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Luxury and Fashion Our global industry experts explore the key trends shaping consumer preferences that drive fashion and luxury, using timely insights to stay one step ahead of the latest innovations and business strategies.

Zara owner Inditex refines its online strategy

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Inditex, the Spanish parent company of fast-fashion retailer Zara, faces a period of uncertainty as the changing retail environment and globally volatile currencies make this rapidly evolving market sector even more competitive. The fashion conglomerate, owner of other fashion retailers such as Bershka, Pull & Bear, Massimo Dutti and Uterqüe, among others, is one of the most dynamic players in the industry.

However, the past few months have seen Zara and its direct global competitors vie to remain in favour with their female, millennial demographic in a market that is fast-maturing and reaching saturation. Currently, Zara has the fourth largest global market share in the apparel and footwear category, behind H&M, adidas and Nike. Other significant competitors include ASOS, Boohoo and Primark.

Despite Zara’s status as the world’s largest fast-fashion retailer, its sales slowed last year due to a lack of distinction between seasonal collections, and general market saturation. To continue to be a key player in the fast fashion arena, Zara needs to ensure that its constant, uninterrupted flow of new designs and products is matched by a digital retail experience that is equally seamless. With competitors like ASOS, Amazon and Missguided enjoying enormous sales and growth, thanks to their sleek online platforms, Zara must streamline its payment and delivery options to ensure that its online shoppers remain loyal.

This week Zara has launched its first dedicated online store in Australia, offering its shoppers free delivery and returns. This epitomises Zara’s business-wide strategy of maintaining a presence in as many regions as possible and tailoring their offerings accordingly; the brand has 7,500 stores in 93 countries, with each outlet respecting and catering for the various seasonal, demographic and cultural differences of their locations.

Consumer attitudes are shifting, preferring to pay more for quality over quantity. To ensure that it remains relevant, Zara must emphasise the quality and longevity of its garments and justify its low price points to ethically-conscious consumers. The global consumer penchant for authenticity and transparency lends itself well to Zara’s brand identity. Its no-advertising policy conserves brand integrity, ironically making it stand out against some of its main competitors. Long-term, this is unlikely to be a sustainable business model, with the fast-fashion market reaching saturation and the shift towards online retailing, but Zara’s position provides a refreshing antidote to other, more Instagram-oriented brands.

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