Recently Backstage Tales got a chance to meet a few insiders from the Inditex Group, the world’s largest fashion retail corporation, which owns such brands like Massimo Dutti, Bershka, Oysho, Pull & Bear, Stradivarius and the world’s leader in mass fashion – Zara. We are now presenting a series of articles about the Inditex Group business and interviews with the insiders from the company. As an introduction to the series we present answers to questions about Zara and Inditex that you may have had but have been too afraid to ask.
Who is the owner of Zara?
Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and was founded in 1975 by Amancio Ortega and Rosalía Mera. Zara is the flagship chain store of the Inditex group, the world’s largest apparel retailer.
What is the Inditex?
Inditex, the biggest fashion retailer group in the world which operates over 6,600 stores worldwide and owns brands like Massimo Dutti, Bershka, Oysho, Pull and Bear, Stradivarius, Zara, Tempe, and Uterqüe, and also a low-cost brand Lefties.
Who is the owner of Inditex?
Today Zara is a part of the Inditex group (Industrias de Diseño Textil Sociedad Anónima), of which Amancio Ortega owns 59.29%, and aside from over 6,000 stores includes the brands Zara, Massimo Dutti, Oysho, Zara Home, Kiddy’s Class, Tempe, Stradivarius, Pull and Bear, Bershka and has more than 92,000 employees.
Where do Zara make their clothes?
So while some competitors outsource all production to Asia, Zara makes its most fashionable items—half of all its merchandise—at a dozen company-owned factories in Spain and Portugal, particularly in Galicia and northern Portugal where labour is somewhat cheaper than in most of Western Europe.
What is Zara’s strategy for success?
Zara has an innovative solution to both the style problem and the marketing problem. Rather than hire world-class designers, Zara, which is based in Spain, politely copies them. Then it relies on a global network of shopper-feedback to tweak their designs. Corporate HQ absorbs thousands of comments and sends tweaks to their manufacturers in Europe and Northern Africa, who literally sew the feedback into their next line of clothes. The clothes are shipped back, and the stock changes so quickly that shoppers are motivated with a “now-or-never” choice each time they try on a blouse that won’t be in-store in a few weeks. It’s the user-generated approach to fast fashion. The brand manages to go through the whole design-manufacturing-distribution process in 20 days and the stores receive new stock every 2 weeks. The old stock goes to sale or gets utilized after that which encourages Zara consumers to visit stores more often than they visit other stores and purchase instantly.
“The desire for innovation and constant improvement with which we began this project 36 years ago is the motivating idea which has guided us up to the present time. Now we have the privilege of seeing how this original idea, from which many others, with an open and creative mind, have emerged and continue to emerge, has converted itself into the Inditex Group”
– Amancio Ortega
How about advertising?
Basically, Zara doesn’t do it. The Inditex Group only spends 0.8% of their revenue on advertising. Instead, the company spends ungodly amounts of money buying storefronts next to luxury brands to own the label of affordable luxury.
Where does Zara position their stores and why?
Zara stores cozy up to the most famous brands in the world to sing their luxury ambitions even as they profit off a brilliant, cheap, short supply chain that delivers similar fashion at a much lower price.
What is Zara’s innovation?
Zara’s most important contribution isn’t a new product. It’s a new process: fast fashion, directed by customers, and enabled by a short manufacturing leash. Process innovation is the story of modern retail. Zara and other process innovators are welcome for cash-strapped customers and they’re a good story for Spain and other countries in its global family that have seen 40,000 jobs created as a result of Inditex’ genius.
If you want to know anything else about Zara or Inditex group, let us know in the comment section below and we will make sure to cover it in the next article of our Inditex series.