu Okunugi and Yumi Nu, in which Chloë Sevigny is the protagonist of a campaign of Zara Home and Charlotte Gainsbourg has her own capsule.

In spite of everything, Zara seems to have no intention of changing its approach to fashion, continuing to represent the affordable and

accessible alternative to luxury fashion, strong of its unique status in a world where Shein's advance continues unabated. Balancing between two worlds, Zara is free to tell its customers a different story from that of its competitors, avoiding in a certain sense to take on major responsibilities, thus not repeating the path taken by Cos, the brand part of the H&M group that in September paraded at London Fashion Week marking a unique precedent of its kind. So, in the era in which in theory everyone condemns fast-fashion but in practice no one does without, the giant of the Inditex group succeeds perfectly in its intent to live halfway between two worlds, free not to position itself in a precise box but certainly able to sell the best of what it has to offer and that we all love to hate.

My Notes:

Page 1

mirror of the trends of the moment, looking through the trends of TikTok and Instagram in an attempt to intercept the tastes and desires of users.

revised and corrected version of the Homme Plissé by Issey Miyake, which has become a fixed presence in fit-pics or in the "get dressed with me"

Page 2

producing more than 50% of the products in countries close to Spain , capable of creating and producing a collection in five weeks

From the website to the in-store display, the brand has gradually absorbed the language of luxury fashion

twenty collections a year

Zara has decided to adopt a Galaxy model, where multiple realities are held together by the history and weight of the brand itself, capable of keeping consistent the sub-brands that gravitate to the microcosm

lines Zara Kids, Zara Home and Zara Beauty in a model whose main strength is to provide more entry points within the philosophy of the brand.

Page 3

unique status

Balancing between two worlds

Zara is free to tell its customers a different story from that of its competitors succeeds perfectly in its intent to live halfway between two worlds, free not to position itself in a precise box but certainly able to sell the best of what it has to offer and that we all love to hate.

Zara was founded by Amancio Ortega and Rosalía Mera in 1975 as a family business (https://martinroll.com/? s=family+business) in downtown Galicia in the northern part of Spain. Its first store featured low-priced lookalike products of popular, higher-end clothing and fashion. Amancio Ortega named Zara as such because his preferred name Zorba was already taken. In the next 8 years, Zara’s approach towards fashion and its business model gradually generated traction with the Spanish consumer. This led to the opening of 9 new stores in the biggest cities of Spain.

In 1985, Inditex was incorporated as a holding company, which laid the foundations for a distribution system capable of reacting to shifting market trends extremely quickly. Ortega created a new design, manufacturing, and distribution process that could reduce lead times and react to new trends in a quicker way, which he called “instant fashion”. This was driven by heavy investments in information technology and utilising groups instead of individual designers for the critical “design” element.

In the next decade, Zara began aggressively expanding into global markets, which included Portugal, New York (USA), Paris (France), Mexico, Greece, Belgium, Sweden, Malta, Cyprus, Norway and Israel. Today, there is hardly a developed country without a Zara store. Zara now has 2,264 stores strategically located in leading cities across 96 countries. It is no surprise that Zara, which started of as a small store in Spain, is now the world’s largest fast fashion retailer and is the flagship brand of Inditex. Its founder, Amancio Ortega, is the sixth richest man in the world according to Forbes magazine. Today, Inditex is the world’s largest fashion group with more than 174,000 employees operating more than 7,400 stores in 202 markets worldwide including 49 online markets. The revenues of Inditex was USD 23.4 billion in 2019. The other fashion brands in the Inditex portfolio are:

Zara Home: Home goods and decoration objects founded in 2003. Operating in 183 markets, 70 of them with stores.

Pull & Bear: Casual laid-back clothing and accessories for the young founded in 1991. Operates in 185 markets, 75 of them with stores.

Massimo Dutti: High end clothing and accessories for cosmopolitan men and women acquired in 1995. Operates 186 markets, 74 of them with stores.

Bershka: Blends urban styles and modern fashion for young women and men founded in 1998. Operates in 185 markets, 74 of them with stores.

Stradivarius: Casual and feminine clothes for young women acquired in 1999. Operates 180 markets, 67 of them with stores.

Oysho: Lingerie, casual outerwear, lounge wear and original accessories founded in 2001. Operating in 176 markets, 58 of them with stores.

Uterqüe: High-quality fashion accessories at attractive prices founded in 2008. Operating in 158 markets, 17 of them with stores.

Apart from fashion brands, Amancio Ortega has also set up a global real estate investment fund, Pontegadea Inversiones, which manages corporate ofces across 9 countries including United States (Seattle), Britain (London), France (Paris), Canada, Italy, South Korea. These corporate properties house large companies including Facebook, Amazon and Apple, and prestigious luxury and retail brands.

The Zara brand strategy

In 2019, Zara was ranked 29th on global brand consultancy Interbrand’s list of best global brands. Its core values are found in four simple terms: beauty, clarity, functionality and sustainability.

The secret to Zara’s success has largely being driven by its ability to keep up with rapidly changing fashion trends and showcase it in its collections with very little delay. From the very beginning, Zara found a significant gap in the market that few clothing brands had efectively addressed. This was to keep pace with latest fashion trends, but ofer clothing

(/resources/books/)

Asian Brand Strategy provides key insights and knowledge about the rising Asian brands incl. model frameworks, brand cases and checklists on Asian branding. Download sample chapter (/wpcontent/uploads/Asian-BrandStrategy-Martin-Roll-Samplechapter.pdf)

LEARN MORE

(/RESOURCES/BOOKS/)

DRIVE IMPACT

Martin Roll enables global clients to deliver business impact and drive long-term value. Learn more about our services and how your company can get ahead

ENGAGE (/CONTACT/)

collections that are a combination of high quality and yet, are afordable. The brand keeps a close watch on how fashion is changing and evolving every day across the world. Based on latest styles and trends, it creates new designs and puts them into stores in a week or two. In stark comparison, most other fashion brands would take close to six months to get new designs and collections into the market.

It is through this strategic ability of introducing new collections based on latest trends in a rapid manner that enabled Zara to beat other competitors. It quickly became the people’s favourite brand, especially with those who want to keep up with fashion trends. Founder Amancio Ortega is famously known for his views on clothes as a perishable commodity. According to him, people should love to use and wear clothes for a short while and then they should throw them away, just like yogurt, bread or fish, rather than store them in cupboards.

The media often quotes that the brand produces “freshly baked clothes”, which survive fashion trends for less than a month or two. Zara concentrates on three areas to efectively “bake” its fresh fashions:

Shorter lead times (and more fashionable clothes): Shorter lead times allow Zara to ensure that its stores stock clothes that customers want at that time (e.g. specific spring/ summer or autumn/ winter collections, recent trend that is catching up, sudden popularity of an item worn by a celebrity/ socialite/ actor/ actress, latest collection of a top designer etc.). While many retailers try to forecast what customers might buy months in the future, Zara moves in step with its customers and ofers them what they want to buy at a given point in time.

Lower quantities (through scarce supply): By reducing the quantity manufactured for a particular style, Zara not only reduces its exposure to any single product but also creates artificial scarcity. Similar to the principle that applies to all fashion items (and more specifically luxury), the lesser the availability, the more desirable an object becomes. Another benefit of producing lower quantities is that if a style does not generate traction and sufers from poor sales, there is not a high volume to be disposed of. Zara only has two time-bound sales a year rather than constant markdowns, and it discounts a very small proportion of its products, approximately half compared to its competitors, which is a very impressive feat.

More styles: Rather than producing more quantities per style, Zara produces more styles, roughly 12,000 a year. Even if a style sells out very quickly, there are new styles waiting to take up the space. This means more choices and higher chance of getting it right with the consumer.

Zara only allows its designs to remain on the shop floor for three to four weeks. This practice pushes consumers to keep visiting the brand’s stores because if they were just a week late, all the clothes of a particular style or trend would be gone and replaced with a new trend. At the same time, this constant refreshing of the lines and styles carried by its stores also entices customers to visit its shops more frequently.

In the following sections, the key components of Zara’s winning formula in the fashion retailing industry are illustrated.

Customer co-creation: Zara’s principal designer is the customer

Zara’s unrelenting focus on the customer is at the core of the brand’s success and the heights it has achieved today. There was a fascinating story around how Zara co-creates its products leveraging its customers’ input. In 2015, a lady named Miko walked into a Zara store in Tokyo and asked the store assistant for a pink scarf, but the store did not have any pink scarves. The same happened almost simultaneously for Michelle in Toronto, Elaine in San Francisco, and Giselle in Frankfurt, who all walked into Zara stores and asked for pink scarves. They all left the stores without any scarves – an experience many other Zara fans encountered globally in diferent Zara stores over the next few days.

7 days later, more than 2,000 Zara stores globally started selling pink scarves. 500,000 pink scarves were dispatched –to be exact. They sold out in 3 days. 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. One of the secrets to Zara’s success includes using Radio Frequency Identification Technology (RFID) in its stores. 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.

Another secret of Zara’s success is that the brand trains and empowers its store employees and managers to be particularly sensitive to customer needs and wants, and how customers enact them on the shop floors. 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. The Zara empire is built on two basic rules: “to give customers what they want”, and “get it to them faster than anyone else”.

Due to Zara’s competitive customer research capabilities, its product oferings across its stores globally reflect unique customer needs and wants in terms of physical, climate or cultural diferences. It ofers smaller sizes in Japan, special women’s clothes in Arab countries, and clothes of diferent seasonality in South America. These diferences in product oferings across countries are greatly facilitated by the frequent interactions between Zara’s local store managers and its creative team.

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 efectively 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 ofces in Shanghai, Tokyo and New York (the leading cities for fashion trends), which act as trend spotters. The ‘Trends’ team never goes to fashion shows but tracks bloggers and listens closely to the brand’s customers.

The fact that Zara’s designers and customers are inextricably linked is a crucial part of the brand strategy. Specialist teams receive constant feedback on the decisions its customers are making at every Zara store, which continuously inspires the Zara creative team.

Zara’s super-efcient supply chain

Zara’s highly responsive, vertically integrated supply chain enables the export of garments 24 hours, 365 days of the year, resulting in the shipping of new products to stores twice a week. 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 fabricprocessing 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 450 million items and launches around 12,000 new designs annually, so the efciency of the supply chain is critical to ensure that this constant refreshment of store level collections goes of smoothly and efciently.

Here are some of the characteristics of Zara’s supply chain that highlight the reasons behind its success:

Frequency of customer insights collection: Trend information flows daily into a database at head ofce, 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 efectively 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.

Manufacturing approach: Zara uses a “make and buy” approach – it produces the more fashionable and riskier items (which need testing and piloting) in Spain, and outsources production of more standard designs with more predictable demand to Morocco, Turkey and Asia to reduce production cost. 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.e. the one with more predictable demand patterns), such as basic Tshirts, are outsourced to low cost suppliers, mainly in Asia. 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.

Distribution management: Zara’s state-of-the-art distribution facility functions with minimal human intervention. Optical reading devices sort out and distribute more than 60,000 items of clothing an hour.

In addition to these supply chain efciencies, 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.

This expectation for such a high frequency of repeat visits is evidence of Zara’s confidence that it is keeping on top of changing consumer needs and preferences and is helping them shape their ideas, opinions and taste for fashion. 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 ofering afordable lines.

Sustainability at the core of Zara’s operations

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. For example, its “for&from” programme which started in 2002 has enabled the social integration of people with physical and mental disabilities, by providing over 200 stable employment opportunities across 15 stores.

Commitment to environment: Being in a business where it taps on natural resources to create its products, Inditex makes eforts 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 2025 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 of their used clothing, footwear and accessories at collection points in 2,299 stores in 46 markets today.

Zara’s culture: The word “impossible” does not exist

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).

Top management gives its store managers full liberty and control over their store’s operations and performance with clearly set cost, profit and growth targets with a fixed and variable compensation scheme. The variable component amounts to up to half of the total compensation – making store level employees heavily incentive-driven.

In addition, once an employee is selected for promotion, his or her store develops a comprehensive training program for that individual with the human resources department, which is followed up by periodic supplemental training – reflecting Zara’s commitment to talent development. 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. The creative team of Zara comprises of over 200 professionals. They all embody and enact the corporate philosophy that the word “impossible” does not exist in Zara.

For example, while many companies struggle with long lead times in discussions and decision making, Zara gets around this challenge by getting various business functions to sit together at the headquarters and also by encouraging a culture (through structures and processes) where people continuously talk to each other. The sales and marketing teams who receive trend feedback talk regularly with designers and merchandisers. It is important that there is constant two-way communication so that sales and marketing teams can talk about new lines to customers and designers / merchandisers have a strong visibility of customers’ needs and preferences enacted at a store level. The production scheduling is also closely coordinated so that there is no time wasted on approvals. The design team structure is very flat and focuses on careful interpretation of catwalk trends that are suitable for the mass market – the Zara customer. The design and product development teams, who are based in Spain, work closely to produce 1,000 new styles every month.

Besides being customer centric, another important reason why Zara’s employee strategy is so successful is the fact that it empowers its staf to make decisions based on data. Zara has no chief designer. All its designers are given unparalleled independence in approving products and campaigns, based on daily data feeds indicating which styles are popular.

Due to the unwavering focus on the customer, the entire business model is designed in such a way that the pattern of needs for the finished goods dictate the terms of the production process to follow, instead of having the raw materials determine the nature of the production process – something that is very rare in multinational companies of similar scale.

In sum, the entire brand culture is extremely customer-centric, which has been and continues to be a significant contributor to Zara’s success.

The Zara brand communication strategy

Zara has used almost a zero advertising and endorsement policy throughout its entire existence, preferring to invest a percentage of its revenues in opening new stores instead. It spends a meager 0.3 per cent of sales on advertising compared to an average of 3.5 per cent by competitors. The brand’s founder Amancio has never spoken to the media nor has in any way advertised Zara. This is indeed the mark of a truly successful brand where customers appreciate and desire the brand, which is over and above product level benefits but strongly driven by the brand experience.

Instead of advertising, Zara uses its store location and store displays as key elements of its marketing strategy. By choosing to be in the most prominent locations in a city, Zara ensures very high customer trafc for its stores. Its window displays, which showcase the most outstanding pieces in the collection, are also a powerful communication tool

designed by a specialized team. A lot of time and efort is spent designing the window displays to be artistic and attention grabbing. According to Zara’s philosophy of fast fashion, the window displays are constantly changed. This strategy goes down to how the employees dress as well – all Zara employees are required to wear Zara clothes while working in the stores, but these “uniforms” vary across diferent Zara stores to reflect socio-economic diferences in the regions they were located. This efectively communicates Zara’s focus on the mass market, yet another detail that reflects its close attention on the customer.

To tap into the emerging e-commerce trend, Zara launched its online boutique in September 2010. The website was initially available in Spain, the UK, Portugal, Italy, Germany and France, and was extended to Austria, Ireland, the Netherlands, Belgium and Luxembourg. Over the next 3 years, the online store became available in the United States, Russia, Canada, Mexico, Romania, and South Korea. In 2017, Zara’s online store launched in Singapore, Malaysia, Thailand, Vietnam and India. More recently in March 2018, the brand launched online in Australia and New Zealand. Today, its online store is available in 66 countries. As of 2019, online sales grew to constitute 14% of Zara’s total global sales.

As a fast fashion retailer, Zara is definitely aware of the power of e-commerce and has built up a successful online presence and high-quality customer experience.

Zara’s future brand and business challenges

Charting a new digital strategy in the COVID-19 crisis: With its primarily ofine shopping experience, Zara has been hard hit by global store closures amid the COVID-19 crisis in 2020, with sales falling 44% year-on-year in Q1 2020 and the company reporting a net loss of USD 482 million. Inditex has announced that it will be closing between 1,000 to 1,200 stores worldwide, focusing on smaller ones in Asia and Europe. While online sales have been encouraging – Zara’s online sales for Q1 2020 grew 50% – it is not enough to mitigate the damage.

Amancio Ortega plans to spend USD 1.1 billion scaling up its digital strategy (https://martinroll.com/resources/articles/branding/digital-branding-implications-on-strategy/) and online capabilities by 2022 and a further USD 2 billion in stores to improve integration between online and ofine for faster deliveries and realtime tracking of products. Its goal is for online sales to constitute at least 25% of total sales. To achieve this goal, Zara will need to think of new ways to engage its customers digitally, not just through its online store, but through online communities and social media.

Mobile commerce: Zara woke up late to the potential of mobile commerce and needs to catch up fast with competitors. Diferent forms of market analysis strongly point towards a scenario wherein spends on mobile commerce will overtake desktop based ecommerce by 2021. On an average, most brands currently get about 15-20% of their website trafc via mobile devices and this is growing rapidly. With the deluge of investments planned in the mobile commerce space and Zara’s competitors already having an advantage on the mobile front, Zara needs to quickly make mobile shopping not only an efortless experience but also a delightful one.

Price is not an advantage anymore: Ofering the latest fashion lines at afordable prices continues to be a strategic advantage for Zara, but cannot continue to be the only one. Across the world, and closer to home in Europe, competitors are cutting prices and refining their business models to cut the competitive advantage that Zara has. Swedish fast fashion retailer H&M, which is placed #30 just behind Zara on Interbrand’s list, launched an online store in Spain in 2014 to take own Zara in its home turf. Again in its home market, it now faces increasing competition from brands like Mango, which cut prices and started focusing on fashion segments in which Zara enjoyed popularity. In addition to H&M and Mango, other competitors like Gap and Topshop are all fighting for a share of the fast fashion retail market pie. Also with the rise of e- and m-commerce, the number of indirect competitors has mushroomed. We now have online fashion aggregators that bring in multiple brands under one single online platform and cut through borders and price segments. Some examples of such aggregators who are doing well include Lyst, Farfetch, Spring and Yoox Net-a-Porter.

For Zara to efectively compete and maintain its strategic advantage, the focus needs to shift away from price but towards quality. Even today the Zara brand enjoys high levels of appeal, which is evident by the serpentine queues outside its stores when it launches in new markets. There is a need for Zara to start investing in building a strong brand

My Notes:

Page 2

Zara was founded by Amancio Ortega and Rosalía Mera in 1975 as a family business

distribution system capable of reacting to shifting market trends extremely quickly.

heavy investments in information technology

Zara Home

In 2019, Zara was ranked 29th on global brand consultancy Interbrand’s list of best global brands. Its core values are found in four simple terms: beauty, clarity, functionality and sustainability.

Page 3

combination of high quality and yet, are affordable

The media often quotes that the brand produces “freshly baked clothes”, which survive fashion trends for less than a month or two.

Unsustainable methodology.

Shorter lead times

artificial scarcity.

lesser the availability, the more desirable an object becomes if a style does not generate traction and suffers from poor sales, there is not a high volume to be disposed of

Zara only has two time-bound sales a year rather than constant markdowns, Rather than producing more quantities per style, Zara produces more styles

Zara only allows its designs to remain on the shop floor for three to four weeks. pushes consumers to keep visiting the brand’s stores customer is at the core of the brand’s success sked the store assistant for a pink scarf, but the store did not have any pink

scarves.

7 days later, more than 2,000 Zara stores globally started selling pink scarves. 500,000 pink scarves were dispatched – to be exact. They sold out in 3 days.

Customer insights are the holy grail of modern business, and the more companies know about their customers, the better they can innovate and compete.

Radio Frequency Identification Technology (RFID) in its stores.

Page 4

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.

The Zara empire is built on two basic rules: “to give customers what they want”, and “get it to them faster than anyone else”.

its stores globally reflect unique customer needs and wants in terms of physical, climate or cultural differences. It offers smaller sizes in Japan, special women’s clothes in Arab countries, and clothes of different seasonality in South America.

Zara employees are trained to listen, watch and be attentive to even the smallest seismographic signals from their customers

Zara has set up sophisticated technology driven systems, which enable information to travel quickly from the stores back to its headquarters

Its design teams regularly visit university campuses; nightclubs and other venues to observe what young fashion leaders are wearing

Zara’s designers and customers are inextricably linked is a crucial part of the brand strategy.

new products to stores twice a week.

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.

Page 5

minimal human intervention. Optical reading devices sort out and distribute more than 60,000 items of clothing an hour.

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

closely monitors changes

suppliers have fundamental rights at work and by initiating continuous improvement programs

Inditex has pledged to only sell sustainable clothes by 2025 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.

Page 6

fast implementation

The creative team of Zara comprises of over 200 professionals.

constant two-way communication so that sales and marketing teams can talk about new lines

Zara has no chief designer.

entire brand culture is extremely customer-centric, which has been and continues to be a significant contributor to Zara’s success.

spends a meager 0.3 per cent of sales on advertising compared to an average of 3.5 per cent by competitors

The brand’s founder Amancio has never spoken to the media nor has in any way advertised Zara.

Page 7

designing the window displays to be artistic and attention grabbing.

window displays are constantly changed

Zara employees are required to wear Zara clothes while working in the stores, but these “uniforms” vary across different Zara stores to reflect socio-economic differences in the regions they were located. This effectively communicates Zara’s focus on the mass market, yet another detail that reflects its close attention on the customer.

Will

revamped Zara

give affordable luxury a run for its money ?

Zara is segueing into the premium segment with a $ 699 leather coat and designer collaborations. But with consumers grappling with inflation, is now the time to hike prices ?

Nov 29, 2023

A belted leather coat? $699. A double-faced leather coat with fleece? Make that $869.

These jackets aren’t from Michael Kors or Coach, but from Zara, the Spanish fast fashion company primarily known for its low prices and rapid production process. Though just a fraction of the price of luxury brands, Zara’s increasingly expensive offerings have sparked online conversation and global headlines over the past year.

“Is this still the same affordable Zara that I've been wearing since college?” writes Chinese netizen @snail on Xiaohongshu. “The most expensive items are now priced at 5,000 RMB ($700) each, and even a past-season silk dress costs 2,000 RMB ($280). It seems like they’re venturing into the realm of affordable luxury.”

With the global market saturated with fast fashion options and consumer preferences shifting toward quiet luxury, Zara appears to

Zara’s limited edition real leather collection includes a $869 double-faced leather jacket with fleece (right). Photo: Zara

have taken note. The flagship brand of Inditex has subtly repositioned itself, presenting a more upscale image to attract those with greater purchasing power and keep up with the evolving trends.

Launching premium collections in China

And nowhere is Zara’s premiumization strategy more apparent than in China. In November 2023, the high-street brand hosted a pop-up on Wukang Road, Shanghai, to unveil its latest collaboration with London-based Studio Nicholson. Chinese KOLs attended the event dressed in minimalist wool coats, blazers, and slacks from the collection, exuding sophistication and class.

By partnering with a brand known for its quality fabrics and higher price points (Studio Nicholson’s bestselling trench coat retails for $1,200), Zara distances itself from traditional perceptions of fast fashion while continuing to offer affordable pieces.

Chinese KOLs attend the Zara x Studio Nicholson pop-up dressed in apparel from the brand's collection. Photo: Zara

“This strategy attracts consumers seeking affordable luxury, blending style, quality, and versatility in pieces like those from Studio Nicholson, which aim to provide an accessible modular wardrobe foundation,” says Sophie Coulon, managing director at digital consultancy VO2 Asia Pacific. “Moreover, targeting new demographics interested in premium but affordable options allows Zara to expand into new markets.”

In addition to global collaborations, local partnerships have also been key to Zara’s image revamp. Since 2022, the Inditex brand has teamed up with emerging Chinese designers like Susan Fang, Calvin Luo, and, most recently, Xi Xing Le to inject fresh creativity into its designs and create deeper inroads in the Chinese market.

surpassed Tmall in sales in the clothing, and bags and accessories categories. In an increasingly digital retail landscape, a dynamic online presence is essential for brands to remain attractive and memorable, Coulon says.

In conversation, not competition, with affordable luxury

Zara isn’t the only high-street label eyeing on the premium sector. H&M Group-owned Cos has launched a limited-edition occasionwear line, Cos Atelier, described as being “founded on the principles of luxury and exceptional design.” Meanwhile, Spanish retailer Mango has launched a special collection called Capsule, featuring dresses and jumpsuits for formal occasions.

However, these brands are not necessarily aiming to directly compete with affordable luxury brands like Michael Kors, says Aurelien Rigart, co-founder of IT Consultis, a digital transformation consultancy in China and APAC.

“Their primary goal lies in increasing their Average Unit Retail (AUR) and Average Value per Transaction (AVT) among their existing loyal customer base,” Rigart tells Jing Daily. “Rather than focusing solely on capturing a share of the affordable luxury market, Zara and Cos seek to leverage their extensive customer pools, brand visibility, and accessibility to drive growth in the premium segment.”

By offering premium-priced items like a $699 leather coat, Zara also aligns itself with the quiet luxury trend that is driving sales for brands such as Zegna and Brunello Cucinelli. “By emulating this strategy at a more accessible price point, Zara and Cos can cater to discerning consumers seeking understated luxury without the exorbitant price tag associated with traditional luxury brands,” Rigart adds.

My Notes:

Nov 29, 2023

ncreasingly expensive offerings

Page 1

It seems like they’re venturing into the realm of affordable luxury

Page 2

subtly repositioned itself, presenting a more upscale image to attract those with greater purchasing power and keep up with the evolving trends.

Launching premium collections in China

Zara distances itself from traditional perceptions of fast fashion while continuing to offer affordable pieces.

“This strategy attracts consumers seeking affordable luxury, blending style, quality, and versatility in pieces like those from Studio Nicholson, which aim to provide an accessible modular wardrobe foundation,”

Since 2022, the Inditex brand has teamed up with emerging Chinese designers like Susan Fang, Calvin Luo, and, most recently, Xi Xing Le to inject fresh creativity into its designs and create deeper inroads in the Chinese market.

Page 4

not necessarily aiming to directly compete with affordable luxury brand

“Rather than focusing solely on capturing a share of the affordable luxury market, Zara and Cos seek to leverage their extensive customer pools, brand visibility, and accessibility to drive growth in the premium segment.”

References:

How Zara appropriated the language of luxury. (n.d.). Nss Magazine. https://www.nssmag.com/en/fashion/27347/zara-luxury

Evrard, E. (2014, June 19). Is Zara The Newest Luxury Fashion Competitor? Luxury Society. https://luxurysociety.com/en/is-zara-the-newest-luxury-fashion-competitor/

Brand Vision Insights. (2023, December 11). Zara’s Marketing Strategy: a Deep Dive into Fast Fashion Dominance | Brand Vision. Brandvm.com. https://www.brandvm.com/post/zaras-marketing-news

Martin Roll. (2021, November). The Secret of Zara’s Success: a Culture of Customer Co-creation | Martin Roll. Martin Roll; martinroll.com.

https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-success-aculture-of-customer-co-creation/

Is Zara the new face of luxury? (2024, March 1). Mintlounge. https://lifestyle.livemint.com/fashion/trends/zara-luxury-industry-fast-fashion111709273056394.html

Martino, F. (2021, November 26). Zara and the fast-fashion that plays luxury. NSS Magazine. https://www.nssmag.com/en/fashion/28079/zara-fast-fashion

Law, J. (2024, March 25). Will revamped Zara give affordable luxury a run for its money? Jing Daily. https://jingdaily.com/posts/zara-premium-pricing-chinaaffordable-luxury

Manufacturing Platform for Apparel Industry | Fast & Sustainable - Fashinza. (n.d.). Fashinza.com. https://fashinza.com/brands-and-retail/news/the-secret-behindzaras-success/