I’m as fashionable as the selection at Costco allows, but studying innovation as I do, Zara, the Spanish fast fashion retailer, comes up frequently.
Zara has over two thousand stores world wide, each gathering vital feedback from customers. Whereas many retail outlets will respond to customer purchase data, Zara goes a step further and gathers staff observations of how customers are reacting to items and what they are saying about what they want.
This information is used by over three hundred designers working at Zara to produce fashions that directly reflects the tastes of its customers. The turn around from identifying a preference to producing a product can be as little as three weeks.
Fast to market
Zara keeps all its operations, including design, sample fabrication and product photography in close proximity in-house. The trendiest products for sale is manufactured nearby to Zara’s offices in Spain.
The result is that Zara can restock its stores twice a week, with items designed and produced very recently. If an item proves unpopular, a replacement can be produced very quickly without the less appealing item accumulating in inventory.
This rapid introduction and replacement of items means that a shopper is conditioned to buy without delay, since the item may not be made again.
Zara pays little on advertising, instead focusing its investments on technology, fast fashion turnaround and appealing stores.
Zara has also invested heavily in e-commerce, which is a natural fit for the company since it is highly data-dependent and benefits from fast product turnaround.
There’s a clear trend here, with fashion demanding feedback from customers, design and manufacturing all be performed at breakneck speed to beat competitors to market and reduce the risk of producing large quantities of apparel that nobody wants to pay full price for. This is as true for Zara as it is for Adidas and Levi Strauss.
Principle 23 – Feedback: By gathering feedback from all its stores into its design and prototyping headquarters, Zara can increase its fashion production pace and accuracy.