keresési feltétel:

The story of the king of fast fashion - Zara case study


The Zara case study shows how Zara became the undisputed king of fast fashion, how agility in fashion was achieved.

Zara's organisation of over 2,000 stores generates €18 billion a year. Their aim is to make fast and sensible design a reality in the world, and putting their customers at the centre of that is essential. This case study shows how Zara became the undisputed king of fast fashion. How agility in fashion has been achieved.

 

Fast fashion and the Fast fashion model 

Fast fashion is a departure from the traditional norms of designer-led fashion seasons. In this case, designers constantly adapt their creations to the needs of the customer. Inditex, the parent company of Zara, goes against the traditional fashion business models. In order to respond quickly to customers' needs at affordable prices.

Inditexs’ founder Amancio Ortega is often cited as the creator and pioneer of the fast-fashion model. The result of this model is quality design and a fast, creative response to market needs. Fast fashion companies tend to implement vertical integration design. As well as just-in-time production and fast communication between customers and designers. Inditex aims to meet customer needs by reducing time. The fast fashion model is based on speed, change, flexibility and responsiveness, i.e. an agile supply chain.

 

Zara's customer-centric value chain - operating model 

Zara's designs are not dependent on design masters. Instead, its designers carefully follow the trends of the runway and try to implement them in the mass market. They can go from concept to sale in two weeks. This speed allows them to launch 11,000 new products a year, compared to 2-4,000 for competitors. More than 300 designers draw inspiration from fashion shows and the streets, and design collections based on store sales. The stores send orders to the centre twice a week, which arrive in 2 to 3 days on hangers, labelled and ready for sale. They also send information about their sales with the same frequency, which provides Zara's designers with information about the products sold, colours and sizes. 

Many fashion companies outsource production, but this takes a lot of time. In order to speed up, Inditex operates on a vertical integration model, through its own wholesale stores worldwide. The company manufactures the goods in its own units and the design is also done in-house. Popular examples of vertical integration include McDonald's, Apple, Alibaba, but also Luxottica, Ray-Ban and Oakley.

Thanks to this speed, three quarters of the goods on display are changed every three to four weeks, which corresponds to the average time between visits. It is estimated that the average Zara shopper visits the chain 17 times a year. This compares to three to four times a year for competing chains and shoppers.  

 

Zaras’ costs 

Inditex spends 0.3% of its turnover on advertising, which is between 3% and 4% of the industry average. Zara never shows its clothes at expensive fashion shows. It first presents its designs directly in stores. This ensures exclusivity and prevents overexposure to design. Customers feel that if they buy one shirt at Zara, five other people will not have the same shirt. Young, fashion-conscious consumers, whose tastes change rapidly and unpredictably, are constantly thirsting for new clothes. Zara has proved adept at appeasing this.

It is also well below average in terms of IT costs. To be precise, it spends a quarter of the average, only 0.5% of its turnover. At Inditex, applications are written and maintained by an IT team of 50 people. They have no formal process for identifying and prioritising IT initiatives. They convene a steering committee when new applications and infrastructure are needed as the company grows. 

Zara is a perfect case study for many things. It is also a perfect example to understand how a traditional brand evolves over time to stay relevant. Zara is not just a fast-fashion brand, in fact it is the true king of fast fashion. How sustainable is this operating model? The English-language description and article used as the source for this article also elaborate on this.


Megosztás


Did you like it? Check these out too!


Where does agility come from?
Lead: Agility is no longer the prerogative of just developed Western companies. How can you make a successful agile transformation?

The Agile Coaching Growth Wheel
The Agile Coaching Growth Wheel is a tool to help and develop teams using agile practices.

Decades of budget planning are a thing of the past at IKEA
Instead of traditional budget planning, IKEA plans scenarios and scenarios that increase the flexibility of the organisation.



Contact


Next steps
Write us a message
We will contact you within 48 hours