Industry Consumption Projections in 2020-21
The coronavirus epidemic is projected to lower industry expansion projections for 2020-21. The shutdown of non-essential retail locations is predicted to have had a significant impact on industry consumption in 2020-21. (Croudace 2021). Although retailers have reacted by expanding their online business, this has not been sufficient to compensate for decreased in-store sales. The retail sector in the United Kingdom is made up of approximately 300,000 distinct enterprises. It engages nearly 3 million people, accounting for more than 8% of all UK jobs, and offers vital products and activities to consumers, satisfying their requirements and ambitions. In 2019, retail transactions in the United Kingdom were £439 billion (brc.org.uk 2022). The retail business is an important element of the sector, accounting for 5.2% of the UK’s GDP in 2020 and 9.3 percent of all UK jobs in 2019. (Croudace 2021). In the United Kingdom, approximately 555,000 workers are now working in style, textile products, and clothing commerce (fashionunited.uk 2022). The majority of occupations in fashion-related businesses involve the retail selling of apparel.
In this day and age of innovative press and technological advancements, where consumers are constantly bombarded with targeted advertisements, it is extremely difficult for companies to proceed effectively without marketing, particularly digital brand management, due to the rapid acceptance of the internet and the utilization of computers and other similar technologies (Segran 2019). With the arrival of Covid-19, customers’ preference for internet buying has grown. When it comes to top-branded clothing retailers, the first thing that comes to mind is either H&M or Zara. H&M, which sells fast-fashion apparel and items for men, kids, women, and teens, has surpassed Zara to become the world’s second-largest apparel shop. The corporation runs its operations both offline and digitally, with over 5000 outlets in 74 nations and digital buying in 33 nations (Segran 2019).
Every company functions in an ever-changing setting referred to as the business environment. It comprises both internal and external elements that have a significant and secondary impact on the functioning environment of the company. There are several sorts of organizations that function with varied aims and have unique operational structures. The standard of practice differs owing to changes in the kind of assets and the extent of their activities.
H&M is always releasing new products that satisfy the consumer’s requirement for clothing at a reasonable price. Their entire emphasis is on style and reliability at the minimum feasible cost (Delirium 2017). They provide anything a customer may desire, from informal clothing to formal clothes, athletic wear to lingerie, all at a reasonable price. They collaborate with other well-known firms to develop a fresh style. H&M’s business plan is based on contracting non-essential processes so that they may concentrate on their main company structure. H&M does this by sourcing apparel and products from a diverse range of vendors and does not possess one plant (Xuejie, Chang and GuangHao 2019). Their main goal is to provide “fashion and quality at the best price.” The CEO, who is selected by the directors, is in charge of managing the H&M group daily and designates employees of the senior administration group. H&M Group considers the demands of current and upcoming populations and recognizes that their overall company must be done in a financially, culturally, and ecologically viable manner. This is why they generate high expectations and ambitious objectives (Chen and Fang 2019). They aim to leverage their size and scope to drive the transition to cyclical and climate-friendly clothing while being an ethical and egalitarian corporation. Anything they do is an element of the societal and ecological context of their goods, from the elements they utilize and progressively reuse, towards how they engage with individuals and the standards they create for their vendors (hmgroup.com 2022).
Retail Transactions and Jobs in the UK
Likewise, Marks and Spencer (M&S) is a leading retailer in the United Kingdom. Mark & Spencer is a well-known shop with a diverse item selection that is privately held. It has stores in several regions of the world, indicating that the provided organization has a high market worth (Joshi et al. 2021). This company accomplishes its functions feasibly and exactly by developing robust technologies and planning. Marks and Spencer’s corporate strategy has been simulated by employing a variety of distinct Techniques such in which they give size and recognition of which are currently confronting the company structure. The company’s hierarchical framework comprises a large number of concepts, obligations, laws, viewpoints, business activities, and initiatives. M&S is ideally equipped as an own-brand store to collaborate with its long-standing valued source partners to create newer methods of looking at problems (Joshi et al. 2021). Since purchasing habits have shifted, Marks and Spencer’s embrace of the emergence of rival stores such as H&M and Zara, as well as the internet competitive industry, has become irrevocable. Furthermore, huge companies such as Marks and Spencer demand more time to make a choice, which may be highly stressful in the event of reaching a judgment (Arustamyan, Al Taj and Nasir 2020).
The worldwide institutions are the corporations that sell commodity lines in overseas nations by transporting merchandise to nations and also engaged in numerous finished commodities this category of firm’s institutions they did not have their institutions in the overseas country they own firm’s entities do not have any overseas nations where they extract to or extract from their items, their advancement and procedures are completed in the home country. The worldwide expansion and advancement of commerce among many businesses around the entire globe have emerged forward to offer their goods and deliver their facilities not only in their home nation but also in distinct overseas nations, which has decided to expand up to more possibilities for international businesses, allowing them to expand and diversify (Bernon 2018).
Zara is a prominent clothing company that competes with big clothing retail companies such as H&M and M&S. Zara’s major goal is to manage consumers’ likes and inclinations and modify their trends before their needs and inclinations alter (Segran 2019). To do this, Zara guarantees that its outlets have up-to-date clothing selections and that they purchase at minimum twice a week to replenish their inventory. Zara’s organizational structure is vertically and organized according to hierarchical tiers. It demonstrates the positional hierarchy of the organizational regions and the power that they have over the personnel in a certain fashion (Wang 2018).
This corporation does not invest in advertising, but rather in shops, location, decorating, and storefronts; in other words, Zara seeks to enhance the store’s image. They do not use excessive advertising to attract potential customers. They just arrange themselves where the target audience will see them enter and purchase. Zara is a rapid fashionista (she imitates the designs of other companies). Zara sets varied pricing in each country based on the consumer and the currencies. Zara is a quick learner when it comes to new technology (Chunling 2020).
The design team is the people that have to create the elements that go into the shops. They must adjust to all of the new outfits they acquire (Borozan 2020). It is comprised of ongoing development and teamwork. Every store establishes a collaborative structure in which all workers share responsibilities. Workers are instructed to present a positive picture of the organization. Because Zara does not promote, consumers’ interests must be prioritized. This firm is searching for dedicated and collaborative staff that can meet the conditions set out (Shameem et al. 2021).
The firm’s manufacturing provides a schedule and resource benefit, intending to enhance its performance and productivity while contributing the fewest feasible mistakes and expanding output without raising expenses. Zara distinguishes itself by tailoring the production method to the needs of the shops, eliminating bulk producing and producing in little quantities. The quick transmission of content from shops is critical to marketing (Sitaro 2020).
Each department is autonomous. Other sections are unaffected by the internal issues. Each department has a distinct purpose. It objectively depicts the staff hierarchy. They establish distinct lines of power. Zara’s marketing is complicated by the fact that it employs distinct techniques for each area. Employees are well-trained and educated on how to provide a positive picture of the organization. The design, production, and distribution processes all work in tandem. Zara has created value for customers, industries, and, most importantly, the communities. Supervision of suppliers’ ethical practices, sustainable transportation strategies, and training for a more ethical method of consuming are only a few of Zara’s accomplishments.
Organizational Chart of Zara
The advantage of acquiring a European label is that the firm may sell and distribute its products in other European countries. In Europe, the firm is not subordinate to frontier restrictions or extra taxes from a political standpoint (Truong 2016). It is one of the most important advantages to the fashion firm. Most significantly, Zara can import/export raw materials as well as distribute completed items throughout European nations. The corporation is not required to pay additional taxes on importing and exporting. Politically driven economic rules also have a significant impact on the firm’s income and revenue. A strong political climate is essential for the development of the firm. When the democratic scenario in a country is unsettled, it interrupts the firm’s logistic network and marketing system. This type of disruption boosts costs and influences the firm s revenue. The corporation has no alternative but to confine its operations to adjacent nations (Camargo, Pereira and Scarpin 2020).
Zara’s ability to meet the demands of the majority of clients contributes to the development of a loyal clientele. Zara is a lower-priced brand as compared to other European corporations, which allows Zara to have a broader marketing presence than its competitors (Orzan et al. 2021). A complex chain of sluggish economic development around the world can impair the firm’s economic position. A rise in labor prices or total production costs might put the company’s finances in peril. Because of the covid-19 epidemic and quarantine, businesses all around the world have been compelled to shut down. Zara has no choice but to shut 2270 of its retail outlets throughout the world. Putting the firm’s functions available on the internet was one of the best decisions it’s ever made. It helped to keep the damage to a minimum (Kim and Oh 2020).
Societal changes are always evolving, and they have an influence on the supply and demand for a firm’s items. Zara’s target clientele is incredibly vast and diverse. Customers may choose from a wide range of items offered by the organization (Christopher 2016). Zara is a memorable corporate identity for many customers as a result of the firm’s focus on excellent items and years of brand promotion. When clients purchase Zara’s merchandise, they feel special. The firm’s stockholders make a lot of money, and the clients feel like they received a good bargain. Cultural influences have a significant effect in impacting client purchase decisions. It might be clothing, accessories, footwear, or anything else. Consumers will not embrace a concept if it does not fit in with their surroundings. Zara, on the contrary, introduces goods that are both geographically and culturally relevant. The firm has always offered a wide variety of items and services to its customers and will strive to do so in the future. Nevertheless, over time, the customer market has become extremely concentrated. They increasingly choose firms that provide a diverse range of items in a single market niche (Aabed 2017).
When the covid-19 outbreak struck the world, a surge of lockdowns and workplace suspensions left roadways, shopping malls, and stores desolate throughout the world. Zara was keen to make a financial investment in the e-commerce and digital commerce software industries. It was quite profitable for the corporation. To discover client tendencies and buying behaviors, the company employs complex research techniques and software. It would assist the organization in launching items that would be more appealing to buyers (Mahardika and Wayansantika 2021). Zara’s webpage and e-commerce network have an innovative design, and consumers from all over the globe engage with it daily. To interact with its clients, the company employs a variety of marketing platforms. Zara created productive cooperation with Toyota by implementing JIT and Lean production ideas throughout its production processes. Technology also improves a company’s client response. RFID software has been used by the corporation to track its items and stocks (Christopher 2016).
Zara is a corporation that places a premium on morality and sustainability. Their goal is to implement these ideas throughout their whole operational organization and also their supplier chain. Zara, for example, is subject to strict norms and standards (Orzan et al. 2021). The corporation pays its employees a living pay, for which special regulations have been enacted. Compliance with legal requirements is becoming increasingly important for the business, and the firm has made investments in this area throughout its supply network administration. To provide garments that are in keeping with current trends, the firm has already encountered certain copyright violation concerns. One of the reasons companies may replicate another without substantial penalties is due to archaic regulatory theories. Simultaneously time, Zara must strictly maintain copyright restrictions since the garments they sell require a significant commitment of time, labor, and expense. As a response, Zara must consider establishing copyrights and trademarks restrictions to help preserve its electronic and intellectual resources (Orzan et al. 2021).
Global Expansion of Companies
Global warming and energies, ecosystems, sustainable resources, animal rights, and other ecological concerns have all been extensively addressed by the company. The organization has verified that all types of hazardous materials are removed from its logistics framework. Zara has publicly stated that its platform would develop ecologically sustainable items. The company has also demonstrated a dedication to animal protection, renewable materials, freshwater, ecosystems, and other ecological concerns (Chunling 2020). Consumers’ hearts and loyalties will be won if the corporation takes ecological concerns effectively. The garment industry operates on the basic idea of disposable things, which are worn and then disposed of. Trendy products do not usually last long. People only use it to make themselves seem attractive and to snap pictures. Fashion businesses inspire individuals to just adopt the trend. Consumers are becoming more environmentally concerned, and they are looking for environmentally friendly products. They no more accept the use-and-throw mentality, which amounts to little more than more unsustainable consumption (Aabed 2017).
Zara has in-house production facilities near company headquarters. It enables the company to be self-sufficient at all stages of its supply chain, such as raw material procurement, production, and marketing. Zara’s outstanding logistics management provides it a distinct benefit over its competitors because it can overcome any disruption in the distribution network. Zara tries to emulate current patterns and presents such latest fashions to its consumers in the least amount of time possible Zara has a distribution channel that enables it to adjust to the ever-changing demands of its clientele (Duoyan 2021). Zara’s quick responsiveness to client demand helps it to satisfy consumer demands and, as a result, contributes to prosperity. The corporation spends a lot of money acquiring premises next to premium companies to own the identity of expensive goods. The firm’s degree of originality is highly sophisticated, and it is employed as the foundation for differentiating and segmenting its market activities to preserve market supremacy. Although the firm primarily concentrates on women’s clothing, it also creates and manufactures men’s and kids’ clothing. The other two sectors provide support to the product category in which Zara has completely invested. In regards to functioning, each sector is extremely diverse, resulting in goods and services that are distinct and distinctive in the marketplace (Schaich Graniel et al. 2021). Apart from its rivals, Zara has succeeded to develop a worldwide supply chain system that guarantees its outlets are supplied with merchandise on time, therefore satisfying consumers at all times. It may be understood in the perspective of distributing the corporation’s liability, particularly during periods of economic uncertainty, which have grown typical in today’s economic climate (Ha 2021).
Zara’s main issue is its centralized distribution structure. If a technological problem arises in the transmission networks, the entire system may fail. Zara will never be regarded as a premium luxurious label in the clothing industry since it is regarded as a brilliant design lookalike, imitating runway clothing rather than forecasting season trends. The firm’s advertising approach has frequently been in the spotlight (Koivulehto 2017). Zara employs an advertising approach that does not use commercials. This is problematic in an era when aggressive advertising is often used in the fashion sector. Zara’s economic competence may gradually deteriorate if the company does not accept vigorous branding. Client loyalty is tough to achieve and maintain in the business category into which Zara has completely delved. This is due to the reality that the industry’s clients’ wants and desires are always evolving. As a result, clients in the business can quickly shift their focus to ostensibly newer and less expensive trends in the marketplace (Anwar 2017).
Zara’s Organizational Structure and Competitive Strategy
The globalization of commerce fosters an environment in which enterprises may readily progress and grow their activities in emerging and growing marketplaces throughout the world. Zara can therefore quickly extend its business in new nations (ZARA 2017). The fashion business is vast, and the variety of fashion requirements contributes to the sector’s size. As a result, Zara may expand into markets where other corporations have not yet completely invested. The corporation’s degree of originality is also desired, since it may aid in the creation of modern trends and marketplace niches (Yide).
Developments in the worldwide design business signify the rapid rate at which clothing customers’ needs change. This causes the corporation to constantly change its sales techniques and spend in the creation and creation of newer trends, which is a costly endeavor for the business. It boosts the industry’s operating costs. Another challenge to the corporation is the growing amount of companies entering the quick fashion market throughout the world. Given that there are other significant rivals in the sector with whom the firm is competing, the competing landscape becomes highly complicated (Nazarani and Suparna 2021).
Atmospheric analysis may be conducted from both a macro and a micro-level. Customers will lower their purchase of non-essential goods when overall financial outlook and buyer trust are bad. This makes it difficult for Zara to compete in an extremely competitive market where the need for apparel has declined. Zara, on the other hand, offers premium goods at affordable pricing, giving the firm a competitive edge in respect of cost, reliability, and brand identity. Zara’s performance is dependent on an efficient supply chain, and it is one of the few firms that have in-house creation and manufacturing techniques. It is safe to assume that Zara’s distribution network, which is centered on digital technology and digital designing and manufacturing processes, allows the company to retain a strategic advantage over other worldwide rivals (Mayrhofer and Roederer 2016).
This is certainly the situation for apparel purchase behavior, with a good reputation, cost, trend, and reliability all having a significant influence on the decision-making mechanisms that contribute to shopping. This component of customer behavior may help Zara develop strategic benefits centered on an efficient transportation and supply chain that ensures reliability at a low cost while maintaining a strong brand identity. Zara may adopt a strategic industry expansion plan built on its positive performance in Europe in addition to sustaining corporate progress in regards to market share and economic rewards. Within the context of a branding plan paradigm, a unified communication approach is an essential component of the expansion strategy. This appears to be much more important in the apparel retailing industry setting, as personalities are used as a major medium of communication in interacting with consumers. Due to the extremely fluctuating structure of apparel retailing, Zara must distinguish itself from other rivals throughout its debut stage into various areas. Given the obstacles in accessing these regions and the many cultural origins concerned, Zara can seek spontaneous development in terms of outlet launches as it expands.
Conclusion
Zara is a well-known apparel firm that interacts with major clothing retailers such as H&M and M&S. Zara’s organizational system is vertically arranged with hierarchical layers. When it concerns new technologies, Zara is a fast learner. Each shop creates a competitive framework in which all employees share tasks. Zara has added value to consumers’ businesses, sectors, and, most significantly, societies. The corporation has preserved a very strong cost-profit ratio. Consumers pay reasonable rates for the brand, and stockholders profit handsomely. The property concerns are very severe, and Zara should make an effort to prevent environmental problems. Numerous conclusions may be drawn from the publication’s study on the magnitude of rivalry in the worldwide clothing sector and Zara’s economic situation. International design is quite active. The company’s dynamic presents both possibilities and problems to the firms who operate in it. Zara has been highly productive in regards to designing and executing initiatives that allow it to capitalize on market prospects. The corporation works by focusing on enhancing its processes rather than addressing the competitive considerations offered by the sector’s competing companies.
To some extent, an overseas marketing plan stays the same as tactics employed in other markets to efficiently serve specific client segments. Cultural factors, on the other hand, can impact Zara’s worldwide marketing methods. Zara might use a vigorous expansion plan in response to the internationalization process and globalization to continue corporate development.
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