In this world of rapidly moving trends, no company does fast fashion better than Zara International. Shoppers in a growing number of countries — 88 as of April 2016 — are fans of Zara’s knack for bringing the latest styles from sketchbook to shopfront at lightning speed and reasonable prices.

In fast fashion, moments matter

Zara’s parent company Inditex is known for year-on-year strong sales gains. Low prices and a rapid response to fashion trends have pushed it into the top ranks of global clothing vendors. The chain specialises in lightning-quick turnarounds of the latest designer trends at prices tailored to the young — about A$35 an item.2 Louis Vuitton fashion director Daniel Piette has described Zara as ‘possibly the most innovative and devastating retailer in the world’.

Inditex shortens the time from order to arrival using a complex system of just-in-time production and inventory management that keeps Zara ahead of the competition. Their distribution centres can have items in European stores within 24 hours of order receipt, and in American and Asian stores in less than 48 hours. ‘They’re a fantastic case study in terms of how they manage to get product to their stores so quick’, said Stacey Cartwright, executive vice president and CFO of Burberry Group PLC. ‘We are mindful of their techniques.’

The firm carefully controls design, production, distribution and retail sales to optimise the flow of goods, without having to share profits with wholesalers or intermediary partners. Customers win with access to new fashions while they’re still fresh off the runway. Twice a week Zara’s finished garments are shipped to physical distribution centres that all simultaneously distribute products to stores worldwide. These small production batches help the company avoid the risk of oversupply. Because batches always contain new products, Zara’s stores perpetually energise their inventories. Most clothing lines are not replenished. Instead they are replaced with new designs to create scarcity value — shoppers cannot be sure that designs in stores one day will be available the next day.

QUESTIONS

1. In what ways are elements of the classical and behavioural management approaches evident in how things are done at Zara International? How can systems concepts and contingency thinking explain the success of some of Zara’s distinctive practices?

2. Zara’s logistics system and management practices can handle the current pace of growth, but they will need updating at some point in the future. How could quantitative management approaches and data analytics help Zara executives plan for the next generation of its logistics and management approaches?

3. As a consultant chosen by Zara to assist with the expansion of its Australian stores, you have been asked to propose how evidence-based management might help the company smooth its way to success with an Australian workforce. What areas will you suggest to be looked at for evidence-based decision making, and why?

4. Gather the latest information on competitive trends in the apparel industry, and on Zara’s latest actions and innovations. Is the firm continuing to do well? Are other retailers getting just as proficient with the fast-fashion model? Is Zara adapting and innovating in ways needed to stay abreast of both its major competition and the pressures of a changing global economy? Is this firm still providing worthy management benchmarks for other firms to follow?