Zara: A “Sustainable When Suitable” Brand

Jo Dikhta Hai Vo Bikta Hai: The funda most stores around the world utilise to increase their sales. This scheme is especially effective for the apparel market, where customers get tempted by seeing the mannequins donning amazing attires outside the stores. Throw in some lighting and bling with glass walls, and Voila! The lavish clothing store is set.

The downside is that these stores give an expensive vibe, hence only attracting customers who prioritise brand name over price. This is the one thing that separates “Fast Fashion King” Zara from its competitors. Fast response, availability of the latest fashion designs at a lower price, and predicting the upcoming trends gave Zara the superpower to be the global fast fashion expert. 

As Zara has the scheme of generating products on the latest trends in just 13 days, consumers come across lots of possibilities at reasonable costs. This “buy to wear once” mentality became the main ingredient in Zara’s fast fashion snack. 

The power of fast fashion made Zara what it is today, a popular fashion retailer in front but a non-sustainable brand behind the screen. In the guise of luxury, quality, and accessibility, Zara portrays the image of being a high-end fashion brand. But, at the end of the day, it’s your same-ol’ trend monger.

By implementing carefully observed tactics followed by big names in the fashion world, Zara has maintained its place in the top charts. Positioning their stores in the high street and rapidly reacting to the ongoing trends are some fundamental strategies maneuvered by Zara. These strategies led to Zara gaining the image of being a “copycat” in the global market.

From being a newbie in Spain to spreading throughout 96 countries, Zara’s story is crispy and scandalous. Let’s see what makes Zara such a success, Elite style. 

Zara’s Story

From Zorba to Zara, Amancio Ortega Gaona & wife Rosalía Mera’s journey succeeded in converting a high-end look-alike into a fast fashion elite. After starting a clothing factory in Spain named Inditex in 1963, Ortega saw potential in the apparel industry. Thus, Zara came into the picture in 1975 as a clothing store in A Coruña, Galicia, Spain. 

The founder couple chose Zorba as their store’s name after being inspired by the same-titled Greek movie. But, there was another establishment, a bar, named Zorba on the same street, which led to the name change of the store to “Zara.” 

This was the only time Zara decided to not copy someone else…you’ll see what I mean soon! 😏

Beginning its journey with a meager budget of 30 Euros in 1975, Zara was producing similar-looking outfit designs of popular brands at cheap prices. They expanded their horizons in the 1980s by giving their design, production, and distribution processes a few twists, leading to now being a brand with 2003 stores worldwide. 

The parent company, Inditex, in the meantime, came up with different subsidiaries like Pull & Bear and Massimo Dutti, all belonging to the fashion industry. Despite the arrival of new birds in the nest, Zara maintained its top position in the group by singlehandedly generating 70% revenue. This means that in the 32.6 billion euros sales generated in 2022 by Inditex, approximately 22.8 billion euros was contributed by Zara. 

What Makes Zara Unique?

Ever heard the term “Fast Fashion”? The process of producing trending designs in mass quantities is what fast fashion is about. From designing & manufacturing to distributing clothing items to stores, the lead time involved in fast fashion is comparatively less than the traditional method. Hence it has been adopted by many brands as part of the newly booming “see-now, buy-now” model. This strategy accurately feeds our Gen Z’s appetite to get everything within palm’s reach without long waiting durations. 

So, basically, fast fashion is what’s in fashion these days. And a big credit for this trend goes to Zara. Instead of setting a particular design or styling pattern as its statement, Zara eyed the potential high-end clothing pieces present in the market. Zara took inspiration from the on-trend pieces of these high-profile brands and produced their own collection. Whether this can be called inspiration or duplication is a tough nut to crack! 

So, Zara revolutionised the fashion industry by making high-end clothing items available for all. For this, they have been accused of being a copycat by fashion influencers and other brands like Gucci, Prada, etc. 

Regardless of the negative reputation, Zara is now one of the first brands people turn to shop for the latest designs, especially the fair gender. Zara became the place where a girl from a middle-class family could afford the trendy floral dress, usually available for hundreds of dollars in the market. Zara’s success in catching consumers' nerves became evident with the beautifully designed 2000 stores spread worldwide, from Spain to the USA & India, within four decades.

Lavish Stores with Reasonably-Priced Items

Zara might be a retailer in the fast fashion industry, but they believe in keeping pace with high-end brands around the world. To do this, Zara always places its stores in the poshest locations in the city. With authentic interiors and classy representations, Zara stores are always in highlight alongside names like Gucci and Louis Vuitton. 

But the items found inside these stores are not overpriced and are thus successful in alluring consumers even more. Seems like the roadway to “look rich without being rich” goes through the streets of Zara stores.

Core Values of Zara

Every brand’s vision and values make them unique from its competitors. This statement is especially true for Zara. By following the mantra of keeping “consumers first and rest after” (or so they preach), Zara strictly plans its strategies with the four core values: Beauty, Clarity, Functionality, and Sustainability. 

These four objectives are a part of Zara’s unique business model, but when it comes to one of these objectives, there's a serious lack of enforcement! Read on to find out Zara's sustainability front...

Zara’s Business Model 

Zara has been living and breathing the same business model for years now. Many believe that the Zara business model, which has been the same since its inception, is running out of its course. Despite these allegations, Zara is going strong and is unrivalled in the fast fashion category. 

Zara is famous for stocking the trendiest designs in its stores, and they do this by reducing the lead times between production and distribution. This was the big strategy that founder Ortega came up with while launching Zara. He called it “instant fashions,” which worked out pretty well for both the subsidiary and the parent company, Inditex.

Let’s see what comprises Zara’s infamous business model in brief:

1. Research: One of the perks that contribute to Zara’s success is being true to its reputation for reacting to new trends instantly. Zara hires employees to keep an eye out for what’s on trend. Every Zara store has a direct channel built where the employees forward the most wanted designs and ideas to the production houses of Zara. Along with this, Zara’s branches have trend-predicting software programs available that are utilised accurately by around 300 designers. These designers work in what Zara calls “The Cube” to predict future trends, find inspiration from chosen trend designs, and finalise the next collection theme.

2. Design: Zara follows a strict customer-centric approach by stocking items specialised for different tastes. Whatever is trending in the USA will be found in Zara’s Los Angeles & San Francisco stores. Likewise, the 21 Indian Zara stores, a joint venture with Tata, would have items similar to the trends ongoing in the nation.

Zara produces 2-3% more designs than any other brand, gathering up to roughly 12,000 designs per year. They keep low stocks for various designs hence creating artificial scarcity in the market. So, they are giving what the customer wants to wear and are also saving themselves the trouble of witnessing mountains of unsold goods in case of poor sales.

But this strategy is surely creating a mountain of once or twice-worn apparel waste in the world. The renowned activist, Greta Thunberg, commented on Fast Fashion brands like Zara for fooling people by “greenwashing.” The term here was in reference to the effects mass production of these products has on the environment and the brand’s meager efforts to prevent this. Well said, Greta, well said!!

3. Manufacture: Zara utilises its factories (design houses) for 85% of its utility by designing, manufacturing, packaging, and transporting in-house. These operations might seem complicated, but every step is carried out precisely, without any confounding hitches. Fabrics utilised for the production are transported mainly from Spain, France, & Italy. About 80-90% of production takes place in Europe, out of which 50% is produced in A Coruña, the headquarters of Zara. 

One might wonder, with such mass production, what are the conditions under which around 10 thousand employees (as per Inditex Employee Statistics 2022) work in Zara?  

4. Retail: Among the 40,000 products designed annually, only 12,000 reach stores around the world. An interesting fact about Zara stores is that every city has a prototype where they do product assortment by testing the most efficient position in terms of sales. Thus, whatever assortment strategy works for the new collection is then preached to all Zara stores in the country. 

This super-efficient business model works wonderfully in making Zara the fourth-largest brand in terms of market share. The only party paying the price is our dear mother nature. Wondering how? A little patience and some more in-depth information about the business model will take you to the primary section of our topic. So, read on, fellas!  

Advantages of Zara's Business Model

Zara has always been praised for its fast response to customer demand on what’s trending. Store managers order certain designs, and the New Collection is delivered twice a week without delay. They follow the 13 days deadline strictly so that all levels throughout the production & distribution chain get carried out without a glitch. 

Another pro of Zara stores is their location. You will find a Zara store placed side-by-side with one of the high-end brands. The store’s size, design, and lighting is always exquisite, catching passerby's eyes instantly.

Along with a tried & tested product assortment, Zara also keeps complementary items together. This way, Zara provides its customers the chance to create a complete look, thus increasing sales for all product categories. 

Overall, Zara earns 85% of its inventories, whereas the competitors get only 60-70% for the same. The reason behind such a high difference is the almost no outsourcing strategy of Zara. As Zara restocks much sooner than other retailers, every four to six weeks, they keep the stock amount short. Hence, the demand for the latest inventory increases, allowing Zara to sell its products soon. Limited items are then sold at a higher price due to consumer demand. 

So, if you are looking for that gorgeous dress, you saw a few weeks ago in your nearest Zara store? Then there is a high probability you won’t find it hung there. But don’t fret, as you can get the same design on Zara’s website or another store in your city. With this well-planned strategy, Zara became the king of the fast fashion industry around the world.

Disadvantages of Zara's Business Model

With a fast approach to reacting to the customer's demand and the latest trends, Zara failed to go digital at the same speed. Zara went online in 2010, which was a decade late than its other competitors, such as ASOS. This caused them to suffer losses, as consumers nowadays prefer shopping online with millions of options present.

Another disadvantage was the one for which Zara has been poked numerous times. Although efficient for the business, Zara’s complete focus on fast fashion is causing damage to the environment. A large carbon footprint and excess use of natural & energy resources make up the “fast” in the fast fashion industry. Hence, the human dream of achieving a sustainable environment is getting out of hand. 

With rapidly changing fashion trends, people’s wardrobes keep on updating. It’s just a pity that our planet is struggling to keep up with “the change.” 

The Truth Behind Zara’s Sustainability Front!

Zara has been going on and on, for decades, about its four core values and how it inseminates those values without fail. But is that the actual truth or just a cover to hide the dirt inside? 

Zara, just like many successful companies out there, feeds off the innermost desires of human beings. And being stylish as per the ongoing trend is a necessity now. When I say necessity, I mean it in the literal sense. 

Whether we are going to the office or an evening party, our wardrobe now consists of completely different attires for both occasions. This requirement to wear something trendy is now an instinct, as it helps us be part of the “cool crowd.” And Zara, being a quick responder to its consumer’s demands, delivers new collections. Amidst the description of the summer/spring collection, they often (always) forget to mention the pressure their business model is putting on mother nature.

Although sustainability is one of the face values which Zara claims to follow, its business model is largely causing harm to our already beaten environment. As per reports, 20% of greenhouse emissions are done by the apparel and footwear industry. Despite Zara’s Global Water Management Strategy, implemented to avoid discharging hazardous chemicals into the surrounding area, the actual results of environmental safety are not publicly available.

And since Zara enjoys a market share of 72.96% worldwide in the Inditex group (as per Inditex’s report), its contribution towards making our planet shittier to live in is quite large. 

But, hey, let’s not forget Zara’s limited-edition collection of “sustainable fashion” produced from captured carbon emissions. Well, thanks to Zara, sustainability is now a limited-edition concept in the fashion world. 

Although we appreciate the polyester-created outfits, what about the results this initiation had for saving the environment? Where are the numbers that showcase the reduction in carbon footing percentage accumulated by Zara? Don’t waste your time Googling it because you will find nada!

Zara Sweatshops: More Like Sweat & Tear Shops!

Zara claims to be an environment-friendly brand, as it is “still planning” to start using 100% sustainable fabrics by 2025. But, till then, no fixed promises of reducing carbon footprint by high percentiles!

And don’t get us started on the conditions of Zara’s sweatshops, which are mostly located in Spain. Remember the query we raised earlier regarding the labour (employee) conditions in Zara? We have the answer for you!

Throughout the final production stage, a few tasks are handled by outsourcing contractors in Zara. There have been many cases of labour abuse by contractors where labours were reported to have 16 to 18 hours of long shifts with barely enough minimum wage. 

Brazil’s labour controversy in 2011 brought forward the pitying conditions of Zara and other similar fashion giant sweatshops. The contractor outsourcing around 90% of Zara’s Brazilian production subcontracted the work to a factory to get the task done. There, immigrants from Peru and Bolivia were found working their fingers to the bones in an unsafe environment for penny-like wages. Fourteen migrants were Bolivians, and one from Peru, among which one was 14 years old, were facing days of forced labour along with restricted mobility to and from work. Many immigrants were also made to work extremely hard in the name of getting legal documents to gain citizenship in Brazil. 

The raid caused a huge pushback for Zara, as the Brazilian Government fined them for several misconducts. There have been a few more occurrences leaking the poor condition of Zara employees, especially the outsourcing labours.    

Despite claiming to provide living wages to all suppliers, Zara still faces allegations due to the hidden supply chain. In short, many facets of their supply chain falls under the criteria of uncertainty when it comes to transparency. 

The Bottom Line

Even after inducting around 2,299 stores for the repair & reuse program, Closing The Loop, Zara’s race towards eco-friendly surroundings is miles away. 

When you look from a business point of view, Zara tops all the charts profoundly. But business is not all about profits. It has a give-and-take relationship with the consumers & environment. 

With the largest Inditex revenue, Zara has the responsibility of reducing the doom fast fashion can bring. For that, having eco-friendly stores is not enough. Let’s think big and fast because the trending shirt and pants duo you are eyeing to purchase from Zara is not going to save you from witnessing the planet’s demise.