Fast evolving retail requires fast-changing merchandise, hence the entry of fast fashion. The idea is to hook the customers. Make them visit the store again so that a new trendy collection is not missed out. A plethora of fashion retailers are following this business model. The frequent changes of collection, minimal time requirement for designing and production and then replenishment of stock, backed by strong network of logistics, have re-vitalised the fashion industry. This has ensured that the consumers never lose interest and never find monotone in the wardrobe, never ever plagued by the question “what shall I wear this weekend?” Fast fashion is just the befitting sartorial response to the fast-paced life.
Who are in the race?
Mango, Zara ,Forever 21, Jack & Jones, Vero Moda and Only from Bestseller, and H&M are some brands who have established themselves in the fast fashion domain, ruling the present day high street market globally. All the brands, except H & M, have already made much-hyped entry in India. Their success is mainly dependant on the aspirational outlook of today’s customers who want to don the same outfit that has made appearance in a fashion magazine or in an advertisement, but who are cautious enough to shell out their hard-earned money. Aping the same fashion, high street fashion brands have made their collections affordable, turning far-fetched dream into reality.
The operational strategy
Both Zara and H&M have the capability to change collections every three weeks. Zara has already crossed ten thousand miles stone in launching new designs. Jack & Jones offer 12 collections in a year conforming to the latest trends. These brands show immense capability to adapt to changing consumer preference. They have adopted unique strategy to induce lean real time for designing, production and swift logistics services. The seamless communications is maintained between the store staff, head quarters and production division to optimise the product turnover.
Designing logic
Equipped with a team of 100 fashion designers, H&M ensures that a collection moves from design sheet to retail shelves within two-three weeks. The inspiration of these collections is mainly sourced from the street-trends, movies, magazines and exhibitions. The price point is always kept customer-friendly. Buzz around the brand is always maintained by huge advertising campaigns. It is interesting to note that unlike H&M, not a single penny Zara invests in advertisements. Its strength is in low outsourcing operational costs owing to its own design and production houses. Though trendy in fashion statements, the fast fashion products are never of top quality, lasting only for few seasons. For Inditex, the parent company of Zara, time is the main factor to be considered, above and beyond production costs. Vertical integration enables the brand to shorten turnaround times and achieve greater flexibility, reducing stock to a minimum and diminishing fashion risk to the greatest possible extent. With over 300 designers, Inditex created more than 30,000 collections last year.
A CASE STUDY ON ZARA
Source: Inditex Group
Manufacture
For Inditex, which owns the brands like Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe besides Zara, a significant proportion of production takes place in the Group’s own factories, which mainly manufacture the most fashionable garments. The Group takes direct control of fabric supply, marking and cutting and the final finishing of garments, while subcontracting the garment making stage to specialist firms located predominantly in the North-West of the Iberian Peninsula. The Group’s external suppliers, a high percentage of which are European, generally receive the fabric and other elements necessary for making the clothing from Inditex.
Logistics
All production, regardless of its origin, is received at the logistical centres for each chain, from where it is distributed simultaneously to all the stores worldwide on a highly frequent and constant basis. In the case of Zara, distribution takes place twice a week and each delivery always includes new models, so that the stores are constantly refreshing their offer. The logistics system, based on software designed by the company’s own teams, means that the time between receiving an order at the distribution centre to the delivery of the goods in the store, which is on average 24 hours for European stores and a maximum of 48 hours for American or Asian stores.
Distribution in the company’s own stores
The point of sale is not the end of the process but rather its restart, as the stores act as market information gathering terminals, providing feedback to the design teams and reporting the trends demanded by customers. Both the interior and exterior of the store design are given the highest priority. Here, the shop windows play a major role, acting as authentic advertising for the brand in the world’s main shopping streets. As for the interior design, the aim is to create a well-lit space where the clothes take pride of place, eliminating all barriers between the garments and the customers.
The main development strategy for the Inditex sales formats is the opening of stores managed by companies in which Inditex is the sole or majority shareholder.
Commercial formats
In order to segment its approach to the market, Inditex has different fashion distribution chains, all of which share the same commercial and managerial focus: to be leaders in their segment through a flexible business model and an international scope. However, each of the chains has a great deal of autonomy in managing its business; their management teams are independent in commercial decision-making and in the way they administer their resources.
Nonetheless, the fact they belong to a Group spread over 77 countries provides a great number of organisational and knowledge-management synergies. Thus, each management team can concentrate on developing its business in the knowledge that certain support elements are covered by the Group’s accumulated experience.
Inditex, as the parent company, is responsible for the central corporate services, ie, those services shared by the eight chains and which facilitate international growth, administration, the use of logistics technology, the general HR policy, legal issues, and financial capacity, among others.
Franchise model
In smaller or culturally different markets, the Group has extended the store network through franchise agreements with leading local retail companies. At the end of the FY2009, there were 624 franchised stores out of a total of 4,607 stores. The main characteristic of the Inditex franchisement model is the total integration of franchised stores with own managed stores in terms of product, human resources, training, window-dressing, interior design, logistical optimisation and so on. This ensures uniformity in store management criteria and a global image in the eyes of customer around the world.
In India fast fashion brands are making beeline to captivate the target groups with their enormous collections. It’s a new experience for the fashion industry and a new trend is to set in pushing the consumers’ aspiration further ahead. All we’re about to witness is reformation in the fashion scene generating a demand for MORE.
