Zara is an industry leader in the fast fashion industry.
It’s well-reputable in 96 countries, and renowned for its constant stream of trendy collections, and affordable prices.
The Spanish clothing retailer rarely advertises itself and comparatively invests less in marketing campaigns. Yet, it’s a major revenue contributor to its parent company Inditex and brings nearly $20 billion to the group.
Its brick-and-mortar stores stay busy even on weekdays, and its online website receives 1 million visitors daily. People love its products so much that when textile commerce went down three years ago, Zara’s rose by 2.17%.
How did it reach that position without spending heavily on advertising? Today, we’ll talk about nine marketing strategies Zara employed that helped the company grow into a multinational retail chain.
1. Imitative Strategy
Zara manufactures a large selection of luxury apparel and accessories for men, women, and children.
Its product lines cover almost everything from jeans and jackets to shoes and perfumes. Every item it produces demonstrates popular style and sophisticated cuts, distinguishing them from average fashion retail collections.
But the thing is, that’s something nearly every other designer stores offer. So, how does Zara compete with other fashion brands?
Through frequency-based imitative strategy.
Imitative strategy is a product design technique in which companies take existing ideas and improvise them. Meaning, instead of creating your own, you make an alternate version of someone’s else product.
Zara monitors current trends and picks popular designer styles as templates for its product collection. It enables its in-house designers to rapidly manufacture new collections and launch them in quick succession. Therefore, every other week you’ll notice different items in its outlets.
Its products come out with such high frequency; they’ve been quoted as freshly backed clothes.
With its fast fashion model, the retail giant produces 12,000 styles each year and sells items in millions.
Zara’s competitive advantage is fast fashion. It applies the imitative strategy to satisfy customers and deliver quick results.
Find a value proposition that can help you gain a competitive advantage over your rivals. With it, you can increase brand awareness and attract your target audience.
Zara has positioned itself as a luxury brand through product designs and exclusivity.
It releases trendy collections in limited quantities and frequently swaps them with new products. As a result, 85% of new arrivals are sold at retail price and people wait in advance for its upcoming collections.
Exclusivity is a marketing strategy that generates customer demand through product scarcity.
The limited quantity adds value to your items, making them more desirable to your customers.
It also helps you reduce product wastage. Zara sells 450 million items each year with only 18% wastage. The small quantities allow Zara to experiment with various designs without incurring huge losses.
People have a natural desire to possess exclusive items because it makes them feel distinguished. With Exclusivity, you can target those emotions and ensures these customers stay interested in your brand.
Use this tactic to increase your brand value and improve the retention rate.
3. Price Edge
Zara typically caters to men and women who love premium quality products but can’t afford to buy designer goods. To meet its customer demands, it sets lower prices on its items to make them more accessible.
Take the Prada raffia tote, for example.
Last year, Prada released a tote bag that immediately became a cult favorite for its simple yet minimalist style. But with a £1,400 tag, anyone can tell the item was clearly made only for the elite crowd.
Zara’s in-house team took that design and created a slightly different version for just £30. The affordable tote bag satisfied both brand-conscious and price-sensitive customers.
Another good example is its Vinyl High Heel.
Recently, Zara introduced a pair of £60 Embellished Vinyl High Heels that look almost similar to Manolo Blahnik’s £875 Hangisi pumps.
While Zara by no means sells its items at cheap rates, it does offer designer-inspired goods at nearly 70% low prices. Since it invests little in innovation, it can afford to bring the prices down without hurting its profits.
Your product prices play a large part in your customer’s purchase decisions. Whatever pricing you decide to set will eventually define the value of your product.
Adjust your pricing according to your target market income range and location to generate maximum results without negatively affecting your brand image
4. Strategic Store Locations and Effective Distribution
Zara operates around 3000 stores worldwide, and most of them are located in Metropolitan cities and prime locations, usually near other high-end retailers.
You’d think being in the vicinity of designer brands would make Zara feel more afraid of competition. But from a strategic point of view, Zara is getting the better deal out of it. How? The site location brings relevant foot traffic, and the proximity to fashion retailers inadvertently boosts its reputation.
Zara also makes its store location decisions based on its distribution strategy.
Unlike its competitors H&M, Zara follows a vertical integration business model—doing most of its production and distribution in-house. It manufactures 50% of all items in Europe, and to offset the higher cost of labor, it has established a large part of its stores in Spain.
The vertical model not only makes distribution easier but also helps Zara respond to unexpected situations fast.
Before you select your business location, consider its feasibility and the foot traffic of that area.
If you’re a premium brand but open a store near Walmart, you’d be targeting the wrong audience.
5. Customer Insights
As a fast fashion brand, Zara relies heavily on market trends and consumer needs to continuously produce new styles. It employs both online and offline channels to learn what buyers prefer and which outfits are trending in the market.
The social media team engages in conversations to gauge customers’ reactions to its products and receive constructive feedback. With millions of followers on Twitter, Facebook, and Instagram, Zara generates a significant amount of customer insights from its social channels alone.
The staff of its brick-and-mortar stores is also trained to listen to visitors’ queries and pass them on to the in-house team for design ideas. Every small piece of information is recorded by its employees to its centralized database, which goes to its team of designers, who revamp and churn out new styles every week.
A classic example is the popular Pink Scarf story.
In 2015, multiple women from different geographic areas walked into Zara outlets and asked for Pink Scarfs. While they didn’t receive the desired color, the assistants recorded their interest in the database. Seven days later, Zara released 500,000 Pink scarfs, which were sold within three days.
People purchase items either to solve a problem or to entertain them. If you know what your target market wants, you can build your products accordingly.
6. Digital Transformation
Digitalization is one of Zara’s strong marketing points. It has implemented technology in several areas to streamline its operations and generate more sales.
A major example of its digital transformation is the online Boutique. Zara entered the eCommerce industry late, but its growth was remarkably quick.
With “click and collect” shipping options, and mobile apps, it attracts younger audiences from all around the world and makes millions from online sales.
Another area where Zara has introduced digitalization is the supply chain. It adds RFID microchips to its clothing to keep track of its inventory. The chip simplifies inventory management and allows store assistants to entertain customer queries better.
Zara also occasionally taps into innovative technology to improve its store visitor’s shopping experience. One of its recent tech-campaign involved an augmented reality app that lets visitors virtually try outfits.
Digitalization can help you achieve your marketing goals more quickly.
You can increase your brand presence, optimize your customer journey, and boost your sales while saving costs on automation.
The above three are just a few of Zara’s successful examples. The fashion retailer also uses AI technology to forecast clothing trends and centralize the flow of information.
7. Store Experience
Zara invests only 0.3 percent of its budget in advertising. Instead of pursuing traditional marketing methods, it uses store layout and customer experience to promote its products.
The storefronts are often adorned with glass windows and wide entrances to improve the visibility of the products. Its display windows exhibit the latest designs to draw traffic, while the minimalist interior pops out the item colors to make them noticeable.
Nothing in its store is randomly placed. Every item is strategically arranged to increase its appeal. Zara employs visualizing experts specifically for product placement. And every week, the team uses pilot stores and builds mock presentations to ensure the collections at real outlets are displayed to draw attention.
Zara has digitalized most of the navigation steps as well to deliver excellent customer service. Buyers don’t have to wait for a salesperson to check the size or wait in queue at the counter.
They can simply scan items with the company’s app to discover available sizes and get purchase receipts digitally.
Your store experience can serve multiple purposes. It can show your products to advantage, facilitate sales, communicate your brand messages, and retain customers.
Focus on your product purchase funnel to meet the above goals.
Zara releases new designs so frequently it doesn’t have to worry about utilizing personalization to satisfy its target audience. Yet, it uses customization in its product strategy to delight its customers.
In 2019, it introduced custom embroidery on its Denim items and built pop-up corners on some of its stores for pre-orders. Following its success, it launched the “Edited” collection to let customers add personalized stamps to their leather bags.
Over the years, it extended customization to bathrobes, towels, and other home items, and today, it has a permeant section on its website dedicated to personalization.
While Zara adopted this strategy a little later than other fashion retailers, it has, since then, embraced it completely.
Interestingly, Zara’s personalization strategy isn’t limited to product customization. As a multinational brand, it sells its products in around 88 countries, and each state has cultural and climates differences. To adapt, it tailors its designs to suit the respective countries’ cultures.
It’s one of the reasons, despite economic uncertainties, Zara’s sales ratio hasn’t been affected much.
Most designer brands typically incorporate personalization in their product strategy to deliver exclusive service to customers. It helps them refresh old ideas and retain their buyer’s interest.
Leverage this strategy to nurture your loyal customers.
9. Positive Brand Image
Zara has made concentrated efforts to promote itself as an eco-friendly brand. It has launched notable initiatives over the years to build a favorable brand reputation in the market.
In 2016, Zara introduced the “Join life” campaign, featuring apparel made from sustainable materials with recycled packaging. Within six months of its release, Zara saw an 8% increase in sales and subsequently added used-cloth donations to its campaign to promote zero waste.
Zara has also brought a lot of traction from its social projects. In the last decade, it has collaborated with over 400 non-profit organizations supporting various environmental and social activities.
One good example of its social contribution is the For&From program, which involved opening job opportunities in its stores for people with disabilities. Zara generated €7.5 million in net sales from 15 stores with that move alone.
It now plans to make 50% of all its products sustainable by the next year and reduce its carbon footprint to nearly zero by 2040.
Sustainably has become a major factor in people’s buying decisions.
With climate change, people are becoming more conscious of their purchases and support brands that are more transparent about their manufacturing process.
Take the above observation into account while devising your marketing strategy.
When you think about Zara’s current market position, it might seem almost impossible to reach that level of success. But we often ignore the fact that every business starts out small, and so did Zara.
The multinational fashion giant that you see today began as a family business in a small city in Spain. Its founder, Amancio Ortega, started the business with bath robes and coats, and it took decades for Zara to establish its presence worldwide.
Fortunately, you have access to resources that Zara didn’t have in the early years.
With digital channels, you can easily avail finances to fund your operations and apply the above marketing strategies cost-effectively.