Zara Business Plan

Zara: An Overview

Zara is a fashion retailer that was started in Spain and has expanded all over the world. Rosalia Mera and Armancio Ortego started the company in 1975. The first store opened in Galicia, Spain and was originally branded Zorba until the owners found out that there was a store with the same name a few blocks away. They opened their first store internationally in 1980 in Portugal. They finally reached the American market in 1989. What makes Zara so unique is its vertical integration, which helps the corporation rapidly design, manufacture, and ship all of its designs within a very short time. They currently have over 2000 stores and are still rapidly expanding around the globe with their fashionable and affordable clothing for the young and fashionable.

What Zara Sells

Zara Sells Men’s, Women’s and children’s clothing at a mid price point. Because it only takes a few weeks to get from design to shelf, the store restocks at least twice per week and attracts customers on average six times per year. Competition for Zara includes Gap and H&M, but has a slightly higher price point than these competitors in North America. It sells clothes through small, mid sized, and department stores, as well as online. Zara is a huge brand and has stores in over 80 countries, making it very recognizable. Another unique aspect of Zara is that it does not spend money on advertising, but rather uses that money to invest in opening new stores.

To Whom Zara Sells

Zara’s primary market is fashion savvy people who want the newest trends at lower prices. The design team at Zara creates over 1,000 unique pieces each month. These pieces will be in the hands of customers within a few short weeks and sold out soon after arriving at a store. Younger generations of shoppers are more likely to visit this store and its primary audience is under the age of 40. Zara sells all around the globe and maintains it’s style wherever it goes, but does have a higher price point in its North American stores. Zara is the third largest retailer in the world and has the potentially to have even more growth.

Problems Zara currently has

Fans of Zara have a term for the twice-weekly shipment of new merchandise called “Z-day.” This is a day where each store receives its new inventory. The reason this is important to shoppers is because each store gets a very limited supply of each clothing item, and these items can easily be sold out in as little as a few days. Zara rarely has leftover inventory and only holds two sales per year to sell these unwanted items. Because there is such a limited quantity of goods, many shoppers who cannot make it the same day as these new shipments arrive will miss out on clothing. While some people are completely dedicated to the brand and go many