Zara is able to sell fashionable clothing to consumers. It can quickly respond to consumer trends and bring garments to market that follow trends in the local market. This concept of “fast fashion” allows trends to move from catwalk/conception to retail location quickly, in some instances in just a few weeks. It also affords these fashionable items at reasonable prices. Consumers therefore look to Zara for affordable, trendy clothing.
Zara is able to deliver on this promise for trendy, affordable goods because of the strategic choices it has made within its supply chains. They allow Zara to quickly adapt the clothes that it sells in its stores. Zara created two basic collections each year, but regularly introduced other items throughout the seasons.
Characteristics of importance:
•ZARA receives textiles from their own suppliers, often undyed ‘gray’ fabric, which allows for customization closer to the sale date. •Low levels of inventory – they produce a lot of products, thousands of skews and much higher than the average company, but they only produce a few of each item. This helps them keep their inventory levels low, and also drives multiple visits to consumers to the store to see the latest trends. •Shortened period of garment development from market research → sample creation → shipping final garment to stores. Design/production and majority of suppliers are located close to the action where it will be sold helps shorten this process. (Versus other companies who outsource in third world countries). This shortened cycle time reduced working capital. •40% of finished garments were manufactured internally; and many of the ‘risky’ fashion items were contracted by local suppliers so they were able to get them to market quickly, get feedback, and order more of the lot based on consumer shopping data •Different than other competitors,...