Zara

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  • Topic: Millard Drexler, A Coruña, Fashion
  • Pages : 5 (1835 words )
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  • Published : January 16, 2013
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ZARA
By John M. Gallaugher

A look inside the innovative techniques of one of the largest fashion retailers

2012
Joshua Crocker
MGMT 3030
12/19/2012
ZARA
By John M. Gallaugher

A look inside the innovative techniques of one of the largest fashion retailers

2012
Joshua Crocker
MGMT 3030
12/19/2012

A Goldman analyst once described this fashion retailer as “Armani at moderate prices” and another suggested that fashions were “Banana Republic” while prices were “Old Navy” (Folpe, 2000). Based on any shopping experience, would this sound like a hoax or too good to be true? Well, this fashion retailer is Zara, a subsidiary of Inditex Corporations located centrally in La Coruna, Spain. And through innovative techniques ranging from little advertisement, no line sales, and the ability to produce most products in-house, Zara has established itself as described by LVHM as ‘the most innovative and devastating retailer in the world’ (Surowicki, 2000). This analysis will look into these innovations and how they are applied to the world of fashion, and more specifically the operations of Zara. When talking about a business in any given industry, any C-level manager will say that their company is about the customer first. That what the customer asks for is what the company will provide for them. Well, it sounds all well and good but how many of these companies have the statistical proof that they are satisfying. By taking a look at the conventional methods of a fashion retailer, we can compare what Zara did right to what the other guy did wrong. Let’s use the example of Gap. During the 90’s, Gap had a great turnover rate from shelf to the consumer. CEO at the time Mickey Drexler, a man known for style, even revolutionized the khaki pant-button down combination as America’s business casual (Gallaugher, 2008). When sales declined in the early 2000’s, Drexler was left with the decision on where Gap would head next. A decision that appeared to be made with no substance, Gap opted to head into the youth market in an attempt to expand. Unfortunately, this direction completely backfired with twenty nine straight months of lost profit and as founder and Chairman Dan Fisher so eloquently put it, “it took us thirty years to get to $1billion in profits and two years to get to nothing” (Sellers, 2003). Gap also was outsourcing the majority of their manufacturing over-seas to maximize profits. This means they were able to enforce different labor laws in these foreign countries which included longer work days and lowered pay. The prime example of Gap’s illegal doings comes from a 2007 video revealing New Delhi children as young as ten years old making clothes in “slave labor conditions” (Cho, 2007). Now, granted they were not the only retailer to act illegally with Nike and Wal-Mart recently indulging in wrong practice. But Zara stands out even more amidst labor law allegations because they simply do not outsource. This analysis will touch base further on the positives/negatives of outsourcing as we turn back towards Zara’s customer satisfaction. Imagine yourself walking into any given clothes retailer and you have a very distinct idea on the articles you wish to purchase. Now imagine a sales associate approaching you with the ‘false’ intent of assisting you with the ‘real’ intent of meeting their daily sales quota. They ask what you’re looking for, and rather than just give you that cardigan sweater, they follow it up with a t-shirt, some jeans, and a funky colored scarf. Any customer who has been pestered by this scenario can agree that this is not a friendly shopping experience. The sales associates at Zara have been trained into a different mold. With price and security tags already included during manufacturing, this allows more time for the sales associates to ask questions to the customers while they shop. Asking them things like: ‘What if that skirt were in a different length?’ or ‘What colors would you like to see?’...
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