Zara Case Study Answers
Explain the data collected by Zara to predict the trend.
What makes the middle aged mother to buy cloths in Zara while the daughter aged in mid 20s buys Zara clothing? Because it is fashion able and up to trend. By collecting data and focusing on shorter response times, the company ensures that its stores are able to carry clothes that the consumers want at that time. Zara can move from identifying a trend to having clothes in its stores within 30 days. That means Zara can quickly and catch a winning fashion trend, while its competitors are struggling to catch up. Catching fashion while its hot is a clear recipe for better margins with more sales happening at full prices and fewer discounts. In comparison, most retailers of comparable size even smaller, work on timelines that stretch into 4-12 months. Thus, most retailers try to forecast what and how much its customers might buy many months in the future, while Zara moves in step with its customers. Unlike other retailers, Zara’s machinery can react to the report immediately and produce a response in terms of a new style or a modification within 2-4 weeks. Many other retailers have such long supply chain lead times that for them it would seem a lost cause those to even try and respond to sales report.
In order to collect data, they also visit university campuses, discos and other venues to observe what young fashion leaders are wearing, from daily feedback from the stores and from the sales report. There are 200 designers who are the major players in the Zara creative beehive. They are not allowed to let anything get by them. They receive data from the boutiques on what is selling and adapt their products almost simultaneously with purchasing behavior. They are also kept up to date on what is selling at the different designers from whom they draw their inspiration, in order to determine their pieces' selling potential. Collecting vital information, such as daily sales numbers, allow designers to approximate what
What makes the middle aged mother to buy cloths in Zara while the daughter aged in mid 20s buys Zara clothing? Because it is fashion able and up to trend. By collecting data and focusing on shorter response times, the company ensures that its stores are able to carry clothes that the consumers want at that time. Zara can move from identifying a trend to having clothes in its stores within 30 days. That means Zara can quickly and catch a winning fashion trend, while its competitors are struggling to catch up. Catching fashion while its hot is a clear recipe for better margins with more sales happening at full prices and fewer discounts. In comparison, most retailers of comparable size even smaller, work on timelines that stretch into 4-12 months. Thus, most retailers try to forecast what and how much its customers might buy many months in the future, while Zara moves in step with its customers. Unlike other retailers, Zara’s machinery can react to the report immediately and produce a response in terms of a new style or a modification within 2-4 weeks. Many other retailers have such long supply chain lead times that for them it would seem a lost cause those to even try and respond to sales report.
In order to collect data, they also visit university campuses, discos and other venues to observe what young fashion leaders are wearing, from daily feedback from the stores and from the sales report. There are 200 designers who are the major players in the Zara creative beehive. They are not allowed to let anything get by them. They receive data from the boutiques on what is selling and adapt their products almost simultaneously with purchasing behavior. They are also kept up to date on what is selling at the different designers from whom they draw their inspiration, in order to determine their pieces' selling potential. Collecting vital information, such as daily sales numbers, allow designers to approximate what