-
Essay / An examination of the business strategies of Zara, a fashion retailer
One of the phenomena in Spain is the rise of Inditex, known for its ownership of Zara. It would seem strange that Inditex, a growing global company, would have its headquarters in La Coruña, a typical, quiet European city. Yet despite being based in a struggling country with an unemployment rate of over 50% for those under 30, it is still able to generate strong demand for clothing. Zara is a company that has benefited from “fast fashion” where the newest trends presented at fashion shows are redesigned and manufactured more cheaply for the general public. Many people at the forefront of the fashion industry agree that Zara's "fast fashion" has changed the fashion industry. Say no to plagiarism. Get Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get Original Essay Zara's “fast fashion” has evolved due to people's continued desire for change and novelty. Why exactly do people want to constantly change their clothes when it seems frivolous and the evolution of fashion seemingly has no sense of direction? Agnes Brooks Young responds to this dilemma by presenting the theory that our spiritual needs for "experience, recognition, and response" (167) must be met, which are just as necessary as our physical needs, i.e. say food, shelter and clothing. Brooks states in his book: "the fashion of each new season is an attempt at partial experimentation, cautiously adopted by women until its general assurance is assured" (170). In the case of women, they want to look beautiful and stand out from their peers. At the same time, these changes are slow because women do not want to stand out in unwanted ways because they want to be unique. No other affiliation is as personal or as revealing of a woman's personal preferences. Fred Davis also offers a further explanation of the origin of fashion cycles. In Davis' book, he names Charles Frederick Worth as the man who revolutionized fashion. In the mid-19th century, Worth became the first person to label a clothing line, thereby becoming known to the public. Before this event, clothing styles did not change for more than several decades. In his research, he uses Sprole's theory to analyze fashion. This theory conceptualizes fashion as a process: invention, fashion leadership, increasing social visibility, conformity within and between social groups, social saturation, decline and obsolescence – each stage is equally important. Modern technological advances have made brands more well-known and fashion changes more publicized; as a result, people know better what they want. Davis concludes that "the intensive capitalization... of the clothing industry, the wealth of consumers as well as the democratization and relaxation of class boundaries, and the greatly accelerated flow of information via electronic media" (Davis 107) are the reasons for the rapid change in consumer preferences. “Fast fashion” has developed as a result of this modern phenomenon. Its success comes from its ability to take advantage of the accelerated pace of each step of Sprole's theory, becoming a very successful business model for a company such as Zara. Zara's effective copying of designs has increased the speed of copying among all fashion designers. Raustiala comments that one of the peculiarities of the fashion industry is that "fashion companies take measures to protect the value oftheir trademarks, but seem to accept the appropriation of their original creations as a reality” (Raustiala, Sprigman 4). Legally, it would seem that intellectual property would be better protected in an industry that produces a wide variety of goods. Industry critics have criticized the current legal regime for its failure to protect clothing designs. Despite this, the fashion industry remains surprisingly silent when it comes to copying. What is also unique to this industry is that there have been no anti-piracy campaigns. Raustiala says this low emphasis on intellectual property protection is driving innovation in the retail industry, in what is known as the “piracy paradox.” Nebahat Tokatli also concludes on this point, observing that Zara has "'introduced economical interpretations of runway styles into its stores at breathtaking speed'" (29). A designer dress photographed on a mannequin during fashion week usually won't hit department stores for months, but a knockoff or derivative may be spotted hanging at Zara within a few weeks. While discussing this topic with her colleague, she mentions that the clothes she saw during a visit to a Zara store reminded her of Prada, Alexander Wang, Balmain and many other high-end brands. These high-end designers are now forced to reanalyze their marketing and release schedules in response to Zara's success in order to remain competitive. Hansen credits Zara's success for its ability to "manufacture 840 million garments per year and has approximately 5,900 stores in 85 countries, although this figure is constantly changing as Inditex has in recent years opened more than one store per day , or around 500 stores per year. .” Zara has taken copying to its limits, removing the innovation process and perfecting the production process. Thanks to this efficiency, Zara was able to grow quickly. Zara's rapid response to trends has affected the speed at which other fashion companies respond to consumer demands. Tokatli notes in his research that “fast fashion” seeks to increase the variety offered to customers. Shortened delivery times and production cycles are characteristics associated with “fast fashion” compared to traditional ready-to-wear and haute couture. Zara offers its customers good quality and inexpensive clothing from high-end stores. As a result, customers do not feel like they are buying something “cheap” (Tokatli 28). Hansen notes that “a brand at Inditex will create a fall collection, then ship just three or four dresses, shirts, or jackets of each style to a store.” Since styles change quickly, customers are forced to buy impulsively because they know they won't have a second chance to buy the clothes a week later. Zara stores are located close to its factories, allowing it to respond quickly to customer preferences. More than half of Zara's factories are owned by Zara itself – this vertical structure allows for rapid flow of information when production changes need to be made (Hansen). As a result, there is very little excess inventory, reducing the losses faced by traditional retailers. The money saved here is used to respond more quickly to the production of clothing that matches new consumer preferences. Store managers are trained to charge more if there is demand for a particular style. Popular styles are copied instantly. Raustiala notes that the beauty of copying is that it..