Topics: Retailing, Vertical integration, Supply chain management Pages: 4 (1166 words) Published: December 18, 2012
Zara as being one of the major international clothing retailers stands out with its business and marketing model. Zara is also often one step ahead of the high-fashion ready-to-wear brands by providing similar garments made with less expensive fabric so prices much lower. Zara’s business model is characterized by flexibility, which is a production method that fulfils demand in order to manage quick turn-around, limited season stock and at a low price. The secret to Zara’s success is that, although shopping there is cheap, it doesn’t feel cheap. The stores are large, modern, swanky and centrally located. The number of SKU’s displayed per square meter are significantly lower than the industry standard. Zara is famous for developing cut price interpretations of catwalk styles and getting them into its stores with breathtaking speed. A designer dress photographed on a model during fashion week won’t arrive in department stores for months, but it can easily appear in a Zara store within three weeks.

As the first retail chain established by Inditex, Zara has become the largest and most expansive. It had three product lines (men, women, and children), each with its own creative team of designers, sourcing specialists, and product development personnel. The creative team relied on feedback -- from store managers, staff, and fashion-forward young people that populated universities and discotheques-to create the product line and to make adjustments for manufacturing later in the season. Zara’s clothing line changed continuously throughout the season. Therefore, its design team had to not only create, the collection months ahead of time like other apparel brands, but it must also aggregate information from market feedback using Zara’s IT system to create the proper alterations to the clothes.

The design teams bridged the merchandising and back-end production aspect of the retail industry, but these functions are normally performed by two separate management teams in...
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