Ref: https://en.wikipedia.org/wiki/Zara_(retailer)

1. ZARA
RETAIL
OUTLET
PRESENATATION
BY NADIA QAYUM

2. “The most innovative and devastating retailer
in the world”

3. ZARA FAST FASHION OUTLETS
– Fast fashion is a term used to describe cheap and affordable clothes
which are the result of catwalk designs moving into stores in the
fastest possible way in order to respond to the latest trends.

4. – Zara is a Spanish clothing retailer.
– Created in 1975
– By Amancio Ortega
– The clothing retailer has more than 2,100 stores
across 88 countries.
– Head Quarter: Arteixo
– Website: www.zara.com

5. MISSION STATEMENT

6. – The first store featured low-priced lookalike products of popular,
higher-end clothing fashions. During the 1980s, Ortega changed the
design, manufacturing, and distribution process to reduce lead times
and react to new trends in a quicker way, which he called "instant
fashions".
– The firm tripled in size between 1996 and 2000, then its earnings
skyrocketed from $2.43 billion in 2001 to $13.6 billion in 2007 and
2015 --> $23.4 billion

8. DESIGN
– Follow evidence of customer demand
– Thirty thousand items a year
– Young Designers (26 average) draw the
design sketches then discuss it with market
specials and planning & procurement staff.
Designs inspiration is copied from different
sources (trade fairs, catwalks, magazines)
from all around the world. It is worth to
mention that out of 40,000 designs only
10,000 are approved.

9. MANUFACTURING AND
LOGISTICS
–The average time for a Zara concept to go from idea to appearance in store is fifteen days
–If enough customers come in and ask for a round neck instead of a V neck, a new version can
be in stores with in just ten days
–To put that in perspective, Zara is twelve times faster than Gap despite offering roughly ten times
more unique products
–Just in Time Production.
–12 inventory turn over per year
–12000 designs per year
–30000 SKUs / year

10. MANUFACTURING AND
LOGISTICS
– How?
– Vertical integration
– Vertical integration is when a single firm owns several layers in its
value chain
– Nearly 60 percent of Zara’s merchandise is produced in-house, with
an eye on leveraging technology in those areas that speed up
complex tasks, lower cycle time, and reduce error.
– Zara holds 6 days worth inventory

12. CENTRALIZED LOGISTOCS
– Each Zara outlet sends in two orders per week on specific days and
timing. Trucks leave at specific times and shipments arrive in stores at
specific times. Garments are already labeled and priced upon
destination.
– As a result of this clearly defined rhythm, every staff involved (from
design to procurement, production, distribution, and retail) knows the
timeline and how their activities pan out with respect to other
functions. That certainly also extends to Zara customers, who know
when to visit stores for fresh new garments.
– Zara’s strong distribution network enables the company to deliver
goods to its European stores within 24 hours, and to its American and
Asian outlets in less than 40 hours

13. INVENTORY OPTIMIZATION
– Inventory optimization models are
put in place to help the company to
determine the quantity that should
be delivered to every single one of
its retail stores via shipments that go
out twice every week. The stock
delivered is strictly limited, ensuring
that each store only receives just
want they need. This goes towards
the brand image of being exclusive
while avoiding the build up of
unpopular stock.

14. HUMAN RESOURCE MANAGMENT
– The human resource at Zara are one of the components behind the
unique efficient and quick response system. People are highly
motivated which reflects Zara HR policy. Zara hires young people,
provides training and fair incentive schemes which result in high
and effective communication

15. LOW MARKETING/ADVERTISING
COST
– Fashion retailers spend on average 3.5% of revenue on advertising
their products, while Zara's parent company Inditex spends just 0-
0.3%.
– Zara has coordinators whose main task is to change the layout of the
shop every week and to open new stores

16. AVAILABLE IN ALL SIZES
– Small boutiques
– Mid sized stores
– Colossal sized departmental stores
– Bright lighting used to highlight vivid colors,
designs, fabrics used on merchandise.
The right side wall
consider highest sales
area , as customers
have tendency to turn
to right when entering
the store.

17. ZARA TARGET
– Zara consumers are young
– Sensitive to latest fashion
– Zara sells apparel, foot wear and
accessories for men women and kids

18. LEVEL OF CUSTOMER
SERVICES AND CUSTOMER
CONVENINCE
– Alteration
– Dry cleaning
– Gift cards
– Payment methods
– Reservation
– Exchange and return
– Well trained staff

20. KEY SUCCESS FACTORS OF ZARA
– Zara vertical integrated supply chain is very strong gives them highly
competitive advantage
– Short lead time: Fashionable clothes
– Lower quantities: Scarce supply
– More styles, more choices
– Cost leadership ship
– Zara’s average customer visits 17 times annually