What is Zara’s secret to success?Zara is one of the biggest names linked to the boom of fast fashion, a new retail model that revolutionized the apparel industry by doing away with long-established seasonal fashion cycles. Fast fashion retailers operate on short product lifecycles: stores are quickly restocked with new styles, allowing the retailer to react quickly to customer feedback and new fashion trends. Stock is also produced in smaller quantities, reducing capital binding for the retailer and creating a feeling of scarcity for the consumer (“I need to buy this coat now, there are only 3 in store and it won’t be reordered”). By stocking fewer products, which are often replaced with new and different ones, Zara and other fast fashion retailers manage to:
- Keep their clothes relevant
- Get customers to return more often to see the new merchandise
- Tempt customers to buy now, as the same product may not be in store next week
- Sell more products at full price
- Be unaffected if some items prove unpopular, as they are stocked in limited quantities
- Get higher net margins.