Z A R A

  

 

Company profile

 

The founder of Zara, Amancio Ortega, opened the first Zara store in 1975 in a central street in downtown A Coruña, Galicia, Spain. Its first store featured low-priced lookalike products of popular, higher-end clothing fashions. The store proved to be a success, and Ortega began opening more Zara stores throughout Spain. During the 1980s, Ortega started changing the design, manufacturing, and distribution process to reduce lead times and react to new trends in a quicker way, in what he called "instant fashions". The company based its improvements in the use of information technologies and using groups of designers instead of individuals.

In 1980, the company started its international expansion through Porto, Portugal. In 1989 it entered the United States and in 1990 France.

This international expansion was increased in the 1990s, with Mexico (1992), Greece (1994), Belgium and Sweden (1994), etc. until reaching its current presence in over 73 countries.

Zara stores are company-owned, except where local legislation forbids foreigner-owned businesses; In those cases, Zara franchises the stores.

 

Company structure

“ZARA walks at the pace of society, dressing ideas, trends and tastes that society itself has matured.”

Zara through its unique business models and stores has proved business can be successful with little or no advertising. This business is possible only through superior customer service helped by continued ability to restock and respond to customer needs within days. This gives Zara the competitive edge. Hence, keeping in mind the mission, they always innovate their products to enhance shopping experience and provide new designs at affordable costs made from quality materials which follow latest trends.

Zara's policies:

At the store

•  We save energy.
•  The eco-friendly shop.
• We produce less waste, and recycle.
• Our commitment extends to all our staff.
• An environmentally aware team.

We save energy. The eco-friendly store.

We are implementing an eco-friendly management model in our shops in order to reduce energy consumption by 20%, introducing sustainability and efficiency criteria. This management model sets out measures to be applied to all processes, including the design of the shop itself, the lighting, heating and cooling systems and the possibility of recycling furniture and decoration.

We produce less waste and recycle. Recycling hangers and alarms, which are picked up from our shops and processed into other plastic elements, is an example of our waste management policy. Millions of hangers and alarms are processed each year and both the cardboard and plastic used for packaging are also recycled.

• With the product
•  We use ecological fabrics.
•  Organic cotton.
•  We manufacture PVC-free footwear.

We use ecological fabrics. Organic cotton.

Zara supports organic farming and makes some of its garments out of organic cotton (100% cotton, completely free of pesticides, chemicals and bleach). They have specific labels and are easy to spot in our shops.

We produce PVC-free footwear. No petroleum derivatives or non-biodegradable materials are used in the production of our footwear (PVC free).

In transport

We use biodiesel fuel.

Zara's fleet of lorries, which transport more than 200 million items of clothing a year, use 5% biodiesel fuel. This allows us to reduce our CO2 emissions by 500 tons.

Animal Welfare

All products of animal origin sold in our shops, including fur and leather, come exclusively from animals raised on food farms and under no circumstances come from animals sacrificed exclusively for the sale of their hide.

Structure

Zara has captured the public’s attention due to its efficient and unique business structure and turn around efficiency. Owned by the Inditex Group and opened in 1975, Zara has over 1,560 stores in 70 different countries with over 10,000 new design launches each year. Louis Vuitton’s fashion director has referred to Zara as, “possibly the most innovative and devastating retailer in the world.”

The Inditex Group is made up of eight different retail sale formats, one including Zara. Inditex operates on a fashion philosophy that boasts, “creativity and quality design together with a rapid response to market demands.”

More specifically, Zara operates with a lean organizational structure, which emphasizes high performance. The lean organizational structure also works to reduces the number of managerial hierarchy levels and decentralize decision-making. This model limits the business’s focus on redundant administrative procedures. From design to delivery it takes the company only five weeks for a garment and only two weeks for an existing model. This method shortens the product life cycle, which allows for greater success in meeting consumer needs. Customer satisfaction is of extreme importance to Zara and the consumer’s purchases truly shape almost all of Zara’s business decisions. Zara and its lean organization thrive on the use of information technology. Zara shops use this technology to report directly to their production centers and designers in Spain. Additionally, store managers use PDAs to check on the latest clothing that’s been designed and place their orders based on the demand they see in their store.

Moreover, Zara is also a vertically integrated company. Vertical integration describes a company that has control over several or all of the production and distribution steps involved in the creation of their product. The retailer operates with a vertically integrated demand and supply chain while most other textile chains rely on outsourcing and cheap labor, whereas Zara owns its on textile dye house.

Customer Demographic

Zara’s target market is young, price-conscious, and highly sensitive to the latest fashion trends. They have an advantage over traditional retailers because they do not define their target by segmenting ages and lifestyles giving them a much broader market.

They segment their product line by women’s (60%), men’s (25%) and the fast growing children’s (15%) department.

Zara started operations in Spain in 1975, and now operates in 74 countries worldwide.

 

Look and Feel

  

The global fashion powerhouse has opened a three-level, 1830m² concept store in the $1.2M world-class retail precinct, Westfield Sydney. Anchoring this exciting new development on Pitt Street in Sydney’s CBD, the Westfield Sydney Zara store offers a full range of women’s, men’s and children’s wear. The women’s wear showcase includes three lines: Zara Woman, Zara Basic and the youth concept TRF, featuring the latest world fashion trends. The store has a very sophisticated, classy, clean and sexy feel. With the use of black and white it evokes glamour and luxury. It has a standard layout with the registers up the back of each level as well as the change rooms. The store is divided up into menswear, women’s wear and children’s wear and the clothes are displayed both on racks on the floor and along the walls. The one thing that seems to be an issue is the change rooms. There are not enough and when it’s busy it can’t handle the capacity of people. I like the fact that you are not hassled, however there is staff on the floor if you need a hand.