Across the street from famed luxury brand Salvatore Ferragamo and Versace on New York City’s busy 5th Avenue is Zara, the flagship chain store of the world’s largest apparel retailer Inditex. Known for its beautiful minimal store design and trendy, cat-walk inspired apparel, Zara is the pioneer of “fast fashion,” a term used to describe a market-based model that produces quick, runway-imitated apparel to capture the most current fashion trends.
Today Zara has over 2,000 stores worldwide, with an increasing number of locations in the U.S, a smart move for the Spain-based company. As the largest apparel market in the world, the U.S. alone comprises about 28% of the global total and has a market value of about USD$331 billion; the average American spending about USD$1,604 on apparel and services in a year [1][2]. But Zara’s revenue of USD$14.4 billion last year didn’t derive purely from their unique business model, in fact they are not alone in the fast fashion industry.
With over 5,500 combined retail locations worldwide, chances are you’ve heard or have even come across some of the other fast fashion retailers: H&M, Forever 21 and Uniqlo. As fierce competitors of Zara, they too create quick runway copies especially targeted towards the powerful millennial demographic. But in terms of speed and quality, none can beat the reigning fast fashion royalty, Zara.
The Spain-based retailer takes only 10-15 days to go from design stage to sales floor, an incredible feat even for their competitors and especially from other traditional retailers who take about 6 months to update their collections. Their efficiency derives from building and controlling their own manufacturing instead of sourcing from third party vendors in foreign Asian countries, something that Forever 21 and many other retailers do. Zara also stocks very little and updates their collections frequently, restocking with designs every two weeks. Not only does this encourage customers to come back to their stores often, but it also pressure customers to buy when given the chance. Zara is not only able to deliver quick and affordable trendy apparel, but they’ve also created the appeal of product exclusivity around their own product.
Zara strategically aligns itself with high-end, luxury brands, first by investing in beautiful and often historical locations to open shop and second by keeping close proximity to its expensive competitors. Its store designs are kept at a beautiful minimal and their apparel are displayed by collections, echoing the same feel and appearance of other high-end luxury boutiques. The defining difference is their price averaging closer to more affordable brands such as The Gap and Banana Republic, making fashion more accessible to the general consumer market.
Fast fashion stores such as Zara are revolutionizing the retail industry. Even luxury brands are changing the way they design and put out fashion, moving from two collections a year (fall & spring) to four to six collections annually. Zara found a profitable opportunity with fast fashion, and there are likely even more profitable opportunities in your business’ particular industry.
Mr. Edsel Oliveira has over 20+ plus years of management experience in assisting businesses from all over the world establish and significantly grow in the U.S, particularly with apparel business consultancy. He was influential in introducing famed Grendene footwear brands Rider and Ipanema to the U.S. and can assist in transferring your Brazilian business to the U.S. or your American business to Brazil.
