How Does ZARA Realize The Size Of Chinese Clothing Industry?

1. Quick response.

When there are new popular elements in movies or TV media, ZARA can complete the imitation of star costumes or creative works of top costume designers in a matter of days. From the identification of fashion trends to the new fashions that cater to the trend of fashion, ZARA takes only two weeks, while the traditional production cycle takes 4-12 months. So Zara has created a myth of supply chain in the field of fast moving consumer goods. ZARA designs 18 thousand new designs every year, with an average of 2 to 3 weeks' new shelves, which can produce 7 days, 14 days of cabinets and 30 days of counters. About 50 thousand new fashions are launched annually. Another fashion brand GAP can only launch 4000 models a year. Zara can quickly catch customers' preferences and quickly make clothes, and then send them to stores around the world. The Spanish national newspaper reported: "a designer's clothes designed on a computer can reach customers in two to three weeks' time."

Of course, it matches the design speed of Zara, the work of hundreds of designers obscurity, and an average of 20 minutes to design a garment, which is 4-6 times the H&M. So Zara has no response to fashion, so how can Zara accurately collect these fragmented fashion elements?

　 2, fashion capture

Zara Designer It is a typical "flying trapeze". They often fly through various fashion conferences, or enter various fashionable places. Therefore, ZARA's design inspiration comes from a large number of fashion frontiers distributed in bars, showrooms, fashion week and so on. Usually, when the latest designs of some top brands come out soon, Zara will release very similar fashion designs. This way of design ensures that Zara will keep up with fashion trends. Therefore, every year, Zara will pay tens of millions of euros to the top brands. Zara did not give up this design pattern. Zara earned more profits than fines. Besides, the best place to collect fashion elements is shops, because only shops can understand the needs of customers. The store provides sales data, and then delivers it to the storefront manager. After finishing the storefront manager, the store manager gives the result to the design department. The design part designs the style according to the customer's needs, then submitting it to the commercial department to evaluate the cost and price, and then start the production. Because customers' demand for fashion is changing, data collected from shops are timeliness. This means that designers no longer play a decisive role in design, but need to understand the psychological needs of consumers. This is a reverse design concept.

Therefore, although ZARA is not the first advocate of fashion, it can rely on shops to collect current fashion trends and turn the current popularity into a realistic actor at the fastest speed. Some people call it "ZARA is a monster, a designer's nightmare", because the rapid response of ZARA will undoubtedly greatly reduce the overflow value of big brands. Because no matter how big the brand of clothing, from design to the cycle of at least 6-9 months or even longer, so they have to work hard to predict what will be popular in a few months, how big the sales will be, and the final result is often a lot of unsalable goods, which can not be filled with the best sellers, but can only see the passing of good sales opportunities.

3, strong logistics

Few people know that the Zara logistics warehouse is 9 times the size of Amazon, and there are countless trucks at the gate of the warehouse transporting products to the rest of Europe or the airport two times a day. Zara in terms of logistics, all long-distance transportation is an aircraft, rather than a cargo ship. They are willing to pay high freight rates rather than spend on advertising and marketing.

ZARA's distribution system is also well developed. About 20 kilometers of underground conveyor belt delivers ZARA products to the cargo distribution center in La Coruna, Spain, which has a very mature automated management software system. To ensure that every order arrives on time, ZARA uses optical reading tools to conduct product inspection and selects and inspected more than 60 thousand items per hour. The transport trucks in the logistics center continue to drive to Europe based on the fixed departure timetable. ZARA also has two air transport bases. Usually European stores can receive goods within 24 hours, and American stores need 48 hours, and Japan is 48 hours -72 hours. Under the intervention of information technology, the accuracy rate of ZARA shipment is as high as 98.9%, while the error rate is less than 0.5%.

Even if expensive costs are to be pursued, ZARA can still make gross margins and net interest rates equal to H&M through other advantages, and ZARA is unwilling to save the cost in order to increase profit margins. ZARA focuses more on fast and sensitive reaction speed, and has reached unprecedented heights for all fashion brands and retailers.

Water and wood comments: it is precisely because of the Zara reaction speed, design speed, and logistics speed has made a great breakthrough, so all the clothes in the ZARA headquarters warehouse will not stay for more than three days. The shop will give orders to the headquarters two times a week to replenish products, and the turnover rate of inventory is 3-4 times higher than that of other brands. And on average, only 15% of the clothes are discounted every quarter, while the other brands are 50%.

4, no marketing

Zara Brand management Strategy, there is a famous "three no" principle - "no advertising, no outsourcing, no discount." This is very different. Zara's advertising accounts for only 0.3% of sales, far below the average of 3% to 4% of the industry. In addition, the types of Zara discount generally account for less than 10% of the total variety, and generally only 15% off.

Instead of making big investments in advertising, they focus on the location of the shops. They often choose storefronts in the golden section of the city. These flagship stores often have luxurious appearance and large area, which can give consumers a unique shopping experience.

The quantity of each style in the same store is very limited, and each design in the flagship store has no more than two weeks. This "scarcity" created by human beings can give consumers two kinds of impression: one is that the clothing of this store is selling very fast, and the other is that the clothes in the shop are always new.

And ZARA attaches great importance to window design, making windows the most effective advertisement. As Sara's founder Amancio Ortega said, "fashion is on the street. The street is the best T stand to show the fashion. Sara is fashion.

Customers will also be happy to see ZARA as a fun to discover fashion because they display the shop as a window. Statistics show that customers go to ZARA17 times a year on average, while other brands only have 4 times.

In addition, ZARA does not focus on producing more quantities for each style, but focuses on the diversity of styles. ZARA the production volume of each garment is very small, which artificially creates a scarcity. The more it is not easy to get, the more it can stimulate people's desire to buy. ZARA executes the strategy of always out of stock. For the same style of clothing, there are only a few stocks in the retail store. Perhaps because of your hesitation, you may miss the chance to finally own it, because you may see a new shelf tomorrow. This initial chagrin is a decisive purchase speed when customers are patronizing again. 5, big data

The IT system has been deployed to every store in Zara. Each store has its own shipping list, but the French shop's shipping list is different from the Italy store. This is a very personalized approach.

The store manager is responsible for checking the sales of goods in the store, and then ordering from the headquarters according to the needs of the next week. Headquarters gathered the information through the Internet and sent them to Spanish factories to produce and deliver them as quickly as possible. The store manager himself decides what to enter; the Zara's assessment of the store manager is to see if the store's sales have gone up. If there is a backlog of goods, the store manager will pay for those stocks.

Zara has an all-weather open data processing center. Every retail outlet can track sales data through this system. In addition, customer feedback can also be reflected in the system. Zara can quickly find out which items are good and which are unsalable.

In the ZARA store, cameras are installed in every corner of the counters and shops, and the store manager carries PDA. When the guests reflect to the salesperson: "this collar is very beautiful", "I don't like the zipper of pocket", these detailed details are transmitted to the headquarters designers at least two times a day through the Zara internal global information network. After making decisions at headquarters, the details are sent to the production line to change the product styles.

This way YE greatly reduces the inventory rate. At the same time, Zara analyzed similar "regional popularity", and made the closest market segmentation in the production of color and edition.

H&M always wants to keep pace with Zara, but the result is not obvious. Why?

Because the H&M supply chain, from print to shipping, takes about three months, and can not support the huge data supply of big data compared with Zara two weeks. The key to the success of big data operation is that the information system must be closely integrated with the decision-making process, respond quickly to the needs of consumers, correct them, and execute decisions immediately.

In the view of water and wood, ZARA is creating a completely new business mode. It pursues "high speed, small batch and multi style". These three characteristics are the general trend of the fast moving products industry. Of course, this is a complete business model based on customer needs.

6, financial chain

The vast majority of Zara production in the world is outsourced to third world processing plants. The core of its business is brand design and channel development. Of course, many brands do the same, but the essence of Zara is not here.

Many factories in China are always dragged down by inventory returns, so the connection with the brand is too low, and the supply relationship is very fragile. But the more than 2000 processing plants distributed around the world can start at any time. How did Zara do it?

Zara has opened up the financial relationship with suppliers, so that the factory that works with it no longer needs to worry about capital. For example, a downstream processing plant needs to produce 20 million of the value of its products to Zara. Once funds are lacking, the factory will not function. According to the traditional financial format, the processing factory needs to go to the bank to guarantee the loan independently, and the bank needs to go through the mortgage formalities, which is very troublesome and difficult.

Zara can provide the fastest online financing for its more than 2000 core suppliers worldwide. On the end to end electronically based system, the supplier of Zara will only send an application directly from Hongkong or Singapore to the Chinese account in accordance with the corresponding requirements, and can complete such a financing in 24 hours without any complicated procedures. Processing plants around the world no longer need to worry about funding.

These funds come from highly efficient and developed capital markets. Zara obviously built a higher level of financial links, which also promoted the rapid growth of the entire Zara ecosystem. Zara has obtained a management body that is working with all suppliers.

Therefore, the core of an organization in the future is to integrate a higher level ecosystem. The future is no longer a competition between price and technology, but a competition between ecosphere. The pattern of ecosphere should be like this. Logistics is the foundation, information flow and capital flow are the support, and culture is the top level. That is the competitiveness of future organizations.