Blog: What drives the world's largest retailer's success?

Petah Marian | 1 August 2012

Zara, which opened its first store in 1975, has taken its pioneering fast fashion approach global, becoming the world's largest retailer in the process. 

While Zara has become ubiquitious on high streets around the world, its founder, Armancio Ortega, has remained fiercely private. In the recently released book 'The Man From Zara', Covadonga O'Shea looks to understand the man behind the brand. Here are five strategies that have driven the retailer's success:

  • Zara constantly renews its stock - 40% of stock is changed each week -while stock in the stores is replenished every three days. Each year it offers 20,000 SKUs and and aims for a complete turnover of stock in its stores every 28 days.
  • The company's strategy is to create a climate of scarcity and opportunity in its stores, which means that customers must purchase items they like when they first see them, as the same product is unlikely to be in stock a week later. 
  • Vertical integration means Inditex has much more control over the production of its products. Inditex owns some 99 companies covering not just textiles and fabrication, but also logistics, marketing, construction, real estate, finance and power generation. It produces over 50% of its collections in its own factories and in Spanish and Portuguese co-operatives. 
  • Ortega goes out of his way not to see other retailers' collections to avoid claims of copying. "They can accuse us of plagiarists if they like, but the truth is that among all the great brands, and the not so great ones, there are always areas where they coincide. It might be better to refer to that process of mutual influence as 'inspiration," Ortega reportedly said. 
  • Stores are largely autonomous: managers decide which stock to carry and are responsible for their smooth running. There are six fundamental things that Ortega expects from his stores at a minimum: always wear a pleasant expression, smile at the cash desk, have a pen in the hand, the manager should attend to customers most, the changing rooms are treated as an important point of sale, and in-store staff must be patient.


Asia facing up to increased competition

Increasing competition for garment sourcing contracts is seeing China not only being challenged by other countries in Asia, but by sub-Saharan African and even Russian suppliers too. And it is pushing...


Cambodia raises garment worker wages

The monthly minimum wage for workers in Cambodia's textile, garment and footwear sector is set to rise to $153 from January next year, following a vote on the issue last week. The increase marks a ris...


Sportswear initiatives start to take shape

The results of two highly-anticipated initiatives in the sportswear sphere were revealed last week: the launch of Under Armour’s new UAS lifestyle brand and the first pair of running shoes created at ...


Hanjin Shipping collapse triggers fear of West Coast port repeat

The recent bankruptcy of South Korea's Hanjin Shipping, the world's seventh-largest container shipper, at the end of August, has left billions of dollars worth of merchandise in limbo, leaving the fal...

just-style homepage

Forgot your password?