DEEP DIVE: ZARA
The Overview:
Whether it be on social media or while you’re out shopping, ZARA is a name you’ve probably heard of and it’s hard to miss. ZARA is a popular chain retailer of fast fashion based in Spain. It was founded in 1975 by Amancio Ortega and Rosalía Mera and expanded into the United States in 1989. In 2011, ZARA launched its website in the US, and rapidly expanded its online presence to other countries shortly thereafter. It is known for producing “dupes” or similar-looking items to those produced by fashion houses, using lower-quality materials and less time-consuming methods of construction to make high fashion styles accessible to those who may not typically have the ability to purchase them. With their high volume products, they make garments for women, men, and children ranging from casual basics to upscale “fancy” items. One unique aspect of ZARA is that the brand is vertically integrated, and since it controls its supply chain, it can design and release clothing much more quickly and efficiently than other brands. What could ZARA do better, what’s working for them, and what needs to go?
The Problem:
With consumer perspective driving any retail industry, ZARA must take into account what their customers are saying about them. In order to keep prices low and affordable to a larger demographic, ZARA sacrifices quality. ZARA’s product quality has become the target for quality control departments; the company needs to balance quality and other factors to safeguard the interests of the customers. In addition, the in-store shopping experience in terms of service and environment can be improved. Though it could be hard managing all ZARA stores across the country and around the world, the lack of staff can cause inefficiency in the checking out and returning process. Based on the results from a public survey, only 33.19% of customers were satisfied with the staff’s attitude at ZARA. Not only are employees lacking because of short-staffing, the stores themselves present disorganized and messy; not the look that ZARA aims for with their clothing brand.
The Solution:
Cutting product volume in order to prioritize staffing, quality, and cleanliness that works with their brand would allow for more consumer satisfaction and bring people back as repeat customers rather than those who will buy one piece and not come back. Appealing to repeat customers allows for larger profit for any company rather than trying to attract new customers, so having the quality and the in-store experience that makes repeat customers feel valued will allow ZARA to continue bringing those customers back.
The Research:
Currently, ZARA targets Generation Z and Millennial individuals who have an interest in high fashion but lack the ability or motivation to purchase from high-end designers. They are active on social media and their fashion sense is heavily influenced by the trend cycle. With TikTok, Snapchat, Instagram, and Twitter taking the internet in stride and dominating the social media field, ZARA has grown to popularity among many who are investing more into fashion but may not be able to afford higher-end products. Due to ZARA’s success in targeting this demographic, the company would benefit from continuing to appeal to this group but could expand by attracting consumers within this age range who also value environmentally friendly sourcing. ZARA and its goal to become eco-friendly is one of their biggest perspective-expanding opportunities because Millennials and Gen Z-ers care about the environment. Among Gen-Z and Millennial females, 40% of consumers say that sustainability efforts are important to them, and 35% say that Diversity, Equity, and Inclusion initiatives are as well. If there were an ideal consumer for ZARA, it would be the 22-year-old working female who likes to bring style to the office. She has money to spend but wants a diverse wardrobe so she is okay with giving up quality for a larger amount of pieces that she could mix and match to follow trends more easily. In order to continue targeting this group of consumers, ZARA would benefit from following social trends rather than just the ever-changing fashion trends.
The Interviews:
From interviews taken with consumers who were at or around the ZARA retail store on Newbury St, Boston MA, the general consensus is that the subpar in-store experience is only offset by the lower price tags that allows working individuals and students to buy quick and cheap trendy clothing at prices that won’t make them regret their purchase, even if the style falls out of trend. Julia Gertie, 20 years old, explained that when she wants something that she knows will go out of style she will immediately shop at ZARA first because she doesn’t want to spend so much money. She reported that when she has to make a return “I have to wait in the longest lines, and the process of a return is very complicated, so I end up keeping the item because the return process is painful.” In addition, she points out that in-store customer service and overall experience are very overwhelming. During another interview, Ryan Carter, a student at Boston University, said hat “while it is painful to shop there, and I know about how horrible the fast fashion industry is, I am a college student at the end of the day and I can only afford so much for items that will probably go out of style.” He notes that the increase in brand awareness across different social media platforms has also influenced him to go to ZARA because he wants to buy what is trendy and he can see people review products before he might want to get them. By focusing on customer experience as well as continuing to keep up with trends, ZARA would succeed in bringing these consumers back with promises of a more seamless encounter with the company as well as pieces they will like and continue to love.
Many of ZARA’s customers are turning towards eco-friendliness and want the stores they shop at to reflect those values. The current push for increased awareness of how our overconsumption, as members of a global community, is affecting pollution and overproduction has greatly impacted how fast fashion brands operate and promote their products. The EPA reported that, in the US, 9 million tons of clothing and footwear were landfilled in 2018. In response to the sustainability trend, ZARA released its “join life” tag in 2019 that denotes products made from recycled materials or those that can be recycled for other garments. Other brands in the category, like H&M, Uniqlo, and Asos, have launched similar initiatives. ZARA may have taken a step towards reducing overconsumption, but this issue could be resolved much more efficiently if they were willing to raise prices slightly and cut product volume in order to increase quality and deliver pieces that people will be able to rewear time and time again, knowing that the pieces they can count on allow them to minimize their own clothing overconsumption as well.
The Competitive Analysis & Gap:
Though ZARA remains to be a giant within the fast fashion industry, competition continues to threaten ZARA. Within the fast fashion category, ZARA’s top competitors are H&M and Primark. Although each brand has its distinct style, they are all international brands that look to trends for design inspiration and produce high volumes of clothing quickly. These brands also all sell business-casual and more dressy clothing. H&M has been a top contender in the fast fashion world for years. A strength of the brand is that they offer many different styles under the umbrella of their store — a person looking for corporate workwear, someone trying for a grunge look, and a middle schooler looking for a nice dress for a school dance could all find something there. H&M has about 4,000 stores worldwide, more than ZARA, and has teamed up with designer brands such as Versace and Alexander Wang to release collaborations. Pricing can also be a problem in competition as ZARA’s average apparel price is about 20$ more than that of H&M, but for both of them being fast fashion companies, it seems as though it is simply the name “ZARA” that can afford to up-price low quality products.
Primark is a much smaller brand than the other two but follows a similar method of production. It has almost 400 stores spread throughout Europe and the US. One defining feature of Primark is that they sell their products at very low prices. Like ZARA, it relies on word-of-mouth more heavily than traditional marketing, which allows for lower prices. Uniquely, Primark doesn’t participate in e-commerce — instead, it allows customers to check the in-store availability of items. This saves them money on both materials and wages. In 2021, Primark generated $6.4 billion in revenue.
In order to take advantage of ZARA’s own strengths while learning from what other companies are doing well, the company could start by focusing a larger part of its advertising on social media in order to reach the target demographic more efficiently. TikTok has blown up because influencers try on and review products before viewers make a purchasing decision. ZARA should use this trend as an opportunity to showcase the quality of products and at the same time help with the return issue because people can get information about the sizing and how it fits. Using digital platforms will increase exposure to the brand and help ZARA see what products are trending and where they may need to improve their quality.
The Outcome & Conclusion
Overall the need for a better customer service system, a resource for finding the best quality and fit for clothes, and a more sustainable marketing strategy will help ZARA continue to lead the fast fashion industry but also continue to stay relevant as the world around them changes in regards to other socioeconomic issues.
Written by Noelle Kim & Emmeline Chung
Spread Designed by Ellie Kwon