Clever Strategies

A few weeks ago in class I was thrilled that we were given readings on Zara, a Spanish retail company, due to my love for fashion.  When I was reading “Retail: At the speed of Fashion“, an article that we were assigned to read prior to class I was very impressed by some of their Strategies.  Firstly, Zara has a very short response time to trends.  Zara identifies consumer trends and brings that trend to the market within 30 days.  These trends are identified by daily feedback and sales reports.  This is a clever tactic because, it enables them to constantly bring new designs to their consumers.  This is a form of mass-customization.  This tactic allows Zara to keep variety high, inventory low, and it keeps customers satisfied.  The low supply of goods encourages consumers to immediately purchase the items they like because most of their products do not last long.   Furthermore, their strategy involves little risk because they produce a small supply, and they do not rely on this one design to bring in huge profits.  Therefore, if the design is not liked by consumers Zara does not feel a significant loss.  Moreover, this strategy allows designers at Zara to create clothes that they know their consumers will buy.  Their response to trends can be as little as 2 weeks and, trends normally last longer than that short amount of time.  This approach to supply makes Zara superior to it’s competitors, because other brands create lines for various seasons from 4 months to a  year in advance.  This forces competitors to take part in the difficult task of predicting future trends, and consumer wants.  Zara is able to bring designs to the market quickly because of 80% of their production is done in Europe.  The final question would be, why aren’t all retail brands implementing this strategy.  The answer, is because it is expensive to implement such a strategy.