Running a fashion store means you need to ensure that products and services are available to customers as per the latest trend prevailing in the market. And, today a successful example to look upon, is the brand Zara.
Zara – a leading Spanish fashion retail brand is owned by distribution group Inditex. Founded in the year 1975, the brand is engaged in the textile design, manufacturing, and distribution. Having an approximate count of over 1700 stores across 86 countries, Zara’s profitability is still rising among the highest in the industry.
What makes Zara successful? What operational strategy does Zara use? What can other fashion retailers learn from Zara? The answers to the questions will help you understand Zara’s secret to retail success.
For Zara, it’s supply chain is its competitive advantage. It designs fashionable products as per different tastes. Zara’s designs are mostly inspired by sources like trade fairs, catwalks, magazines, from all around the world. This determines the uniqueness in their design and the ability to meet the demands of fashion-centric customers from all age groups. So, whenever a new style is seen in the market – talented designers at Zara come up with new ideas and get them into the stores while the trend is at the peak. This way Zara products are always associated with the new trend in the industry which automatically leads to high demand.
Fashion retailers like Zara (or the ones planning to become a fashion giant like Zara) are always advised to grab an enterprise inventory management system which can help them to automate their entire process, with hand-picked, tailored functionalities.
Centralized Inventory management
Zara designs thousands of products every year and delivers them to their stores twice a week. It adopts an inventory management tool that makes it easy for them to determine what products, how many, and which sizes should it be delivered to the stores. Therefore, having an inventory optimization model in place, the brand ensures that each store receives only those products that are required. This way it avoids over-stocking of unpopular products.
Organized logistic and distribution process
Zara allows its stores to place only two orders per week on a scheduled date and time. The shipping carriers are also scheduled to leave as well as produce shipments at specific times. This results in an organized logistic and distribution system that allows your staff to know how activities are performed with respect to other functions.
With an organized logistic system in place, Zara has the ability to get the product from the “idea generation” to designing to reaching the store in 15 days, whereas the industry standard is 6 months.
At Zara, the production process is very accurate and efficient as they come up with different methods that fit their line of business, and hence they have a strong distribution system in place. Their distribution network allows them to deliver products to its European store within a day, and to its American and Asian outlets in less than 2 days.
Changes should not be a disruption but should be a part of your system. Zara, a leading fashion brand can be aspiring to many fashion retailer. From its cross-functional operations strategy, coupled with its supply management and organized distribution method, Zara is a good example to highlight well-managed inventories, lower markdowns, higher profit, and great brand value.
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