Zara: Fast Fashion

What was the key of the success of the world major clothing retailer? How could it beat its closest competitors in such a short time? One word: Fast Fashion.

This term signifies being faster than the main idea of fashion desire, empowering the company by having fast operations with the objective to have in the stores whatever the trend in fashion is at the day. This requires a complex and effective supply chain and operations. But, how fast is Inditex? Three stores are opened everyday in the world, being Latin America the 4th most important region for its expansion1.

The corporation with headquarters in Coruña, Spain has fought the industry-wide trend towards transferring fast fashion production to low-cost countries. An interesting fact of this company is their policy of zero advertising, focusing the investment on opening new stores constantly.

The group always encouraged an extensive market research providing a constant stream of inputs into the product development process. In order to have the capability to reply very fast to the market research results, Inditex facilitated the direction and joint decision by locating various business functions near the headquarters, this control consisted also in an early investment in raw material, and direct or indirect ownership of processing and production capacities. In this strategy, communication and information technology where totally necessary to manage the huge and constant flow of data from all their stores. Inditex flat organization ensures that important conversations don't fall through the bureaucratic cracks, they design, they produce and they distribute.

But how the company is capable of managing the complex distribution and vertical integration strategy? They have developed a successful diverse method of doing business in the fashion industry by working trough the whole value chain, being vertically integrated and becoming highly capital intensive.