Three Secrets Of Successful Fashion Brand ZARA

Recently, Spain is known.

Pablo Isla, chief executive of group Inditex, opened the lecture at Tsinghua University, China's highest school. The theme of the speech was quite gimmick: humility and Innovation: decryption.

The successful gene.

As the Inditex group that has just made the world's richest Oman Theo Ortega, its success secret has been attracting much attention.

Especially in the global market, the consumption power is generally insufficient, and the well-known clothing brands are slowing down.

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The latest earnings data show that as of July 31st, Inditex's operating profit in the first half of the year was 1 billion 606 million euros, up 7.9% over the same period last year.

Net profit increased 7.1% to 1 billion 256 million euros compared with the same period last year.

At the same time, reporter statistics found that from 2010~2015 years, the average annual revenue and net profit growth rate of Inditex group remained at 11.22% and 14.39%, respectively, which is obviously contrasted with GAP, UNIQLO and H&M, which had a serious decline in performance.

Excellent performance also made the Pablo Isla, group CEO, selected the list of The Best-Performing CEOs in the World in 2014 and 2015 in HBR.

Coincidentally, shortly after Pablo Isla's public speaking in Tsinghua, HBR announced the latest list of the best CEO in the world. As in 2015, Pablo Isla once again ranked the top of the list of fashion categories, ranking third in the overall list.

"Customer centered"

In Tsinghua's public speech, although Pablo Isla has not explained too much about the details of brand operation that the public is concerned about, it has repeatedly stressed the Inditex "customer centered" business philosophy.

"The core of our operation is to focus on customers and improve customer satisfaction."

Pablo Isla said that as a fast fashion positioning Zara, brand not only to ensure that their products meet the latest trend of fashion, but also to ensure that each customer can afford Zara products.

"We attach great importance to meeting customer needs, and customers' dissatisfaction with enterprises is the biggest risk of enterprise operation."

In order to achieve this, Zara has used RFID technology in all shops and production and pportation to ensure that the group can understand the daily sales data and inventory situation of every store in the world, and conduct in-depth analysis and sorting out these data to guide the next production of the group.

The wide application of IT technology has also enabled Zara to make quick decisions and become the "benchmark" of global fashion brands.

"We will launch 18 thousand new models a year. Every shop in the world should ensure that two new customers are renewed every week to ensure that customers of Zara have fresh feelings every time they enter the store."

Pablo Isla said that to do this, Zara's retail outlet is also the core and design source of the brand. In addition to the statistics of the world's stores through IT technology, the group also requests the shop assistants to keep in touch with customers and feedback the needs of customers to the group every day.

After that, the group will feedback the analysis results of the notifications to designers, and the design team will extend the design on the basis of the bestseller, such as introducing more products in terms of material and printing.

Yang Dayun, President of fashion industry in China and President of UTA Fashion Management Group, said that Zara's fashion design and quick response are indeed the key factors for its success. But Zara has maintained rapid growth for many years, and basically grasped the global consumption trend.

"Zara's customer positioning is very good. Unlike GAP and UNIQLO, who aim at basic consumer demand, Zara's products are always following fashion. Product parity, its customers are mostly impulse consumers, and their desire to buy is strong, so its impact on global economic weakness is not great."

Yang told reporters that, especially in Europe, where the Zara brand headquarters is located, its economy has been in the doldrums for many years, while the income of the middle class in Europe has not increased much and its purchasing power has decreased. So many people turn to choose cost-effective brands like Zara.

In the first half of the year, the sales of Inditex group accounted for about 60% of the total revenue in Europe, especially in the first half of the Spanish market, which benefited from the steady economic growth in Spain. In the first half of this year, Inditex group gained 8% sales growth in the local market.

Zara's great success in brand positioning and operation mode not only brings the concept of fast fashion brand, but also makes it a target for the apparel industry to emulate.

However, judging from the current market situation, Zara still has the advantage of "being imitated and never surpassed".

Building a strong supply chain

"Zara's powerful information collection system does help companies make a lot of market decisions.

But this link can be easily achieved through IT technology. The real difficulty is how to implement these decisions quickly. "

Liu Weiwen, director and deputy general manager of JEANSWEST group, told reporters.

For the apparel industry, to realize the fast turnover of clothing products, the real time consuming is not the production and processing links, but the development of front-end fabrics, dyeing and printing. All these require the brand to establish close cooperative relationship with the upstream suppliers.

In this regard, Pablo Isla said that Inditex group has more than 1700 suppliers worldwide, and the group has deep cooperation with these suppliers.

JEANSWEST is one of the suppliers of Zara.

Liu Weiwen visited the headquarters of Zara three years ago as a supplier. He told reporters that the products of Zara were divided into two parts: basic and popular. For the basic Zara, it would be produced in the areas outside Europe, and it was sensitive to fashion. The popular fashions requiring fast updating were basically produced in the European factory of Zara.

"These factories are close to headquarters and can quickly implement production decisions."

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Compared with the fast fashion brands such as H&M and UNIQLO, Inditex group is definitely a heavy asset company.

Yang told reporters that Inditex group has invested in, shares or acquired many factories in Europe, and the vast majority of its production is also realized in its own factories in Europe.

At the same time, Inditex group is also the only enterprise in the clothing industry that reserves the logistics and pportation company.

"This heavy asset operation mode can help enterprises to reduce the cost of each link and improve communication efficiency and reaction speed.

Zara took more than 20 years to build a strong supply chain system through continuous investment. This is also an important reason why other fashion brands can hardly replicate their models.

In a depressed market environment, Zara's large investment in the supply chain can ensure efficient operation of all its links, while avoiding the impact of raw material price fluctuations and so on.

This is also Yang Dayun's view that Zara is the most powerful part of achieving the perfect docking of time and demand.

Pablo Isla has repeatedly stressed the huge role of flat management in the whole group: "Inditex is a very large group with many brands under it. We have been working hard to manage the group in a better way, so that the management structure of the group can be flattened as far as possible, so as to improve enterprise efficiency, stimulate staff enthusiasm and attach importance to team training."

Seize the opportunity of Globalization

To seize the opportunities of globalization and expand the development of emerging markets is not only an important strategy that Inditex group has always adhered to, but also the key to its rapid development.

Zara is firmly pursuing this strategy.

In the world's most important fashion cities such as Paris, Tokyo, New York and London, Zara has shops in its core business circle.

"A brand must be bigger, and it should not rely solely on the local market.

Zara is getting better and better in the competition with world-famous brands.

Pablo Isla said that the Inditex group currently has about 7096 stores and has entered the world's 92 sales market.

China is now the second largest selling market of Zara, and we predict that China will soon become the first largest selling market of Zara.

The Chinese market is very large, and consumers are growing fast, and the demand for fashion products is higher and higher. These will bring great opportunities to Zara's future development.

Not only is Zara, the fast growth of international fast fashion brands such as UNIQLO, H&M, and Gap all benefited from the support of China's consumer market.