{"id":2228,"date":"2015-12-07T15:56:49","date_gmt":"2015-12-07T20:56:49","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/zara-sprinting-past-traditional-retail\/"},"modified":"2015-12-09T17:02:36","modified_gmt":"2015-12-09T22:02:36","slug":"zara-sprinting-past-traditional-retail","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/zara-sprinting-past-traditional-retail\/","title":{"rendered":"ZARA: Sprinting past traditional retail"},"content":{"rendered":"

Amancio Ortega is no household name,<\/strong> but he was briefly the richest man in the world (he\u2019s now #4). [1]\u00a0 He\u2019s the low-profile founder of Inditex, whose largest brand, ZARA, has taken the world by storm.<\/p>\n

\"Inditex<\/a>
Inditex has outperformed the market nearly 4x over the past 10 years and has outperformed fast fashion and traditional retail competitors as well. [2]<\/figcaption><\/figure>\n

In fickle world of fashion, it is increasingly important to be \u201con trend.\u201d\u00a0<\/strong> But trendiness is elusive to most retailers, who hire teams of designers to predict styles a year or more in advance, when they lack real information (e.g. fashion shows, media buzz). [3] Compounding this is the fleeting nature of trends \u2013 often lasting only a few weeks before they become pass\u00e9 and leave retailers with a mountain of inventory to clear at rock-bottom prices. In this environment, the retailer with the fastest supply-chain wins.<\/strong><\/span><\/p>\n

\"New<\/a>
New York Magazine spread, highlighting the fleeting fashion trends of the 2000’s [4]<\/figcaption><\/figure>\n
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ZARA is a leader in the emerging \u201cfast fashion\u201d space.<\/strong>\u00a0 They aim to consistently provide quality, fashion-forward apparel at reasonable prices. ZARA achieves this consistency through carefully optimized merchant-centric operations, encompassing the entire production cycle from design to manufacturing to sales. [5] While an average specialty apparel retailer might take 6 months (often much more) to get products designed and in stores (and might<\/em> be able to rush a small selection in 6-8 weeks at a high cost), ZARA takes as little as two weeks to achieve the same thing. [3] [6]<\/p>\n

ZARA stores are \u201cthe axis around which the entire business pivots.\u201d<\/strong> They also serve as the brand’s advertising (ZARA spends next to nothing on traditional advertising – you will never see a TV ad for ZARA).\u00a0 Stores are on \u201conly the best locations on the most outstanding shopping streets.\u201d [5] Store managers place orders twice per week; these are reviewed and edited by HQ to include new products and ensure balance across the chain and within two days, the store has received the order. [7] The stores also provide crucial data to headquarters, providing tens of thousands of unfiltered customer reactions to product for design teams to leverage when creating new product. [5] [8]<\/p>\n

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