Why ZARA Stores Became a Customer Magnet
How they changed the definition of success in fashion retailing.
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 0.3 percent of sales, compared to competitors’ 3 to 4 percent.
Pulling Customers Back into the Stores with “Fast Fashion”
ZARA wants to get a product from inception to market—inside a store on a 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 creates 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 your customers’ lives and what makes them tick? What’s your version of “fast fashion” for your customers?
Do You Know Your Customers?
Zara works to appeal to “fashionista” customers motivated by the “hunt.” They produce small batches to create exclusivity and turn over product rapidly. Customers swarm to stores to see what is new and what they must not miss.
As the Customer Leadership Executive for five large U.S. market leaders, Jeanne fought valiantly to get the customer on the strategic agenda, redirecting priorities and creating transformational changes to the brands’ customer loyalty. She has driven achievement of 95 percent loyalty rates, changing customer experiences across 50,000-person organizations.
Jeanne developed her passion for customer loyalty at Lands’ End, Inc., where she reported to the company’s founder and executive committee as leader for the Lands’ End customer experience. She was Senior Vice President of Franchise Services for Coldwell Banker Corporation. Jeanne served Allstate Corporation as its chief officer for customer loyalty & retention. She was Microsoft Corporation’s General Manager of Worldwide Customer & Partner Loyalty. At Mazda Motor of America she initiated the brand’s retention effort.
After 25 years as the Customer Experience Executive in five major US Corporations, Jeanne founded CustomerBliss in order to create clarity and an actionable path for driving the customer loyalty commitment into business operations.
You can learn more about Jeanne at her website CustomerBliss.com, on her blog, on Twitter @jeannebliss, on her CustomerBliss Channel on Youtube or you can check out her books: I Love You More Than My Dog”: Five Decisions That Drive Extreme Customer Loyalty in Good Times and Bad and Chief Customer Officer. Getting Past Lip Service to Passionate Action.