Develop and improve products. List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Business Business Essentials. Business Essentials Guide to Mergers and Acquisitions. Table of Contents Expand. Key Differences. Special Considerations. Zara vs. Zara is most prominent in its native Spain but has managed to expand globally, expanding its brand to include Zara Home.
Uniqlo is particularly geared toward its native market in Japan but has expanded to include 19 markets worldwide. Article Sources. Investopedia requires writers to use primary sources to support their work.
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This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Articles. Another benefit of producing lower quantities is that if a style does not generate traction and suffers from poor sales, there is not a high volume to be disposed of.
Zara only has two time-bound sales a year rather than constant markdowns, and it discounts a very small proportion of its products, approximately half compared to its competitors, which is a very impressive feat. More styles: Rather than producing more quantities per style, Zara produces more styles, roughly 12, a year. Even if a style sells out very quickly, there are new styles waiting to take up the space. This means more choices and higher chance of getting it right with the consumer.
Zara only allows its designs to remain on the shop floor for three to four weeks. At the same time, this constant refreshing of the lines and styles carried by its stores also entices customers to visit its shops more frequently.
In , a lady named Miko walked into a Zara store in Tokyo and asked the store assistant for a pink scarf, but the store did not have any pink scarves. The same happened almost simultaneously for Michelle in Toronto, Elaine in San Francisco, and Giselle in Frankfurt, who all walked into Zara stores and asked for pink scarves.
They all left the stores without any scarves — an experience many other Zara fans encountered globally in different Zara stores over the next few days.
They sold out in 3 days. How did such lightning fast stocking of pink scarves happen? Customer insights are the holy grail of modern business, and the more companies know about their customers, the better they can innovate and compete. But it can prove challenging to have the right insights, at the right time, and have access to them consistently over time.
The brand uses cutting-edge systems to track the location of garments instantly and makes those most in demand rapidly available to customers.
Additionally, it helps to reduce inventory costs, provides greater flexibility to launch new designs, and allows fulfillment of online orders with stock from stores nearest to the delivery location thereby reducing delivery costs. Zara empowers its sales associates and store managers to be at the forefront of customer research — they intently listen and note down customer comments, ideas for cuts, fabrics or a new line, and keenly observe new styles that its customers are wearing that have the potential to be converted into unique Zara styles.
In comparison, traditional daily sales reports can hardly provide such a dynamic updated picture of the market. In the fashion world, a trend starts small, but develops fast. Zara employees are trained to listen, watch and be attentive to even the smallest seismographic signals from their customers, which can be an initial sign that a new trend is taking shape.
Zara knows that the quicker it can respond, the more likely it is to succeed in supplying the right fashion merchandise at the right time across its global retail chain. Zara has set up sophisticated technology driven systems, which enable information to travel quickly from the stores back to its headquarters in Arteixo in Spain, enabling decision makers to act fast and respond effectively to a developing trend.
Its design teams regularly visit university campuses; nightclubs and other venues to observe what young fashion leaders are wearing. In its headquarters, the design team uses flat-screen monitors linked by webcam to offices in Shanghai, Tokyo and New York the leading cities for fashion trends , which act as trend spotters.
Specialist teams receive constant feedback on the decisions its customers are making at every Zara store, which continuously inspires the Zara creative team. After products are designed, they take around 10 to 15 days to reach the stores. All clothing items are processed through the distribution center in Spain, where new items are inspected, sorted, tagged, and loaded into trucks.
In most cases, clothing items are delivered to stores within 48 hours. This vertical integration allows Zara to retain control over areas like dyeing and processing and have fabric-processing capacity available on-demand to provide the correct fabrics for new styles according to customer preferences. It also eliminates the need for warehouses and helps reduce the impact of demand fluctuations. Zara produces over million items and launches around 12, new designs annually, so the efficiency of the supply chain is critical to ensure that this constant refreshment of store level collections goes off smoothly and efficiently.
Frequency of customer insights collection: Trend information flows daily into a database at head office, which is used by designers to create new lines and modify existing ones. Standardization of product information: Zara warehouses have standardised product information with common definitions, allowing quick and accurate preparation of designs with clear manufacturing instructions.
Product information and inventory management: By effectively managing thousands of fabric, trim and design specifications and their physical inventory, Zara is capable of designing a garment with available stock of required raw materials. Procurement strategy: Around two-thirds of fabrics are undyed and are purchased before designs are finalized so as to obtain savings through demand aggregation. The more fashionable and riskier items which are around half of its merchandise are manufactured at a dozen company-owned factories in Spain Galicia , northern Portugal and Turkey.
Clothes with longer shelf life i. Even when manufacturing in Europe, Zara manages to keep its costs down by outsourcing the assembly workshops and leveraging the informal economy of mothers and grandmothers. Optical reading devices sort out and distribute more than 60, items of clothing an hour.
Zara has become one of the best-known and most successful fashion brands in the world. However, US consumers tend to know little about not only the parent company driving its success but also its sister brands around the world. Since Zara's billionaire founder Amancio Ortega opened the first Zara store in northern Spain in , it has grown to become an enormous, over 2,store chain, with a presence in 96 countries around the world.
In that time, Ortega has also grown his business by acquiring and launching other fashion brands, which now fall under the Inditex umbrella. While many of these other Inditex brands do not currently have a presence in the United States, they are found in hundreds of countries around the world and make up a mammoth combined store count of more than 7, locations.
Bershka is the second-largest chain by store count in Inditex's entire operation. Massimo Dutti was originally a men's fashion label that was acquired by Inditex in Several years later, it added women's wear to its offering, and in , kids also joined. This is Inditex's higher-end label, and it's targeted at an older customer. Prices are higher than at Zara, and the focus here is less on staying on trend but rather on creating more classic, timeless styles.
The Evolution of Supply Chain in the Fashion Industry Traditional Supply Chains are based on made-to-stock model, economies of scale and mass-production. This model is unidirectional and sequential.
Companies have a concept, then design, plan, produce, stock, stock, stock, distribute…. Social entities are flexible, plastic. Skip to content The Fashion Retailer. Loading Comments
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