ZARA: IT FOR FAST FASHION
By: Ezra Eusebio
THE ZARA EXPERIENCE
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For the young, fashion-conscious city dwellers
Taste in clothes changed rapidly—hard to predict and influence
High end couture styles for lower prices
Sophisticated interior design-updated every 5 years
Fashion Life Cycle
ABOUT ZARA
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The idea of Zara was created by Amancio Ortega.
Partnered with Jose Catellano Rios, Inditex CEO
Inditex-Multinational clothing retailer and manufacturer
The first store opened in 1975
Headquarters are in La Coruna, Spain
Presently in over 73 countries
THE UNIQUE IDEA
 “Link customer demand
to the manufacturing, and
link manufacturing to
distribution. That is the
idea we still live by” –Jose
Maria Castellano Rios,
Inditex CEO
 Different from average
retailers
 Focused on turning
around delivery time
within 3 weeks
 Producing clothes worn by
celebrities with quick
turnaround
Product Development
DYNAMIC COMPANY
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Product Design Team, on going development
Commercial Team-Allocation
Product Manager Team-Research
Store Managers-Selection
Division of Labor Chart
MARKETING
 Competitors:
-HM, Gap, Benetton
 No advertising-only promotes, bi-annual
sales and store openings
 Cost .3% revenue in marketing as opposed
to the average 4%-5%.
 IDEA: Not to produce classic clothes
-Shorter life spans
-Buyers shop on impulse
-Loyal shoppers for latest trends
-Non-durable garments
 No selling online
OPERATIONS:3 CYCLICAL
PROCESSES
 Ordering-Store managers order based on needs from hand-held
devices
 Handheld device shows, photos, available garments etc
 Fulfillment-allocated by commercial team, delivered to stores right
away
 DC to store right away
 Design and Manufacturing
 Difference-regularly buy for two seasons but continue to develop more in
between
 Operate with short lead time.
 Own facilities that are quick to produce new garments and textile.
INFORMATION TECHNOLOGY
 Salgado and Castellano focused on what
new systems were needed if any.
 No justification of IT efforts and no
cost/benefit analysis
 Wrote applications themselves and made
own accounting software
 The IT department had 50 people from
local universities and divided in 3 groups:
1. Store solutions
2. Logistics support
3. Administrative systems:
 Staff retention wasn’t an issue. Only one
person has left in 10 years
INFORMATION TECHNOLOGY
CONT.
 Inventory was used to simply make allocating decisions. Having 100%
control on inventory
 The applications just presented managers with quantities and due dates.
 Most of the sophisticated technologies were put into equipment like
cutting clothes and patterns
 Hand held devices were known as PDA’s (Personal digital Assistants. This
was because faxing order forms back and forth was too complicated.
 PDA’s are constantly upgraded
THE CASE
 Salgado wants to change the system. The Sanchez doesn’t
 DOS (Disk Operating System)
-Stopped being supported by Microsoft in 2003.
-But it was easy to maintain over time due to the POS application
that ran on
top of it
 The system for new stores now is simple:
-There’s two floppies with all the applications needed
-If something happens and software reinstallation was created.
Daily sales were copied onto floppy disks. POS terminals and PDA’s
couldn’t share information.
CASE CONTINUED
 Would upgrading to a modern operating system put a risk and robust the
infrastructure?
 The hardware vendor said they weren’t planning on changes its machines
so that it won’t run on DOS
 Should Zara updated to windows UNIX or Linux?
 Should they build new capabilities into the software?,
 Updated apps could have larger screens and key boards. They can go
wireless. Stores can do inventory transfers.
 Update floppy disks?
ANALYSIS
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Adaption to change needs smooth transition
Wireless-easier on costs
Cross information between PDA and POS
Switch from floppies, information can be linked together
IT Training, store training
Advantages
-More capabilities, better capabilities, larger screens, execution of returns, data,
cost efficient, no floppy disk, sales available via internet, inventory availability,
avoid phone calls
ANALYSIS
 Keeping it the same
 Convenient, safe, and successful
 Disadvantages: Newer and better capabilities limited, adaptability to
change, possible expansion
QUESTIONS
1.
Describe the Zara Customer?
a. Fashion-conscious city
dwellers
3. Zara’s Marketing Idea consists of
which of the following?
a. Annual Sales
b. Missy
b. New Store Openings
c. Conservative
c. No online store
d. All of the Above
d. All of the above
2. Where is Zara’s corporate
headquarters?
a. New York
b. Spain
c. Italy
d. France
CONCLUSION
Answers:
1.A
2.B
3.D