ACHIEVED GLOBAL SUCCESS WITH ZERO
ADVERTISING
BUILT ON SPEED DESIGNED FOR ADDCITION
What is Fast Fashion?
A contemporary term used by fashion
retailers where designs move from catwalk
to current fashion trends FAST
COLLECTIONS are thus based on catwalks
to designing to manufacturing in annuals
spring and autumn
CHEAP so that mainstream consumer can
wear the current style at a low price
Company Overview
Spanish Brand
launched in 1975
30,000 near carbon copies of Fashion big names designs per year
The largest fashion retailer in the world
Specialities: lightning fast and locally targeted
Parent Company: Inditex, one of the 8 brands
6104 in 80 markets, 1770 Zaras
Originally named Zorba
ACHIEVED GLOBAL SUCCESS WITH ZERO ADVERTISING
BUILT ON SPEED DESIGNED FOR ADDCITION
Main Business
Woman: Formal and serious
TRF: Trendy for young fashion girls
Man
Kids
Mini
Vertically Integrated
Business Model
• A company tends toward forward vertical integration when it controls distribution
centers and retailers where its products are sold.
Garments enter retail shop within 3 weeks of design where the norm is 6 months
new clothes arrive twice a week which means Zara has 104 seasons annually
global distribution centre owns 2.5million items a week, nth in the house remains for more than 72 hours
strategy of centralized stocks and constant JIT (justintime) restocking, Zara receive goods from more than 300
suppliers from 10 different countries twice a week between 24-48 hours
Customers: Driving Force and Starting point
customer care
Store: Meeting point for customers
top locations
No central marketing department
appropriate coordination of garments
No indulgence in flashy events
attention to exterior and interior
architectural designs
No usage of high profile designers
Flexible Integrated Business Model
Design/production: Inspiration from global
fashion shows
proximity of production facilities
immediate reaction to trends
Logistics: constant renewal offers
Design-->Manufacturing/Sourcing-> Distribution/Logistics-->Store
Why is Zara so successful?
Marketing team attends global fashion shows where trends are reiterated to
designers
Manufacturing and designing lies within the same building allowing easy
communication and products launched will be weeks before a luxury brand
limited quantity per shop and low stock level promoting exclusivity
no repetition of fashion lines to encourage immediate purchase
main forms of ads is thru store front displays
FAST FASHION: speed at which new designs move from catwalk to consumer to
capture current fashion trends
Zara is more concerned with finding the exact retail site that best suits the
company rather than spending the extra money on luring customers into the
store
ZARA in 中国
When it just opened in China, there was a saying “Zara just murdered
everything around it”
Aim in china: To maintain standards of quality and immediacy required
by the shops
Chinese shop for styles and popular brands
Growing middle class contributing to this trend
Price is along the $25-$75 range
Chinese trust foreign brands due to established heritage, no cutting of
corners, market status etc
Understanding the importance of e-commerce in China but not
lowering the exclusivity of their products, Zara offers online shopping
but self collection at the shop itself, exclusive for you only
Segment Marketing
GEOGRAPHIC: Cities in China
Shanghai-14
Beijing-10
Hongkong-9
Shenzhen-4
Shenyang-4
Reason: Higher purchasing power in these
cities and larger exposure to global fashion
PSYCHOGRAPHIC: Lifestyle and Personality
Greater spending power of middle class
Shopping and spending culture of richer
Chinese
Look towards Western culture, fashion etc.
BEHAVIORAL: User status, loyalty status
showing off wearing expensive, higher class
products
attracted to NEW-ness of Zara products,
shelf is replaced twice a week, attracting
customers to keep going back
Competitors
Forever 21
Topshop
H&M
Ted Baker
Mango
Warehouse
Asos
Miss
Selfridge
H&M
ZARA
Uniqlo
Swedish
Spanish
Japan
Fashion & quality at
low price
Fast, affordable,
repackaged fashion
Uniqlo provides
casual clothing for all
kind of people.
Marketing Strategies
Designers’/Artistes
collections
Zero Advertising
Increase customer
equity
Online Flagship store
& High Technology
No. of stores
170
415
242
Market Share in Asia
9.67%
18%
81%
Revenue
$15.1 billion
$16.6 billion
$10.5 billion
Objectives
H&M tried imitating but still less responsive to fashion fads as it sources
suppliers from Asia to lower cost while Zara sources suppliers closer to its
main European markets.
Zara’s strong market power signs a 10-15 year lease allowing it to have a
better bargaining power as compared to other competitors in China
only 0.3% sales spent on ads while competitors spend 3.5%
Stake in Social Media
SWOT
OPPORTUNITIE
STRENGTHS WEAKNESSES
S
THREATS
established brand
western centric designs
ECB lowered interest rate
spanish economic slump
logistical vertical integration
1 distribution centre in 1
location
emerging Chinese middle
class
expensive Europe
manufacturing base
market power to determine
store locations
outdated POS system
foreign brand adoration
saturation of retailers
high inventory turnover
centralized distribution
systems
cost leadership
china factories sourcing
Major Problems
Growth in China is soaking up factory capacity
in Spain
Dear air-freight transportation costs
Difficult balance between tight lead times and
production speed to match up with demand
Fast Fashion Opportunities
IN CHINA
Growing urban disposable income
Decentralizing and cascading of development
Low fast fashion penetration rate
Abundance supply of gross floor area
What’s Next?
Replicate model in China? to make use of
extensive train transport system and set up
design base, incorporating Chinese influence
Expansion of retail stores in other major cities