How Does Fast Fashion Zara Reverse Growth Under Multiple Shocks?

In recent years, under the multiple impact, many fast fashion brands have not had a good result, which is different from that of most fast fashion brands.

Now, ZARA, the founder of fast fashion brand, has maintained its high level of revenue collection. How did it do it?

According to the annual report released by ZARA group Inditex group at the beginning of the year, in the 2015 fiscal year, the Inditex group opened 1 years or more of the store sales (accounting for 78% of net sales), recorded an increase of 8.5%, a substantial increase in speed compared with 5% in the 2014 fiscal year, and the group added 56 new markets to 330 new stores during the year.

At the same time, the group maintained a strong growth momentum in the 2016 fiscal year.

According to the data released in the first quarter of the group, Inditex group achieved a net sales of 4 billion 879 million euros, up 11.5% from 4 billion 374 million euros a year earlier, and increased 17% after excluding the exchange rate effect.

Inditex's excellent revenue results make the gap between ZARA and other fast fashion brands eager to catch up with them.

In this regard, in the rapidly changing consumer market, how does ZARA defend the status of the king?

ZARA's rapid reaction supply chain system has always been a benchmark for many fast fashion brands.

In the apparel industry is still in the two quarter of a year, the launch rate of new products, ZARA will strive to create a fast supply system, to achieve two weekly product updates, 15~20 products each year.

This fast fashion renewal speed and supply system have been regarded as the core competitiveness of ZARA by many brands.

Fast supply system allows brands to follow the trend of the market and introduce products that satisfy consumers' current purchasing desire.

Although speed is one of the key factors that ZARA can win in the market, it is not the only reason.

Take H&M, the largest competitor of ZARA, for example, it also has a faster update speed in terms of goods renewal cycle.

At the same time, H&M is even better than ZARA, who lacks publicity power in brand promotion.

In addition to inviting celebrities, supermodels and net red to carry out brand endorsement and film promotion every year, H&M's joint product line with well-known designers has been popular in the market and has become a highlight of brand promotion.

This brand operation method is also emulated by many clothing brands such as UNIQLO.

But these big promotion investment still did not let H&M win in the starting line.

A senior expert in the industry said that various brands were launched.

The joint series does play a good role in enhancing brand image, but its contribution to brand performance is relatively limited.

Because the frequency, style and quantity of joint series are relatively limited, they are not the main products of brand marketing.

Unlike other fast fashion brands with high investment in marketing, ZARA hardly invites celebrities to endorse products, and brands spend only 0.3% to 0.4% of their total marketing cost each year.

In contrast, the cost of investment in marketing is generally maintained at about 3% to 4%.

Skimming out the dazzling marketing "tricks", ZARA's input in all links of the supply chain is not easy. It is also a theoretical basis for many brands to know that ZARA can maintain high product renewal rate, but it still cannot be surpassed in the actual operation.

Unlike conventional clothing brands, such as land and sea pportation, ZARA is mostly pported by air freight to ensure a fast pace.

In the warehouse of ZARA headquarters, all garments will not stay for more than 3 days. The store will replenish the order two times per week.

ZARA inventory turnover is 3~4 times higher than other brands.

At the same time, ZARA also has a strong set.

In real time, control the product sales of terminal stores, and adjust the production and replenishment according to these data.

Strong control over terminal sales allows ZARA to maintain high product sales and only 15% discount products a year.

The data of other brands generally remain at around 50%.

At the same time, ZARA's adhered to the design idea is also the key factor to win the market.

Although ZARA has always been criticized by the industry for its copying practices, seamless docking with fashion trends and customer preferences, rather than overemphasizing the tonal and style of the brand, has greatly reduced the risk of ZARA product development.

Relying on the design team's annual "fashion collection" in fashion week and the understanding of the trends in various areas, the popular pop money has been launched quickly to ensure that the brand achieves a higher sales volume in the terminal market.

At the same time, around the market demand for product development, so that consumers maintain a high ZARA consumption stickiness.

It is reported that the average customer goes to ZARA17 times a year, and the consumption of other brands is only 4 times.

The reason why ZARA can go further is to save the fancy "routines" and direct consumption demand.