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[BRAND REPORT]

L4 Fashion Buying & Range Planning

YU HENG, LIN


This report is aiming to define and research into the high street fast fashion brand ZARA. First of all, brand story and the target customer profile will be provided. Second, the current market position of ZARA will come out with the PEST and SWOT analysis. Then, a marketing strategy could be carried out within marketing mix decisions (4P’S). Finally, the conclusion will summarize what the strategy focus on.

[INTRODUCTION]

[CONTENTS] BRAND HISTORY CURRENT MARKET POSITION CUSTOMER PROFILING PEST ANALYSIS SWOT ANALYSIS MARKETING 4 P’S BRAND SUMMARY REFERENCES


[HISTORY] ZARA is a Spanish fast fashion retail brand founded in 1975 by Amanico Ortega and Rosalia Mera. It is the main brand of the Inditex group, the world’s largest apparel retailer owning brands such as Massimo Dutti, Pull&Bear, Bershka, Stradivarius etc. ZARA designs, manufactures and sells apparel, footwear and accessories for women, men and children. Today, the brand has more than 2,200 stores in 96 countries around the world. Four key values of ZARA that defined all its stores is beauty, clarity, functionality and sustainability. The brand is also renowned for its ability to develop a new product and get it to stores within two weeks, while other retailers take six months. The brand is the pioneer of fast fashion and now ZARA is looking to technology to keep up with faster fashion.


The graph shows where ZARA and its competitors compare in terms of both price and fashionability. ZARA is more expensive and fashionable than most high street and online brands, and still far cheaper than designer brands like Selfridges. However, there also are similar brands which are close in fashionability of ZARA with cheaper price such as MANGO or TOPSHOP.

PRICE

[CURRENT MARKET POSITION]

FASHIONABILITY


TARGET MARKET GENDER female

ECONOMIC STATUS students/young professionals/

INTERESTS & BEHAVIOR Socialising: hanging out with friends/ bars, clubs and parties/ eating out/ coffee shops/ trendy exhibitions/ cinema/ music/ bookstores/ discovering new

FASHION NEEDS & SPENDING HABITS modern and busy women who are fashion forward and willing to try new style and outfits/ need different pieces used for multiple occasions/ enjoying shopping in physical stores, but frequently purchase

higher income/ retirement

places

online to save time/ want to own designer pieces by cheaper prices

AGE 13 – 40

Social media: prolific social media users with smart phone and laptop/ regularly sharing life and seeking inspirations on Facebook, Instagram, Snapchat and Twitter etc.

Concerns: aware of ethical and environmental issues

[CUSTOMER PROFILING]


MEET Mathilda! Mathilda is from London and shares a flat with friends. She majored in fashion design and currently graduates from the university. Now, she just starts her first job in the fashion industry with limited salary and the budget she can spend on shopping is limited as well since she has to pay the initial living costs.

[CUSTOMER PROFILING]

In her spare time, Mathilda usually socialize with flatmates or friends either on museum exhibitions, night out or exploring new places/events in London. She often visits Oxford street/ Regent street because she is fashion oriented and always follows the latest fashion trend. Also, she sometimes browses Selfridge and Harvey Nichols in order to be inspired. Mathilda is a smartphone and social media addict. She loves sharing her life through posting pictures or videos on her Instagram and Facebook. Browsing FB and IG takes up much of her time every day and she is under the influence of famous fashion bloggers or celebrities such as Alexa Chung. She is used to buy her outfit online since shopping online saves her time and fits her busy life style. If the brand could offer options not only free shipping & returns also the next day delivry online, would encourage her to commit to a purchase.


[ P E S T A NA LYS I S ]

POLITICAL ----------------------------------------------------------BREXIT retailers might face rising costs, tariffs and uncertainty (import duties, delay at ports etc.) if the UK is unable to ensure a favorable free-trade agreement with the European Union. Also, the uncertainty surrounding Brexit hits consumer confidence for the general economy, which may influence their purchase decision.

TURKEY’S POLITICAL INSTABILITY it deterred many UK companies from investing in ranges such as denim sourced from Turkey. Also, the Turkish lira has fallen and this may be great opportunities on price, but the supply chain struggle to sustain the business.


[ P E S T A NA LYS I S ]

ECONOMIC ------------------------------------------------------I N F L AT I O N the prolonged weakness of the pound has driven up import and manufacturing costs. While inflation is expected to soften in 2018 and out to 2023, it will continue to drive the overall clothing market until 2021.

SQUEEZED DISPOSABLE INCOME cost of living outstrips wage growth limiting consumer spend on discretionary womenswear purchases.


[ P E S T A NA LYS I S ]

SOCIAL ------------------------------------------------------BABY BOOMER KPMG reported that those aged between 50 and 70 spend the most online and in stores , while millennials born between 1982 to 2001 spend the least. One factor is that baby boomers have more disposable income than younger shoppers. As a large portion of the nation being senior citizens, mobility and the need to provide convenient services becomes fundamental.

E T H I C A L / E C O FA S H I O N Rising awareness of sustainability and this would encourage retailers to make ethical choices when it comes to their selection of materials and supply chain. For example, numerous labels like Burberry, DKNY and Gucci have opted to remove fur from their collections.


[ P E S T A NA LYS I S ]

TECHNOLOGICAL -----------------------------------------------------------------------------------------ONLINE online womenswear sales will rise 48.3% between 2017 and 2022, taking 35.7% of total spend on womenswear.

SOCIAL MEDIA Social media is cited as inspiring 69.5% of 16-24 year old clothing choices and 59.2% of 25-34 year old, highlighting its influential role in the womenswear market. / Snapchat is launching a new set of ecommerce advertising features, including shoppable advertisements. / Instagram Stories has started testing shopping in its Stories feature since June. An US retailer reported a 25% increase in traffic and an 8% increase in revenue as a result of the beta testing from using Shopping in its Instagram Stories.

AI artificial intelligence starts to replace human resource. The best fashion businesses are increasingly combining human with AI to improve customer service, identify consumer trends, offer greater personalisation and to ensure their supply chain is as responsive as it can be.


[S [ SWO WOTTAANA NALYS LYSI ISS] ]

STRENGTHS ----------------------------------------------------------N E W D I G I TA L S T O R E in Westfield Stratford, which is aiming to integrate and enhance the online and offline shopping experience.

WIDE RANGE OF PRODUCTS In order to meet wider range of customer needs, ZARA offers womenswear, TRF, menswear, kidswear, shoes, and accessories.

FA S T FA S H I O N Rather than producing more quantities per style, Zara produces more styles, roughly 12,000 a year. Also, shorter lead times allow Zara to ensure that its stores stock clothes that customers want at that time. Its vertically integrated supply chain enables the shipping of new products to stores twice a week.

S U S TA I N A B I L I T Y at the core of ZARA’s operations, which means the brand have commitments to its employees/suppliers and the environment.


[ S WO T A NA LYS I S ]

WEAKNESSES ----------------------------------------------------------PRICE Price of ZARA is relatively higher than other high street brands such as Primark and H&M. Some competitors are cutting prices and refining their business models to cut the competitive advantage that Zara has.

ADVERTISING Zara does not engage in advertising and instead uses its store locations as a marketing strategy. Without advertisements, Zara relies heavily on word of mouth or social media. This causes the perception of potential customers towards Zara may not be accurate.

E-COMMERCE Zara’s social media platforms such as Facebook and YouTube exists merely as a feed for updates rather than a platform that consumers can interact with.


[ S WO T A NA LYS I S ]

OPPORTUNITIES ----------------------------------------------------------C O L L A B O R AT I O N with designers or celebrities such as H&M. Every year, fashion lovers and bargain hunters alike anticipate news of H&M’s latest designer collaboration. It is efficient at creating buzz and sales.

S A M E D AY D E L I V E R Y ASOS has successfully launched its same-day delivery service in major UK cities (London, Leeds, Manchester and Birmingham), intending to provide convenience and choice for customers. A report showed that 72% of customers would shop more if same-day delivery was a possible option.

SOCIAL MEDIA ZARA could better exploit its social media platforms such as Instagram. For instance, launching shoppable advertisements.


[ S WO T A NA LYS I S ]

THREATS ----------------------------------------------------------W E AT H E R A report found that In-store fashion like-for-like sales dropped by 7.75% and pointed out this might result from the warmer weather. Retailers across the UK have launched substantial discounts on new-season products since unusual weather dampen demand for coats and knitwear.

NEW ENTRANTS such as ARKET (high quality) and Weekday (focusing on young customers) are expected to steal market share from existing retailers rather than generate additional sales.

E - R E TA I L E R S such as Boohoo, ASOS and Amazon allow consumers to browse thousands of new products online every day, putting immense pressure on physical shops to keep up. 11.9% of womenswear shoppers already shop at Amazon, prior to the launch of its own label Find, with its deepest penetration in the 25-54 age ranges. And, the UK sales of ASOS were up 23% on 2016 to ÂŁ300m.


[MARKETING STRATEGIES]

P RODUCT ZARA keeps offering a wide range of trendy products for women, men and children. Within each of these categories the brand offers not only clothing but also shoes and accessories, and ZARA ‘s product range could apply to different occasions. Except the existing product ranges such as womenswear (18-40) and TRF (13-25), ZARA is planning to add a new category aiming at elder customer aged 50 -70, which is more delicate and luxury. The brand will launch its first collection cooperated with famous designers in order to attract customer who want products that unique or differentiated.


[MARKETING STRATEGIES]

P RICE The price range for ZARA sits at a mid-high end of the high street. The price of ZARA’s products is generally higher than most high street brands such as H&M, M&S and PRIMARK, similar with MANGO and TOPSHOP, lower than COS, ARKET and SELFRIDGES. ZARA continually provides both trendy products and classic pieces which are meeting demands of fast fashion with a wide range of prices. Therefore, customer can choose products depending on different budget. Customer is able to embrace designers’ aesthetics through collaboration product line. This category would be more expensive than other products of ZARA but still cheaper than designers’ own brands. Prices online and instore are the same. Standard delivery is free once orders over £50, and customers can choose to pay for the same day or precise day delivery.

Product

Price

JACKETS

£29.99 – 95.99

COATS

£25.99 - 159

BLAZERS

£19.99 - 119

DRESSES

£9.99 – 69.99

SHIRTS/BLOUSERS

£12.99 – 69.99

TOPS

£12.99 – 39.99

KNITWEAR

£9.99 - 159

SWEATSHIRTS

£9.99 – 49.99

TROUSERS

£9.99 – 69.99

JEANS

£12.99 – 39.99

SKIRTS

£15.99 – 79.99


[MARKETING STRATEGIES]

P LACE ZARA is a global leading high street retailer who has 2,238 physical stores in all five continent. Also, customer around the world can purchase online through its official website zara.com. The brand continues developing its e-commerce and want to make its fashion collections available to every country in the world by 2020- even in those markets that do not currently have bricks-and-mortar stores. Using social media platforms in a more interactive way such as launching shappable ads on Instagram. Although the Inditex group has considered easing the number of physical stores it opens in order to focus on its multichannel efforts and tap into the shift towards consumer spending online, the brand has improved its bricks-and-mortar stores in order to meet recent customers’ need – pursuing personal, memorable and attractive experiences that add value to the brand. While extending its ecommerce market to satisfy the growing e-customer, ZARA has launched its first store globally to feature new digital technology that integrates the online and offline shopping experiences in the east London shopping centre. The brand is aiming to improve and enhance customer experience in the physical store by technology (the interactive mirror/ self-checkout), interior decoration, VM and music.


[MARKETING STRATEGIES] P ROMOTION End of season sales (two to four times per year) are essential in order to reduce the amount of slow items. Provide additional discount while different festivals e.g. 10% off discount for X’MAS. Instead of investing in physical advertisements, ZARA chooses to pay more on e-marketing e.g. customer who share ZARA’s post or hashtag #ZARA on social media is able to get 5% off voucher ; send newsletter through email or text and post on social media at least two times a week to better engage customer.

Involving well-know fashion bloggers such as Isabella Thorsden to use and share ZARA’s products through social media. They could inspire customers with ideas for outfit and furthermore influence their purchase decision. hey alert us to exciting new designers, but they also give us ideas for fabulous outfit ensembles. The brand regularly updates its store layout such as window displays and mannequins in order to create a fresh experience for customer each time. Build the customer database to increase their loyalty to the brand, and they can get 20% off in the month of birthday. Cross - Selling could stimulate customer to buy related or complementary items e.g. purchasing shirts could gain 5% off discount for blazers.


[BRAND SUMMARY] BRAND POSITION ZARA is the leading fast fashion brand in high street, offering highly fashionable products at mid-high end of price. Other high street retailers like TOPSHOP and MANGO give similar prices for products close in fashionability. TA R G E T M A R K E T Females aged 13 – 40, socializing and discovering, are the group ZARA is mainly focusing on. Besides, to respond the demographic changing ZARA will launch new categories for shoppers aged 50 – 70. PRODUCT The brand owns wide range including womenswear, TRF, menswear, and kidswear, and each of those contains clothing, shoes and accessories. And ZARA intends to develop collaborations with famous designers or celebrities. PRICE The price range for ZARA sits at a mid-high end of the high street and it is quite wide, shoppers with squeezed budget could afford the basic items. The brand also offers higher price items with better quality and materials.

COMPETITORS TOPSHOP and MANGO which offer high fashionability at mid-range price are main competitors on the high street. Also new entrants such as Weekday and ARKET are possible to steal market share from ZARA. On the other hand, Boohoo, ASOS and Amazon are online players that ZARA has to compete against online. S T O R E L O C AT I O N ZARA has 64 stores in the UK and another 2,174 shops over the rest of the world. All ZARA stores are easily accessible and visible in prime locations. E-COMMERCE With regard to recent customers who want newness and want it immediately so they are more likely to purchase online, ZARA have to pay more attention on increasing online sales and better integrate social media with marketing strategies to sell and promote the brand itself. Also, the influence of fashion influencers such as bloggers cannot be looked down.


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Profile for Yu Heng Lin (Winnie)

ZARA - Brand Report  

A business report I have conducted into the brand ZARA, deeply analysing external and internal factors which might influence the brand and e...

ZARA - Brand Report  

A business report I have conducted into the brand ZARA, deeply analysing external and internal factors which might influence the brand and e...

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