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Theoretical Approach to Industry Analysis  

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Theoretical Approach to Industry Analysis  

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!. High Competition
2. Reach to wider audience
3. No advertisement
4. Consumer switching
5. High end merchandisers

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1. E-commerce
2. Backing some flagship designs
3. Growing market potential
4. Market expansion
5. Attention to distribution network

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1.Generalized Collection
2. No advertising
3. Low safety stock
4. Imitation of products
5. Self contained distribution system

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!. Unique designs
2. Strong presence
3. Brand Value
4. Great supply chain
5. Design advamtage
6. Low cost high profit

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New line of maternity Range of products.

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Cult high street store Zara launches its first ever maternity range - and excitable shoppers say it's 'a reason to have a baby'

New collection can be found under the corner shops section of Zara website

Range includes specific maternity wear as well as items that will fit regardless

Fashion fans love range, with one joking she would have another baby to wear it

Cult high street store Zara has launched its very first maternity range to keep expectant mothers stylish.

The Spanish retailer introduced a 'mum' section under the corner shops area of its website without advertising the new addition.

Under the new tab, expectant mothers will find a range of items including skinny jeans, dungarees and even a maternity bag complete with a changing mat.

The edited collection features clothes specifically for maternity as well as items that will fit regardless such as chunky scarves and comfortable sneakers.

The website reads: 'Shopping for maternity clothes doesn't need to be hard.

'From workwear essentials, to comfortable stretch pieces, to the latest trend hits, our new online collection of maternity wear has options to offer for all women.'

Thanks to Zara, new mothers will be able to keep up with all the latest trends with their red leopard print tube dress.

Other items on offer include a pair of comfortable-looking velvet pajama-style trousers with a matching jacket.

Zara are even selling an adorable printed sweatshirt which says 'baby in progress'.

The retailer launched the new section back in September, and it can also be found by searching maternity.

Fashion fans were delighted with the launch - which follows brands such as H&M, Topshop and ASOS - and took to social media to express their joy.

One fan wrote: '***squealing*** what a time to be alive! I'm not even preggers and find this immensely exciting - long overdue IMO. When women become pregnant, they want to wear the SAME clothes, just bigger in certain areas!'

Another said: 'how cool and stylish is this gonna be?!.... not enough to make me want another but @Zara will do maternity so well.'

One user joked: 'Zara now doing a maternity range and if that's no a good enough reason to have another baby, I dunno what is?!'

This isn't the first time the retailer has launched a new section without advertising - back in April last year eagle-eyed fans spotted a special prices area on the website.

It's unclear why the clothes are on offer at special prices, and there is no indication to suggest they're on sale, but the section is home to bargains galore nonetheless.

Prices in the section range between £5.99 and £39.99.

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Zara launches its very first maternity range

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The Spanish retailer introduced a 'mum' section under the corner shops area of their website without advertising the new addition.

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Zara market strategy analysis covers all the 4P's
Product-Price-Place-Promotion

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Marketing Mix of Zara analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the Zara marketing strategy. The article elaborates the pricing, advertising & distribution strategies used by the company.

Let us start the Zara Marketing Mix:

Product:

Zara is one of the leading luxury fashion labels in the world. Zara's offer products for men, women and children. It offers jeans, trousers, tops, skirts, knitwear, T-shirts, shoes, bags and accessories. All these are the product strategy in the marketing mix of Zara. It is a one stop solution for everyone whether you want to buy formals or causals. One can choose from different styles Zara has to offer. It launches at least 10,000 new designs in a year. Zara products are a hit with the high end fashionistas as well as with the masses. The taste of the target market influences the availability of products line. Zara also teams up with local talent to provide best fashion trends.

Zara believes in sustainable development and is committed to reduce the production of waste. It recycles its hangers and security tags. Zara gives out their products in paper or biodegradable plastic bags. Zara uses ecological fabrics like organic cotton in the production of some of their items. These products have a unique and distinct label which can be identifies easily.
Image: Wikimedia

Price:

Zara's products are high on fashion and low on prices. Zara provides latest fashion at much lower prices in all its international stores as compared to other competing international brands. Zara follows low pricing strategy. It can afford to do that as it doesn't spend enormous amount of money on advertisements and raw material. It has an overall low cost structure compared to its competitors. Zara's prices are country specific. The tagging on their products are done locally in each respective market. Zara sets market-based pricing strategy which sets the target price consumer is willing to pay. The budget for production according to the target price. This in turn fixes the profit margin they earn on every item. This gives an insight on the marketing mix pricing strategy of Zara.

The brand uses various schemes as a way of sales promotion. Zara has low level of discounting around the year and discount sales of 50% or more twice in a year, for which the consumers eagerly wait.

Place:

Zara has enormous reach with stores in 88 countries, with over 6500 outlets. Zara also sells through its online store. All these cover the marketing mix place & distribution strategy of the brand. It is a vertically integrated company. Zara's supply chain is what provides them a competitive advantage. It uses its unique business model to bring new products and fashion to the market in shortest time possible. Store managers send orders to the headquarters twice a week based on the sales data of the store and the shoppers' preferences. The commercial team compiles the order then sends it to the manufacturing hub. The commercial team also coordinates with the in-house designers to find out new trends and develop new products. New products are produced in relatively small batches which helps them give exclusivity.

Most of the Zara stores are owned by the company and are not a franchise. This helps in keeping the shopping experience at Zara intact and constant be it London or Paris or New Delhi. The stores are located in posh locations and are spacious and modern in look with walled mirrors and excellent lightings. Their stores are designed by Zara's decoration team.

Promotion:

Zara barely spends any money on advertising. It is famous for being press shy. Even its owner never gives any press interviews. Unlike its competitors, Zara doesn't engage in any flashy campaigns. This is the reason why Zara's advertisements are not visible on television. Zara's unique selling proposition is its short processing time, a large variety of styles and affordable pricing. It relies on word of mouth promotion and social media rather than expensive marketing tools. Zara's social media reach is quite exceptional. It has 2.5 million followers on Facebook and 15 million followers on Instagram. It is interesting to note that Zara doesn't put its logo on their products.
About Zara:
Zara prefers spending their percentage of revenue in opening new stores. The brand spends money on expensive real estate for its stores and on its décor. Zara believes that its show windows are suffice for advertisements and they do not need anything else to sell their products. This concludes the marketing mix of Zara.

Zara is one of the leading fashion clothing and accessories brand. It was founded in 1975 by Amancio Ortega and Rosalia Mera. Zara belongs to the Inditex group. It is known for its perfect combination of high end, chic clothing at affordable prices. It is this quality of the brand that makes it a go-to fashion brand for everyone. Its inaugural store was opened in a coastal town called A Coruna in Spain and slowly Zara expanded in other cities in Spain and then in Portugal. In 2010, Zara made an entry into the Indian market and opened its first store in Delhi. Today Zara is present in every corner of the globe. Zara is an eco-friendly company. It is one of the few brands known to produce 100% toxic free clothes. Zara is known for introducing latest fashion trends in the market. Zara gives fast response to customer's desires and changing preferences. It has introduced the concept of "fast fashion".

Browse 4Ps Analysis of more brands and companies similar to Zara Marketing Mix. The Marketing Mix section covers 4Ps and 7Ps of more than 300 brands in 2 categories.

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Zara Marketing Mix (4Ps) Strategy | MBA Skool-Study.Learn.Share.

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Marketing Mix of Zara analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion). Zara marketing mix explains the business & marketing strategies of the brand.

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                                         ZARA

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                                         ZARA

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Project done at Aalborg University ( Denmark ). Topics discussed: Value Chain; applied Agency Theory; Transaction Cost Economics; Applied VRIO Framework

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Rather than subcontracting manufacturing to China, India or Bangladesh, Zara built 14 automated factories in its home country Spain, where robots work 24/7 cutting and dyeing fabrics and creating semi-finished products, which are then finished to suits, shirts, dresses and the like by about 350 finishing shops in Northwestern Spain and Portugal.

Globally, most fashion retailers have followed a similar business model for several decades. Designers and buyers keep searching for new fashion trends round the year and around the world. They make decisions 6-9 months in advance based on what they believe (or guess) consumers will buy. More often than not, bad bets result in heavy discounted sales (markdowns) to clear out unsold inventory.
Uniqlo, Zara, and H&M follow three uniquely different models that are each proving to be hugely successful. All three understand that success in the fashion business does not come from guessing on the next hot style. Any retailer may have a few great buyers who are able to identify some winners, but being dependent on the keen eye or gut feeling of a handful of people is a highly risky strategy.

Therefore, all three companies have institutionalized this process, thereby greatly reducing their markdowns. How do they do this? By gaining a deep understanding of their customers wants and needs. Sounds fairly simple, doesn't it?

(image courtesy: flickr)
Japanese retailer Uniqlo wants to be the number one apparel brand in the world by 2020. In 2013, parent company Fast Retailings global revenue was 1143 billion Japanese Yen ($11.2 billion). Swedish apparel retailer H&M had revenues of 150 billion Swedish Kroner ($22.9 billion) in the same year, during which the estimated revenues of Spanish retailer Inditex Group (the parent and owner of Zara) was 16.6 billion Euros ($22.4 billion). In comparison, American fashion group Gap Inc. had revenues of about $16.5 billion.

Uniqlos topline has grown almost 67% in the post-Lehman four-year period from 2009 to 2013, whereas Inditex has grown about 50%, H&M 26.4% and Gap less than 19% during this period.
Tadashi Yanai, CEO of Fast Retailing and the wealthiest man in Japan, looks mild, but has ambitions of conquering the world. His goal is to turn Uniqlo into a company with $50 billion revenues by 2020, selling low priced yet fashionable, basics like Oxford shirts, V-neck cashmere sweaters, T-shirts, jeans and down jackets. Hes planning to open 1000 stores in the US market. Currently, hes got just 17 there.

Yanai differentiates Uniqlo from fast fashion chains like H&M and Zara. While other apparel companies try to find or follow the latest fashion trend, Yanai believes that customers care more about quality and value than about a quick response to changing styles. So, Uniqlo uses long development cycles in which they test new materials and designs. They create long-term partnerships with vendors. This strategy is similar to that of car manufacturers, who spend months or years in product development to create a new product.

Uniqlo identifies styles within product categories that dont go quickly out of fashion, finding a way to create levels of differentiation within these styles. The results have been impressive, and Uniqlo is gaining fast on competitors such as Gap.

At the other end of the spectrum is Zara, which has built its strategy around consumer trends, embracing the fast-changing tastes of its customers. Zara has developed a highly responsive supply chain that enables delivery of new fashions as soon as a trend emerges.

Zara comes up with 36,000 new designs every year, and it delivers new products as many as 2-6 times each week to its 1900+ stores around the world. Store orders are delivered in 24-48 hours. It takes the company only 10-15 days to go from the design stage to the sales floor. How is Zara able to do this? By being fast and flexible.

Rather than subcontracting manufacturing to China, India or Bangladesh, Zara built 14 automated factories in its home country Spain, where robots work 24/7 cutting and dyeing fabrics and creating semi-finished products, which are then finished to suits, shirts, dresses and the like by about 350 finishing shops in Northwestern Spain and Portugal.

Imagine the foresight robots dont (yet) form a labour union and also don't take the weekend off. Some American apparel companies are now partly following the Zara model, getting their longer-lead-time goods manufactured (semi-finished) in Asia and doing the finishing work in the US.

H&Ms approach is somewhat of a hybrid of the Uniqlo and Zara models. It manages to merge a commitment to longevity while staying responsive to fashion trends. The clothing collections are created in Sweden by 200-odd designers. H&M outsources production to a network of more than 500 suppliers. About a third of their products are made in Europe, whereas almost two-thirds are made in Asia. Generally, the items with very short lead times are manufactured in Europe, with longer-lead items manufactured in Asia. Like Zara, this allows H&M to be more responsive to trends.

Its a new world war but this time, the English, the Germans and the Italians are no longer some of the key players, they've been replaced by the Swedes and the Spaniards, while the Japanese and the Americans are still in the game.
DISCLAIMER: The views expressed are solely of the author and ETRetail.com does not necessarily subscribe to it. ETRetail.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.

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Uniqlo vs Zara vs H&M vs the world of fashion retailing - Re-Tales by Amit Bagaria | ET Retail

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Rather than subcontracting manufacturing to China, India or Bangladesh, Zara built 14 automated factories in its home country Spain, where robots work 24/7 cu..

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1. Chanel
2. Ralph Lauren
3.Prada
4. H&M
5. Uniqlo

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ZARA focuses on pulling people in and no pushing product out.

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Spain-based Zara, the world's largest clothing retailer and owned by Inditex, is introducing an augmented reality experience in its stores. Shoppers can engage their mobile phones to see models wearing selected fashions when they click on sensors in the store or displayed on AR-enabled shop windows. Initially launched in 120 stores worldwide, such technology is irresistible digital-honey to draw millennials into the store and shop.

Creating customer curiosity is a most powerful pull marketing strategy. Every human being is innately programmed to satisfy it. With this new AR application and in so many other ways, Zara excels by pulling customers into the brand, unlike its closest competitor H&M, which remains fixed on pushing its brand and product out to the customer.

In studying these two oft-compared brands, the essential differences revolve around their overall approach to marketing. H&M still is fixed on the old 4Ps of marketing model-Product, Price, Promotion and Place-where the company and the brand is the focus.

By contrast Zara has evolved to the new 4Es of marketing strategy-Experience replaces Product; Exchange is new Price; Evangelism is now Promotion; and Every Place is new Place-that puts the customer at the center around which the company and brand revolve.

For Zara, it is all about the customer-experiences for the customer, exchange with the customer, Evangelism through the customer, and being every place for the customer. Shelley E. Kohan, assistant professor Fashion Institute of Technology, recently shared an analysis of the Zara difference based upon the 4Es marketing concept.
Zara makes customer experience king
Product used to be king, but not anymore. In the new retail economy, experience matters more than product in the mind of the shopper. Zara understands this.

"While Zara is an excellent purveyor of product, it also capitalizes on the store experience by continuously offering reasons for customers to visit the stores and catch the hottest trends at affordable prices," Kohan explains, noting that Zara has cultivated a loyal customer who visits about six times per year, as compared to other retailers in the contemporary market where two to three visits per year are the norm.

The fast-fashion experience formula for success combines frictionless shopping in a highly curated product environment offering scarce supply and new styles that rotate rapidly. "The more quickly and efficiently a customer can navigate through the store to explore and find hidden gems, the better the experience," she says. "Zara nails that."
Zara exchanges with customers for value
The old pricing formula-Pile it high, sell it cheap-worked well through the 20th century, but in the new experience economy, it has been replaced by the concept of exchange.

"Exchanging dollars for product is no longer meeting the needs of today's shopper as they strive for deeper connections with the brand," Kohan states. "Retailers must adapt to the changing consumer where the top characteristic is value. Today, value is measured beyond price, but also in time and convenience."

Zara has a deep understanding of the entire value proposition it exchanges with the customers. Its fast-fashion deliverable is available in the quantity, format and time in which the customer needs the product. That translates into great value.

"Branded value aligns customer's needs with a brand deliverable," Kohan stresses. For example, the most loyal customers for retailers typically account for 80% of the sales. These brand loyalists are also less price sensitive. "Appealing to the loyal segment of the target market, like Zara does, allows for higher profit margins and caters to customers who seek out branded value," she emphasizes.

Zara masters the concept of exchange as it is not the cheapest in the fast-fashion arena, but it consistently delivers branded value of trend-right product at appealing prices.
Zara creates brand evangelists
By making the brand experience meaningful and the exchange valuable, Zara taps the potential of its customers to evangelize the brand. Rather than push marketing out, Zara pulls customers in, cultivates them as brand influencers to improve operations, services and products and stimulates them to spread the word.

"Shopper frequency at Zara is 2x to 3x higher than traditional women's apparel, which indicates super loyalty to the brand," Kohan says. These loyalitsts become brand evangelists who share excitement about the brand with their networks. Zara, for example, has over 25 million Facebook followers, 16 million on Instagram and over one million in Twitter.

Zara has a highly evolved data infrastructure, Kohan also notes, that allows for super-efficient analysis of what's selling and being said on social media platforms. This data is used to improve various aspects of the business from product offerings to service enhancements. "The two-way communication between the customer and Zara allows for continual improvement of product and services," she says.
Zara is every place the customer needs it to be
Personal commerce is the every place where the customers are, rather than only in the physical place the brand is present. This is the new distribution model for retailers today: Delivering the brand experience and products when and where the customer demands it. Zara does that for them.

"Zara has devoted significant time, money and resources to develop a synchronized strategy between online and offline commerce," Kohan explains. Through this technology and mobile connectivity, it links a customer's shopping visit and provides access to inventory not present in the specific location. "It is a big win for both the customer and the company," she says.

And the company's store location strategy is another aspect of its every place factor. It currently operates in 2,213 stores across 93 markets and 39 online markets. The flagship locations are located in the most critical markets that appeal to their most loyal shopper. "Zara has the courage to continually strengthen their portfolio of stores by closing unprofitable ones, opening new markets, and expanding sister brands in existing markets (Zara Home, Massimo Dutti)," Kohan says.
Zara is all about the customer
Zara has cultivated unique advantages with its 4Es approach to marketing by focusing on experience, exchange, evangelism and every place strategies for the customer, rather than the old product, price, promotion and place concept focused on the brand. "As the brand ethos is so embedded in the customers' mind, the customer becomes the brand manager," Kohan explains.

In 2016, the service agents responded to more than 17 million customer inquiries, Kohan found. "Zara actually listens and reacts to customer feedback as its most valuable brand asset to improve its products and services, " she says.

Further, Zara focuses on its own people with corporate initiatives on diversity, respect, equal opportunity, work-life balance and professional development. Zara fosters a highly-engaged workforce that translates into highly-engaged interactions with customers. Additionally, over 60% of the Inditex workforce is 30 or younger thus aligning with the target market of the brand.

"The result is the customer and the company work cooperatively together so that the Zara customer becomes the Chief Customer Officer providing feedback on all aspects of the business," Kohan concludes. This is a fundamentally different alignment than brands using the 4Ps approach to marketing operate. Today the customer, not the company, calls the shots. Zara involves the customer interactively in the decision-making process. That is the Zara difference.

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Why Zara Succeeds: It Focuses On Pulling People In, Not Pushing Product Out

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Analysis of Zara's fast-fashion retailing strategy with FIT Shelley E. Kohan, based on the 4Es model of marketing, where Experience replaces Product, Exchange in new Price, Evangelism is now Promotion and Every Place is the new Place. Zara recognizes the customer as its most valuable brand asset.

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Inditex owner of ZARA sees a 9% profit increase

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MADRID (Reuters) - Inditex (), the world's biggest clothes retailer and owner of Zara, reported a slowdown in sales growth in its third quarter as Europe's warm autumn kept shoppers away, though it pointed to a brighter end of the year.

Fashion retailers such as Next and John Lewis have already reported a hit from warmer-than-usual weather as shoppers ignored new winter ranges. Inditex's biggest rival, Sweden's H&M (), will report fourth-quarter sales on Friday.

Inditex said on Wednesday that sales between August and October rose 6 percent year on year to 6.3 billion euros ($7.4 billion), in line with analysts' forecasts, while net profit rose 2.7 percent to 975 million euros.

The sales growth was down from 9.2 percent in the previous quarter and 11.6 percent a year ago.

"The top line is showing a big deceleration versus previous quarters," analysts from Kepler Cheuvreux wrote in a note.

Most of the lower growth is already priced in to the shares, they added. Inditex shares have fallen about 2 percent this year, against a decline of more than 20 percent for H&M.

However, colder weather arrived in November and Inditex said sales at its more than 7,500 stores and online increased 13 percent at constant exchange rates between Nov. 1 and Dec. 11, as shoppers snapped up items such as oversized sweaters and puffer parkas from new collections.

Shares in the company were up 2.8 percent at 1029 GMT.

"A return to more seasonal weather across Europe has allowed the group to step up top line gains considerably," Jefferies analysts said in a note.

Analysts said the lower sales growth and a strong euro helped to push the company's gross sales margin for the quarter to 58.4 percent, down 33 basis points from a year earlier.

Inditex's profits are sensitive to fluctuations in the euro because it makes most of its clothes in the euro zone to respond quickly to fashion trends but generates more than half of its sales in countries outside the currency bloc.

The business model has kept Inditex ahead of rivals such as H&M. By keeping its manufacturing bases close to its distribution center in the northern Spanish region of Galicia, it can shift new designs from catwalk to shop window within weeks.

The Spanish retailer's other brands include teen label Bershka and underwear chain Oysho.

Inditex Chairman Pablo Isla said on Wednesday that the company would sell several stores purchased in Spain during the 1990s, in keeping with its policy of renting property to expand.

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Warm autumn cools sales growth at Zara owner Inditex

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Inditex , the world's biggest clothes retailer and owner of Zara, reported a slowdown in sales growth in its third quarter as Europe's warm autumn kept shoppers away, though it pointed to a brighter end of the year.

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2,200 stores in 96 countries and growing stores numbers and uses online sales method which is a success

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The clothing retailer has more than 2,200 stores in 96 countries and is the flagship brand of the Inditex Group. Zara is renowned for its ability to develop a new product and get it to stores within two weeks, while other retailers take six months. Zara added a net of 51 stores in 2017, plus 38 Zara Home locations. Spain is the biggest market with 563 stores (including Zara Kids and Zara Home), followed by China (223 stores), France (150), Russia (144) and Italy. The U.S. has 87 stores as of January 2017. Zara's online

sales soared 41% in 2017 to 10% of the brand's total. Zara launched online sales in Singapore, Malaysia, Thailand, Vietnam
and India last year.Rosalia Mera, who co-founded Zara with her former husband Amancio Ortega, died in 2013 at the age of 69. She was the wealthiest self-made woman in the world with a fortune estimated at $6.1 billion at the time of her death.

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Zara on the Forbes World's Most Valuable Brands List

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Zara on the Forbes World's Most Valuable Brands List

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ZARA make revenue of USD 9 billion annually as per report 2016

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Reason why Zara is ahead of it's competition

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The one reason Zara is dominating the fashion industry right now

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                                                                 ZARA

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                                                                 ZARA

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Zara is a fast fashion retailer producing women and men's apparel, and also started Zara kids and ZARA home.

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                        ZARA (CLOTHING INDUSTRY)

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                        ZARA (CLOTHING INDUSTRY)

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Analysis of this industry centric to brand ZARA.