One Year, The New 20 Season "Cost-Effective King" Zara, We Need To Close Thousand Stores To Do Online.

According to media reports, Inditex, the parent company of Zara, recently said that it plans to permanently shut down its 1000 to 1200 stores, which is equivalent to 16% of its total global stores, and is more actively turning to online sales to comply with changes in people's consumption habits after the outbreak. The planned closing stores will affect many brands such as Zara, MassimoDutti and Pull&Bear, mainly smaller stores.

Taking into account the change in consumer behavior after the outbreak, Inditex will invest 2 billion 700 million euros (about 3 billion US dollars) to expand the e-commerce channels of the two brands of Zara and Bershka, while expanding the store space of the brand stores, thereby increasing the competitiveness of the company so as to better cope with the garment industry depression caused by the new crown.

As one of the largest fashion retailers in the world, sales fell by 44% to 3 billion 300 million euros and a net loss of 409 million euros as a result of the outbreak in the first quarter of April.

Public information shows that Inditex, the parent company of ZARA, is one of the largest apparel retail groups in the world, occupying 1.4% of the global apparel retail market, ranking second (2016) after H&M. The company has 8 brands: Zara, Pull&Bear, MassimoDutti, Bershka, Stradivarius, Oysho, ZaraHome and Uterq u E. The products cover women's wear, men's wear, children's wear, underwear, accessories, home clothes and household goods. The company operates in Europe, America, Asia Pacific and Africa.

ZARA was established in Spain in 1975 under the Inditex group (stock code ITX), a subsidiary of the clothing brand is also specialized in ZARA brand clothing chain retail brand, ZARA is ranked third in the world, Spain ranked first clothing business, in 87 countries set up more than more than 2000 clothing chain stores.

ZARA designer brand's superior design price is even cheaper, simply to let civilians embrace HighFashion. Inditex ranked first in Spain, surpassing the US GAP, Sweden's H&M and Denmark's KM to become the world's top apparel retail group.

Zara has been popular among consumers since its entry into the Chinese market, and its customers are constantly in the market. From 1998 to 2018, the company's revenue increased by 13 times to 26 billion 100 million euros in 20 years. Moreover, the net interest rate of the company maintained at a relatively good level of 10%-15% and continued to improve steadily.

After 2012, in the background of the saturation of some regional stores, the number of new Zara stores has obviously slowed down. The focus of the company's expansion began to shift from "store expansion" to "sales area expansion". The single store area of ZARA's main brand rose from 1107 square meters in 2011 to 1449 square meters in 2017. At the same time, the company also began to overweight online channels, take online and offline linkage sales strategy. As of 2017, the group opened up online sales channels in 47 markets, accounting for 12% of the total sales in the region, accounting for 10% of the total sales, representing an increase of 41% over the same period last year. Zara is committed to promoting the integration of online and offline channels, launching the distribution service of the day and the next day, realizing the comprehensive opening of store inventory and online inventory, and gradually deploying RFID technology in the whole brand (all the ZARA brands have been deployed), and expanding mobile payment to more and more markets to enhance the convenience of consumers in various scenarios.

Huaan securities analyst Yu Xiaowen said that in terms of market share, the fast fashion led by Zara continues to improve in the global fashion sector. Zara entered the Chinese market in 2006, and its sales share increased rapidly from 0.1% in 2007 to 0.8% in 2016, ranking eighth. The total share of fast fashion brands including Zara increased from 0.3% to 3.2%. The apparel industry is relatively fragmented and the total share of the top 15 in 2016 is only 12.8%. In contrast to the relatively mature market in Western Europe, the top 15 share in 2016 was 23.5%, of which fast fashion brands accounted for 11.3%, about half of the top 15, and the market share of Zara and its group were 2.5% and 3.9%, respectively, third and second respectively.

Yu Xiaowen introduced that in the clothing industry, according to the definition of "fast consumer goods" refers to the commodity consumption process is relatively short commodity, the general use of consumption process within a year "definition, ten years ago or even decades ago, clothing has strong durable goods attributes, but now has more" fast food "attributes. With the emergence of fast fashion brands such as Zara and the improvement of people's consumption level, the frequency of people buying clothing has been increasing more rapidly. The focus has shifted from paying more attention to function to paying more attention to styles, especially those with new styles, but with more functional styles. Consumers are also more popular with consumers. The new frequency on Zara is significantly higher than that of peers. The frequency of updates is 18 to 20 seasons a year. Most clothing companies change for 4 seasons a year. It is worth noting that Zara pricing adopts a cost-effective strategy, which greatly improves consumers' desire to buy and purchase frequency.

What's more, we must see that the R & D design of traditional clothing enterprises is determined by the global authority and designers, that is, "suppliers decide what consumers wear." their influence on fashion trends is indeed undeniable. However, there are many changes, adjustments and transformations in the middle from authoritative organizations and designers to the final populace landing. According to the cultural trend, the design that the brand manufacturers ultimately adjust according to the fashion trend may not meet the needs of consumers, and may even be different. These characteristics make it difficult for many enterprises to design products satisfying consumers.

Zara's mode is different from the above traditional mode. According to Zara's earnings report and from 0 to Zara, Zara's design process is contrary to traditional enterprises. Its R & D design ideas come from the professional buyers and design teams all over the world, and from the front end store information collection. Zara has nearly a thousand fashion buyers all over the world, paying attention to fashion trends and street elements in real time, and purchasing the most popular fashions nowadays, researching and inspiring designers. At the same time, designers maintain close contact with offline stores and online teams to understand consumer preferences. Zara values information feedback from front-end sales, including qualitative information about sales data and clerks' records.

In Yu Xiaowen's view, with the development of the times, especially the development of the Internet, the quality, basic functions and purchase channels of the products are no longer the threshold, but the bottom line. The competition between the clothing brands gradually turns to mining and meeting the needs of consumers. This seems to be the inevitable trend of the development of the consumer industry. Therefore, with the advent of the era of independent consumption, it is difficult for the brand to meet the demand through mass production and development. It is necessary to develop more new products by accurately studying the needs of consumers, analyzing the characteristics of different target groups, analyzing the pain points of different products in different scenes, and making more precise marketing in the later stage. Efficiently reach the target users.