How Zara became successful through efficient use of technology
The industry average in the clothing industry to take a design to distribution is around 9 months. Zara, through efficient use of technology, has developed a distribution model that takes new models from design to the store in just 3 weeks. As a result, the company produces approximately 20,000 designs a year!
To make this work, Zara uses technology to make sure departments and outlets the world over constantly know what is needed when and where. Designers keep in daily contact with store managers, discussing which items are most in demand and which aren't. This, supported by real-time sales data, allows the designers to action repeat orders and create fresh designs, and from La Coruna they are shipped directly to the stores, eliminating the need for expensive warehouses.
- It employs 100s of designers at its HQ in Spain
- Half its production facilities are close to its HQ in Spain, Portugal and Morocco - choosing not to outsource production to cheaper countries
- It produces very small quantity of each collection thus creating an aura of exclusivity
- All its merchandise is distributed from Spain
- Its order to delivery is 24 hours in Europe and 48 hours in US and Asia
- All Zara stores receive shipments twice a week
- Zara lines rarely stay on the shelves for more than a month.
- If something fails the line is withdrawn immediately
- An average Zara shopper visits the store 17 times a year compared to industry average of 3
- Fashion retailers spend on average 3.5% of revenue on advertising their products, while Zara's parent company Inditex spends just 0.3%
- It spends a significant amount of time and effort regularly changing store windows
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