Study of Three Retail Trends in Fashion Industry in respect to Zara

This report analyzes the current retail trends in the fashion industry and their impact on Zara. The three trends discussed are COVID-19, sustainable fashion, and artificial intelligence.

Inquiry-based
Learning

Table of Contents
To study the three retail trends in Fashion Industry in respect to Zara..........................................3
Theme and Background...................................................................................................................3
Reasons for Choosing the Theme....................................................................................................3
Aim of the report....................................................................................................................3
Research Questions................................................................................................................3
How the Aim will be achieved: Current retail trends.............................................................5
Analysis of the Company.......................................................................................................6
Primary Research.............................................................................................................................9
RECOMMENDATIONS...............................................................................................................13
CONCLUSION..............................................................................................................................14
REFERNCES:................................................................................................................................16
Books and Journals:..............................................................................................................16
Appendix........................................................................................................................................18

To study the three retail trends in Fashion Industry in respect to Zara
Theme and Background
Inquiry based learning is a form of learning which includes research about a topic. It
helps to gain knowledge about a concept by gaining primary and secondary sources. The report
is based of study of current retail trends in respect to Zara (Zain, 2018). It is one of the successful
company is fashion industry of retail sector. The trends of fashion industry will help Zara to
operate effectively and use them to attract more customers. The three trends are discussed in the
report that is COVID 19, sustainable fashion and artificial Intelligence. All this will help the
company to work according the trends in the industry.
Reasons for Choosing the Theme
Zara has its operations around the world. It has around 2270 stores at various locations.
The revenue earned by company in 2018 was around €18,021 million. The company is largest
apparel retailer in the world (Yan, 2020). The company is able to adapt the changes quickly and
that is the reason behind success of the company. The company regularly innovates its products
and services so as to attract more and more customers. The company is also famous for
providing quality services to all its customers. As fashion industry is at boom and there are
various recent trends that are important to study.
Aim of the report
“To analyse the current trends in retail industry.” A study on Zara.
Objective of the research
“To study the impact of the three current trend on Zara.”
Research Questions
 What is the impact of COVID 19 on Zara?
 How do the sustainability in fashion industry impacts the working of Zara?
 What is the impact of Artificial Intelligence on Zara?

How the Aim will be achieved: Current retail trends
According to the past records it has been observed that retail industry of UK comprises of
more than half of the total value earned and for this purpose it is significant to be observed. The
one third of consumer saving portion is spent in the retail industry which creates an impactful
focus on the growth of economy of United Kingdom (Zahara and Syukri, 2020).
COVID- 19
The retail industry of makes the respective firms in it faces a lot of challenges. To fulfil
these, there is high requirement of bringing dynamism and these factors can be seen as
operations through sustainable development in fashion trends, implication of artificial
intelligence techniques which can raise customer involvement (Von Briel, 2018). Along with this
the recent trend of COVID- 19 has proved to be a very complex situation for retailers.
In the view to overcome this they have brought several changes in operations which can
renew consumer focus. The primary and major focus of the industry is to divert focus of
consumers back to shopping. Due to COVID- 19, employees are restricting themselves from
offline buying; rather they are shifting to online trends which are reducing retail involvement
(Verburg, 2018). It is seen the COVID 19 has impacted the sales as well as performance of the
organisation. There are various measures that are taken by the company like digital marketing
and use of online mode to sell the goods and services. It is seen that the efforts of Zara were to
sell the goods by enhancing the online mode and delivering the goods to the customers safely.
Sustainable fashion
Along with this to enhance focus of consumers, fashion retailers are focused on bringing
sustainable fashion through inculcating clothes which can be recycled and reduce harm on
environment. Sustainability is an important concept and should be adopted by business to
achieve success. It is an approach that means optimum utilisation of resources. That helps to
attract more customers and establish a strong image in the market. Zara is focusing to become
100% eco efficient (Ma and Han, 2019). That means the company will use the resources in such
a way that is efficient and will not harm the environment.
They can manufacture the clothes that are recyclable and do not harm the environment.
The company will use the material that is used for long time (Pantano and et. al., 2017). In
fashion industry also it is important to use sustainability approach. The company is focusing to
provide high quality product to its customers. As the customers have become conscious about the

quality of the product and services offered it is important for the company to adopt the same.
Zara has stated that by 2025 the company will use 100% sustainable fabrics. Along with that
Zara has understood the trend and importance of sustainability and will use renewable sources at
its factories, headquarters and all the stores. This will help the company to gain to gain more
customers and also support of government as they are serving customers and taking care of
environment (Stender and et.al., 2018).
Artificial Intelligence
Another trend that is important nowadays is that of artificial intelligence. It is use of
human minds in the working of machines. It helps the company to work more effectively and
efficiently. It is seen that if the company is able to take effective decision making. Zara has
understood the need of customer assistance and the way the customer's are served (Irawan,
Syahrial and Sofyan, 2018). The benefit associated with artificial intelligence is that the
company is filling the loopholes of and will help the company in demand forecasting. It is vital
for a company to know about the needs and wants of customers and the demand.
It helps to analyse the taste and reference of the customers (Chandrachud and Rajagopal,
2020). By which company can read the minds of customers and then serve them according their
likes and dislikes. As the company is facing problem of maintaining safety stock artificial
intelligence will help them to know and managing the demand. This also helps to forecast the
demand in fashion industry. It also helps Zara to gain advantage over the competitions (Franz,
Katzlinger, and Stabauer, 2018).
Analysis of the Company
Zara is a retailer in fashion industry in Spain. The products offered by company are
clothing, accessories, swimwear, shoes, perfumes, and beauty. The company was founded 46
years ago in 1975 by Amancio Ortega and Rosalía Mera (Hutapea, Copriady, and Rasmiwetti,
2020).
SWOT Analysis
Strengths
 The first and foremost advantage that
Zara has is that of unique designs. The
company has provides quality and
designer products to all it clients.
Weakness
 The major drawback of the company is
that they do not spend much money in
advertisement (Nair, 2019).
 It is the weakness of company. As by

 Another major strength of Zara is that
company has established a brand image
in the market. Along with that expands
its business gain success (Septyastuti,
Sutrisno and Widarti, 2021).
advertising Zara could double its
revenue.
 The company focuses on providing
latest stock to its customers and that
also impacts the company in a way that
they do not have safety stock for the
customers.
Opportunities
 As the use of e-commerce is
enhancing. Zara has also taken
advantage and used digital platforms to
attract more and more customers. The
company has its own online sores.
 The company conducts proper research
about the market and expands its
operations to earn more and more
profits.
Threats
 As there are various firms operating in
fashion industry it is a threat for the
company. The major competitors of
Zara are Mango, H&M and Vero Moda.
 The company is spending less in
advertising as it is important to remind
the customers about the brand and
advertise the products and services
offered by them (Schmidt-Wenzel and
Rubel 2019).
PESTLE Analysis
It is the study of macro economic factors that have impact on the working of an
organisation. The PESTLE Analysis of Zara is mentioned below:
Political Factors: The Company has its operation around the globe. The company
exports its goods in European markets with low cost and little efforts. As the financial
regulations of the business are in such a way that company is able to operate smoothly (Fang and
Hang, 2017).
Economic Factors: As Zara is a Spanish Company and Spain has problem of
unemployment. This is reason company is able to take advantage of low cost labours. Also the
company has served the customers in such a way that they have gain loyal customers.
Social Factors: There is direct impact of social factors on the supply and demand of the
products offered by the company. Along with that Zara takes advantage of the social factor and

conducts proper research. That helps to know about the current trends and serve the customers
accordingly.
Technological Factors: Zara uses the updated technology. The company has its own
website and has presence over digital platforms (Peláez-Ruiz, and Piedrahita-Ospina, 2017).
Legal Factors: The Company follows all the rules and regulations and take sustainability
and ethics as priority.
Environmental Factors: Zara is planning to develop the stores as 100% eco efficient.
The company is planning to be eco-friendly (Rundgren and Chang Rundgren, 2018).
Porter 5 Force's Model
It helps to identify the competition in the market. Porter Five Forces Model in respect to
Zara is mentioned below:
Competition in the industry: There are direct competitors of the company in the
industry. The major competitors of the company are Vero Moda, H&M and Mango.
New Entrants: The Company has earned a strong image in the market. There is
requirement of huge capital and it will take time for anew player to enter in the industry (Yuni,
Alghadari and Wulandari, 2019).
Power of Supplier: Zara always maintains goods relations with the suppliers as there is
high switching cost if the company wants to switch to another supplier.
Power of buyers: There are various competitors of the company. Also the company has
established a strong and loyal customer base. This shows there is moderate fear of competitors.
Threat of substitute products: As H&M provides the same products so there is threat of
substitute products for the company (Amallia, and Advinda, 2019).
Primary Research
It is a method of collecting first hand data and then collecting information. There are some
tools of collecting data through primary method that are questionnaire, interview etc. For this
report questionnaire has been sent to 30 employees of Zara through online mode. It helps to
know about the trends that are followed by Zara.
Q1. According to you, is it important to know about the trends in the
market?
Frequency
Yes 20
No 10

Interpretation: From the above graph it is analysed that 20 out of 30 employees believe that it is
important to have knowledge about the current trends in the market. The rest 10 out of 30 say
there is no need to study these trends.

Q2. What are the current trends that have impact on the performance of
Zara?
Frequency
Artificial Intelligence 10
Sustainable Fashion 10
Digital Marketing 10
Interpretataion: It is seen that 10 employees said that artificial intelligence is in trend, 10 said
that sustainable fashion is in trend and the rest 10 out of 30 believe that digital marketing is in
trend.

Q3. What is the impact of COVID 19 on Zara? Frequency
Increase in performance 8
Decrease in Performance 15
No Impact 7
Interpretation: 8 out of 30 employees believe that COVID 19 has enhnaced the performance of
Zara. While 15 believe that it decrease the performance. Rest 7 out of 30 believe that it has no
impact.

Q4. According to you why Zara uses the concept of Sustainable Fashion? Frequency
To recycle the clothes 10
To reduce wastage 5
For benefit of environment 5
To increase the profitability position 10
Interpretataion: It is evaluated that 10 out of 30 sustainable fashipon is used by Zara as it helps to
recycle clothes. 5 belive that it is used to reduce wastage, other 5 believe it is used for benefit of
employee. 10 out of 30 employees think it helps to increase the profitability of company.

Q5. What are the benefits of Artificial Intelligence in Zara? Frequency
Understand needs and wants of customers 6
Helps in analysing demand 24
Interpretataion: From the graph it is analysed that 6 out of 30 employees believe that artifical
intelligence helps in understanding the needs and wants of customers. The rest 24 belewive it is
used to analyse the demand.
RECOMMENDATIONS
After doing this report is seen that Zara is a string brand is gaining success in the market.
The company is one of the successful company operating in retail sector. The company is able to
serve customers by providing quality products and services to all its customers. It is important
for the company to study about the retail trends in the market and take measures to compete in
the market. Here are some recommendations for Zara. The company has presence over e-
commerce. The company should enhance its operations over digital platforms. As after COVID
19 all the customers are more interested to buy through online platforms. This will help the
company to attract more and more customers and server them. As the technology is
improvisation at a rapid pace. It is important for the organisation to know about the tends and
take measures accordingly. Along with that the company should enhance its expenses over the
advertisement. It is important for the company to advertise the products and services and make
the customer's aware about the the brand. It also helps the company to gain competitive

advantage. It is essential for the Zara to advertise the brand as the direct competitors may take
lead if the company will not spend on the same.
Another point is company does not maintains safety stock. So it is suggested that they
should know about the references of customers. And they should keep the required amount of
safety stock with the company. By using artificial intelligence the company will be able to know
about loopholes between the amount of products demanded by the customers and the presented
once. The company should also provide discount and offers to customers as that will help the
company to gain advantage over the competitors. The company should also understand the
concept of sustainability and take measures for the same.
Zara should use sustainable fabric as that will help the company to gain advantage and
also earn a powerful image in the market. The company should also check whether the finances
are used appropriately. It is also important that company should know about the needs and wants
of the customers and should use money for those platforms. Artificial Intelligence will be a very
useful tool for the organisation. As that will help the company to know and study about the mind
of customers. As that will help them to enhance sales and that also sales of the company. All
these suggestions will help the company to achieve success. To gain advantage for long run and
that will help the company to establish strong image in the market.
CONCLUSION
From the above report it can be analysed that inquiry based learning will help to analyse
proper information about the field of research. This report is about the current trends in the retail
industry and how Zara is getting impact by those trends. It is important for the company to work
and operate about the trends. There are models that tell about the company. Also there are
recommendations in the end to support the report.

REFERNCES:
Books and Journals:
Amallia, Y. R. and Advinda, L., 2019. Need Analysis Development of Guided Inquiry Based
Learning Module in Plantae and Animalia Learning Materials for Student of Senior
High School Grade X. International Journal of Progressive Sciences and
Technologies, 16(1), pp.85-90.
Fang, J. and Hang, B., 2017. Function Design for Inquiry-Based Learning Platform Based on a
Computer Network. International Journal of Emerging Technologies in
Learning, 12(2).
Franz, L., Herzog, M., Katzlinger, E. and Stabauer, M., 2018, April. Reflecting Peer Reviews in
Inquiry Based Learning Scenarios An Analysis of Peer Feedback Levels and their
Implementation. In 2018 17th International Conference on Information Technology
Based Higher Education and Training (ITHET) (pp. 1-8). IEEE.
Hutapea, R., Copriady, J. and Rasmiwetti, R., 2020. The Effect of Inquiry Based Learning With
V-Diagram on Students Science Process Skills in Provision Solution Materials. Journal
of Educational Sciences, 4(4), pp.718-726.
Irawan, Y., Syahrial, S. and Sofyan, D., 2018. The effect of using Inquiry based learning strategy
on students speaking ability (A case study at SMAN 7 Bengkulu Selatan). JOALL
(Journal of Applied Linguistics and Literature), 3(2), pp.59-79.
Ma, W. and Han, T., 2019. Development of Inquiry-Based Learning Tourism Products in
Binzhou from the Perspective of Tourism Resources. Journal of Landscape
Research, 11(5), pp.141-145.
Østergaard, L. D., 2018. Creation of new routines in physical education: second-order reflection
as a tradition-challenging form of reflection stimulated by inquiry-based
learning. Sport, Education and Society.
Peláez-Ruiz, A. and Piedrahita-Ospina, A., 2017, October. Towards a virtual proposal of
inquiry-based learning for the acquisition of scientific competencies in seventh grade.
In 2017 Twelfth Latin American Conference on Learning Technologies (LACLO) (pp.
1-4). IEEE.
Rundgren, C. J. and Chang Rundgren, S. N., 2018. Aiming for responsible and competent
citizenship through teacher professional development on teaching socioscientific
inquiry-based learning (SSIBL). In Asia-Pacific Forum on Science Learning and
Teaching (Vol. 19, No. 2).
Schmidt-Wenzel, A. and Rubel, K., 2019. Inquiry-based learning in social work. In Inquiry-
Based Learning–Undergraduate Research (pp. 139-147). Springer, Cham.
Septyastuti, H. L., Sutrisno and Widarti, H. R., 2021, March. The effectiveness of inquiry-based
learning with OE3R strategy for scientific argumentation skill. In AIP Conference
Proceedings (Vol. 2330, No. 1, p. 020004). AIP Publishing LLC.
Stender, A., and et.al., 2018. Making inquiry-based science learning visible: the influence of
CVS and cognitive skills on content knowledge learning in guided
inquiry. International Journal of Science Education, 40(15), pp.1812-1831.
Verburg, M. B., 2018. Direct Instruction versus Guided Inquiry‐Based Learning in a Physics
Practical (Master's thesis).

Yuni, Y., Alghadari, F. and Wulandari, A., 2019, October. Gender reviewed mathematical
intuition at 7th grade students through open-ended based-inquiry learning. In Journal
of Physics: Conference Series (Vol. 1315, No. 1, p. 012080). IOP Publishing.
Zahara, R. and Syukri, M., 2020, February. Promoting inquiry-based learning for science,
technology, engineering, math (STEM) to enhance students’ creative thinking skills.
In Journal of Physics: Conference Series (Vol. 1460, No. 1, p. 012120). IOP
Publishing.
Zain, A. R., 2018, September. Effectiveness of guided inquiry based on blended learning in
physics instruction to improve critical thinking skills of the senior high school student.
In Journal of Physics: Conference Series (Vol. 1097, No. 1, p. 012015). IOP
Publishing.
Nair, K.S., 2019. Paradigm shifts in Indian retail-trends and prospects. International Journal of
Indian Culture and Business Management, 18(4), pp.518-529.
Pantano, and et. al., 2017. Does innovation-orientation lead to retail industry growth? Empirical
evidence from patent analysis. Journal of Retailing and Consumer Services, 34, pp.88-
94.
Von Briel, F., 2018. The future of omnichannel retail: A four-stage Delphi study. Technological
Forecasting and Social Change, 132, pp.217-229.
Yan, L., 2020 Trends to Green Collaboration in Chinese Retail Industry Based on Discrete
Choice Model.
Chandrachud, S. and Rajagopal, N., 2020 Emerging Trends and Changing Pattern of Indian
Retail.

Appendix
Q1. According to you, is it important to know about the trends in the market?
It is important to know about the trends in the market. It is seen that in fashion industry the
trends keep on changing. The trend that is going on in the market impacts the profitability
position of the organisation. The company that follows the trends are able to establish strong
image in market.
Q2. What are the current trends that have impact on the performance of Zara?
In relation to Zara there are number of trends that influence the performance. It is vital to know
about these trends. So below mentioned are the trends that have direct impact the performance of
Zara are as follows:
 Artificial Intelligence
 Sustainable Fashion
 Digital Marketing
Q3. What is the impact of COVID 19 on Zara?
It is vital to note that COVID 19 impacts the performance of business in an adverse way. As the
buyers are not spending money on fashion industry So it is evaluated that COVID 19 has
negative impact of the performance Zara.
Q4. According to you why Zara uses the concept of Sustainable Fashion?
It is a strategy that emphasises the most efficient use of resources. This aids in attracting more
customers and establishing a good brand profile. Zara is working hard to become 100%
environmentally friendly. That is, the organisation can use resources in a way that is both
profitable and environmentally friendly.
Q5. What are the benefits of Artificial Intelligence in Zara?
There are number of benefits of using latest technology. It is seen that various business
organisations are using artificial intelligence and in respect to Zara the benefits of Artificial
Intelligence are as follows:
 Understand needs and wants of customers
 Helps in analysing demand
 Less need of manpower
 Effective decision making