The Secrets of Zara’s Success
Classy, well-tailored, cheap-and ethical. Can the world’s favorite clothing store do no wrong?
by Marion Hume
The Daily Telegraph | June 22nd 20011
How do we love thee, Zara? Let us count the ways. Some numbers make a good place to start: a company founded on just €30 is now worth an estimated €32 Billion. Last week its parent company, Inditex, of which Zara represents over 60 percent, declared an 11 percent rise for the first quarter to €2.96 billion.
Translated, Zara was coining it while other retailers spent January to March moaning about recession and rising production costs. Next quarter’s financials look set to be more spectacular, if the response to the £49.95 blue dress worn by the Dutchess of Cambridge after her wedding is anything to go by.
So why do those as diverse as Kate and the business brains at Harvard which recently commissioned a study of the brand love Zara? Here’s a top 10.
1 The designs work in normal life.
Walk into a Zara. See anything you like? Thought so. A bug reason for this is that there is no Zara “style” – its appeal is broad. Yet you won’t find everyone else in the office in the same dress, and here lies the first clue to its supremacy. Although Zara may run up 30,000 copies of an item, supply is spread thinly over its 5,157 stores in 81 countries, plus its online shop. Scarcity plus realistic design equals kerching! at the cash till.
2 Fast Response to city-specific trends
A new white jacket arrived at the Manhattan flagship store. But customers passed, telling sales staff that New Yorkers prefer cream. A system is in place for retail staff to transmit such information straight to the design team at Arteixo, a tiny town in north-west Spain. Within a fortnight, a much bigger consignment of cream jackets had been dispatched to become a sell-out on 42nd street.
3 It’s mass with class
That Zara has its headquarters in Spain is significant. While influences are global, Spanish customers have always liked curvy cutting to flatter a proud bearing. The result is that Zara tailoring seems higher quality than other in this price range (blazers start at around £49.99), and styles are on-trend as opposed to too trendy.
4 A signifier of stylish city
A Zara store opening signifies a city has arrived sartorially. “Thank God, we won’t be a third-world fashion country any more,” said a Sydney- residing fan at the first Australian opening in April. Such was the delight down under that crowd control barriers had to be maintained for weeks. Those in Cape Town, Taipei and Lima may be equally excited.
Just as consumers are driven by scarcity, so the press is intrigued by the greatest fashion story never told. Inditex founder Amancio Ortega, 75, the son of a railwayman who is now rated as the ninth richest man in the world, has never given an interview- and probably never will. Next month, he hands over to his equally taciturn second-in-command, Pablo Isla.
6 A Brilliant brand name
Those launching brands seek short, sharp names that work in every language. Yet this four-letter word was an accident. From 1963, Ortega’s company, which manufactured nightwear, was called Confecciones GOA (Amancio Ortega Gaona’s initials backwards). In 1975, he started to sell direct to public through a little shop in La Coruña and decided to call it Zorba. But the owner of a nearby bar of the same name protested. A new name had to come from the letter moulds already cast. Ironically, Spain is the only country in which Zara is pronounced not “Zah-rah” but “Tha-ra”.
7 The Green Frock
Inditex ups its eco rating by using wind turbines and solar power in its headquarters. Recaptured energy is even redirected into the steamers that press every garment. Items are despatched in battered boxes, which are reused and then recycled. Bicycles are provided for workers to whizz around inside vast warehouses. Green, yes- but is also makes good business sense because it saves money.
8 Seductive, sustainable store design
Store design is really working when you are too busy shopping to notice. Zara stores are built to seem airy and light-even on a busy Saturday-while the current in-store look, closely inspired by Prada, is for squadrons of mannequins gathered together to show off the season’s many looks. To decide on how its global stores should appear, Inditex tests entire “streetscapes” of prototypes for new-look Zara stores within a vast hanger at Arteixo. The radical Rome store, the prototype for all new builds, is on target to receive a platinum standard in Leadership in Energy and Environmental Design (LEED), a seal of sustainable architecture that is one of the most demanding of its kind.
9 A hooray from Harvard
The ultimate business plaudit is a study by Harvard business school. What do the money men love? That Zara turns the fashion system, which usually starts with the whim of a designer, on its head, by putting the customer at the heart of a unique business model. But there is a downside: for this model to thrive, Zara’s “designers” are strongly “inspired” by the creations of others, who are neither acknowledged nor paid. Not for nothing had Daniel Piette, fashion director of Louis Vuitton, described Zara as “the most innovative and devastating retailer in the world”.
10 Ethics Appeal
Inditex is intelligent in its generosity to charity. Following the Haiti earthquake, Inditex sent €2 million of emergency reconstruction relief as cash, not clothes. You might think that those who have lost everything need clothes, but as a result of other fashion giants sending these, local clothing industries have never recovered, leading to a greater dependency on aid, rather than trade.
In Spain, some stores’ employment practices make it possible for those with mental and physical disabilities to join the workforce.
But let’s hold back on awarding Zara that tenth love point for now; a somewhat murky supply chain makes all fast-fashion tough to love. Potentially vulnerable garment workers manning sewing machines in countries such as Bangladesh, Turkmenistan and Pakistan. In Zara’s favor, though, much of its production is in factories it owns in Spain, meaning it can guard against the scary labour practices that haunt the high street.
However, you can help by letting them know how much that matters and even that you are prepared to pay a little more and wait a little longer to ensure fashion is fairer.
Remember how they listen to customers asking for cream jackets? Use that system to ask for clean jackets at the cash till or via zara.com. You could also suggest that Zara provides “swing tags” that detail your garments journey to you.
Why would the world’s biggest fashion force care what you think? Because Inditex has conquered by putting the customer at the care of the story. Do speak up.