How Does Fast Fashion Leader Zara Predict "Next Season'S Popular Colors"?

Before the new season comes,

Retailers can hardly predict whether black is still popular or whether other colors will become popular colors.

In fact, even in the season, customer preferences often change.

In the past, most retailers relied on forecasting to decide what customers wanted to wear.

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Most retailers will be able to predict errors and bear serious consequences - at least half of their inventory should be sold at half price a year.

Zara's holding company,

Industrial companies are very unhappy with such losses and decide to adopt adaptive strategies in terms of production and retail.

The holding company introduced fashion into the fashion industry in 1975 when Zara was put on the market.

Zara does not predict clothing styles that customers may want, but rather responds faster to customers' clothing styles.

Zara did this in two ways.

First, Zara shortens its own supply chain, shifts production plants closer to customers, and is willing to invest in higher production costs for greater flexibility. Among these measures, the company redistribus garment factories for the US market and European market, and pfers them from East Asia to closer to the terminal market, such as Mexico, Turkey and North African countries.

Close supply is the key to the success of the organization of the textile company.

The shortened supply chain reduces the time from the design studio to the main street retail store to only 3 weeks, which is 5 months shorter than the average supply time of the industry.

Second, Zara will only produce a certain style of clothing in a small batch. In fact, all clothes are real time products that participate in the market. Successful products that are quickly snapped up will be selected for mass production.

Compared with competitors, Zara retail stores tested more styles to ensure customers' active participation and prepare for continuous production.

In the 6 months before the start of the new season, Zara is used to develop products for the season 15%~25%. At the beginning of the new season, only the products of 50%~60% were produced, and the average productivity of the industry was 80%.

As a result, about 50% of Zara's clothing is produced in the middle of the season.

If Haren pants and leather pants suddenly become popular, Zara will react quickly and design the new style, and send it to stores before a certain fashion trend reaches its peak or recession.

The effect of this approach is very obvious: in 2010, Zara's price reduction goods accounted for only 15%~20% of the stock, which was in sharp contrast to the industry average of 50%.

In addition, although the direct production cost of Zara is higher than that of other production centers located in the Far East, the profit rate of a certain period is 2 times that of the industry average, and the turnover of retail stores is quite high, which brings huge investment returns.