Fast Fashion Is Trapped. Is ZARA OK?

In the first two weeks, UNIQLO and KAWS jointly released T-shirts to become explosive money, and the panic buying situation of many stores took on the limelight of others. fashion The existence of a company. ZARA threw out a spancript and immediately brushed the sense of existence. Today's story starts with the founders of their families.

1, how did the poor tailor fight against the overturn to become a big billionaire?

If you are ordered to be in danger of the company, let the company counter attack the successful people (for example, Lining). cowboy Pants companies dominate the American Apparel Industry for more than ten years (for example, the former CEO:Mickey Drexle of GAP), which is called the great God. The ability of Oman, Theo Ortega (Amancio Ortega) standing behind ZARA is another high myth.

Ortega was born in Spain in 1936 and broke out in Spain in the same year. Fascism ignited the prelude to World War II.

After the end of World War II, Spain was also politically isolated and unable to get financial aid. It can be imagined that he grew up in a very long period of time, accompanied by the state's closed door, poverty and material shortage.

He first worked as an apprentice in a shirt shop, then went to fashion fashion sewing. After a few years, he turned over and became a department manager. Opportunities are reserved for those who are prepared. He finds that many women are obsessed with a fashionable nightgown. Ordinary women can not afford it. So he built a similar Nightgown by hand.

As a result, several low-priced nightgowns were carried by the second light with the first barrel of gold. In 1963, he and his wife opened Goa, a small clothing workshop. During the 10 years, the small workshop grew slowly, from the original three to 500, and the special design team.

At that time, Ortega completed sales by dealers.

It was not until the European oil crisis broke out in 1975 that a German dealer of cooperation suddenly collapsed, and a large sum of orders collapsed, almost bankrupting him. Only then did he realize the importance of having channels.

When he was lucky enough to survive, he created his own. brand They sell their own products. No longer rely on middlemen, direct docking with users, reduce spanfer links.

In those days, Ortega opened a Zorbas clothing store with 30 euros, which is the current Zara.

With fashion and low prices, Zara quickly became popular in Spain. Next to the whole world, Eurasia and North America are all right. Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Uterque, ZARA HOME and other clothing brands have been established.

He was sitting on a $65 billion 500 million shirt selling clothes to overwhelm Li Jiacheng, the Chinese richest man, and even the equine father and little brother of the IT overlord company, ranking sixth in the 2019 global Forbes rich list.

The rich in front are not selling IT or selling. extravagant He is the richest man by selling clothes, which is really admirable.

2. What is the secret of ZARA's success?

This year, he is 83 years old. He is still the oldest rich in the list. Besides having more time and opportunities than others, the more important reason is himself.

Fashion companies are different from sportswear. Children's wear Or knitted apparel company, it has its own unique survival law.

Style, fabric and color should be changed frequently and styles should be more frequent. The production enterprises must have the ability of quick response. From market information collection, determination of style, purchase side, accessories And accessories, to plate, platoon, craft sewing production, to the final ironing packaging, factory shelves, speed and speed.

We must go faster and retreat faster, so that the risks and benefits will increase at the same time, and such a highly difficult operation will result in high profits.

To them, time is life. In order to satisfy both the demand and the difficult marketing, it is very hard for Ortega to do so:

1. product standardization, ZARA takes the lead in establishing POS terminals, so that all stores can accurately monitor and assess the sales situation in real time. Headquarters can know when to make necessary strategic decisions on supply and demand so that new products or exits can be rushed up.

2. shorten the links between design and promotion. ZARA's designers are leveled and have the right to decide on product design and promotion plan independently in order to capture fashion more quickly in the design process. Trend Trend;

3. vertically integrated management, efficient promotion, from top to bottom to control the whole process from production to sales, we can get clothes faster.

4. logistics is fast, ZARA logistics warehouse is 9 times the size of Amazon, two air bases have been built, more than 20 km underground, underground spanportation network has been built. All the long haul spanport is flying, not how fast it is. The money on the plane can be totally ignored compared with the profit.

5., establish real-time tracking of information system. ZARA store manager can feedback customer information to headquarters at any time through tablet computers. No need for headquarters allocation, goods can be flexibly spanferred between stores, in order to collect user needs and improve service quality in time.

6. shop on the high site, ZARA in the most prosperous big city to open a large shop, choose the location and location of their own matching, or directly open to the side of luxury goods, advertising is free.

This is the "fast fashion" created by Ortega. It created the 15 day production cycle of the world, and recorded 2 new advertisements every week.

What is the concept of this record?

ZARA since fashion and fast, no time to design, it can not be separated from plagiarism, even if it is simple and rude to completely copy the big style, and complete a series of movements from 0 to 1, the fastest time in the country, but it is said that ZARA can do the fastest 20 minutes, the average shipment time is two weeks.

The speed and kill rate were 5 days faster than H&M, and 25 thousand new products were designed every year, which is 4~6 times of H&M.

If you go to GUCCI, every season, you may see the same thing every time. After you know, you go to LV and COACH second times. As the saying goes, when love is not fresh, it is hard for each other to move on. Ortega is also well versed in this business. ZARA is meant to keep you fresh.

Look at the market, you pay attention to observation will find that a product sales volume is not good, or the price is high to frighten people, or the quality is too bad, the design is not willing, everyone is not willing to use. If the product can solve these two problems, it will open the market.

Microsoft has reduced the complexity and price of computers, changed the computer from the super machine to the common people's home. YouTube has reduced the cost of video shooting, so that people can share with them what they want. ZARA allows people who can't afford the brand to wear fashionable clothes with great brand and popularize fast fashion.

It has no fixed positioning style, everything is for high-end, parity, fast and fashion. In this way, countless handsome men and women all over the world seem to be addicted to running to the shops to buy, buy and buy, average 13~17 times a year, pushing the performance of ZARA to one peak after another.

The shares of its parent company Inditex SA (ITX.MC) Indo textile group have been able to walk on more than ten years long until 2017.

3, how much more is left for the fast fashion future?

ZARA's model also has some drawbacks, for example:

Seeking "fast" means "lazy" in design and production. ZARA has caused many plagiarism lawsuits, and tens of millions of euros in infringement tickets have been handed in each year, and more than 20 independent designers have been accused before. Although these are not the case for ZARA, fines are only small CASE relative to annual profits, but they are not conducive to brand building and sustainable operation.

Second, he controls all links in the supply chain, and risks are concentrated on himself. If the economy is not good enough, sales will be less than expected, and there will be no pressure to disperse.

3. Insisting on direct management will limit expansion. Investing in new stores and refurbishing old stores reduced asset turnover (GAP 2.07, H&M 1.87, ZARA 1.27).

Since fast fashion entered the US in 1980s, the clothing consumption in the United States suddenly doubled 5 times. In China, there are more than 2600 tons of waste clothes every year, hundreds of millions of tons of waste textiles, if burned or buried, it will not only pollute the environment seriously, but also a great waste of resources.

In the past, everyone consciously bought fast fashion clothes, casually throwing them away and throwing them away. With the improvement of the quality of life, people are increasingly pursuing quality and reducing consumption. They begin to sell goods at a premium of three.

Buying five ZARA coats can buy a G2000, and buy five pairs of ZARA shoes. leather shoes Although the latter costs more money, it wins quality and quality and is durable.

Besides, in the past, people did not wear Care's clothes, but they would be excited for several days, but now they are also concerned about piracy and plagiarism. Carrying a "cottage" bag, you are embarrassed to go back home, let alone drying your friends circle. The "bad value" that was once fashionable is no longer being bought.

The old customers, "post-90s", have entered the age of 30, and their interest in fashion has gradually been replaced by quality. The main consumers of fast fashion are spanferred to the "millennial generation". They are more interested in diversification and personalization than plagiarism. The change of consumer groups also affects the myth of "fast but not broken".

After 2017, fast fashion brands collapsed.

H&M also slowed down the pace of opening stores. In the fourth quarter of 2017, the fourth quarter was the lowest in history since 2008. Sales fell by 4%; Forever 21 pulled out of China for bankruptcy and reorganization; Topshop parent Arcadia group also applied for bankruptcy, and New Look lost 5 million 100 thousand pounds in the first 9 months of December 31, 2018 compared with the same period last year, and withdrew from China.

Local clothing brands are also unsatisfactory. Women's wear La Natsu Bell is in deep trouble in net profit decline. The company said it expects the net profit attributable to shareholders of the company will fall by more than 50% in January 2019 -6. shares The price fluctuates to the closing line of the pledge, forcing the controlling shareholders to replenish the pledge.

Zara was also unlucky. In 2017, the worst performance since 2008, with gross profit margin falling to 57.4% from 59.8% in 2013, followed by Waterloo.

Seeing this situation, fast fashion brands suddenly exploded and searched for the way to break the situation.

UNIQLO, on the basis of focusing on basic funds, has been playing the single technology innovation and selling sales by explosive products. H&M constantly adjusts its brand and expands its home H&M home store; ZARA is based on online channels and digitalization, releasing the first lipstick series ZARA Ultimatte water test and beauty market, accelerating the development of ZARA home home line.

All that we want to do is important after all.

Look at the most powerful line. In November 2018, the ZARA online sales network expanded to 106 new markets with a total market volume of 202. By the end of the 2019 fiscal year Q1, Inditex's online sales network has covered Morocco, Egypt, Lebanon, Israel, Serbia, Indonesia, Arabia, the United Arab Emirates and Saudi Arabia.

It also announced that it would use RFID (radio frequency identification) system to complete the digital upgrading of all physical stores and achieve the goal of covering all parts of the world through online sales by the end of 2020.

Judging from the latest two financial reports, this series of actions is still effective. In the 2018 fiscal year, although the global economy and retail environment were sluggish, Inditex's performance was still bright, with sales rising 3% to 26 billion 140 million euros, breaking the 26 billion euro mark for the first time. 2019 financial year Q1 (as of April 30th) financial data: Sales of 5 billion 930 million euros, an increase of 5% over the same period, net profit of 734 million euros, an increase of 10% over the same period.

4, conclusion

ZARA's report card came to us in the fast fashion industry, and gave us a lot of joy. I also take a very cool view of its short-lived success. What ZARA wants to do is not to build and consolidate its brand style, but to continue to deepen the coverage and even open up new routes along the way through the Internet.

Under the shackles of new fashions and consumption concepts, fast fashion's self help may be a deep dialogue with the Z generation. This will be a painful and lengthy process, and it will also aggravate the concentration of market share. As one of the members, ZARA chooses the right time to verify it. Author: L round