Spanish clothing giant Inditex, owner of the Zara brand, is investing EUR2.7bn (US$3.1bn) to bolster its online business and plans to turn its stores into ‘sustainability hubs’ as it looks to transform its profile and accelerate its digital transformation.
Outlined in its growth plan for the next two years, Inditex has earmarked EUR1bn to boost its online capabilities, and a further EUR1.7bn to upgrading its integrated store platform by rolling out new advanced technology solutions.
The company is developing a proprietary technology platform as the basis of the online operating system over which all of the integrated digital operations related with Inditex’s e-commerce will run. The aim is that online sales will account for over one-quarter of all sales by 2022, compared to 14% currently.
The advanced technology will be used to enhance the customer experience by allowing shoppers to check stock in real-time through an app so they can purchase and pick-up items immediately, and pre-book fitting room slots, while also locating garments exactly where they are displayed in the store.
“This strategy is a culmination of the project the company has been investing in steadily and significantly since 2012, a project that will transform its profile notably,” says group executive chairman Pablo Isla. “The overriding goal between now and 2022 is to speed up full implementation of our integrated store concept, driven by the notion of being able to offer our customers uninterrupted service no matter where they find themselves, on any device and at any time of the day.”
Inditex says its store technology upgrade plan will continue with its policy of opening larger stores and absorbing smaller units. And each store, whether online or physical, will become a sustainability hub: they will use less and renewable energy, eliminate single-use plastic, recycle all materials and foster the reuse of all garments.
The company says it has committed to ambitious targets for the use of sustainable and/or recycled fibres by 2025 and has the full engagement of suppliers.
A take-back programme will also be completed this year, while the stores will adopt the management and recycling of all materials used in-store. There will also be a strategic focus on garment reuse and recycling, alongside academic and R&D entities and institutions such as the Massachusetts Institute of Technology.
Yesterday (10 June), Inditex revealed a EUR409m loss in its first-quarter against earnings of EUR734m last year as a result of the coronavirus pandemic.
Net sales fell to EUR3.3bn versus EUR5.9bn in 2019, while online sales were 50% up between 1 February and 30 April, surging 95% in April alone.