Zara: Fast fashion in the

Digital age
By Group-9
Zara’s Competitive Advantage
o The products designed by Inditex’s over 700 designers provides it with the assortment
of around 65000 new designs every year.
o They use various technologies like RFIDs embedded in products to understand demand
and made a collaborative use of “Hard data” and “Soft data” to ensure the efficient
communication flow of information throughout the company.
o The information flow system established by Inditex makes its manufacturing &
distribution more efficient and less prone to breakdowns.
o Inditex established a well responsive supply chain that enabled Zara to be on the edge.
o It could deliver new merchandise twice in a week to all the stores across the world.
Zara’s Competitive Advantage
o Inditex’s manufacturing hack of producing “greige goods”, raw fabrics that had not yet
been dyed or printed, helped them minimize the material cost and production time.
o Inditex followed “Oil Stain” pattern for launching in new markets which enabled them
to achieve economies of scale.
o Inditex designed its stores like designer boutiques, and each store had distinctive
aesthetics.
Zara’s Competitors in India
• H&M, Uniqlo, Gucci, Adidas & Nike are considered Inditex’s closest competitors in
India.

• Zara is relatively more fashionable than H&M, Uniqlo and others.

• Among its competitors, H&M and Zara are considered similar, both are considered
as “Fast Fashion Retailers”.

• Gucci is a closest competitor of Zara in accessories when it comes in Indian

Market.
4) Why do Gap and H&M not mimic Zara’s model?

• Yes, Zara has an advantage over Gap & H&M.

• When opposed to Gap's seasonal fashion trends, Inditex promoted items based on
real-time needs and reduced lead times while the majority of fashion retailers
depended more on sea-based delivery.
• Utilizing RFID chips to better understand consumer demand and the Zara AR app
to improve in-store purchasing for customers.
• Zara makes compromises by producing goods in small quantities and
manufacturing the majority of its products in Europe.
• Zara is the biggest and most globalized chain shop in Inditex. In 7210 plants across
47 countries, Inditex collaborated with 824 suppliers.
4) Why do Gap and H&M not mimic Zara’s model?

• Inditex hired more than 700 designers to create more than 65,000 designs annually
by combining both the hard data (RFID) and the soft data to understand the client
(feedback from frontline store personnel).
• Zara's prices are not reasonable. Most of Zara's clients are not very price conscious.
Zara can only succeed by being receptive, not by competing in the fashion industry.
• Zara's business approach is to provide clients rapid fashion, and they do this by
using a vertically integrated production system. When compared to its rivals, the
average time it takes to go from the design board to the shop is only 15 business
days.
• With the use of air shipping and ten company-owned logistics hubs in Spain, Inditex
was able to deliver goods to every shop it owns in less than 48 hours.
8 .Zara has limited resources and has to choose with regard to it’s online
strategy. Do you think Zara should invest more on its online presence, or do you
think Zara should invest more in integrating its online and offline shopping
experiences?
• Over the years 2012 to 2017, online sales of clothing and shoes increased at a 19 percent
CAGR. Over the 2017–2021 period, Technavio predicted that worldwide online clothes sales
will increase by about 14% annually.
• By industry and nation, internet sales penetration varied greatly. Online sales were still
comparatively underrepresented in Spain and Portugal, where a large portion of Zara's sales
were made.
• Due to cannibalization from internet sales, brick-and-mortar establishments, which had large
fixed expenditures, were seeing a fall in foot traffic.
• The added benefits of Stitch Fix's customized box service, touch-and-feel-kind client
interactions, and atmosphere Additionally, 30% of all items purchased online were returned,
compared to a return rate of 9% for items purchased from physical retailers.
• The in-store catalog and customer shopping experiences at offline retailers were enhanced by
the use of digital technology. comparable to omnichannel retail.
• In the near term, online and offline retail in the fashion sector "substitutes," but over time,
they can both "complement" one another.