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Zara: disrupting the traditional cycle of fashion
Daly
Posted on December 6, 2015 at 5:06 pm
How running a fashion company made Zara’s founder richer than Warren Buffet

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On December 14, 2015, Daly commented on Reality TV to Ghalichi Glam – Lilly Ghalichi’s lifestyle conglomerate :

Great article Ilene! I didn’t know about this company before. It is very interesting to see how Ghalichi Glam is leveraging on Instagram as an extension of its online channel, especially in light of our in-class discussion on Facebook. Besides the popularity of Lilly Ghalichi, networking effect is probably playing a big role in customer acquisition here.

On December 13, 2015, Daly commented on Made Eyewear- Innovating convenience, quality, and personalization in affordable products :

Very interesting! It’s the first time that I hear about this brand! I am very familiar with Luxottica, the Italian manufacturer controlling around 80% of the major brands as well as retail chains in the industry. Do you have any insights about how Made Eyewear is able to compete in such a monopoly and differentiate from Luxottica?

On December 13, 2015, Daly commented on Louis Vuitton: Luxury handbags coming off an assembly line? :

Very interesting! I am surprised there is so much disclosure regarding redesign of the manufacturing process and introduction of automation… LV has always been reluctant to share details about its production process and especially about which steps are done by hand! As many other luxury brands, they advertise hand crafting as a way to stress their superior quality in the eyes of the customers…

On December 13, 2015, Daly commented on Rent The Runway: Giving You the Chance to Wear the Dress of Your Dreams :

Very interesting post! I have just tried RTR experience for the first time in the occasion of Holidazzle and I have loved it! I am wondering why a company with a similar value proposition has not taken off yet in Italy… Do you think partnerships with designers are difficult to replicate in other countries? I guess it could be difficult to make partners understand the real value behind data collected and some designers may be concerned about cannibalization of their owned channels…

On December 8, 2015, Daly commented on Zara: disrupting the traditional cycle of fashion :

Certainly Zara has some rivals adopting a similar “fast fashion” business model, namely H&M and Forever 21, and also more traditional retailers, such as Gap for instance, are currently testing more flexible manufacturing processes to keep pace. In my view, Zara still differentiates itself from copy-cutters in two aspects. First, the company’s tight control on its supply chain is pretty unique and allows Zara to set the pace of its product and information flow. Even Benetton, which has been widely recognized as a pioneer in tight supply chain management, does not keep control on its stores, relying heavily on franchises. Second, in order to maximize its responsiveness, Zara engages in very expensive practices, which may seem definitely questionable, but eventually pay off. Just to give you an example, Zara ships most of its items hung up on racks instead of packing them into boxes, so that store managers can put products on display as soon as they’re delivered, without having to iron them. Looking at financial performance, H&M reported 8% decline in like-for-like sales in August, while like-for-like sales at Inditex were up 9% over the same period.

Collection of customer insights is extremely time-consuming! Sales staff is trained to draw insights from customer comments. Every day, store managers gather these insights in a qualitative fashion and transmit them over the phone to market specialists sitting in cross-functional teams at the headquarters. Moreover, store managers have three parallel conversations with teams dedicated to each of the three clothing lines (men, women and children). Again this practice may sound crazy at first, but it enables Zara to meet exactly its customers’ demand.