What Is The Thinking That Makes ZARA Stand Out When It Is Struggling In The Clothing Industry?

According to the world clothing shoes and hats net, long before the concept of Internet attacks,

Brand ZARA is already a "rare creature" that has begun to connect with the Internet. There are many new concepts of enterprise pformation, such as Internet +, digitalization and user thinking.

In March 15, 2017,

The largest parent company in the world

Inditex, the retail group, released its 2016 fiscal year report with a total revenue of 23 billion 300 million euros (171 billion 300 million yuan), a record high.

Each brand has gained growth in all geographical markets.

This is unique in the downturn of the global economy and the perplexity of the apparel industry.

Amancio Ortega, founder of Inditex group, is a Galicia tailor born in poor rural areas of northwestern Spain. Amancio Ortega

In less than 40 years, he pformed his small company into an industry magnate whose personal wealth even surpassed Bill Gates, who has been in the world's richest more than 10 years.

Speculation about Oman and Theo's business secrets is coming and going, and almost no unified and reasonable explanation can be found.

But one of the achievements can not be ignored - the flexible and subversive management process he led.

The unthinkable location has brought "digital" innovation.

In 1975, the first ZARA clothing store opened.

Since then, Inditex group headquarters has been located in an unknown town of altso, a small town in northwestern Spain, which ultimately controls a huge network of more than 80 countries and more than 7000 shops.

The traffic distance between altso and the capital Madrid is 600 km.

But in fact, this road was opened only in July 2002.

There is a rumor that Inditex has a ghost ship used for sewing on the high seas. It is speculated that Inditex and Columbia drug trafficking groups have countless ties to get huge growth.

Former Spanish defense minister Jose Bono (Jose Bono) told Oman a dinner at Theo, telling him a story: the last advice of King Charles V to his son, heir Philip II, was: "if you want to stick to the land and stay with Toledo, if you want to open up territory and move to Lisbon, if you want to subjugate the country, move to Madrid."

In reality, Oman and Theo are also stubborn executors of crisis consciousness.

In order to achieve the Zara philosophy of "buying at once", Oman and Theo put the stakes in the most advanced technology and applied them to all levels of management, design, production, logistics and sales, hoping that the clothing would be able to reach the most remote shops from the designer's mind on an average of only 12 days.

But designers, business managers and agents of various countries are gathered in remote headquarters. With the opening up of the international market, "12" is almost impossible to complete.

In 1989, ZARA has built a company's intranet.

The supplier can enter a basic navigation system through code, and quickly access all the standards of Inditex group for products from packaging to identification.

This can simplify the production process, quickly install new products, and quickly respond to customer needs.

This helped ZARA start Raiders in the European market in 1990, and opened 500 stores in 9 European countries.

Before 1995, when handheld terminals (PDA) were not yet popular, all orders in ZARA stores were pferred to headquarters through fax.

To avoid errors, ZARA began to store a personal digital assistant for each store, allowing store managers to quickly understand the sales records and inventory situation of the last three days.

All data is governed by the master computer and it also collects daily sales reports.

Therefore, even at headquarters, Inditex Group employees can instantly know the sales situation of Kuala Lumpur stores.

Another major innovation of Inditex is the optical processor invented by its network technology director Juan Cobian (Juan Kovian).

This advanced application can read the label code and convert it to the corresponding price, and calculate the corresponding discount.

This helps Inditex save a lot of money, because it only needs 3 cardboards to put labels on 48 countries and regions, and millions of garments cost thousands of euros.

"Triangle" only invested 40% of the products.

60% of ZARA's products are fixed, that is, the style that is never obsolete, and the other 40% products are called "fashionable money", which will be replaced in about two weeks. This is a new way of attracting customers by Oman and Theo: the update rate of clothes almost changes as fast as customers' preferences.

ZARA try to keep the inventory down to the lowest level before new products are put on the shelves.

"If the general standard in the industry is reduced to 50%, then we have to compress to 25%", so that the company has enough leeway to adjust its strategy continuously according to the market changes.

Therefore, outdated basic clothing, such as jeans, tops and men's white shirts, are outsourced to external suppliers, leaving the strain to products closely related to fashion.

If some clothes are all over the world, the designers at the headquarters will put down the computer and stand up and run around and discuss with each other in the office.

At the Inditex headquarters in a safe corner, each children's wear department, men's wear department and women's wear department are divided by glass partition to form three rectangles of the same size. Each department area also has three types of professionals: designers, business managers and agents in various countries.

Only after the triangle is weighed, the new dress will be finalized.

Designers go out two times a year to find new inspirations in fashion shows in Paris, Milan, London and New York.

Though ZARA pays tens of millions of euros in tort penalty every year, the profits earned are much higher than the fines.

They also regard store design as the top priority of their work, and even the kind of candy that the counter should provide.

Business managers interact with suppliers or self operated factories to adjust product prices.

They are always closely related to the third triangle, that is, the agents of various countries.

Agents should study not only the products inside the shops, but also the streets, and investigate the competitiveness of the products.

Even though the design of the product is excellent and the standard of material meets the requirements of the company, they often say "no" to the products designed by the designers.

Agents need to stick to "Zara only producing products that customers want to buy".

Raul Esteladera Raul Estelladella, head of {page_break} Inditex, said, "if we only look at the production cost and decide the new products, our products will have great advantages, but they can not meet the fashion standards and meet the needs of the customers. If the designer decides that the products will be gorgeous, but the price is too high, no one will buy them; if the agents decide, then the store will only sell the best selling pants."

This is why Inditex headquarters is designed to open space. No one sits on the seat for a long time, but is busy with communication.

They start working at 9:30 in the morning, and decide the end time of their work independently by controlling their pace.

Adhere to the "big database" to achieve "made in Europe"

When many fashion manufacturers pfer clothing production processes to the third world countries with low labor force, 80% of Inditex's clothing is still made in Europe. Although the cost is increased, Oman Theo believes that sticking to "European manufacturing" can ensure speed and quality, so that the company can launch the new "European" fashion in the shortest time.

In order to constantly shorten the shelves time, Inditex continuously develops logistics centers outside its headquarters.

Today, the ZARA logistics warehouse is 9 times the size of Amazon, and all the long-distance pportation uses the aircraft, not the cargo ship. Oman and Theo are willing to pay high freight charges, and are unwilling to put them into advertising and marketing.

In less than 30 years, ZARA built 16 factories and interconnected them through 2 tunnels and 212 km long railways.

The two fashion giants of the US Gap and Sweden H&M have made the garment production to the third party, but ZARA is the first person to produce and distribute the closed loop and build their factory into a "big database".

In the factory, the relevant data of various styles will be sent directly from the design department to the computer of the factory, and the computer will be operated according to the design instructions. One centimeter of rag will not be wasted, and all the cutting areas will be marked.

If there is a blemish error, it will only affect a group of garments instead of all products, which will achieve cost control virtually.

Throughout the development process of Inditex40 over the past years, in the era of the Internet has not yet been born, it has become a "advance" heterogeneous.

The essence of its reaction speed is fast iterative thinking. Radical "bringing ism" symbolizes user thinking. Thousands of square meters of storage clothing supermarket and distinctive spatial display are the initial manifestation of "experience thinking", and even the use of some scientific and technological means has been hidden "digitalization" ambitions.

Today, ZARA store manager takes PDA with him.

When the guests reflect to the clerk: "this collar is very beautiful" and "I don't like the zipper of pocket", the staff need to pmit information to headquarters designers at least two times a day through the ZARA internal global information network. After making decisions, the staff will immediately pmit to the production line and change the product style.

If there is a backlog of goods, the store manager will pay for those stocks.

The "two goals" put forward by Oman and Theo to store employees in 1975 have been followed today: first, employees must report customers' preferences to factories, and two, try to achieve zero inventory.

When asked by the British media about the essence of business, Oman and Theo said, "the concept of business is very important, but at the very beginning, we must uphold the correct concept."

This is probably the key reason for the strong momentum of Inditex today.

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