Zara had its own factory set up in La Coruña in the 1980's,and upgraded its production and distribution facilities in 1990, controlling most of the steps on the supply-chain, designing, manufacturing and distributing its products. The design of the upgraded factory was done by Toyota Motor Corp and was referred to as the "just in time" system because it allowed a self containment model throughout the stages of materials, manufacture, product completion and distribution to stores worldwide in just a few days.
By focusing the attention on the fashion items their customers needed and delivering them,Zara saw great success, rather than predicting a season;s trend and promoting it through fashion shows or similar routes which is traditionally used by the fashion industry.
Zara offers more products than similar companies. It produces 10, 000 distinct products with 2,000 to 4,000 items for its key competitors. If a design doesn't sell well for a week once it hits the store it is taken back to the factory and a new design is pursed, cancelling all the orders for the previous one.
Store managers are given sophisticated technology gadgets which allows them to monitor their customers preferences or fashion changes, technology such as PDA's with wireless transmission capabilities are generally used.
Some of the items designs are usually carried over from year to year, while some only stay on the shelf for four weeks, which causes customers to make a return visit as they anticipate the new designs. An average store in Spain expects a customer to visit their store 3 times a years, Zara customers make return visits up to 17 times a year.
50% of Zara products are manufactured in Spain, 26% in the rest of Europe and the remaining 24% in Asian and African countries and the rest of the world.Zara makes its most fashionable items- which is equivalent to half of all its merchandise- at a dozen company owned factories located in Spain and Portugal, particularly in Galicia and northern Portugal where labor cost is much cheaper. Some of the competitors usually outsource all their production to Asia.
It was reported that Inditex launched its first online boutique for its best selling brand Zara on September 06, 2010.The website started in Spain, UK, Portugal,France, Germany and Italy, six of the most important countries among the company's 76 markets.Customers online were given the same privileges as the in stores customers in regards to the exchange and return policy. They were also given wide payment option and could have either made a store pick up or paid-for postal delivery.
Cheif Executive, Pablo Isla said that the company was waiting for the for the online demand to increase before they had ventured out into cyberspace. In November 2010, another five countries were added to the online boutique.
In 2011, Zara entered the Australian market with a three story, 1400 sqm store in the Westfield Sydney complex opened on April 21, 2011 and a second three story 1800 sqm store a Bourke Street Mall Melbourne which opened on 15 June 2011.Zara will open its third Australian store in November 2011 at Burnside Village Shopping Centre in Adelaide, South Australia. It will be Australia's largest at 2,300 sqm, and modeled on the design of their Fifth Avenue, New York store.
In November 2011, Zara entered the South African market with a flagship store in the upmarket suburb of Sandton, in Sandton City Shopping Complex, Johannesburg. In March 2012, Zara opened their second store in South Africa, at Gateway Theatre Of Shopping in Durban. Later in 2012, a third store was opened in CapeTown at the Victoria & Alfred Waterfront mall.
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