Zara’s Retail Marketing
1.0 Introduction
Zara is a clothing and accessories company that is headquartered in Galicia, Spain (Zara, 2014). The company was established in 1970s by two entrepreneurs: Ortega Amancio and Mera Rosalia (Zara, 2014). Zara is considered the largest clothing retail firm in the world (Zara, 2014). The company owns a number of recognized brands, such as Pull and Bear, Bershka and Uterque among others (Zara, 2014). The company is distinguished by its capability of developing a product, and displaying on its stores within a period of two weeks; this contrast with a period of 6 months that is witnessed in the retail industry (Zara, 2014). The company is also distinguished from other companies by the fact that it does not embrace the current trend of taking the fast-fashion production to economies that are associated with low levels of cost. As opposed to investing its revenue in marketing, Zara resolves to expand the number of stores in different localities; this has seen the company continue upholding the objective of excising a zero-advertising policy. Currently, the apparel retailer has more than 2000 stores worldwide; however, the company relies on the Spanish market (Zara, 2014). The clothing retailer deals in a number of products; these include the categories of male and females’ clothing. They are further classified to the upper and lower garment, footwear and cosmetics among others. Additionally, the company engages in the sale of children accessories and clothing. With its focus on sizes and women’s clothing, the firm has gained popularity in Spain, and the entire world (Zara, 2014). This report is focused on assessing the retail mix of Zara and the extent to which the retail mix offers a basis for a competitive advantage that is sustainable. The report would finally assess the challenges that Zara faces due to continued international growth.
2.0 The Retail Mix and the Basis of Offering a Competitive Advantage
2.1 The Merchandise Range and Assortment
Zara is associated with policies that are responsive to the quick market-changes as far as fashion is concerned among consumers (Bush, 2009). The products are also associated with a high content of fashion. Besides, the company ensures that it provides a wide range of products as far as the retail clothing industry is concerned. However, the products are not characterized with physical qualities that are deemed to be disproportionate. The products of Zara are categorized in a number of groups; they are categorized according to prices, age and the content of fashion. Additionally, these categories are further categorised into the children’s, adult male and females’ clothing. As opposed to other similar firms which their prices are determined by different branches, Zara’s prices are determined centrally; this is an attempt to reflect relatively similar prices in different stores.
The reliance on the zero-advertising policies and low prices has seen the firm lower its lower the cost of operation, as well as experience increased levels of sales. Coupled with a supply chain that is short and vertically integrated, Zara has been able to experience optimal results as far as far as the cost reduction, profit maximization and efficiency are concerned. In relation to other fashion retailers in the industry which spent more than 3% on advertising their brands via media, Zara stands out as a company that spends less than 0.4% on advertising via a similar platform (Nagy and Várfalvi, 2012, p.209). The company also differs from other players due to the fact that Zara displays trendy items in its stores as opposed to diverse shows.
White (2005) asserts that Zara also adds value to its business operation via the creation of a sense of scarcity among customers as far as new items are concerned. Although different stores in the UK are frequently stocked with new items after every fortnight, Zara attempts to undersupply the stores with various items with a view of creating a sense of scarcity among the customers (Fredriksson, 2011, p.43).
It is not uncommon that the Zara’s stores are characterized by clothing and other accessories that are stocked and arranged sparsely. In a number of cases, the shipments that are made to the UK are often small in an endeavour to create scarcity; additionally, a store can be stocked with new items after a period of one month. The difference of stocking the stores with items every month and fortnight attempts to create the sense of scarcity among consumers. In this regard, Zara normally witness significant sales since customers are inclined to think that the new items are likely to run out of stock.
This has seen Zara perform optimally in the recent past. However, the optimal performance is also explained by the fortnight stocking of new items in various; this aspect normally creates a sense of freshness among consumers.
