The Secret of Zara’s Success A Culture of Customer Co-creation – Martin Roll
Zara stands out as a leading global fashion retailer, arguably the most successful, renowned for pioneering “fast fashion” since its inception in Spain in 1975. The brand’s ambition is to cultivate a passionate yet responsible approach to fashion across diverse consumer groups, spanning cultures and generations. Zara’s success stems from numerous factors, but a cornerstone of its global dominance is its unwavering commitment to putting the customer first. This customer-centric philosophy has been ingrained in Zara’s DNA from day one, shaping its culture and brand identity.
Zara’s product range includes clothing for women, men, and children (Zara Kids), along with shoes and accessories. Zara TRF, a sub-brand, caters to younger demographics with trendier and edgier fashion items.
Delving into the Zara Brand Story
Amancio Ortega and Rosalía Mera established Zara in 1975 as a family-operated business in Galicia, northern Spain. Initially, the store offered affordable alternatives to popular, high-end fashion designs. The name Zara was chosen after Ortega’s initial preference, Zorba, was unavailable. Over the next eight years, Zara’s unique fashion approach and business model resonated with Spanish consumers, leading to the opening of nine additional stores in major Spanish cities.
In 1985, Inditex was formed as a holding company, providing the framework for a distribution network capable of swiftly adapting to evolving market trends. Ortega innovated a design, manufacturing, and distribution system that drastically reduced lead times and enabled rapid responses to emerging trends, a concept he termed “instant fashion.” This innovation was fueled by significant investments in information technology and the utilization of design teams rather than individual designers.
The following decade marked Zara’s aggressive global expansion into markets including Portugal, the USA (New York), France (Paris), Mexico, Greece, Belgium, Sweden, Malta, Cyprus, Norway, and Israel. Today, Zara’s presence is almost ubiquitous in developed countries, with 2,264 strategically located stores in prime urban centers across 96 countries. Zara’s journey from a small Spanish store to the world’s largest fast-fashion retailer and Inditex’s flagship brand is remarkable. Its founder, Amancio Ortega, is consistently ranked among the wealthiest individuals globally by Forbes.
Inditex, the parent company, is the world’s largest fashion group, employing over 174,000 people and operating more than 7,400 stores in 202 markets, including 49 online markets. In 2019, Inditex generated revenues of USD 23.4 billion. Inditex’s brand portfolio also includes:
Zara Home: Founded in 2003, offering home goods and decor, present in 183 markets, with physical stores in 70.
Pull & Bear: Established in 1991, focusing on casual wear and accessories for young adults, operating in 185 markets, with stores in 75.
Massimo Dutti: Acquired in 1995, providing high-end clothing and accessories for sophisticated men and women, present in 186 markets, with stores in 74.
Bershka: Launched in 1998, blending urban and contemporary fashion for young men and women, operating in 185 markets, with stores in 74.
Stradivarius: Acquired in 1999, offering casual and feminine apparel for young women, present in 180 markets, with stores in 67.
Oysho: Founded in 2001, specializing in lingerie, loungewear, outerwear, and accessories, operating in 176 markets, with stores in 58.
Uterqüe: Established in 2008, offering high-quality fashion accessories at accessible prices, present in 158 markets, with stores in 17.
Beyond fashion, Amancio Ortega’s investment firm, Pontegadea Inversiones, manages a global real estate portfolio, including corporate offices in nine countries, housing major companies such as Facebook, Amazon, Apple, and luxury retail brands.
Zara’s Brand Strategy: Adapting to the Speed of Fashion
In 2019, Interbrand ranked Zara 29th among the best global brands. The brand’s core values are encapsulated in beauty, clarity, functionality, and sustainability.
Zara’s success is largely attributed to its ability to rapidly adapt to evolving fashion trends and integrate them into its collections with minimal delay. From its inception, Zara identified a market gap: providing high-quality, affordable clothing that mirrored the latest fashion trends, a need unmet by most brands. Zara meticulously monitors global fashion trends, swiftly translating emerging styles into new designs and delivering them to stores within weeks. This contrasts sharply with traditional fashion brands, which typically require up to six months to bring new collections to market.
This strategic agility in introducing trend-responsive collections has enabled Zara to outperform competitors and become a favorite among fashion-conscious consumers. Founder Amancio Ortega famously viewed clothing as a perishable commodity, advocating for short-term use and disposal, similar to everyday consumables like yogurt or bread, rather than long-term storage.
The media often describes Zara’s output as “freshly baked clothes,” with a shelf life aligned with fleeting fashion trends. Zara’s “fresh fashion” approach is built on three key pillars:
Reduced Lead Times (for Fashionable Apparel): Shorter lead times allow Zara to stock stores with current customer preferences, such as seasonal collections, emerging trends, or celebrity-endorsed items. Instead of forecasting future customer desires, Zara aligns with current demand, offering products consumers want to purchase now.
Limited Quantities (Creating Scarcity): By producing limited quantities per style, Zara mitigates risk and generates artificial scarcity. Mirroring luxury fashion principles, reduced availability enhances desirability. Lower production volumes also minimize potential losses from slow-selling styles. Zara strategically limits discounts to two annual sales, marking down a significantly smaller percentage of its inventory compared to competitors.
Increased Style Variety: Rather than focusing on large quantities per style, Zara offers a broader range of styles, approximately 12,000 annually. This ensures continuous novelty and increases the likelihood of meeting diverse consumer preferences. Even if a style quickly sells out, new styles are readily available, providing constant choices.
Zara’s practice of keeping designs on the shop floor for only three to four weeks encourages frequent store visits. Customers are incentivized to return regularly, knowing that desired styles or trends may disappear quickly and be replaced by new arrivals. This constant refreshment of inventory enhances customer engagement and loyalty.
The following sections will further explore the key components of Zara’s successful model in the fashion retail industry.
Customer Co-creation: The Customer as Zara’s Primary Designer
Zara’s unwavering customer focus is fundamental to its success. A compelling example of customer co-creation involves a story from 2015. A customer named Miko in Tokyo, along with Michelle in Toronto, Elaine in San Francisco, and Giselle in Frankfurt, independently inquired about pink scarves at Zara stores. None were available, a common experience for Zara customers globally during that period.
Remarkably, within seven days, over 2,000 Zara stores worldwide began selling pink scarves. An impressive 500,000 pink scarves were dispatched and sold out in just three days. This rapid response highlights Zara’s exceptional ability to translate customer feedback into tangible product offerings.
Customer insights are invaluable for modern businesses, driving innovation and competitiveness. However, obtaining timely and consistent insights can be challenging. Zara leverages Radio Frequency Identification Technology (RFID) in its stores as a key tool. This technology allows real-time tracking of garment locations, ensuring that high-demand items are quickly replenished. RFID also optimizes inventory management, facilitates rapid new design launches, and enables efficient online order fulfillment from the nearest store, reducing delivery costs.
Furthermore, Zara empowers its store employees and managers to be attentive to customer needs and preferences expressed on the sales floor. Sales associates and store managers are trained to actively listen to customer feedback, noting comments, suggestions for designs or fabrics, and observing emerging styles worn by customers that could inspire new Zara designs. This real-time, dynamic market feedback surpasses the insights provided by traditional daily sales reports. Zara’s operational philosophy is built on two core principles: “give customers what they want” and “deliver it faster than anyone else.”
Zara’s robust customer research capabilities enable product offerings to reflect specific regional customer needs, considering climate, cultural, and physical differences. Smaller sizes are offered in Japan, specialized women’s clothing in Arab countries, and seasonally appropriate apparel in South America. Frequent communication between local store managers and Zara’s creative teams facilitates these localized adaptations.
Fashion trends often emerge subtly and evolve rapidly. Zara employees are trained to detect even faint signals of emerging trends from customer interactions. Zara understands that rapid response is crucial for supplying the right fashion merchandise across its global retail network. Sophisticated technology-driven systems facilitate quick information flow from stores to Zara’s headquarters in Arteixo, Spain, enabling swift decision-making and trend responsiveness. Zara’s design teams regularly visit university campuses, nightclubs, and other trendsetting venues to observe emerging styles. At headquarters, design teams utilize flat-screen monitors linked via webcam to offices in fashion capitals like Shanghai, Tokyo, and New York, serving as trend-spotting hubs. The ‘Trends’ team prioritizes tracking fashion bloggers and closely listening to customer feedback over traditional fashion shows.
The close connection between Zara’s designers and customers is a defining element of its brand strategy. Specialized teams constantly receive feedback on customer choices in Zara stores, directly informing and inspiring the creative process. For customers seeking support or information beyond in-store interactions, while a direct “Zara Customer Service Number” might not be publicly emphasized as part of their core strategy in the same way as some other brands, Zara provides various channels for customer communication. This includes online platforms and in-store assistance, reflecting their commitment to accessible customer support. While the focus is on empowering in-store staff to address immediate needs and gather feedback, customers requiring further assistance can typically find support through Zara’s website or by contacting their local store directly.
Zara’s Highly Efficient Supply Chain: Delivering Fashion at Unprecedented Speed
Zara’s responsive, vertically integrated supply chain enables garment exports 24/7, 365 days a year, with new products arriving in stores twice weekly. From design to store arrival, the process takes just 10 to 15 days. All items are processed through Zara’s distribution center in Spain, where they are inspected, sorted, tagged, and dispatched within 48 hours. This vertical integration grants Zara control over critical processes like dyeing and fabric processing, ensuring on-demand fabric availability for new styles based on customer preferences. It also eliminates warehouse needs and minimizes the impact of demand fluctuations. With over 450 million items produced and approximately 12,000 new designs launched annually, supply chain efficiency is paramount for maintaining a constant flow of fresh collections.
Key characteristics of Zara’s supply chain contributing to its success include:
Frequent Customer Insight Collection: Trend data flows daily into a central database, informing design modifications and new line creation.
Standardized Product Information: Warehouses utilize standardized product information with common definitions, enabling rapid and accurate design preparation with clear manufacturing instructions.
Product Information and Inventory Management: Effective management of thousands of fabric, trim, and design specifications, along with physical inventory, allows Zara to design garments using available raw materials.
Procurement Strategy: Approximately two-thirds of fabrics are purchased undyed before designs are finalized, leveraging demand aggregation for cost savings.
Manufacturing Approach: Zara employs a “make and buy” strategy. Fashion-forward and riskier items are produced in Spain, while production of standard, predictable designs is outsourced to Morocco, Turkey, and Asia for cost efficiency. Company-owned factories in Spain, Portugal, and Turkey handle about half of the merchandise, focusing on trend-sensitive items. Basic items with stable demand, like T-shirts, are outsourced to lower-cost suppliers, primarily in Asia. Even in European manufacturing, Zara minimizes costs by outsourcing assembly to workshops and leveraging informal labor.
Distribution Management: Zara’s state-of-the-art distribution facility operates with minimal manual intervention. Optical reading technology sorts and distributes over 60,000 garments per hour.
Beyond supply chain efficiency, Zara can modify existing items in as little as two weeks. This rapid product lifecycle ensures alignment with evolving consumer preferences. Unsuccessful designs are quickly withdrawn, further orders canceled, and new designs pursued. Zara closely monitors shifting fashion preferences, maintaining basic designs year-round while frequently refreshing trend-driven items, some of which remain on shelves for less than four weeks. This encourages frequent customer revisits. While a typical Spanish high-street store anticipates three annual customer visits, Zara expects around 17, reflecting its confidence in meeting and shaping consumer fashion tastes.
Zara’s high repeat-visit expectation demonstrates its commitment to staying ahead of consumer needs and preferences, influencing fashion trends and extending the lifespan of seasonal styles through affordable offerings.
Sustainability at the Heart of Zara’s Operations: A Commitment Beyond Fashion
Sustainability has become a critical business imperative, particularly for brands seeking to resonate with and retain global customers. Inditex prioritizes both people and the environment in its sustainability commitment.
Commitment to People: Inditex fosters a shared sustainability vision among employees through professional development, diversity and inclusion, and volunteerism. It upholds fundamental labor rights for suppliers and implements continuous improvement programs. Inditex invests over USD 50 million annually in social and community initiatives. The “for&from” program, launched in 2002, promotes social integration for individuals with disabilities, providing over 200 stable jobs across 15 stores.
Commitment to the Environment: Recognizing its reliance on natural resources, Inditex strives to minimize its environmental impact in alignment with the UN Sustainable Development Goals (UNSDGs). Inditex has pledged to exclusively sell sustainable clothing by 2025, ensuring that all cotton, linen, and polyester are organic, sustainable, or recycled. The “Join Life” initiative helps consumers identify eco-friendly garments made with materials like organic cotton and recycled polyester.
Inditex also implements comprehensive measures to protect biodiversity, reduce water and energy consumption, minimize waste, and combat climate change. The Global Water Management Strategy, for example, commits to zero hazardous chemical discharge. A waste reduction program allows customers to deposit used clothing, footwear, and accessories at collection points in 2,299 stores across 46 markets.
Zara’s Culture: “Impossible” is Not in Our Vocabulary
Zara fosters an entrepreneurial culture, attracting young talent with rapid career advancement opportunities. Approximately two-thirds of store managers are promoted internally, contributing to low employee turnover. Zara empowers young employees, encouraging risk-taking (with an emphasis on learning) and rapid implementation, reflecting the fast-paced fashion industry.
Top management grants store managers significant autonomy over store operations and performance, with clear cost, profit, and growth targets and a compensation structure that includes a substantial variable component (up to half of total compensation), incentivizing performance.
Zara invests in talent development, providing comprehensive training programs for promoted employees, followed by ongoing supplemental training. The organizational structure is flat, with minimal managerial layers.
While customer feedback is paramount, Zara also employs trend analysts, customer insights experts, and fashion industry professionals. The creative team comprises over 200 individuals who embody the corporate philosophy that “impossible” is not an acceptable answer.
Zara overcomes decision-making bottlenecks by co-locating various business functions at headquarters and fostering a culture of continuous communication. Sales and marketing teams regularly share trend feedback with designers and merchandisers, ensuring a two-way flow of information regarding customer preferences and new product lines. Production scheduling is tightly coordinated to minimize delays. The flat design team structure focuses on adapting catwalk trends for the mass market. Design and product development teams in Spain collaborate closely to produce approximately 1,000 new styles monthly.
Beyond customer-centricity, Zara empowers employees with data-driven decision-making. Zara operates without a chief designer, granting designers significant autonomy in approving products and campaigns based on real-time data indicating style popularity.
Zara’s entire business model is designed to prioritize finished goods demand over raw material constraints, a rare approach for multinational corporations of similar scale. This customer-driven approach is a fundamental element of Zara’s success.
Zara’s Brand Communication Strategy: Location and Display as Key Tools
Zara has historically adopted a near-zero advertising and endorsement policy, prioritizing investments in new store openings. Advertising expenditure is a mere 0.3% of sales, significantly lower than the 3.5% average of competitors. Founder Amancio Ortega has maintained a low public profile and avoided traditional advertising, a testament to the brand’s organic appeal and customer-driven success.
Instead of advertising, Zara leverages strategic store locations and visually compelling store displays as primary marketing tools. Prime urban locations ensure high customer traffic. Window displays, showcasing key collection pieces, are meticulously designed by specialized teams and frequently updated to reflect Zara’s fast-fashion philosophy. Even employee attire reinforces brand messaging; Zara employees wear Zara clothing in-store, with variations across locations reflecting regional socio-economic differences, highlighting Zara’s mass-market focus and attention to customer nuances.
Zara entered e-commerce in September 2010, launching its online store initially in Spain, the UK, Portugal, Italy, Germany, and France, subsequently expanding across Europe, the Americas, and Asia-Pacific. As of 2019, online sales constituted 14% of Zara’s total global revenue, demonstrating a successful online presence and commitment to customer experience in the digital realm.
Zara’s Future Brand and Business Challenges in a Digitalizing World
Navigating Digital Strategy Post-COVID-19: Zara’s predominantly offline retail model was significantly impacted by COVID-19 store closures in 2020, with sales declining 44% year-over-year in Q1 2020 and a net loss of USD 482 million. Inditex announced plans to close 1,000 to 1,200 smaller stores globally, particularly in Asia and Europe. While online sales grew by 50% in Q1 2020, this growth was insufficient to offset overall losses.
Amancio Ortega plans to invest USD 1.1 billion in digital strategy and online capabilities by 2022 and an additional USD 2 billion in store integration to improve online-offline synergy for faster deliveries and real-time product tracking. The goal is to increase online sales to at least 25% of total sales. Achieving this requires Zara to explore innovative digital customer engagement strategies beyond the online store, including online communities and social media engagement.
Mobile Commerce Imperative: Zara’s late entry into mobile commerce necessitates rapid catch-up to competitors. Market analysis indicates mobile commerce is projected to surpass desktop e-commerce. With mobile traffic growing rapidly, Zara must prioritize making mobile shopping seamless and engaging, especially given competitor advantages in this area.
Beyond Price Competitiveness: While affordable fashion remains a strategic advantage, price alone is insufficient for long-term dominance. Competitors are increasingly adopting price-cutting strategies and refining business models. H&M, ranked closely behind Zara, launched an online store in Spain in 2014. Mango and other brands are intensifying competition in Zara’s core fashion segments. The rise of e-commerce and m-commerce has also expanded indirect competition through online fashion aggregators like Lyst and Farfetch.
To maintain its edge, Zara needs to shift focus from price to enhanced quality and brand positioning. Despite strong brand appeal, Zara needs to invest in building a robust brand identity and actively communicating it, leveraging social media and digital platforms more effectively in its marketing and communication strategies.
Evolving Marketing Strategy: Zara’s reliance on store locations as its primary marketing strategy requires evolution. Brand communication is crucial for attracting new customers. Zara’s limited advertising relies heavily on word-of-mouth and social media, potentially leading to inaccurate perceptions shaped by personal networks. Zara’s social media presence currently functions primarily as an update feed rather than an interactive platform. Low YouTube viewership compared to follower count indicates untapped potential in video marketing. As target demographics increasingly utilize social and digital platforms, Zara must establish a stronger presence and engagement strategy.
Family Business Succession and Planning: Leadership in the 21st century is characterized by constant change and uncertainty. Zara’s leadership transition, with Marta Ortega succeeding Pablo Isla as chair in April 2022, marks a significant generational shift.
Marta Ortega will serve as non-executive chair, overseeing strategic operations. Óscar García Maceiras will assume the CEO role, managing daily operations. This dual leadership structure, common in Europe, aims to enhance corporate governance.
Despite her long tenure at Inditex, Marta Ortega, like her father, Amancio Ortega, will not have a formal office, preferring to work alongside design teams.
Effective succession planning requires Zara’s next-generation leadership to maintain brand promise, balance short-term profitability with long-term growth, and adapt to evolving consumer preferences, particularly localized fashion needs in a globalized market.
Conclusion: Embracing the Customer’s Voice – The Enduring Lesson from Zara
Zara’s enduring success is rooted in its customer-centric approach, its ability to understand, anticipate, and fulfill customer preferences for trendy, affordable fashion. Beyond its efficient supply chain, Zara’s unique customer co-creation model provides a significant competitive advantage. Fashion trends often emerge unexpectedly. Zara’s ability to swiftly respond to trends, as exemplified by the pink scarf phenomenon, demonstrates its agility and customer responsiveness.
In an era of Big Data, Zara’s success underscores the enduring importance of direct customer engagement and observation. Big Data alone is insufficient; authentic customer insight remains paramount.
Zara’s culture, built on the principle that customers are the ultimate trendsetters, is a key takeaway. This philosophy should guide all business strategies.
In essence, Zara’s enduring lesson is simple yet powerful: prioritize listening to your customers. Zara always has, and continues to do so.
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About the author: Martin Roll – Business & Brand Strategist
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