By understanding what motivates its “fashionista” customers, Zara has changed the definition of success in fashion retail. Customers make an average 17 annual store visits, compared to 4 visits for other retailers. The Zara “habit” that keeps customers coming through their door results in more products sold at full retail: nearly 85 percent of Zara’s inventory sells at full price, compared to a retail average of 40 percent. Most important, because customers are Zara’s sales force, advertising is hardly necessary—it’s a mere .3 percent of sales, compared to competitors’ 3 to 4 percent.
“Fast Fashion” is Zara’s Customer Magnet
Zara wants to get a product from inception to market—on a store rack and available to their zealot customers—within 15 days. This speedy process for bringing in product and changing out inventory creates an on-purpose product extinction cycle, and a compelling draw for customers to constantly visit Zara stores. “Fast Fashion” is Zara’s customer magnet. It brings customers into stores to see what is new, what they must not miss, and what they must own before it’s gone forever. Speed of fashion for Zara also means having an agility for listening to and responding to customer requests in the marketplace. Inditex, Zara’s parent company, says that an item requested by enough customers can be in their stores to accommodate that request within ten days.
Zara’s understanding of customers drives its decisions for how it designs, produces product, and stocks its stores. Zara works to appeal to the emotional desire of “fashionistas” to be one of the first and one of the few to own a particular item of clothing. This emotional desire pulls customers back into the stores; it is their magnet for customer repurchasing. To constantly earn this devotion, Zara’s “Fast Fashion” operation integrates design, manufacturing, and distribution, all managed from their headquarters outside La Coruna, Spain. To create exclusivity, they produce small batches of each style.
Three hundred designers work to create the continuous stream of new looks in their stores, resulting in 20,000 new designs a year. Zara wants customers coming back into their stores, where they will always find new products, in limited quantities. This is how Zara created its customer magnet – with the urgency to buy now. The blue blouse she loves today may be gone tomorrow.
What’s Your Customer Magnet?
- How much do you know about the lives of your customers and what makes them tick?
- What’s your magnet that draws customers to you? (Can you come up with your version of “fast fashion” for your customers?)
- How does your customer magnet compare to a beloved company’s customer magnet?
- Do you plan for how you impact your customers’ lives based on how they live?
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