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Retailers Should Think Like Zara: What We Learned At The August Magic
Trade Show
Source: istockphoto.com

Last week, my team and I attended the Magic trade show in Las Vegas. One of the
largest fashion trade shows, Magic is held twice a year and consists of 13 unique
communities covering footwear, apparel, accessories and manufacturing. Over three
days, we met with a variety of apparel and media leaders and attended presentations and
panel discussions on retail, sourcing, social media, apparel manufacturing, automated
manufacturing technology, fashion, store layout and design, outsourcing to countries
such as Vietnam and China, and many other topics.

An overarching theme at the August Magic show was that retailers need to get products
from the design phase to consumers much faster. The current fashion cycle is broken, a
number of presenters suggested, because when consumers see a trend, they want to buy
it right then—not 12 to 18 months later. Zara was cited frequently at the trade show as a
retailer that is pushing boundaries in terms of newness, seasonlessness and customer
traffic.

Zara’s Value Proposition of Newness and Scarcity Is Driving Store Traffic

Zara’s value proposition is newness and scarcity, said Ed Gribbin, President of Alvanon,
a retail, fashion and apparel consulting firm. Once the product is gone, it is gone, he said.
Gribbin highlighted an NPD Group survey that found that the average shopper who is
brand loyal visits a store 4.1 times per year, whereas the average Zara shopper visits a
Zara store 17 times per year—likely because she is afraid of missing something. If you
happen to be in New York City, visiting a Zara can necessitate a strategic approach,
depending on the time of day, because the fitting room line is often 10–15 deep. That is
anecdotal, of course, but it reflects how exciting consumers find Zara’s product
assortment.

According to Gribbin, 65% of Zara’s production is based on proximity, and all of its
products can be delivered from the factory by air within one day to any of its 4,400
stores. Zara has the highest inventory turns in the business, Gribbin said, emphasizing
that retailers might take a lesson from the company and work to shorten the front-end
time it takes to get products “from design to on the back.” He noted that doing so will
save retailers money on markdowns in the long run.

But retailers will have to transform themselves in order to be competitive. Steve

Hawkins, SVP of Sales for American Textile & Apparel, said that reducing turnaround
times requires close collaboration and communication between retailers and factories
because the factories have to plan for equipment, staffing and overall infrastructure
needs.

 The big lesson here is not about creating fast fashion per se, but about
creating timely, fresh products that consumers want.
Traditional Fashion Seasons Do Not Exist at Zara

Zara delivers new product every two weeks, on average, i.e., 26 times a year, rather than
only during the typical, fall, winter, spring and summer seasons. This is in line with how
today’s customers shop: when they see a trend, they want to buy it right away, not 18
months later. Gribbin suggested that the reason retailers are struggling—and the reason
there have been more retail bankruptcies in 2017 than in any year since the recession—is
that the product development cycle is broken.

Today’s procurement processes must be adapted based on consumer shifts, Gribbin said.
Consumers are technology driven and unpredictable, and they want to buy trendy items
as soon as they discover them. But retailers are following an outdated cycle that involves
trying to predict what consumers will want to buy 18 months from now. A responsive
supply chain can respond within two to three weeks to capture consumers’ desire to buy
trends immediately, Gribbin said.

Several other retailers and companies at Magic noted that the seasons are becoming
blurred and that consumers are no longer following fashion rules. Some examples they
cited include seasonless clothing, where there are no limitations in terms of style, color
or materials. According to The NPD Group, the most successful shoe brands offer styles
with seasonless silhouettes, such as sneakers, mules and ankle boots. The seasonless
dressing trend is also spurring innovation. The NPD Group has noted that innovative
footwear styles include hybrids such as espadrille sneakers, peep-toe boots and the Nike
Air Huarache Gladiator. Consumers’ wardrobes are also becoming more casual as people
seek ease and comfort in apparel.

 The lesson here is that seasonless apparel is already a real trend. It promotes
fashion innovation through hybrid products and also keeps new products in
stores all year long.

Sellable Products Are More Important than Design Perfection

Finally, we heard at Magic that designers can often be their own worst enemy when it
comes to perfection and getting a product out the door. Often, designers stress over
finding the perfect button, the right thread, or the perfect finishing—convinced that those
details will make the difference on a garment or accessory. In the end, though, for many
designs, a button is just a button—and speed to market is more important today.
Sweating the details is not always productive, as companies must get products out the
door more quickly.

Products also need to be sellable and relatable, with a point of view, advised Mercedes
Gonzalez, Director at retail consulting firm Global Purchasing Companies. “If I haven’t
seen it before, then I probably don’t want to see it,” she said. Gonzalez’s point was
echoed in a panel titled “Looking at the Future of Creating a Brand and Getting It to
Market.” Panelists emphasized the need for a fashion point of view, the importance of not
getting stuck on perfection, and the need to get out there and produce—because the
retail market today is hungry for products that are unique or differentiated. Panelist
Anthony Bergin, CEO of fashion lifestyle brand Lumber Union, suggested that every brand
needs a secret sauce, something different that is not a fad and that the brand can call its
own.
 The big lesson here is that it is more important to get the product out the
door than to worry about perfection, in most cases.