Fast Fashion ZARA Chain Store: Inspiration from "Noble and Not Expensive"

ZARA store

Walking on the Champs-Elysees Avenue in Paris, the charm of the fashion capital is everywhere. There is a great variety of boutiques here. The famous shops gather and are dazzling and dizzying. Regrettably, at the time when the global economy was in the doldrums, many customers tightened their purse strings in the face of high prices. Some delicately-decorated, beautifully displayed stores were extremely arrogant and business was sluggish. However, on the same expensive rented street, the clothing chain ZARA is popular and selling hot. What are the reasons? When you enter the ZARA store, you will find that ZARA clothing quality and cheap, bright colors, fashion sense is by no means inferior to other famous products, but the price of most of its products is around 30 euros, the lowest is only 6 euros The most expensive women's wear is also rarely over 100 euros. It turned out that "noble is not expensive" is the secret of ZARA competition.

ZARA: Affordable Fast Fashion Outlets

Positioning "affordable fast fashion"

ZARA is the main brand of Spain's Inditex Group, with a total of approximately 630 stores worldwide, and annual operating income of more than 3.2 billion euros. ZARA has an interesting feature. It often opens stores in expensive shopping districts (such as the boutique circle of Milan Cathedral in Milan, Prince Street in Edinburgh, UK), but likes to sell high-quality goods at a cheap price. ZARA's market position is "affordable fast fashion." According to relevant data, the storage period of international brand-name clothing is generally 120 days, while ZARA only has 12 days, and the shortest time is only 7 days. Such rapid turnover greatly reduces the ZARA's storage costs, while the reduction of storage costs means lower costs and rapid product updates. Often the latest season of Dior's new clothes has just appeared on the Paris T-stage, and two weeks later, fashion men and women in Beijing and Shanghai will be able to find the shadow of Dior's latest style in the ZARA store, and the price may even be 1/10 of that of Dior. Not to. How does ZARA meet the seemingly contradictory market demands of speed and fashion in design?

ZARA shop corner

ZARA's competitive advantage lies in its speed, which is the deadliest weapon in its supply chain. ZARA is working on the speed when designing the entire supply chain. Under normal circumstances, the fashion cycle is usually four times a year, and ZARA will deliver the new product to the store in 2 weeks, and quickly launch the latest fashion apparel 26 times a year. This practice breaks the convention, can quickly and effectively sense and capture the instantaneous changes in the market, and responds at a revolutionary speed. It can respond to market demand within a few days, so it does not need to There is a lot of inventory. In the ZARA store, any merchandise that has not been sold within 3 weeks is immediately removed from the store.

In order to grasp this fast-paced sales model, ZARA emphasizes that sales personnel at more than 600 stores worldwide must quickly and effectively report to the headquarters on all aspects of customer's popular tastes. The headquarters has 200 information on customer visits and trends. Many excellent fashion designers can quickly complete the design of clothing and accessories. Since ZARA's product sales period is extremely short and maintains sufficient freshness, ZARA's merchandise will never be discounted, coupled with its “multi-variety, small-batch” marketing strategy, so that customers will have a kind of “if you want to The sense of urgency of buying immediately, ZARA's slow-moving inventory and inventory price loss losses are very limited, and is sufficient to compensate for the cost pressure of channel rental. The business model that ZARA has created through the optimization of the supply chain has been hailed as “the Dell computer in the fashion industry” by the industry; and ZARA’s largest shareholder, Amanacio Ortega Gaona, has thus become Spain’s richest man.

Optimizing the supply chain is more important than reducing costs In order to grasp the quality and timeliness of delivery, ZARA does not generally adopt an outsourced production model. Its products are basically entirely produced by direct factories, mainly in Spain, so that its labor costs may be compared. High, but on the other hand, ZARA's cost savings through the optimization of the supply chain far exceeds its cost of labor, so it can do it "nobility is not expensive."

Renowned scholar Lang Xianping once proposed the concept of an industrial chain. He believes that the entire industry chain can be divided into seven major links. China's manufacturing companies are part of the seven links of the industrial chain. In addition to manufacturing, the other six major aspects include product design, raw material procurement, warehousing and transportation, order processing, wholesale operations, and terminal retail. The six major logistics links plus one manufacturing link constitute an industrial chain called "6+1". Lang Xianping compared ZARA with clothing enterprises in Guangdong, China and found that our apparel companies have to go through the entire “6+1” industry chain. It takes an average of 180 days from product design to sale. He simply calculated that if a company needs 180 days to sell its manufactured clothes, a piece of clothing must be stored in the warehouse for 180 days. Suppose that the cost of storing a piece of clothing is one dollar per day. We will spend $180 to store this garment; ZARA has compressed the entire industry chain from product design to retail to 12 days, if the cost of warehousing of a garment is reduced from 180 yuan to 12 yuan, which is equivalent to reduction The storage cost of 168 yuan. In this case, does it also need to consider the labor cost? At this point, labor costs have become less important.

The industry believes that in the entire supply chain, the correlation between procurement and production links and costs is relatively large, but the more critical is the back of the logistics links, at present, a trend worth watching is that more and more companies It shifts its focus to the end of the supply chain. It hopes that the end will become more and more localized, and the final resource allocation will be closer to the market and close to the customers. This will greatly reduce the losses caused by the slow-moving inventory and inventory depreciation, and the company will also have more A large degree of sensitivity and faster customer response speed.

Innovative surpassing in following Although ZARA has been favored by many consumers, especially young people, there are many people who hate ZARA. Hatred ZARA mostly for some big-name clothing companies, often they just released the fashion trend of the clothing, have not yet had time to produce it, ZARA has already made similar samples into garments, sold to the world, which makes these big-name apparel companies very annoyed, ZARA continues to be lawsuits. Although each lawsuit ended with almost all failures of ZARA, ZARA is still happy and they seem to be willing to pay a high “imitation fee” for this. The ZARA customers are the biggest beneficiaries. They can enjoy the feeling of wearing big clothes earlier and faster with less money.

Obviously, ZARA is a typical enterprise that adopts a follow-up strategy. Following the strategy may not get too much applause, but it is a simple and practical business model. However, followers do not simply imitate and copy behind others, but must constantly innovate and transcend in the process of follow-up. Take the Japanese car as an example. As we all know, Japanese cars were first imitated by the United States, but in the process of follow-up, Japan has made innovations and developments. They have developed more fuel-efficient and more economical models. When Japanese cars just entered the American market, Americans disapproved. However, decades later, Americans suddenly discovered that the Japanese car’s share of the US market surpassed domestic cars.

In China, the number of companies adopting follow-up strategies is innumerable, how to surpass their opponents in following them, and exert their unique advantages to stand out from the competition. The story of ZARA is not inexplicable to us.