As far as fashion goes, it’s largely remained stuck in the mode of old-school retail on multiple levels. The distributor/brand structure of retail has not changed much in decades, nor the mall/brand boutique system. Wholesale retail still constitutes a large part of many luxury and high street labels and that’s not likely to change anytime in the next 12 months. But retail as a whole has been relatively hit by consumer interest and a far more restrained consumption in general. Except Zara.
Zara’s holding company, Inditex SA, announced recently that it would be registering a 10% increase in profits, with a further 13% increase in sales in the first six weeks of this year. Zara is the main driver of its business, which includes a stable of various high street labels as well as the upper-mid segment label Massimo Dutti, which has gained a strong creative direction this year.
We recently headed over to Coruña to check out Zara’s facilities (FYI, they are massive). Here are the top 10 things you need to know about the brand.
1. It’s just called Zara, as it’s spelt.
Yes it’s true that in Spanish, the ‘z’ and ‘c’ are pronounced as a ‘th’. Hence Ibiza isn’t ‘e-bid-zah’ but ‘ei-bee-tha’. Same goes for Barcelona and Valencia. And even though some do call it ‘Thara’ at its headquarters, it’s really just Zara to even those in its offices and the general public, despite what all those blogs out there insist is insider knowledge. Don’t be fooled.
2. Zara produces around 800,000,000 items of clothing in a year.
That’s a lot. It’s over 10% of the entire world’s population. Yet some things at Zara, such as delicate stitching or unique details (pearl buttons on a lady’s jacket or embroidered details on a souvenir jacket) are still done by hand. How is that possible? It’s simple. Zara generates some 30,000 designs a year, so that averages to around 26,000 pieces of clothing a design. Not all of them require hand-work, of course. By combining small production runs with large volumes of designs, it ensures maximum interest and appeal to one consumer or another. Even if design A didn’t speak to you, design A1000 might.
3. It has the lowest wastage in any major fashion label in the world.
This is pretty much a guarantee and a requirement from its parent company. On average, most fashion companies tend to discard or destroy around 10 to 20% of their production at the end of a season, after post-season sales and not counting outlet retail. Zara stands at 1%, which is really incredible. Few companies can claim such standards. What that means is, products are sold generally at full price guaranteeing they won’t have to do clearance retail and make less profit. Obviously not all products sell as well, but on average, 1% of stock is left over, and this always goes towards a charity cause.
4. Stocks are highly limited.
Zara has over 2,213 stores around the world, and it’s expected to increase that by a good number this year, particularly in the North Asia region. With small production runs of 25,000 or so a design, that means each store only gets limited numbers of products. What that means for the consumer is that when store staff tell you something isn’t available, it really isn’t. So buy it on the floor when you can. The odds of it going to sale is low.
5. Data comes first at Zara.
Within the headquarters of Zara and on every design floor sits a huge row of computer terminals. Analysts look at information that pours through from every single store in the world, giving details on which products sold well and which did not, and general interests of consumers. That information is delivered to designers, who then proceed to design with that information in mind. Zara allows their designers to do pretty much what they want, but ultimately, successful sales translates to a good record for designers, and that follows trends customers are interested in.
6. Test everything.
Everything is subject to testing at Zara, and not just for the purposes of quality control, although that too is stringent. Store layouts are tested, designs for clothing are tested internally to see which is preferred and that then becomes the actual product made. That testing includes store managers, designers and lead designers, marketing, and any other relevant department. Even which items are placed next to each other are tested. Nothing is left to chance.
7. Production is efficient.
To ensure minimum wastage, Zara cuts the cloth itself. The raw material comes to the headquarters, is patterned and cut to ensure the best use of material, sent out to production factories (the majority of which are either in Spain or in countries nearby) and put together. It’s then returned to Zara for handwork, quality control, RFID tagging and packing.
8. Zara’s logistics is mindblowing.
Apart from RFID use, Zara’s purchase processing organisation chart is impressive. Stores input what they want to acquire, and that gets sent into a central server. This collates the data, and in two hours, that’s put across to logistics. The logistics department looks at what it has in stock, and packs them accordingly. A specialised conveyor system automatically sorts the items on the belt into individual boxes – these are earmarked for specific stores across the world, not sorted by country. The tags keep track of stock in the warehouses (they have six massive ones across the country) and also the outstanding request. Once a box’s order is completed, a bell sounds to warn staff to pack it up and send it out. In 8 hours, it’s ready. That’s impressive.
9. Many things are still done traditionally.
Just because Zara is tech forward doesn’t mean it ignores traditional ways of doing things. Sampling and samples are still made by hand, with designer and pattern cutter working in small groups and collaborating to create their designs. While we won’t say they are perfect (please make your suiting armholes narrower for better mobility), that’s pretty cool.
10. It just opened the world’s largest Zara store in Madrid.
The brand just opened the largest store in the world at Paseo de la Castellana. It’s 65,000 square feet and right across from El Corte Inglés. Spain remains Zara’s largest market, with 435 stores in the country and 16 in Madrid alone. It will also be a guinea pig testing ground for brand new technologies that Zara is looking to incorporate into its future, such as mobile payments and smart dressing rooms. It’s also going to be highly energy efficient, with a drive towards eventually making all Zara stores around the world powered by renewable energy sources and with efficient water usage. That’s very cool.