ZARA'S Logic Behind The Size Of Chinese Clothing Industry

Zara brand management strategy has 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.

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 pmitted 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.

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

Most of the production in the world is outsourced to the processing plants of the third world.

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.

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.

The IT system has been deployed to

Each store, each store has its own list of goods, but the French store is not the same as 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.

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 lacking

This factory will not work.

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.