Why Can ZARA Respond Calmly To The Impact Of The Electricity Supplier?

Recently, the latest Forbes list is announced.

Amancio Ortega, founder of Bill Gates, became the richest man in the world.

In today's general downturn in the retail industry,

Industry has become

In the hardest hit area, the electricity supplier has already occupied half of the clothing. Therefore, the world's richest man has changed hands, and the traditional clothing retail giant has gone beyond the IT technology giant.

According to the data monitoring report released by Analysys think tank, in 2015 1~12, the scale of clothing and clothing category pactions in China's B2C market reached 654 billion 980 million yuan, an increase of 66.08% over the same period last year.

According to the data of the National Bureau of statistics, the retail sales of clothing, shoes, hats, needles and textiles in the 1~12 months of 2015 were 13484 billion yuan, up 9.8% over the same period last year.

Obviously, clothing business has already taken away half of the clothing retailing industry.

In recent years, under the double blow of the electricity supplier and the economic depression, the offline traditional clothing retailing industry has been throwing away the enemy and throwing away the city.

In the first half of the year, 2016 of the listed apparel companies disclosed their financial reports. Apart from the general decline in revenues and profits, the most shocking thing was the closing of stores.

In the first half of this year, the dress was closed by 29 stores, CABBEEN clothing closed 47 stores, Daphne closed 450 stores, and Hasen closed 156 stores.

These are not bad. From last year to now, some of the top shops were nearly 6000: Bosideng close shop, Lining closed 1800 stores, and Metersbonwe closed 1500 stores.

However, for ZARA, the founder of fast fashion in the world, the growth of performance is still strong.

ZARA's parent company Inditex group's net sales in fiscal year 2015 reached 20 billion 900 million euros, up 15.4% over the same period last year; net profit was 2 billion 880 million euros, up 15% over the same period last year; in the first quarter of 2016, the Inditex group's sales volume reached 4 billion 880 million euros, an increase of 12% over the same period; net profit rose to 554 million euros from 521 million euros in the same period last year, an increase of 6.3% over the same period.

40 years ago, the Internet has not yet been born, but ZARA has become a heterogeneous group at that time, with "prehistoric Internet thinking".

Of course, ZARA does not need to use the concept of the contemporary Internet to demonstrate its consistent success in the past 40 years. What we say is just to make our group of Internet users understand the brilliance of the traditional retail giants.

(1) rapid iterative thinking

ZARA tens of thousands of new products are put into the market every year. The frequency of product batch updates is more than 12 seasons per year.

From the concept of popularity to design, to production, to the supply of stores, the response time of the whole process is less than 3 weeks, and the fastest can be less than 7 days.

The iteration speed of this product, whether traditional clothing brand or clothing electricity supplier, is hard to achieve.

The use of the electricity supplier is intensive supply chain, which is much more efficient than the decentralized supply of traditional stores. Even so, the electricity supplier still can hardly surpass ZARA.

Just like half a century ago, the United States achieved its moon landing with primitive mechanical and electrical technology. ZARA also realized the extreme response of design, procurement, production, logistics and sales by means of traditional management and technology before the birth of the Internet.

In June 2001, Madonna went to Spain's Barcelona concert. The 3 day performance was still in progress. It was found that the audience had already worn the clothes worn by Madonna at the concert. After that, there was a fashion craze for Madonna in the streets of Spain, and the costumes came from the local ZARA shop.

It can be seen that the speed of ZARA design and supply chain is unprecedented.

(two) user thinking

40 years ago, ZARA was positioned to cater to the needs of users through mass, civilian and peaceful pricing. It is totally opposed to the elitism of Armani and Chanel.

The "masses" here refer to the middle class in developed countries in Europe and America.

The west is a spindle shaped society. The number of people on the upper level and the number of people at the bottom are very small. The largest number is the middle class.

ZARA, by adopting the doctrine of buying and buying, and copying the original style of the original brand in a disguised way, sells it to the public at a low price, which gives ZARA the support of the public.

In Europe, ZARA has become a frequent courtroom in court and is fined tens of millions of euros a year.

However, this will not affect the enthusiasm of ZARA to carry out the doctrine of "bringing the doctrine" to the end, because "users get the world", ZARA has no fear. These fines are still a drop in the bucket compared with the net profit of hundreds of millions of euros per year.

(three) experience thinking

"Customer experience" is the most respected concept of electric providers. It is not a good experience of the electricity supplier, but it is adhering to the principle of "what is missing and what to fill", because the consumer experience is the most lacking in e-commerce products sold in the virtual world.

Obviously, offline retailing is "seeing is real, touch is available", giving customers experience is irreplaceable.

After ZARA landed in mainland China, the experience of clothing store ushered in a new revolution. ZARA used thousands of square meters of storage style clothing supermarket, with distinctive spatial display, perfect application of acoustic and optoelectronic technology, supplemented by various humanized facilities, allowing customers to swim, touch, try, contrast, feel and comment freely.

At the same time, ZARA products bring new ideas to the consumption experience with the "small quantity", and the younger generation who advocates individuality and publicity. From then on, there is no need to worry about the situation of "bump shirt". Everyone is a unique experience.

(four) platform thinking

At present, "platform strategy" is popular. Many people mistakenly believe that only the Internet age can have platform strategy.

ZARA is it just a clothing store?

ZARA has long been a fast fashion platform in prehistoric Internet era.

Decades ago, it set up a global fashion observer, buyer and designer team, integrating the global production plant and supplier resources, using the global aviation rapid logistics system, and occupying the global market and users.

ZARA launches more than 10000 new products every year, which will capture all the popular culture, fashion trends, popular elements and popular products of the mainstream European and American communities. Even today's Internet platform companies can not afford to do so.

In short, around the great cause of "fast fashion", ZARA has built an unshakeable platform ecosystem.

Moreover, ZARA's platform really exists in reality, not the virtual world constructed by imagination.

With the use of information technology by ZARA, the platform will be more efficient and firm.

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Four great values of ZARA brand

ZARA's prehistoric Internet thinking mentioned above corresponds to four major values in terms of brand value: richness, scarcity, fashion and peace.

These four values are not available in most of the apparel brands and clothing business enterprises.

(1) richness

The richness of ZARA means "more money".

Shop area is often more than 500 square meters, flagship store can reach 2000 square meters, such a large display area, the result is a great wealth of products.

With casual fashion as its basic position, ZARA has established a complete product line.

From a consumer perspective, ZARA includes men's wear, women's wear and children's wear. It can not only solve the needs of young singles, but also meet the needs of all three small families; from a seasonal perspective, ZARA covers four seasons: spring, summer, autumn and winter; from a functional perspective, ZARA includes T-shirts, trousers, skirts, suits, jackets, windbreaks, knitted yarns, winter wear, belts, boots, bags, scarves, accessories, hats and other costumes and matching products.

In terms of quantity, ZARA launches about 40000 new products every year, and selects 10000 of them to put into production and reach consumers.

In short, ZARA stores satisfy the consumers' one-stop shopping needs with the richness of their products and win high loyalty and patronage.

Because the virtual exhibition space can be infinitely large, the electricity supplier enterprises also occupy a great advantage in product richness.

However, as a single electricity supplier brand, its richness is still very limited.

As a treasure, Tmall, Jingdong and other platforms, according to the rules of sales ranking, the electricity supplier brand must rely on the "explosive economy", often 10% of the explosions, which brings more than 70% of the traffic volume.

Therefore, too much SKU is absolutely disastrous, because most commodities will lack natural flow and become stock backlog.

For ZARA offline retail brands, the flow of each product is almost the same, so there is no need to deliberately make explosions and lose the richness.

(two) scarcity

The scarcity of ZARA refers to "less quantity", that is, in the same shop, the same style often has only a few stocks. If consumers do not start first, then come back in a few days, this style of products will no longer exist.

In this way, ZARA always purposely creates scarcity, so that consumers can't help buying snapping.

At the same time, the scarcity of ZARA also meets the personalized needs of consumers. The probability of wearing ZARA clothes and "bump shirts" is very small. Every ZARA fans are unique clothes.

Therefore, ZARA can deeply attract young consumers with their avant-garde personality and make them loyal customers.

Because of the electricity supplier's "exploding economy", the electricity providers have to throw their resources to explosions, and they sell tens of thousands of products, so there is no scarcity and personalization.

In this regard, ZARA wins the electricity supplier.

(three) fashion

The iterative thinking of fast fashion and Internet is synonymous.

As the originator of fast fashion in the world, ZARA always stands at the forefront of global fashion. With its sharp sense of smell and feelers, it collects and analyzes the world's big data for real-time analysis, through the buying system to imitate the latest styles of big brands, mobilizes the flexible supply chain, and completes the rapid iteration of products.

Because of the fast updating of products, fast response to the trend, and always leading the latest fashion, it is called "fast fashion".

In the fast fashion competition, ZARA has no suspense ahead.

In recent years, the clothing industry must be known as "learning ZARA". In fact, only a few high street brands such as H&M can keep up with the pace of ZARA in the traditional clothing brands. In the brand of clothing business, except for the Korean clothing house, it is entitled to "Han Feng fast fashion", other electric providers are not this magnitude.

(four) parity

The reason why ZARA can beat the fashion leader brand in sales is the parity.

Although ZARA's fashion is closely related to many luxury brands, its price is even lower than that of the luxury brand 1/10, so that the urban youth can afford it.

Such a super cost performance, so that consumers are in hot pursuit.

Every time a new store is opened, it will be sought after, creating a myth of daily sales.

The result of parity is that ZARA is not only the most leading brand of its parent company INDITEX, but also the leader in the apparel retail industry.

Speaking of which, the electricity supplier brand is not convinced.

Well, for parity, electricity providers have the most say.

In order to explode money, electricity providers are losing money to earn money.

On the one hand, traffic, manpower and other costs are getting higher and higher. On the other hand, the electricity supplier has been trapped in the red sea of price war.

The parity of ZARA is aimed at luxury, and the popularity is also aimed at the middle class. Therefore, ZARA does not fight price war. It is also a medium high price in the Chinese market, so the gross profit margin is still very high.

Numerous cases have proved that contrary to the laws of economy and the low price strategy without premium, only the brand will fail.

In this regard, ZARA has actually won the electricity supplier.

Four pillars of ZARA supply chain

Traced back to the source, the ZARA mode is actually the 3 version of SPA (Specialty Retailer of Private Label Apparel, private brand fashion retailer) mode, and the core of SPA mode is integration of production and circulation.

The development of SPA mode has gone through three stages. It was first extracted from the business mode of the fast moving consumer goods industry by GAP company of the United States, and developed as its business philosophy. It was formally defined in the annual report of 1986.

In the second stage, the Japanese SPA mode represented by UNIQLO (UNIQLO) was introduced, characterized by low price popular basic and warehouse type supermarkets.

The third phase of the SPA model is represented by Spanish ZARA and Sweden H&M. It emphasizes the integration of supply chain, based on efficient production capacity, and ensures the rapid updating of products. The "parity" plus "fast fashion" has created a new miracle in the clothing industry.

The four major values of ZARA brand mentioned earlier are not castles in the air and the beauty of the moon. They are built on the strong supply chain behind them.

If the support system behind ZARA is decomposed, it can be summarized as four pillars.

(1) free and flexible design process

ZARA's product design process is different. The general brands are top-down. Designers analyze products and trends, design products, and then make products reach stores and customers through production and logistics. While ZARA is bottom-up, through a large number of "fashion observers", it is spread in bars, social and other fashion venues, and attend the conference of top brands to collect the latest fashion information.

At the same time, stores will collect information such as customers' tastes and preferences at any time. These information will be collected in time to headquarters, and the headquarters will quickly design the latest products through comprehensive analysis.

There are no advanced designers in ZARA's huge designers. They are all "copy workers".

At the same time, ZARA's peak production accounts for only 15% of the total sales in the peak season. That is to say, 85% of the products are designed and produced at any time and freely according to the trend.

Other competitive brands usually pre design and produce more than 60% of the products before the peak season. Less than 40% of the products are temporarily adjusted according to the prevailing trend of the season.

The traditional clothing brands in China usually carry out garment ordering in the two seasons of spring, summer, autumn and winter. Almost all products are pre designed and produced before the peak season.

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(two) tightly organized production system

ZRAR has 22 large factories in science and technology and more than 500 small factories in Spain.

The 22 big factories only do dyeing and cutting, because mechanized large factories do this most efficiently.

And 500 small factories only make style, and one factory produces one style, so that the opportunity of sewing on foot is especially effective.

In addition, ZARA has established strategic alliances with other more than 1200 manufacturing companies through overseas acquisitions, but overseas factories generally only produce basic styles.

Going to the ZARA store to see the signs of clothing will find that "origin" is all kinds of things.

This global production system is tightly organized and is controlled by headquarters at speed, efficiency and quality to meet the needs of fast fashion.

(three) rapid response logistics system

Through the powerful IT technology, ZARA headquarters knows the sales volume and inventory of all the stores, and stores sell the sales data and order information everyday. On this basis, the stores command the whole logistics system to run at high speed.

ZRAR's clothing has been distributed to many stores around the world by air, which has left many competitors unable to catch up.

What is even more surprising is that between the 22 big factories and more than 500 small factories in Spain, and between small factories and logistics centers, logistics and distribution have been excavated by more than 200 tunnels.

As a result, logistics distribution is not restricted by land traffic, and can be operated unimpeded and efficiently at any time.

(four) a large number of stores

Supporting ZARA parity and high supply chain costs is based on economies of scale.

At present, ZARA's INDITEX group has annual sales of over 20 billion euros, becoming the world's leading apparel retailer.

Among them, ZARA contributed 70% to the group.

ZARA has opened more than 2020 stores in more than 60 countries, of which 90% are self owned shops, the rest are joint ventures and franchised stores.

Moreover, ZARA stores are large stores to meet one-stop shopping needs. Location is located in the bustling business circle of big cities, with huge traffic volume and huge sales volume.

To sum up, ZARA as a traditional clothing chain retail brand, its business model and management concept is far beyond the times, and even lose the Internet era.

Moreover, its brand value and supply chain efficiency far outstrip all the current clothing business operators, and of course it surpasses all kinds of competing brands under all lines.

ZARA has maintained the pragmatic spirit of traditional commerce and avoided the bubble in the Internet age.

When ZARA is combined with the Internet and technology, the traditional giants will further self renew, evolve themselves, and lead the future space and time.

Inspiration from ZARA

We must be called "Internet +" today, and people who have Internet origins seem to have a sense of superiority.

However, data statistics show that the average life expectancy of Internet start-ups is only 32 months, and the traditional business tycoons represented by ZARA can follow the traditional business spirit and values and keep pace with the times, so that they can surpass the time and space and enduring enduring.

ZARA gives us three enlightenments: first, the Internet and e-commerce enterprises are cautious about "subverting traditional industries".

Two, Internet and e-commerce enterprises should abide by the basic laws and values of Commerce.

Three is the traditional enterprise + the Internet is the trend of the times. The strong industrial foundation is plugged into the wings of the Internet, and they are the real subversive.