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ZARA: Fast Fashion : (Key Problems (Items displayed on the store front…
ZARA: Fast Fashion :
Key Problems
Current distribution methods are not up to future growth and central location is becoming a problem.
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Zara spent only 0.3% of its revenue on media advertising, compared with 3%–4% for most specialty retailers. Nor did Zara exhibit its merchandise at the ready-to-wear fashion shows.
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Zara parent company Inditex Home Base & production facilities were in the corner of Europe causing higher shipping costs. Its location of Galicia also lacked a strong base upstream in textiles, sophisticated local demand, technical institutes and universities to facilitate specialized initiatives and training
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Timeline
Relevant Facts
The sense of scarcity was reinforced by small shipments, display shelves that were sparsely stocked, limits of one month on how long individual items could be sold in the stores, and a degree of deliberate undersupply.
Devout Zara shoppers knew which days of the week delivery trucks came into stores, and shopped accordingly. Zara shopper visited the chain 17 times a year, compared with an average figure of three to 4 times a year for competing chains
Zara wants customers to understand that if they like something, they must buy it now, because it won’t be in the shops the following week. It is all about creating a climate of scarcity and opportunity.
75% of Zara’s merchandise was shipped by truck by a third- party delivery service to stores in Spain, Portugal, France, Belgium, the United Kingdom, and Germany
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Zara operates about 507 retails stores worldwide adding 1,506 million in revenue to Inditex. Since Zara was well-established brand this help Inditex expand to new chains
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1990's - Zara completed its rollout in the Spanish market, began to move overseas. Became one of the three clothing brands of which customers were most aware in its home market of Spain
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2001 - Inditex operated 282 stores in 32 countries outside Spain. Zara operating 231 such stores in 18 countries outside Spain
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