Zara has become the largest fashion retailer in the world.
They have gained popularity through their rapid method of bringing new styles
and products to their stores, providing a larger selection to their customers.
Here is the Zara PEST analysis:
POLITCIAL
·
Zara has a very good environmental policy. They
take a lot of actions to be eco-friendly. They save energy in their retail
stores and their design shops by using their lighting, heating and cooling
systems smartly. They also try to recycle their furniture and decoration. On
the producing side, they produce less waste and recycle. Also, they use
ecological fabrics and organic cotton.
·
They charge sales tax on their products, if
applicable.
·
Zara’s competition includes stores like Topshop,
H&M, and Forever21. These stores sell fast-fashion at reasonable prices.
Although these stores are similar, they have different styles and methods of
operating. Zara is the largest, but it is growing at a healthy rate.
·
The company has been under scrutiny for ignoring
consumer rights: “The company ignored the supervision by public opinion and
never responded to the opinion of the consumers' association and consumers” (http://english.people.com.cn/90001/90778/90860/7361058.html).
ECONOMIC
·
They have gotten better at pushing out product
from their stores, so they have gained a lot of economical growth.
·
Zara is an international retailer that
originated in Spain, so they are good at handling exchange rates.
·
Because Zara can push new product rapidly, their
consumer spending has increased: “Zara introduce new items every week, which
keeps customers coming back again and again to check out the latest styles”
(Tiplady).
SOCIAL DEMOGRAPHICS
·
Zara consumers go to Zara regularly for their
fashion needs: “Zara's customers visit its shops an
average of 17 times a year” (Ferdows). They carry clothing for women, men, and
children. Their consumers are people whom like the style of high-end clothing,
but they don’t want to pay the high-end price.
·
Zara designers are constantly working
to fill demand and provide new styles for their stores
·
The company doesn’t focus on
advertising. Other than their product (the clothes), they focus on the style
and architecture of their stores to look very appealing and chic to customers.
TECHNOLOGICAL
·
The Zara designers are always doing their
research to see that are the next fashion trends that are coming off the
runways. A lot of time and effort goes into their mission. Also, they like to
remain anonymous because they are considered “copiers” and not “designers”.
·
Recently, Zara has updated their inventory
system to make everything run easier. Before they use to do everything by hand,
when it came to markdowns and such. Now, they use technology and everything is
easier and more efficient. As a result, they sell more.
Sources:
- http://hbswk.hbs.edu/archive/4652.html
- http://www.businessweek.com/stories/2006-04-04/zara-taking-the-lead-in-fast-fashionbusinessweek-business-news-stock-market-and-financial-advice
- http://www.triplepundit.com/2006/08/zara-inditex-and-amancio-ortega-%E2%80%93-the-responsibility-of-international-success/
- https://www.ibm.com/developerworks/community/blogs/jfp/entry/zara?lang=en
- http://www.zara.com/us/en/company/our-mission-statement-c18001.html
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