Fashion

Merchandising
A comprehensive study of the merchandise with respect to
merchandise mix, pricing, innovations and retailing aspect.
Submitted to: Ms. Nethravathi T.S.

Submitted by:
Aayushi Surana
Isha Aggarwal
Manu
Ritu sharma
Meghan Singh
Shilpi

Table of contents
1. Introduction to Zara
i. History
ii. The Zara Concept/Model
iii. Zara Mission and Vision Statement

2. Merchandise Mix
i. Merchandise Mix of Zara/Product Assortment
ii. Zara Departments Width of the Merchandise Mix of Zara

3. Accessories
i. Width of the Accessory Department
ii. Womens Bags Analysis of Product Line
i.

Category Depth

ii.

Category Pricing

iii.

Category Innovations

iv.

Category Marketing

4. Retailing Aspect
i. Location Strategy
ii. Store Layout and Display Strategy

5. Marketing Strategies
i. Competition

6. Conclusion/ Learning Outcomes

7. References

1. Introduction to Zara
Zara is a fashion retailer that caters to the needs of men, women, youngsters,
and of late even kids. It is the flagship brand of the Inditex group that mainly
deals with clothing and accessories. Amancio Ortega and Rosalia Mera
founded Zara in 1975. Very few clothing brands keep up with the latest
fashion and while maintaining high quality standards, as well as being
affordable.

Zara is considered to be one the few brands that not only keep up with the
latest trends, but also maintain high quality standards in addition to being
affordable. This made it the go-to fashion brand for all. So it was not a
surprise that Zara, which started off as a small store in Spain is now the
worlds largest retailer and one of its founder, Amancio Ortego is now the 4th
richest man in the world. In a relatively short time frame Inditex has become
the worlds second largest clothing retailer with 2,692 stores spread across
62 countries worldwide (by the end of January 2006).

In addition to Zara which accounted for 66 percent of the groups turnover in
2005, Inditex owns seven other clothing chains: Kiddys Class (childrens
fasahion), Pull and Bear (youth casual clothes), Massimo Dutti (quality and
conventional fashion), Bershka (avant-garde clothing), Stradivarius (trendy
garments for young women), Oysho (undergarment chain) and Zara Home
(household textiles).

i. History
It all began when Ortega established a dressmaking factory, Inditex, in the year
1963. Ten years later, he started off a small store that was named as Zorba in La
Coruna, Spain with a budget of a meager 30 Euros.

He then changed the name as Zara with no particular intention. And thats
how the worlds favorite fashion brand of today was born. Zara slowly
expanded its empire from the town in Spain to the rest of the country and
then later to Portugal. By the 1990s the store had expanded into the United
States, France and most of the Europe. Today, Zara has close to 6500 stores
across 88 countries around the world.

ii. The Zara Concept/Model

As the largest and most internationalized brand of Inditex's chain, Zara is the
principle driver of the group's growth, sales and profit. Zara's unique
business model brings special interest of business studies and is often sited
as "Dell in the fashion industry".

The core concept of Zara's business model is they sell "medium quality
fashion clothing at affordable prices", and vertical integration and quickresponse is key to Zara's business model. Through the entire process of
Zara's business system: designing, sourcing and manufacturing, distribution
and retailing, they presented four fundamental success factors: short cycle
time, small batches per product, extensive variety of product every season
and heavy investment in information and communication technology. These
four elements are involved in every aspect of the business.

Zaras business model can be broken down into three basic components:
concept, capabilities, and value drivers. Zaras fundamental concept is to
maintain design, production, and distribution processes that will enable Zara
to respond quickly to shifts in consumer demands. Jos Mara Castellano,
CEO of Inditex stated, "the fashion world is in constant flux and is driven not
by supply but by customer demand. We need to give consumers what they
want, and if I go to South America or Asia to make clothes, I simply can't

move fast enough." This highlights the importance of this quick response
time to Zaras operations.

Zaras strategy is to offer cutting edge fashion at affordable prices by
following fashion and identifying which styles are hot, and quickly getting
the latest styles into stores. They can move from identifying a trend to having
clothes ready for sale within 30 days (where as most retailers take 4-12
months). This is made possible by controlling almost the whole garment
supply chain from design to retail.

Zara produces around 12,000 styles per year (compared to the retail average
of 3,000), which means that fresh fashion trends reach the stores quickly. A
typical Zaras customer visits the store 17 times a year compared to the
average of 3 times per year. This high number of styles also means that the
commercial teams have more chances to find a winning style.

iii. Zara Mission and Vision Statement

Through their business models, Zara aims to contribute to the sustainable
development of the society and that of the environment with which we interact.
Zaras Mission and Vision is to give its customer and exclusive choice of fashion
by providing a quicker turnover or new stock than other fashion retailers.
Zara believes in utilizing its shops actively and creating value from product
differentiation. They believe in the principle of small quantity production.

2. Merchandise Mix
Merchandise mix the total set of all products offered for sale by a retailer, including
all product lines sold to all consumer groups.

i. Merchandise Mix of Zara/Product Assortment

Zara has a very extensive Merchandise Mix. Zara offers collections for Women,
Men and Kids, along with special styles each day and a designated section for
all New items. Their casual collection, TRF, short for trafaluc, is also featured as
its own category within their website.

Product Assortment/Merchandise Mix of Zara

 Each subcategory is generally the same for all categories. They are broken out
by clothing type and they do offer the same items that are currently in stores
with some early offerings based on when new styles come out.

Zara Women consisting of Basic and TRF focuses on women of various age
groups ranging from 13 year olds to 20 something year old,working women.
They have the formal and workplace outfits complimenting the working
women as well as the every day, casual wear tees and denims for the young
teenagers.

Zara Man targets the young and hip who want afford the latest fashion trends
at the most affordable costs. Similar to the womenswear, they too have a
wide range complimenting the various needs such as formal wear and
everyday casual wear.


In easy words, Zaras target market is young, price-conscious, and highly
sensitive to the latest fashion trends. They have an advantage over
traditional retailers because they do not define their target by segmenting
ages and lifestyles giving them a much broader market.

3. Accessories
i. Width of the Merchandise Offered in the Accessories Department

ACCESSORIES

SHOES
BAGS
Leather
Cross body
Hand bags
Large hand
bags
Backpacks

Leather
Ballerina
s
Flats
High
Heels
Sneakers
Boots
&Ankle
Boots
Sandals

JEWELLAR
Y
Earrings
Necklace
Rings
Bracelets
Ear cuffs
Brooch

SCARF
S
Double
Faced
scarf
Basic
scarf
Knit
scarf

HEAD
WEAR
Knitted
2 tone
hat
Embroi
der hat

EYEWE
AR

OTHE
R

Cat eye
Round
sunglasse
s
Aviator

Belts
Ties
Key
rings
Bag
charm

ii. Womens bags Analysis of the product line

There were 52 styles of bags at the Zara Store located at Phoenix Mall in
Bangalore on 19th August 2016. Womens handbags have been divided into
4 categories (leather, backpacks, cross body and handbags) and we have
analyzed the collection based on style, color, prize and size.
The theme of the collection ranged from formal sophisticated handbags to
quirky sling bags.

Depth of the Product Line-Womens Handbags

Analysis based on Styles

17%
Backpacks
46%

Handbags
27%

Leather Bags
Crossbody

10%

Zara Bags - Backpacks

Bag Style

Material

Price

Colour

Backpack with metallic fastening

100% polyurethane

1,890.00

Ecru(White)
Black

Technical fabric backpack

Outer Shell-100%
nylon, Lining100% polyester

2,890.00

Black

Mini vinyl backpack

Outer Shell-100%
polyurethane, Main
material-100%
polyurethane,Filling-

2,290.00

Black

1,890.00

Black

Backpack with zip

Outer shell-100%
polyurethane,Lining100% polyester

Image

10

Quilted mini backpack

Detailed Backpack

Convertible Backpack

Quilted chain backpack

Mini quilted backpack

Outer shell-100%
cotton,
Lining-100%
polyester, Filling100% polystyrene

Outer shell-100%
polyurethane,
Lining100%
polyester

Outer shell-100%
polyurethane

OUTER SHELL-Main
Fabric-100%
polyester Secondary
MaterialL-100%
polyurethane
LINING-Main-100%
polyester
Secondary-100%
polyurethane
FILLING-100%

Outer shell-Main
fabric100%polyester
STRAP - 100%
polyurethane
Lining-100%
polyester
Filling-100%
polystyrene

2,290.00

Jeans

1,890.00

Black

2,890.00

Black

2,890.00

Burgundy

2,290.00

Multicolour

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Zara Bags - Handbags

Bag Style
Mini Tote with Handle

Tote with Metallic handles

Drawstring bucket bag

Convertible Tote

Contrasting city bag with cord

Material
Outer shell
STRAP - 100% cotton
MAIN MATERIAL -
100% polyurethane

Outer shell-100%
polyurethane
Lining-70% jute, 30%
polyester

Outer shell-100%
polyurethane
Filling-100% cotton

Outer shell-100%
polyurethane

Outer shellEMBELLISHMENT -
100% polyester
MAIN MATERIAL -
100% polyurethane
Lining-MAIN LINING -
100% polyester

Price

Colour

2,290.00

Navy Blue

2,890.00

Black

1,890.00

Black

1,890.00

Burgundy
Black

2,290.00

Black

Crossbody bag with contrast flap

Outer shell-100%
polyurethane

3,990.00

Multicolour

Tote Bag

100% polyurethane

1,890.00

Burgundy
Black

Image

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Leather flap city bag

Outer shell-MAIN
MATERIAL - 100%
polyurethane Lining-

3,990.00

Black

City bag with Padlock

Outer shell-100%
polyurethane

2,990.00

Multicolour

3,990.00

Beige

City bag with adjustable handle

Outer shell-100%
polyurethane Lining
100% polyurethane

Contrast Mini city bag

Outer shell-100%
polyurethane

2,890.00

Multicolour

Tote with pocket

Outer shell-100%
polyurethane

1,690.00

Jeans
Beige

Mini city bag with lock

Outer shell-100%
polyurethane

2,290.00

White

Drawstring Bucket Bag

Outer shell-100%
polyurethane

1,890.00

Grey
Black

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Zara Bags
Style of bag

Material

Price

Color

Quilted leather crossbody bag

100% cow leather

lining-100% polyester

2290

Grey

Split suede crossbody bag with tassles

100% cow leather

lining-100% polyester

1990

Pink, leather

Leather crossbody bag with buckle

100% cow leather

lining-100% polyester

2290

Pink

Leather crossbody bag with metal detail

100% cow leather

lining-100% polyester

2890

Black

Split suede crossbody bag with tassles

100% cow leather

lining-100% polyester

1990

Leather , green

Image

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Zara Bags
Style of bag

Material

Price

Color

Crossbody bag with contrast flap

100% polyurethane

3990

Multicolor

Quilted crossbody

100% polyurethane
lining-100% polyester

1990

Black

Leather flap city bag

100% polyurethane
2nd material- 100% cow
leather
lining-100% polyester

3990

Black

100% cow leather 3990

lining-100% polyester

Black

Split suede crossbody bag

Mix and match mini crossbody bag

100% polyurethane
2nd material- 100%
polyester
lining-100% polyester

2990

Petrol blue, multicolor

Mix and match mini crossbody bag

100% polyurethane
2nd material- 100%
polyester

2990

Multicolor

Contrast split suede crossbody bag

100% polyurethane
2nd material- 100% cow
leather
lining-100% polyester

2290

Multicolor

Tricolor clutch

100% polyurethane
lining-100% polyester

1890

Tricolor

Studded bucket bag

100% polyurethane
lining-100% polyester

2890

White

Image

15

Tricolor clutch

100% polyurethane
lining-100% polyester

1890

Tricolor

Studded bucket bag

100% polyurethane
lining-100% polyester

2890

White

2290

Black

2890

Multicolor

Mini vinyl backpack

Beaded bucket bag

Material-polyurethane
thermoplastic

100% cotton
2nd material- 100% cow
leather

Quilted patches crossbody bag

100% cotton
Lining-100%
polyurethane

3990

Black

Soft city bag

100% polyurethane
lining-100% polyester

2290

Black

1890

Burgundy, black

1690

Dark pink , black

2290

Black

2290

Black

2290

Red

Tote bag
100% Polyurethane

Mini geometric crossbody bag with tassles

100% cotton
2nd material- 100% cow
leather

Studded mini bowling bag

100% polyurethane
lining-100% polyester

Embroidered clutch

Metallic detail crossbody bag

100% cotton
100% polyurethane

100% polyurethane

Crossbody bag with scarf detail

100% polyester
100% polyurethane

2290

Bottle green

Text crossbody bag

100% polyurethane
lining-100% jute

2290

Leather

1890

Denim blue

1890

Black, burgundy

1690

Black , red

Mini tag crossbody bag

100% cotton

Convertible tote
100% polyurethane

Crossbody bag with detail

100% polyurethane

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4. Retail aspect

i. Location Strategy
Zara stores offer a compelling blend of fashion, quality and price in attractive
stores in prime locations on premier commercial streets and in upscale
shopping centres. The following map displays the locations of Zara stores
located in Bangalore.

Fig: Map showing location of Phoenix Marketcity

For the sake of this report, only one store from Bangalore will be looked at in
depth, which will be the Zara store located inside the Phoenix Market city,
Whitefield Main Road, Mahadevpura. Even within the mall, Zaras location is
strategically positioned to align with its image of high quality and stylish
fashions.

On the following page is the floor map of the Phoenix Market city, with the
Zara store highlighted in orange.

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Fig: Floor map of zara men & women

Fig: Floor map of zara men

Fig: Floor map of zara women

As you can see, the Zara store is located on the ground floor of the mall, which
is the main level when entering from white field road. Thus, Zara has
positioned itself in a high traffic area since people must walk by the store as
they enter the.
The most important aspect is the way Phoenix Market city is structured.

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 Lower Ground: The lowest level where big bazaar, reliance trends, and
fabindia are located.
Ground: Not necessarily the most expensive clothing options, but most
certainly the more high- end of the clothing selections. For instance, Gas,
Mango, Nautica and of course Zara, which target the sophisticated shoppers.
Zara has specifically chosen this spot to coincide with the image of high
fashion they want to portray and keep consistent with their overall retail
strategy
First Floor: Least expensive clothing options are found on this level. For
example, The Gap and American Outfitters. The image associated with these
stores is more casual and target a more youth oriented audience.

The advantage of being located within the Phoenix Market city is that it is in
very populated trade area, where mid-high income customers are the majority
of shoppers since they either, live or work in downtown core. The mall is also
accessible by transit by street car, buses increasing the malls reach of potential
customers from other areas. This, in turn, would increase the size of Zaras
target market. The greatest benefit of Zara being located in this mall is that it is
located near other stores that appeal to similar target markets, such as those
stores also residing on the first floor of the complex. In essence, customers want
to shop where theyll find a good assortment of merchandise. This is based on
the principle of cumulative attraction in which a cluster of similar and
complementary retailing activities will generally have greater drawing power
than isolated stores that engage in the same retailing activities. In simple words,
more shoppers come to a mall for convenience rather than visiting several
standalone stores, and thus, it is more likely that more of the target market will
be drawn to this mall because of the type of stores that satisfy their fashionbased needs. However, this can also be a hindrance as the number of stores
increases competition between retailers within the mall. That is why it is very

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crucial for Zara to differentiate itself from other retailers with the speed and
frequency with which they offer trend-setting fashions.

ii. Store layout and design strategies

The display window at the front of the Zara store has a few main functions,
including helping attract and draw shoppers inside and allowing them to see the
type of merchandise offered in addition to sending a visual message of the store
image. Once inside it is obvious that Zara uses the typical Free-Form (or
Boutique) Layout, making the customer feel more at home and the browsing
experience easier. There are freestanding fixtures and mannequins within the
store, which are designed to grab the attention of shoppers and help guide them
through the store.










Fig: Display window of Zara store

Zara uses a combination of atmospherics to give customers a real shopping
experience. Bright lighting is used in Zara stores to highlight all the vivid colors,
fabrics, and designs used on the merchandise. Zara strategically places pot lights
aiming at the walls because the wall is one of the most valuable areas at Zara.
The right side wall is usually considered the highest sales area as customers
have a tendency to turn to the right when entering the store. Knowing this, Zara

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places its bestselling merchandise, which is Zara Women, within that area.
Another tactic Zara combines to maximize the use of the wall is that they
illuminate the entire section to draw customers to that particular area. The
merchandise usually displayed in this featured area are; the seasons hottest
trends, or an entire shelf to highlight dresses and bags.

Display wall:
Selection display

You will find this in women and basic sections.
The footwear used in this type of visual merchandising will depend on the
colour schemes used on the side walls.
This wall may also be used to highlight the best-selling styles.
If you are missing any sizes, then fill up the space with a top-selling size.

Zaras interior layout strategy presents the Zara Women section to the right of
the entrance, followed by the Zara Basic section to the left continuing on to the
middle of the store, and then the Zara TRF section located in the back as well as
the fitting rooms. This presentation with the Zara Women section in view gives
off a very poised image for the company as you walk by the store. Throughout
the store, various fixtures entice customers such as; tables, accessory columns,
mixed displays and donkeys.

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MIXED DISPLAYS:

DONKEY:

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TABLES:

The companys merchandising strategy heavily relies on colour presentation. It
helps both the customers and the workers locate articles very efficiently. When
the customers are trying to put together a specific outfit or have a particular
image in mind, the attractive colour presentation gives them a better
perspective to reassure their desires. If the customers are simply browsing, the
colours schemes draw them to pick up more than item, because they pieces
complement each other nicely. On the other hand, the workers are constantly
replenishing the floor (as explained in their sustainable competitive advantage),
whether it be runners refilling the stock every hour, or simply returning the
items discarded in the dressing rooms. With so many different SKUs and the
layouts drastically changing every two weeks, their colour blocking strategy is
great assistance to find particular merchandise locations. Another unique
strategy Zara uses to appeal to its customers is the use of the idea-oriented
presentation method. Customers are able to get entire outfit ideas from the fully
dressed mannequins and more inspiration from the way that the merchandise is
displayed. They specifically use frontal presentation on one side of the display to
present an entire outfit along with shoes, and then maximize the space beside it
by using a straight rack to keep all the available sizes of each article. Zara sets

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the mood, and keeps a certain image by using only wooden hangers for all of
their clothing as well as placing mirrors everywhere possible that reach from
ceiling to floor. They also display mixed fixtures and rounders right by the
check-out counters to guide the lines and attract interest from customers
during the final purchase. Point-of-Sale areas are located near the purchase
counter at the back of the store. These areas are where small accessories such as
earrings, necklaces, bracelets, sunglasses, etc., can be found. They are placed
there intentionally to stimulate impulse buying while customers wait in line for
transactions to be completed.

5. Marketing strategies
No Advertisements Strategies
Have you ever seen a Zara commercial on a billboard or on TV?
But that doesnt mean that Zara is doing nothing for its product promotion,
Zaras take on product promotion are slightly different form the other counter
parts. One of the most trend-bucking aspect of the company's business model is
its approach to advertising. Fashion retailers spend on average 3.5% of revenue
on advertising their products, while Zara's parent company Inditex spends just
0.3%.

Location-based Marketing
Zara stores throughout the world are always defined by their prime location.
districts. From Promenade in Delhi to Phoenix in Bangalore, Zara selects the best
commercial sites in each city, always located on the most outstanding areas of
the main shopping

The art of Visual Merchandising
How to Visual Merchandise? Learn from the Daddy!
Their stores are the meeting point with their customers and the best advertising
campaign for the brand. Launched in major cities worldwide, they offer their

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fashion proposal to the high street and represent the true hallmark of the brand,
always with an original and unique touch.

The company believes that its shop windows, are all the advertising it needs.
Zara applies the principles of its business philosophy to the architecture of the
Stores: design, permanent innovation, quick answer and adjusting locally to the
prospects of their customers and the requirements of the environment.
Although sharing the same set of principles, each store is unique and adjusts
to different cultures and environments.
Their architectural projects sometimes involve historic heritage renovation,
with detailed renovation projects of singular spaces.
The interior design of the stores is conceived to give maximum prominence to
the fashion on display. The space layout, the lighting, the furniture and the
materials used are carefully conceived to offer the greatest freedom to the
customers while they discover the latest trends in fashion
Within their stores there are differentiated spaces devoted to each of the
product lines on offer for their customers. In each department - womans wear,
mens wear, childrens wear - the products are placed together according to
their style, creating a wide spectrum that covers from classical to casual, from
basic pieces to those with a stronger fashion component. Apart from the wide
range of clothing; all lines include a large spectrum of accessories and shoes, as
well
The company's success is a proof that it is still possible to build a massive brand
by doing no more than meeting a market need.

Adopting the speed of a tech company; it gets new designs in faster than
most of its competitors
Fresh inventory is key to Zara's sales strategy, with stores getting stocked with
new designs twice a week. The time between receiving an order at the
distribution centre to the delivery of the goods in the store is on average 48
hours for American or Asian stores.

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Ability to mimic, reproduce and indeed create the latest fashion
The success of Zara's collections lies in the ability to recognize and assimilate
the continuous changes in fashion, constantly designing new models that
respond to customer desires.
New and Upcoming Marketing Plans:
Zara to introduce revolutionary in-store technology
The Spanish retailer is about to speed up the high-street shopping experience.
touch screens in the changing rooms where you can request different sizes
without even having to move
self-checkout machines, making those long till-point queues a thing of the past
These advances will no doubt help make the shopping experience smoother.
Caters to the needs of both Fashion Lovers and Animal Lovers!
All the animal products, including fur and leather sold at Zara come exclusively
from animal reared in livestock form and never from animal sacrificed for skin
sale.

Last but not the least,
Part of Zara's international appeal lies in having a brand name that rolls
right off the tongue!

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i. Competition

27

6. Learning Outcome/Conclusion
Zara has managed to develop a highly responsive supply chain of latest fashion
trends.
They have built a successful strategy around consumer demands for new
fashion.
Amongst its competitors , Zara is growing at the fastest pace.
Their unique business model gives them an edge over competitors.

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7. References
1. http://www.supplychainforum.com/documents/articles/Case%20Study%20Zara1.pdf
2. https://hbr.org/product/zara-fast-fashion/703497-PDF-ENG
3. http://www.slideshare.net/koffman/zara-case-study-2780928
4. https://www.scribd.com/doc/307681922/Case-Study-Zara-pdf
5. http://fashiongear.fibre2fashion.com/brand-story/zara/
6. http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/111
72562/How-Inditex-became-the-worlds-biggest-fashion-retailer.html
7. http://www.inditex.com/en/brands/zara
8. http://kwhs.wharton.upenn.edu/2016/02/zaras-fast-fashion-businessmodel/
9. https://www.thebalance.com/merchandise-mix-2890200

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