Be unique and give the customers what they want
Australia recently became the 78th country in the world to house one of global brand phenomenon, Zara’s, 1700 stores. The brand, which began in 1975 in Spain, has managed to establish itself as one of the world’s most prolific fashion retailers. John Caldwell looks at how that happened.
There can be no doubt that the retail industry is going through some difficult times. Chains such as Borders and Colorado have gone under in the last year, and many others would have followed suit if they had not been bailed out by their parent companies.
In these tough economic times, it is good to see one brand that is bucking the trend and expanding their brand. Spanish retail giant Zara has successfully opened two flagship stores in Sydney and Melbourne, with a third store opened in Adelaide this month. It seems that whilst some retailers are harping on about slow sales and low consumer confidence, Zara is proving that customers are spending but are looking for something new in their shopping experience.
Many people are asking, ‘what the secret is to Zara’s success’? Well if we could answer that then it wouldn’t be a secret now would it! Obvious reasons are easily accessible stores, clutter-free layouts, as well as a range that many can’t compete with. Zara has got the most up-to-date stores and such a varied collection that it seems to be catering for just what shoppers are after. Perhaps if others put more energy into developing new initiatives to invigorate the customer experience, and less time banging on about the economy, they too could be sharing some of Zara’s well deserved consumer moolah!
Possibly the company’s biggest strength, though, is something that they took from Toyota. Zara is a vertically integrated retailer. Unlike similar apparel retailers, Zara controls most of the steps on the supply-chain such as design, manufacturing and distributing its products. Zara set up its own factory in La Coruňa (a city known for its textile industry) in 1980, and upgraded to reverse milk-run type production in 1990. This approach, designed by Toyota Motor Corp, was called the ‘Just In Time’ system. It enabled Zara to establish a business model that allows self-containment throughout the stages of materials, manufacture, product completion and distribution to stores worldwide wide within just a few days.
Zara is a global powerhouse now with 1557 stores in 73 countries around the world. This just goes to show that if you give the consumer a unique shopping experience, get your back end right to ensure you can deliver your product, then you to can be recession proof! Well done Zara, you’re my hero!
John Caldwell is CEO for Retailworld Resourcing Australia and company director for the Retailworld Group of companies globally. With nearly two decades of experience in the industry, John has built his business around providing specialised recruiting solutions to retail businesses.
