Zara : Managing Stores for Fast Fashion

7 July 2016

Zara is one of the world most famous bands in the clothing industry, pioneering by offering fashionable items manufactured quickly at reasonable price (“fast-fashion” segment), which was supported by an unmatched capability to complete production up to store delivery in a 3 weeks cycle – compared to the average 6 months of luxury brands. The chain of fashion stores is the first brand developed in 1975 by the entrepreneur Armancio Ortega Goana, founder of Inditex, now one of the world-leading fashion group with 8 well-known brands, $10 Billion in revenues, about 4000 stores and nearly 90000 employees.

The group structure is designed as such to ensure a balance between a corporate-driven control, maintained to achieve coherent brand identities and culture across all stores worldwide, and autonomy of the essential entities of the group. As a result, Inditex centralizes at the headquarters strategy, brand coordination, shared services – such as IT, global HR, logistic – and a team of in-house designers.

Zara : Managing Stores for Fast Fashion Essay Example

A large autonomy at country, brand, product lines and even store level is however provided to enable for quick reaction on customer trends, rapid decision-making, continuous improvement and empowerment of the workforce, key to retain the talented people. Countries are given sufficient freedom to adapt operationally to the local variation in terms of employee, customer and store management, given respect of the fundamental values of the Inditex group – i. e. each brand manages independently its store network, logistic and production facilities.

A triangle composed by commercials – responsible for the product flow in a geographical area-, brand regional managers – DTs, responsible at product line level for operations and performances of 15 stores – and the store managers captures quickly relevant information from the market and provides directions to designers in order to create or adapt the models. Stores are the first entrepreneurial entity of the group and are managed by 3 section managers – for women, man and kids sections.

Section managers (or the overall store managers) are responsible to provide information on customer tastes and reactions – together with the DT, to manage at store level the hiring, evaluation and motivation of the sales associates and to manage the operations of the stores – handling of the deliveries, demand forecast for replenishment or suggestions and request to adapt the internal layout and window dressing, in cooperation with the merchandisers and regional window dressers.

Stores have on average 70 employees, including 60% of part-time or sales associate. They ensure through their work the correct in-store logistic, perfect presentation of the products and fluid customer purchasing experience. Motivation of the sales associates is fundamental for the success of Zara and their fair treatment and rewarding is one of the key values promoted by the headquarters. For this reason, Zara primarily look for motivated individuals passionate about fashion and eager to learn fast.

Starting salaries are above industry-average and bonuses are determined based on store sales in pro-rata of the performed hours. Part-time employees have the opportunities to be promoted section managers, DT or commercials. Finally, it is recognized as a key responsibility of the management, as exemplified in the case by its presence in the performance evaluation criteria of the DT and section manager or the willingness of the CEO to meet its store employees and enquiring them on their work satisfaction.

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