Zara Brand Audit

Zara Brand Audit | 2016
Zara Brand Audit

By: Brendan Richardson
Introduction
Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia. The company was
founded in 1975 by Amancio Ortega and Rosalía Mera and owned by Casper Schmedes. It is the
main brand of the Inditex group, the world's largest apparel retailer. The fashion group also owns
brands such as Massimo Dutti, Pull and Bear, Bershka, Stradivarius, Oysho, Zara Home, and
Uterqüe. The main factor that keeps Zara ahead of their competitors is their one-week policy.
Zara needs just one week to develop a new product and get it to stores, compared to the six-
month industry average.
 FOUNDERS:
Amancio Ortega Rosalía Mera

 INDITEX BRANDS
Zara is the brand with the most new stores with 77 net openings, 13,628 net sales (millions of
euros), 2,162 stores worldwide, 88 markets and 27 online markets. In recent news, Zara founder,
Amancio Oretga had become the richest man in the world for two days on September 10th, 2016.
Category & Competition

Zara is a fashion retailer that sells men, women and kids clothing and accessories. The first store
featured low-priced lookalike products of popular, high-end clothing. During the 1980s, Ortega
changed the design, manufacturing, and distribution process to reduce lead times and react to
new trends in a quicker way, which he called "instant fashions". Six months in advance, Zara
commits to only 15 to 25 percent of a season’s line. And it locks in merely half of its line by the
start of the season, meaning that up to 50 percent of its clothes are designed and manufactured
right during the season. Zara has been under fire for alleged customer discrimination, Deceptive
Pricing and copyright infringement. Top competitors include ‘H&M’ and ‘Abercrombie & Fitch’
Products Within Category
Zara is not individually publicly traded. Their list of products includes shirts, t-shirts, polo shirts,
sweat shirts, jogging, sweaters, shoes, bags, jackets, suits, pants, skirts and gym wear. Their
supply chain ships new products to stores twice a week and the batches delivered are small, so if
the design does not sell well, little harm is done to inventory. Zara competitor H&M, has the
most physical locations worldwide. H&M has been on the market longer and takes advantage of
co-branding and designer collaboration with top companies in their industry. Alex Katz, being its
most recent collaboration.
Brand Analysis
1. H&M - $20.2 Billion in sales

2. Zara - $19.7 Billion in sales
3. Uniqlo - $16.6 Billion in sales
Zara’s sales continue to rise every year as well as sales at H&M and Uniqlo. Zara keeps a
significant amount of its production in-house which keeps pricing consistent. H&M’s like for
like sales shrank during spring season.
Consumer Profile
The demographic of Zara consists of fashion forward men and women ranging from ages 18 to
35 with a mid-range income. Zara being a top fashion retailer; brand consumers purchase their
products daily and do so at their many flagships and stores across the world. A typical Zara
customer is one who is young, fashion-conscious and value-seeking. Zara has high brand
awareness due to its longevity in the retail industry. Zara conveys a stylish personality that
appeals to its confident target audience. Customer loyalty is high in relation to high customer
knowledge and trust amongst their consumers.
Advertising/Marketing Communications
Zara lacks adequate marketing and advertising, but makes up for it and then some with their “fast
fashion”. Zara prides itself on fast moving fashion with new designs restocked in limited
quantity every two weeks. This encourages consumers to check stores frequently to promise
themselves a piece. This provides a sense of exclusivity to shoppers. Current strategies that
H&M are marketing to its consumer are through a mobile marketing campaign to promote the
latest collection. Consumers receive SMS coupons, media sites, and other offers.
Media
Zara's Fashion Retailers Spend On Average 3.5% Of Revenue On Advertising and focuses most
of the rest of its spending on opening stores near high-end retailers. Most of H&M’s spending is
advertising and marketing campaigns.
Promotions
Zara has very few sales and offers while H&M has various sales, special offers and campaigns
(H&M coupons, Promo Codes, Seasonal sales)
Digital Strategies
ZARA Website: http://www.zara.com/us/
On the website you contact them, join their newsletter, find fashion catalogs, collections &
lookbooks and buy new arrivals every week. The Zara online sales are growing and prevalent on
most social media platforms including Instagram, Facebook and Twitter. Zara takes advantage of
content marketing through their social media to grow social media audience. Zara's Instagram
has added 4.6 million followers in 8 months and posts that gather thousands of likes and
hundreds of comments each.
Brand Value
Values associated with Zara include ‘modern’, ‘trendy’, ‘high fashion’ and ‘sharp’. Sales
increase every year.
Brand Exploratory
Quantitative Research
What words would you use to describe the characteristics of ZARA?
Friends/Colleagues/Co-workers
 Respondent 1 - “High fashion”
 Respondent 2 – “Trendy”
 Respondent 3 – “Affordable”
 Respondent 4 – “Trendy”
 Respondent 5 – “Fancy”
Qualitative Research
How does the image of ZARA influence the population between the ages 18 and 35?
Friends/Colleagues/Co-workers
 Respondent 1 - “Encourages younger generation to become more fashion forward”
 Respondent 2 – “Teaches how to shop affordable and fashionable”
 Respondent 3 – “The ZARA brand has built trust amongst their consumers making
ZARA the first place to check for shopping”
 Respondent 4 – “ZARA keeps millennials up to date on high fashion garments”
 Respondent 5 – “ZARA keeps their target market in the know”
Reccommendations
ZARA is a very strong brand and sits alone from their parent company, Inditex. The
company has achieved a major amount of exposure through traditional marketing tactics, but can
benefit from the use of modern day digital marketing. ZARA has been playing catch up when it
comes to being active on social media and ZARA commercial surely would not hurt the value of
the brand and would bring more exposure to the company. ZARA may also want to consider co-
branding and reaching out to other high fashion designers to collaborate on projects and creating
campaigns.
The fashion retailer should also spend more on marketing and advertising. I would
recommend that ZARA introduces an extension to one of their existing product lines. For
example; a ZARA baby collection. ZARA can also had additional products and expand into
different categories with multiple lifestyle items such as home & kitchen, vintage, music, books,
etc.
References
 https://www.inditex.com/documents/10279/208409/Inditex_+Annual_Report_2015_
web.pdf/d3501c55-8e8f-4936-b8d8-0fc47a543c93
 http://www.academia.edu/6500115/Zaras_operations_strategy
 http://www.zara.com/us/en/woman-c270086.html
 https://erply.com/in-the-success-stories-of-hm-zara-ikea-and-walmart-luck-is-not-a-
key-factor/
 http://yourbusiness.azcentral.com/legal-term-stealing-business-idea-12733.html
 http://www.forbes.com/sites/walterloeb/2015/03/30/zara-leads-in-fast-
fashion/#24d5006661d7
 http://www.wsj.com/articles/h-m-turnaround-will-take-more-than-cooperative-
weather-1475237049
 http://mediakix.com/2016/05/best-brands-on-instagram-zara-channel-
followers/#gs.G6=h540
 http://image.slidesharecdn.com/zara1-101017144029-phpapp02/95/zara1-7-728.jpg?
cb=1287326487
 http://www.marketwatch.com/investing/stock/zara/financials

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Zara Brand Audit | 2016

Amancio Ortega Rosalía Mera

Category & Competition

Products Within Category

1. H&M - $20.2 Billion in sales

ZARA Website: http://www.zara.com/us/

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