RFID deployment is already complete at Zara

RFID deployment is already complete at Zara

Spanish fashion retailer Inditex, owner of the Zara brand, is to pilot an at-home pick-up service in China for recycling garments – and is on track to deploy RFID technology across all brands by 2020.

The updates were outlined by CEO Pablo Isla at the group's annual general meeting this month.

He said the new China rollout will collect garments for the company's Closing the Loop reuse and recycling programme, and will initially take place in the cities of Beijing and Shanghai, starting in September. Inditex, the world's largest apparel retailer, launched its Closing the Loop initiative in 2016, and has so far collected over 25,000 tonnes of garments in 21 markets.

Isla also noted that sustainable raw materials and recycled textiles were used in Zara and Massimo Dutti's 'Join Life' and Oysho's 'We Are the Change' collections – with more than 73.6m garments featuring these labels in 2017.

Progress is also being made in research coordinated by the MIT International Science and Technology Initiatives (MISTI), part of the Massachusetts Institute of Technology (MIT), which is focused on improving the recycling of used textiles and creating new fibres using clean technology.

Supported by the MIT Spain-Inditex Fund, the universities of Vigo, the Basque region and Granada and the Polytechnic School of Valencia have unveiled pioneering projects for the separation and subsequent recycling of fibres.

In 2017, Inditex group revenue totalled EUR25.34bn (US$29.7bn), underpinned by growth in all the regions in which it does business, as well as growth in online sales, which accounted for 10% of the total. Net profit totalled EUR3.37bn.

Isla attributed the company's integrated store and online model for driving sustained growth. Inditex operates 7,475 stores in 96 markets and online reached 47 markets.

"All of Inditex's brands benefit from a robust integrated store and online platform. In 2017, online sales already accounted for 12% of the total in the 47 markets in which ecommerce platforms are available, representing annual growth of 41%", Isla said. He also noted how the nature of the integrated model, coupled with constant investment, is paving the way for innovations that are "100% customer focused."

Specifically this includes same-day delivery in seven cities (Madrid, London, Paris, Istanbul, Shanghai, Taipei and Sydney); a next-day delivery option in Spain, France, the UK, China, Poland and South Korea; new automated in-store pick-up points for orders placed online; and plans for integrated stock management in all 48 of the markets in which Zara has an online presence by the end of 2018.

This model has yielded cumulative topline and same-store sales growth of 59% and 36% respectively during the last five years, with all regions delivering positive results.

More than EUR1.5bn has been invested in technology and logistics upgrades during the last five years – including the deployment of RFID technology.

Already complete at Zara and currently in progress at Massimo Dutti and Uterqüe, the plan is to deploy this technology across the rest of the group's brands in 2018 with full rollout scheduled for 2020.

A new distribution centre in A Laracha (A Coruña) is due to start to operation this summer with close to 90,000m2 of floorspace. New technology, including the widespread introduction of high-speed multi-shuttles and the implementation of six new robot palletisers, are enhancing delivery times.

In parallel, work continues on construction of a new distribution hub in Lelystad in the Netherlands, which will complement Inditex's 10 platforms centralised in Spain.