Brands like Zara have transformed the fashion industry. This fashion-forward company is rapidly growing, while other retailers are struggling to get customers through the door.  While traditional specialty retailers have in-house design teams working on next season’s fashions, “fast fashion” retailers like Zara work on styles that accurately on trend.

The consequences of incorrectly forecasting fashion trends a year in advance are deadly to any retailer. Unpopular items will be marked down, which hurts the company in the long run. Zara’s unconventional business model eliminates this risk.

The company’s main approach includes stocking very little and renewing collections often. Unlike other brands that only update their inventories seasonally, Zara’s stores are restocked with new products twice a week. This strategy works in two ways. First, it encourages customers to come back to the store frequently. It also gives shoppers a sense of urgency to buy products that will soon be out of stock.

Zara’s factories in Spain, Portugal, Morocco, and Turkey produce its trendiest clothes. This accounts for about half of Zara’s inventory. Its more basic garments are ordered about six months in advance from factories in Asia, where labor costs are much lower, then sent by ship to Spain.

Zara executives have invested in high-tech equipment and extra capacity that allows their factories to  respond to unexpected production fluctuations. This is something many Asian manufacturers lack the ability to do. Once new products have been examined, arranged, and tagged, they’re packed overnight, loaded onto trucks, and taken directly to a store or the airport. The trucks and planes run on established schedules, delivering clothes to most stores within 48 hours.

Zara’s process innovation is truly revolutionary and makes this company fast and market-responsive. It’s no wonder that Zara has climbed its way to the top of the fashion industry.

To learn more about the methods, policies, and institutions involved in the flow of goods from retailers like Zara to its customers, take MKT 3000: Marketing Foundations!