Zara Attempts to Compete with Online Retailers | Ifashion Network

Zara, the Spanish fast fashion retailer, might have some catching up to do.

Inditex, owner of the brand and also the world’s largest clothing retailer, is currently facing competition from online retailers such as Missguided and ASOS.

The fact of the matter is that many of these competitors are outranking the company in terms of speed. While Zara has been known for quickly adapting to new trends and re-stocking their offerings like clockwork, online retailers are able to refresh their websites with new items at a daily rate.

Zara is experiencing this at a time when more and more people are opting to shop online. Amazon is soon expected to surpass Macy’s as the largest seller of clothing to Americans. Therefore, Inditex is justified in looking toward the world of tech for answers.

The company is now seeking to develop new technologies, enlisting the help of tech firms.

Inditex has incorporated an innovation unit. Led by Alejandro Ferrer and David Alayon, the unit is reportedly looking into new methods of stock handling; they have teamed up with Fetch Robotics and live testing robots to work in stock inventory. They have even looked into developing devices that estimate the amount of clothing within boxes.

It is notable that Inditex does not want to meet its rivals on their playing field; the company is not targeting their efforts toward developing their online presence. Rather, the company seeks to update that which differentiates them: their physical stores.

The company stated that it sought to include features such as “location intelligence,” a new technology which uses ultrasound to track customers as they move around in-store, as well as virtual assistants to further assist in the shopping experience. These efforts will supposedly be used to help customers locate items and learn about offers when they step into a Zara store.

These new changes will probably be crucial to Inditex’s success. The result of their efforts could determine whether or not they will be able to compete with their online counterparts. However, there are those who argue that physical stores cannot be compared to retail websites. After all, increasing production in order to meet online demand is a different business than having to order loads of clothes to a specific location.

But a new trend among Zara’s online competitors suggests that there is one other unique component to their success.

Boohoo, a British e-retailer, sources over half of its products from its home country. The brand uses a “test and repeat” model of operation, offering a certain amount of a particular item initially and then restocking said item depending on the number of orders they get. The fact that the brand increasingly attempts to source goods locally only facilitates the practice.

Likewise, ASOS, another British online company, has always had factories throughout Europe. However, they have also been looking into shifting their manufacturing closer to home.

Both of these actions are viewed as smart decisions by Felipe Caro, a business professor at UCLA: “When it comes to apparel, there is no secret sauce. To shorten lead times, there’s no other way than doing local production.”

Zara itself has traditionally manufactured clothes in locations such as Spain, Portugal, Turkey, and Morocco. However, Inditex has spoken of plans to include a micro-ship within the security tags of garments, which will allow the pieces to be located at any point during the supply process. Pablo Isla, the CEO of Inditex says “This is full integration between store and online stockroom.”

This type of control over items means that more of the items offered for in-store may also be found online, both at the full price.

Featured Image via Wikimedia Commons

Originally published at www.ifashionnetwork.com on June 19, 2018.