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Introduction

Retailing consists of the selling of merchandise to customers who intend to buy a product or service
for personal, family or household use. For a business to increase its retail sales, it is important that
they understand the need of customers and devise a retailing plan on the basis of their needs. The
report outlines the consistency that a company has in its international endeavours. For the purpose
of analysis the study chooses Zara which has a strong presence both in the United Kingdom as well
as on the international platform. The retailers operations in the United Kingdom and India will be
identifies and analysed in both the countries. The differences in operations along with the
consistency in operations will be highlighted and a comprehensive report will be presented

Company profile

Zara is an international retailer and specializes in clothing and accessories and was founded in 1975
by Amancio Ortega and Rosalía Mera. It is a Spanish brand under the flagship chain store of the
Inditex group and owns other brands such as other brands such as Massimo Dutt, Bershka and
Pull and Bear. It is one of the world’s most successful fashion retailers operating in 59 countries and
launches almost 12000 new designs every year and it claims that it needs only one week to develop
a new product and get it to its stores. Zara produces men’s wear, women’s wear, kids wear along
with accessories such as belts, bags, footwear among others. It has recently started Zara home
which is available in UK and includes home furnishings like bed sheets, tableware, decoration,
occasional furniture among others.

Zara entered the Indian markets in 2010 by mid-2014 it had crossed the Rs 5 billion mark due to its
impressive run in India where it is highly sought by its consumers. Zara India is a joint venture
between Inditex and Tata Group's retail arm Trent.

Retail strategy

Retail strategy is the marketing plan of a company that details out the way a business intends to
offer its services and products to its target audience and the ways it will influence them to buy their
product. A retail strategy is one of the most important aspects for a retailer since it allows the
company to know its audience and thus allow them to devise a plan which will allow them to reach
their audience in the most optimal manner which may include things such as the location of their
stores, placement, discounts, signs etc.

The retail strategy of Zara consists of providing its customers with a frequent updated collection by
stocking up very little. Other competitors update their collection every season while Zara updates its
collection every week. This retail strategy puts pressure on customers since they think that if they do
not buy the item on that visit there is a chance that it may get sold out and it also encourages the
customers to come back to the store very often since they will find something new with each visit.
The vertical integration of their company allows them to lessen their turnaround time and achieve a
good flexibility that allows them to stock their products on their shelves as fast as possible.

When it comes to UK, the country views Zara as a fashionable clothing brand which comes in the
mid-range or on the cheaper side of the clothing industry and is viewed by the customers as an
affordable way of clothing. It has its presence in UK for more than 15 years which has given it
enough time to tap the various parts of the country and has a much bigger presence in UK
Zara in India has found immense success where sales have crosses over Rs 1 billion considering that
it is a relatively nascent market since it entered the country only in 2011. However in India, the
brand is considered a premium ones and Also Zara has opened its stores in malls and shopping areas
where other premium brands are present as a part of their retail strategy. The brands customers in
India consider buying Zara as a premium product which is in the higher range of clothes. However
both countries consider the clothes to be one of the most fashionable clothes in the clothing
industry.

Though the company follows a retail strategy of offering the same product globally and making
minor changes to adapt to a market the main difference in the markets of UK on the basis of its retail
strategy is that it is viewed as a premium brand in India while it is viewed as an affordable brand in
UK.

Wheel of Retailing

The Wheel of Retailing is a model which is used in the explanation of institutional changes that
happens when innovators, including large business houses, enter the retail market. It describes how
retailers use different methods to capture the market share and create brand value. The bottom of
the wheel includes the introduction of products using low prices, profits and prestige moving on to
high prices and high margin for the product moving onto even higher prices and margins and higher
reputation and the fourth part of the wheel includes the new form of outlet which enters the
retailing environment that possess the same characteristics as the one which were chalked out at
the introduction of the wheel. This forms a cycling nature of retailing for the business.

Zara entered the UK market after it had an established business in Spain initially introducing itself as
a garment manufacturer which copies high end clothing line in a low cost manner. Once it found
success in Spain it opened up stores in UK in the nineties and offered stylish yet comfortable clothes,
the Zara has 26 seasons over the year since they launch new product lines every 2 weeks unlike the
two or three season collection which other brands generally follow. Zara entered the Indian markets
by charging the same prices which it charges at any other store but these prices are considered
higher in India and has gained a good reputation all over the world. Hence the brand expanded
internationally by maintaining its affordable pricing but expanding to almost 75 countries in the
world.

Competitive differentiation

The man aim of a company is to gain competitive advantage over other brands that are present in
the industry and a channel of doing so is to ensure that its retail strategy and products are different
and unique from its competition. () argues that the main advantage of having competitive advantage
is to ensure that it offers the target group a product which is different from its competition hence
the customers have an incentive to buy the product and come back for a repeat purchase. The
competitive difference may be on the basis of the price, quality, product or any other feature that is
different from the other companies that are present in the market.

The main competitive advantage of the company lies in the speed at which its products hit the
shelves of the stores which is unparalleled. This is done by asking the customers in store as to what
they want instead of merely predicting the next fashion trend. All store manager are equipped with
a system that allows them to record customers opinion about the clothes and what they would like
to see which is transferred directly to the headquarters in Spain and the designers base their clothes
on this data;. Also each store is equipped with appoint of sales system which allows the
headquarters to monitor which item is selling more and accordingly ship the products such that their
inventory is low and the apparel sells out in a fste manner. henc their competative advantage lies in
the affordable clothin that itr can give its customers within a short span of time at the same

The main competitors for Zara in UK are stores sucha s H & M which too provide fashionalble
clothing at an affordable price however the mens fashion at H & M takes a back seat compared to
Zara who offers way more varety in this area compared to H & M. Also H & M offers its clothing at a
much cheaper price which start at euro 2 which spans to euro 150 while Zara starts at a minimuj of
euro 5 and spans to euro 200. While Zara caters to a relatively matured crowd , H & M caters to a
funkier younger crowd. Also the other competitors such as Next and Gap sont come up with a s
many seasons as Zara

The main competition faced by Zara in India are companies like Tommy Hilfiger, FCUK, Calvin Klein,
Vero Moda who like other competitors in UK do not come up with clothes collection as fast as Zara
and are more expensive compared to Zara which makes it such a wanted brand in India. Also the
discount periods in Zara are said to be iconic with people lining up in front of its stores on the
opening day of its discount with no other clothing store gaining this kind of enthusiasm from its
customers.

Hence it can be said that Zaraa is competative difernt in boh the Uka and India due to its speed and
pricing attributes.

Store design

Accroding to (), one of the most striking ffeatures of the reatail aspect of the business is the store
design sicne

The store design of Zara at both UK and India are similar. However it’s the location of the store
which is different. In the UK, Zara has its stores at most shopping areas but in India, Zara opens
stores only at high end malls such at the Palladium Mall in Mumbai and the DLF at Delhi. Also the
presence of Zara is felt in many areas of UK which is more remote than London while in India the
store has opened up in only tier 1 cities such as Mumbai, Delhi, and Bangalore etc.

Advertising promotions

Zara does not advertise through conventional forms such as television

Pricing comes here

Online

Product offering

A product of offered by a company wither in the virtual form or a physical form is made and sold at a
price which is called the product offering of the company. According to (), it is essential that a
company produces unique products in case it wants to gain advantage in the competitive
environment of the industry and these unique characteristics will make the product appealing to the
customers. Many companies offer a mix of products or just one product depending on their retail
structure and continuously revamp or re launch them in order to make them more relevant to their
target audience.

Zara product offering mainly consists of clothing, accessories, footwear and bags for women, men
and kids. Zara two main product lines consists of the men’s line which consists of 22% of the sales
while the women’s clothing consists of about 58% of the sales. Each of this clothing line consists of 5
sub categories which consist of the upper garment, lower garment, cosmetics, footwear and
complements that include accessories such as scarves, neck pieces, socks etc. Another additional line
consists of the kids clothing which consists of about 20% of the company sales. It has come up with a
new line known as Zara home which houses accessories and other home related material like bed
and bath furnishings, duvet covers and other furniture items.

With respect to India the company has the entire above listed product offering other than the home
accessories leg in all its stores in different parts of the country. However the difference lies in the
aspect that Zara home is a huge part of the ZARA retailing in UK, it has absolutely no ZARA home
presence in India. According to the reports by (), ZARA home is a newer concept for the company
and CUK being a much older markets, it was introduced in UK before any plans are chalked out for
introducing it in India.

In both the countries the company further distinguishes the brand in three different categories
which is known as Zara women, Zara Basic and Zara TRF.

Customer segmentation

Customer segmentation refers to the process of dividing the target audience into groups of
individuals who are similar in specific ways that are relevant to marketing such as age, interest,
gender, spending habits and lifestyle. Customer segmentation allows a company to target specific
groups of consumers in an effective manner and optimally allocate its marketing resources to tap
these consumers. Since the consumers of the specific target group are similar, it is easier to group
them and have a uniform marketing strategy to sell them the product. Customers are often
segmented on the basis of geographical, demographic, behavioural and psychographic segment
speaking on the broader segmentation terms.

When it comes to customer segmentation, Zara does nota adopt the traditional bases for
segmenting its customers. It mainly segments its customers on the basis of their fashion needs and
hence mainly on generation X and generation y. Generation X consist of the fashion conscious
younger generation who believe in affordable clothing yet at the same time there are stylish and
comfortable while generation y are middle aged who believe in buying comfortable clothing. . The
main target audience of Zara is women since it produces maximum clothes for women. Its target
audience consists of fewer men which is evident since in all its stores it has double the space and in
many cases 2 stories of women clothing and much lesser space for men’s clothing.

The company segments geographically on the basis of climate and culture due to the norms of the
country. For example it stocks winter clothing in the southern hemisphere and summer clothing in
the northern hemisphere due to the difference in climate experienced during the same time. Hence
in India it stocks according to the climate and in UK it stocks according to its prevalent climate with a
lot of winter were due to the inherent nature of the climate.

The customer segmentation does not change in the case of Zara whether it is India or UK and is
consistent globally. The only thing that changes is that it stocks the clothes according to climate but
does not segment differently according to the fashion sense of women in UK and India since it
considers the global fashion trends.

Supply chain

A supply chain network of a company is described as the organized network of companies and other
suppliers that work together and smoothen out the process in the way the product reaches its
customers. The logistic management of the product includes delivering value to its customers and
mainly deals with the issues of physical delivery of the product to its customers. Channel is the set of
intermediary companies, people or agents who manage the undertaking of products and services
from the manufacturer to the final consumer. The supply chain of a company is analysed as a whole
rather than fragmented parts in order to understand its working with respect to Zara

Zara is known for having one of the most innovative supply chain management and is known to
design its own products as per the requirement of the customer and current fashion trends. For an
effective supply chain, the order and the administration team work on the current seasons well as
the upcoming season such that the designs can be developed in a quicker manner. The company
than manufactures about 50% of the products by its own network but uses sub-contractors for the
sewing operation which allows it use its organizational capabilities in other areas. All products of
Zara irrespective of the area it is manufactured, gets quality tested at the major distribution centre
in La Coruña. The 5-storied and 50,000 square meter distribution centre employs some of the most
sophisticated and up-to-date automated systems that allow the company to have such robust supply
chain management. It is a vertically integrated company which is controls all of its supply chain
management in order or get its products to its consumers with the help of robust technology.

In Case of UK, the company receives its products by trucks bearing Zara’s name directly from the La
Coruna and they receive their orders within 24 hours of placing the order. Wherein India receives its
goods by air which is wither flown in from Coruna or the larger airport in Spain and receive their
product anywhere between 48 hours top 72 hours of shipping.

Supply chain is an important aspect of retailing since it ensures that the product reach the customers
on time and whether it is UK or India, the turnaround time for Zara to get a fashion product on the
shelves of wither of its stores is less than two weeks which is due to its unique supply chain network.

Conclusion 200

Recommendations 100