ZARA Hardly Advertises But Sells Well: Two Secrets Of Business Secrets

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It has been 40 years since its operation, and they have done almost the opposite of advertising and advertising budget. But they have always maintained brand awareness and sales performance. How did they do it?

Before opening up the philosophy of ZARA, we must first understand the relationship between turnover and advertising.

Saito Hyoho, author of hot selling of UNIQLO and ZARA, says that we all know that the main purpose of publicity is to expand the turnover. But what should we do? Let's look at the following formula first.

Turnover = customer number x customer price

Number of customers to buy = incoming number x purchase rate

Arrivals = incoming customers x shop frequency + new guests

Customer unit price = average unit price x per person purchase number

Obviously, the sales volume is formed by the number of customers purchased and the unit price of customers, and the main purpose of publicity activities is to stimulate the growth of the number of visitors.

This is why fashion brands are always throwing money into advertisements, because the more consumers are coming into the shops, the better we can see. The next picture is the advertising fees of Listed Companies in the revenue ratio. It can be found that the global fashion industry will allocate 3%~5% to advertising expenses. Although there are no ZARA (they are not disclosed), according to Saito, ZARA will account for less than 0.3% of the advertising budget.

Advertising distribution budget in the global fashion industry

But global

What the industry is doing, ZARA has a strong personality and insists on keeping advertising costs to a minimum.

But this strategy, even the internal staff, is very strange. It is reported that someone has asked AmancioOrtega, "why don't you advertise?"

"Because advertising is not a customer, it is the business itself, so we will spend money on improving the quality of products and lowering the price. If you are a guest, do you want the store to invest money in advertising or spend on your clothes?"

If they don't advertise, how can ZARA maintain their freshness in their customers' hearts? Saito collated two strategies to tell you that even without advertisements, ZARA can maintain the secrets of high camp:

Use super high rent to grab the essence store and create public praise.

Shop location is king.

In 2011, the first store in ZARA in eastern Taipei showed a high price of nearly 9 million per flat 800 thousand and monthly rent (at which time the average rental price of the store fell to 500 thousand). In 2014, the Queens Boulevard opened in central Hongkong was the site where H&M opened the first shop in Hongkong. According to the Hongkong media, ZARA used to double the rent to get the store.

The rent is expensive, and the brand image and the convenience of the guests are the first choice. Its policy is to strictly select the best location exhibition shop, and hope that the word of mouth of the guest shopping experience will be spread.

Two new products every week is a secret we all know.

In addition to investing in store locations, ZARA's positioning is fast. They insist on two times a week, and new products will be launched on Monday and Friday, while changing the distribution area of merchandise within the store.

In fact, they have never publicly declared that every Monday and Friday will have new products, but this is the law of the world.

Shop assistants know, familiar guests know, there are those who buy or not buy, every Monday and Friday regularly check new products Fans.

Saito pointed out that in a study of the coming shop rate, it is pointed out that the rate of customers coming to shops in general fashion brands is 3.5 times, and that of ZARA is 17 times, which is five times that of the same industry.

The brand image of ZARA is not to let customers get tired of it, and fashion is the image of fresh products. They believe that most customers who have demand for fashionable clothes are not just beginning to make up their minds to buy a product. Instead, they are looking for inspiration at random, or enjoying the new products that bring them imagination. Familiar with the speed of new product replacement of ZARA, most of them will set up the mentality of "not buying this time, maybe next time", so that consumers will buy the products that they want very much, and they will buy them without saying anything, so as to greatly improve their purchase intention.