ZARA

Prepared by:
Manar Abdelmotaleb Sobh. Hanan
Mohamed Herz. Sara
Ahmed Gaafar. Nour
Mohsen Elmzahy
From starting its journey about four decades ago in 1975, with a
budget of just 30 Euros, to now being amongst the world’s most
popular fashion brands, Zara has come a long way. Zara belongs
to Inditex, which is one of the world’s largest distribution groups,
Zara represents about 70% of Inditex’s sales.

ZARA is a Spanish multi-national retail clothing chain. It

specializes in fast fashion, and sells clothing, accessories, shoes,
beauty products and perfumes.
Zara is well known for its ability to be prompt in quickly
delivering new clothes to their stores which are achieved by
following a strict routine. Twice a week, at precise times, store
managers order clothes, and twice a week, on schedule, new
garments arrive.

Vision statement
to contribute to the sustainable development of society and that of
the environment with which we interact.
Mission statement

“give customers what they want, and get it to them faster than
anyone else.”

Such a simplistic, concise, and straightforward statement shows

why this company has been so fruitful. It has the following parts:
Distinguished products. Improving lives.

Zara’s Strategy - 7 Ways it Stays on Top

1. Manufacturing designs close to home.
 By producing locally, Spanish retailer Zara defies a trend started
by other clothing companies. Instead of outsourcing production
to Asia, Zara produces more than 50% of its goods in Spain and
a few neighbouring nations, including Portugal, Morocco, and
Turkey. This makes it simpler for Zara to deliver goods to its
stores rapidly. “When it comes to apparel, there’s no secret
sauce,” said Felipe Caro, a business professor at UCLA
Anderson School of Management “To shorten lead times,
there’s no other way than doing local production.” Local
production gives Zara a leg up on other clothing retailers that
source production overseas. 
2. Having an integrated digital and offline business model.
It would be difficult to find yourself in a city center in many
areas of the world without passing a Zara store. Yet like many
other stores, Zara is investing more in its online operations.
When the COVID-19 epidemic was at its worst in 2020 and
consumers were forced to move a significant portion of their
buying online, Zara's digital sales increased by 77%, accounting
for a third of all sales. Then, on top of record sales the previous
year, Zara's digital sales in 2021 increased by 14%. Inditex
declared that it is investing 2.7 billion euros to further integrate
its online and offline operations in order to maintain this
performance. 1 billion euros will be set aside to improve online
operations, and 1.7 billion euros will go towards integrating its
store network with its online business.

Inditex also intended to open 450 new stores and close up to 1,200
existing ones by the end of 2022. The majority of the closed locations
belonged to other Inditex brands like Pull&Bear, Oysho, and
Stradivarius. For the first time, Inditex finished a year with fewer
stores than it had when it began. But stores will continue to play an
important role in Inditex’s strategy. "Stores will play a stronger role
in the development of online sales due to their digitalization and
capacity to reach customers from the best locations worldwide,"
Inditex has said. Overall "the overriding goal between now [2020] and
2022 is to speed up full implementation of our integrated store
concept, driven by the notion of being able to offer our customers
uninterrupted service no matter where they find themselves, on any
device and at any time of the day," says Pablo Isla Inditex’s former
CEO and Chairman.
In order to track the position of its goods, Inditex has also made
investments in RFID technology. Zara can use this technology to
assess whether the black puffer jacket you seek is offered in-store,
online, or through both channels. This has made it possible for Zara to
easily fulfil an order from a store or a warehouse by transforming
Zara's stores into miniature distribution centers. As stores are closer to
customers than distribution facilities, this strategy also lowers the cost
of last-mile shipping. Moreover, Inditex stated: “the integrated stock
management system, underpinned by the full deployment of radio
frequency identification technology (RFID) providing real-time
data on inventory, is enabling the company to operate with even
tighter inventory levels, while improving the customer shopping
experience.” “When the stores were closed, we were able to offer
to the online customers the clothes in the stores,” said Isla. “Five
years ago this would have been impossible.”

3. Investing little in advertising.

Zara uses its stores to promote its brand rather than spending
much money on advertising. Most likely, you first learned about
Zara when you were out shopping and saw one of their stores
crowded with customers and goods. The number of Inditex
outlets has increased from 750 to over 7,000 over the last 20
years. The stores of Zara, which are frequently found in the
world's top malls and shopping areas, have proven to be
successful marketing tools. Despite Zara's increased focus on
them, online retailers remain essential. Digital marketing
expenses may soar without a store network to draw customers in
 on their regular shopping journeys, as many direct-to-consumer
firms have discovered.
4. Manufacturing in small batches.
Small batch production enables Zara to respond more quickly to
shifting fashions. Zara can remodel a style in as little as two
weeks and get it into stores in time for buyers to snag it off the
shelves. New styles can be introduced to the market by Zara in
as little as five weeks. This tactic also enables Zara to retain less
inventory, which is a bonus. Zara may avoid this by producing in
smaller numbers rather than placing a major wager on a single
style, let's say a floral dress, and then discovering there isn't
enough demand for it. Zara can gauge demand with this strategy
before making a more significant investment. In doing so, Zara
increases profit margins by writing off less inventory.
5. Staying on top of key trends.
Unlike to companies like Gap, Zara has constantly stayed on top
of what customers want to wear while being in business for close
to 50 years. A few weeks after a show aired, Zara was renowned
for putting its own take on runway fashions in its stores. Zara
now influences its design approach through a larger range of
sources. To determine which trends are popular, Zara's designers
frequently observe what influencers are wearing. A Zara
designer remarked, "You can find everything on your phone
today - you can see everything that is being worn in New York,
China, and Tokyo all at once. It was something that didn't
happen 15 years ago." The designers at Zara also take into
account suggestions from shop managers, research what people
are looking for on the Zara website, and pay attention to what
they want. The newest trend is then visualized using all of this
data.
With the release of up to 20 new collections annually, Zara's business
model also enables it to advertise more goods. In contrast, other
clothing companies are restricted to releasing new collections only
four times a year due to a seasonal calendar.
6. Making fashion affordable.
At Zara, purchasing a new outfit won't blow your wallet, unlike
at a high-end retailer. At Zara, you can purchase a dress for
about $20 and a winter jacket for under $60. Most consumers are
in financial difficulty and frequently live paycheck to paycheck.
A successful strategy in retail right today is to have an offering
that targets people that are price conscious, similar to Walmart.
The majority of successful businesses, from Amazon to Dollar
General, price their products at the bottom end of the market.
7. Focusing on novelty.
Particularly in the era of Instagram, where it can be considered
bad taste for someone to wear the same outfit more than once,
consumers demand novelty. Zara creates 20 collections a year to
fill this requirement. About 9,000 SKUs are thought to have
been available on Zara's website in February of this year. There
are a lot of winter coats there. Considering that two thirds of
Zara's inventory is less than three months old, the retailer
likewise transfers stuff swiftly.