Zara Brand Audit | 2016

Zara Brand Audit

By: Brendan Richardson

Introduction

Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia. The company was founded in 1975 by Amancio Ortega and Rosalía Mera and owned by Casper Schmedes. It is the main brand of the Inditex group, the world's largest apparel retailer. The fashion group also owns brands such as Massimo Dutti, Pull and Bear, Bershka, Stradivarius, Oysho, Zara Home, and Uterqüe. The main factor that keeps Zara ahead of their competitors is their one-week policy. Zara needs just one week to develop a new product and get it to stores, compared to the six-month industry average.

FOUNDERS:

Amancio Ortega Rosalía Mera

INDITEX BRANDS

Zara Brand Audit | 2016

Zara is the brand with the most new stores with 77 net openings, 13,628 net sales (millions of euros), 2,162 stores worldwide, 88 markets and 27 online markets. In recent news, Zara founder, Amancio Oretga had become the richest man in the world for two days on September 10th, 2016.

Category & Competition

Zara is a fashion retailer that sells men, women and kids clothing and accessories. The first store featured low-priced lookalike products of popular, high-end clothing. During the 1980s, Ortega changed the design, manufacturing, and distribution process to reduce lead times and react to new trends in a quicker way, which he called "instant fashions". Six months in advance, Zara commits to only 15 to 25 percent of a season’s line. And it locks in merely half of its line by the start of the season, meaning that up to 50 percent of its clothes are designed and manufactured right during the season. Zara has been under fire for alleged customer discrimination, Deceptive Pricing and copyright infringement. Top competitors include ‘H&M’ and ‘Abercrombie & Fitch’

Zara Brand Audit | 2016

Products Within Category

Zara is not individually publicly traded. Their list of products includes shirts, t-shirts, polo shirts, sweat shirts, jogging, sweaters, shoes, bags, jackets, suits, pants, skirts and gym wear. Their supply chain ships new products to stores twice a week and the batches delivered are small, so if the design does not sell well, little harm is done to inventory. Zara competitor H&M, has the most physical locations worldwide. H&M has been on the market longer and takes advantage of co-branding and designer collaboration with top companies in their industry. Alex Katz, being its most recent collaboration.

Zara Brand Audit | 2016

Brand Analysis

1. H&M - $20.2 Billion in sales2. Zara - $19.7 Billion in sales 3. Uniqlo - $16.6 Billion in sales

Zara’s sales continue to rise every year as well as sales at H&M and Uniqlo. Zara keeps a significant amount of its production in-house which keeps pricing consistent. H&M’s like for like sales shrank during spring season.

Consumer Profile

The demographic of Zara consists of fashion forward men and women ranging from ages 18 to 35 with a mid-range income. Zara being a top fashion retailer; brand consumers purchase their products daily and do so at their many flagships and stores across the world. A typical Zara customer is one who is young, fashion-conscious and value-seeking. Zara has high brand awareness due to its longevity in the retail industry. Zara conveys a stylish personality that appeals to its confident target audience. Customer loyalty is high in relation to high customer knowledge and trust amongst their consumers.

Advertising/Marketing Communications

Zara lacks adequate marketing and advertising, but makes up for it and then some with their “fast fashion”. Zara prides itself on fast moving fashion with new designs restocked in limited quantity every two weeks. This encourages consumers to check stores frequently to promise themselves a piece. This provides a sense of exclusivity to shoppers. Current strategies that H&M are marketing to its consumer are through a mobile marketing campaign to promote the latest collection. Consumers receive SMS coupons, media sites, and other offers.

Zara Brand Audit | 2016

Media

Zara's Fashion Retailers Spend On Average 3.5% Of Revenue On Advertising and focuses most of the rest of its spending on opening stores near high-end retailers. Most of H&M’s spending is advertising and marketing campaigns.

Promotions

Zara has very few sales and offers while H&M has various sales, special offers and campaigns (H&M coupons, Promo Codes, Seasonal sales)

Digital Strategies

ZARA Website: http://www.zara.com/us/

On the website you contact them, join their newsletter, find fashion catalogs, collections & lookbooks and buy new arrivals every week. The Zara online sales are growing and prevalent on most social media platforms including Instagram, Facebook and Twitter. Zara takes advantage of content marketing through their social media to grow social media audience. Zara's Instagram has added 4.6 million followers in 8 months and posts that gather thousands of likes and hundreds of comments each.

Zara Brand Audit | 2016

Brand Value

Values associated with Zara include ‘modern’, ‘trendy’, ‘high fashion’ and ‘sharp’. Sales increase every year.

Brand Exploratory

Zara Brand Audit | 2016

Quantitative Research

What words would you use to describe the characteristics of ZARA?

Friends/Colleagues/Co-workers

Respondent 1 - “High fashion” Respondent 2 – “Trendy” Respondent 3 – “Affordable” Respondent 4 – “Trendy” Respondent 5 – “Fancy”

Qualitative Research

How does the image of ZARA influence the population between the ages 18 and 35?

Friends/Colleagues/Co-workers

Respondent 1 - “Encourages younger generation to become more fashion forward” Respondent 2 – “Teaches how to shop affordable and fashionable” Respondent 3 – “The ZARA brand has built trust amongst their consumers making

ZARA the first place to check for shopping” Respondent 4 – “ZARA keeps millennials up to date on high fashion garments” Respondent 5 – “ZARA keeps their target market in the know”

Reccommendations

ZARA is a very strong brand and sits alone from their parent company, Inditex. The company has achieved a major amount of exposure through traditional marketing tactics, but can benefit from the use of modern day digital marketing. ZARA has been playing catch up when it comes to being active on social media and ZARA commercial surely would not hurt the value of the brand and would bring more exposure to the company. ZARA may also want to consider co-branding and reaching out to other high fashion designers to collaborate on projects and creating campaigns.

The fashion retailer should also spend more on marketing and advertising. I would recommend that ZARA introduces an extension to one of their existing product lines. For example; a ZARA baby collection. ZARA can also had additional products and expand into different categories with multiple lifestyle items such as home & kitchen, vintage, music, books, etc.

Zara Brand Audit | 2016

References

https://www.inditex.com/documents/10279/208409/ Inditex_+Annual_Report_2015_web.pdf/d3501c55-8e8f-4936-b8d8-0fc47a543c93

http://www.academia.edu/6500115/Zaras_operations_strategy http://www.zara.com/us/en/woman-c270086.html https://erply.com/in-the-success-stories-of-hm-zara-ikea-and-walmart-luck-is-not-a-

key-factor/ http://yourbusiness.azcentral.com/legal-term-stealing-business-idea-12733.html http://www.forbes.com/sites/walterloeb/2015/03/30/zara-leads-in-fast-fashion/

#24d5006661d7 http://www.wsj.com/articles/h-m-turnaround-will-take-more-than-cooperative-

weather-1475237049 http://mediakix.com/2016/05/best-brands-on-instagram-zara-channel-followers/

#gs.G6=h540 http://image.slidesharecdn.com/zara1-101017144029-phpapp02/95/zara1-7-728.jpg?

cb=1287326487 http://www.marketwatch.com/investing/stock/zara/financials