Since the
beginning of Zara, the idea has been to understand what the customer wants
first and then have an integrated manufacturing and logistics system to be able
to deliver it to them quickly (Budds, 2016). Zara has a great
production model. Zara designers do not have to predict fashion trend in
advance, since they design, produce clothing frequently. And this is mostly
possible because their production facility is onshore in Spain. And, I believe
their secret sauce is keeping the products inexpensive while producing in
Spain. Finally, for socially conscious shoppers Zara is a great place to shop because they produce their products ethically and in an environmentally conscious
way.
As for the retail industry,
inventory is the biggest issue especially when an inventory of items which
nobody wants. And since most companies make their products offshore to save
cost, they order in bulk and they design and order way in advance to have their
stocks ready before any season. These do not apply for Zara. Zara does not make
products offshore. Zara designers submit designs in real time and I think
the internet has a big role to play in that with the hardware devices connected in
the network. And frequent supplies of newly designed products to stores keep Zara’s
inventory rolling and Zara can quickly analyze what is selling and what is not.
Discuss where Zara has succeeded where others such as Gap have
failed… consider what role, if any information systems play in this success.
Zara has taken the guesswork out. They do not have to guess what the customer would want after 6 months.
Because Zara does not make their products offshore. Zara designers can send
their designs almost in real time for production. Zara has figured out a way to
keep inventory revolving, so there is no death by unsold inventory. And
customers always get fresh inventory, which keeps them coming back. Zara has
solved the problem of stale stock and in the process, they have cut out any design
that would not sell.
Zara has 2 ways to engage
customers and win over them. Zara’s latest fashion and new inventory keeps
bringing their customer back, and since the products are affordable, a customer
does not mind coming back. And, since Zara’s customer base is fairly young
population, Zara’s ethical production model where they do not use any child
labor or do not waste a ton of water appeals to environmentally and socially
conscious customer and keep them loyal.
Technology plays a major
role and helps Zara build up their business model. From drawing up a design to
sending it for production, technology is the backbone for production and low
inventory level for Zara. And now with e-commerce, customers can browse through
new products online, that way they keep coming back to shop.
Zara keeps customers
interested, make them feel valued and listens to them. Now, most companies in
different industries are trying to do the same. That is why Adidas is cleaning
u ocean and making shoes with the plastics from the ocean (McAlone, 2016). We can
communicate with almost any company on social media nowadays. Businesses can
offer deals, or they can become socially environmentally responsible so
millennials feel good to be associated with those corporations. Most
importantly businesses should constantly take feedback on their service and
product from customers to make them feel valued and win their loyalty.
References –
Budds, D ( June 2016). The Secret
Behind Zara’s Warp-Speed Fashion: Its Store Managers. Retrieved from
https://www.fastcompany.com/3066272/the-secret-behind-zaras-warp-speed-fashion-its-store-managers
McAlone, N (
November,2016). Adidas is selling only 7,000 of these gorgeous shoes made from
ocean waste. Retrieved from https://www.businessinsider.com/adidas-shoe-from-plastic-ocean-waste-2016-11
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