Current Trends in Retail: A Case Study of Zara

This essay examines the current trends in the retail industry, focusing on a case study of Zara. It explores the concept of fast fashion, the globalisation of Zara's products, and the impact of COVID-19 on UK retailers. The analysis is done using Porter's Five Forces model. Additionally, primary research is conducted to gather insights from individuals. The essay concludes with suggestions for good practices in the retail industry.

Inquiry Based
Learning

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6
APPENDIX-I...................................................................................................................................7
APPENDIX-II .................................................................................................................................8

INTRODUCTION
Inquiry-based Learning aims to provide approaches in order to enhance the learning
process of the students. This approach improves the ability of the student to interact and
participate in the competitions. Further such participation help them to attain skills and
knowledge that will be useful in future to achieve long term goals effectively. Inquiry-based
learning makes easier for students to understand the concept instead of reiterating rules and
formulas (Sleeter, 2019). Thus, the essay examines the research of a retail company by analyzing
its recent trends accompanied by valid research sources.
MAIN BODY
The theme of a research is on the current trends of retail based company (Keane and
Clements, 2017). The company taken under this essay is Zara SA, famously known as Zara, a
Spanish retailer of apparel. The company deals in clothing, accessories, footwear and perfumes.
The three current trends of the company includes, Firstly the Fast Fashion, refers to the
collections which are presented at fashion events to meet the current trends. As nowadays the
consumers want high fashion at cheap price. The clothes are manufactured at rapidly high
volumes and are offered to the consumers at a reasonable price. Generally the aim of fast fashion
is to compete with the traditional fashion by introducing its new trends according to the seasons.
The design worn during catwalk are available at the retail stores at affordable prices. Fast fashion
is trendy because of innovations in the flow of goods and services. The fashion focuses on
responding the current demands of the consumers by producing goods at efficient cost. Zara, is
an leading example of fast fashion, as the company effectively focuses on supply chain
management. Zara is the most successful forerunner brand of Inditex, which is a Spanish
clothing company. Sometimes the company make use of local labor in order to increase the
production or to meet the consumer's demand. This defines the fast fashion inherited by Zara.
According tho the news, the company even promised to sell sustainable clothes by the year 2025.
Further the company by the end of next year will start keeping the containers in the stores to
collect the old clothes in order to reuse or recycle them into new ones. On the other hand, this
trend of being fast fashion is also criticized by the people, as the barely use such materials. Thus,
Zara has been credited and even blamed from acquiring such norm. Yet is an leading example of
this trend.
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Along with the introduction of “Fast Fashion” the company's strength have contributed in
the success of the brand and made the company a global fashion icon. The company is ranked at
29th on Interbrand list of global brand. The brand introduced apparels, footwear and perfumes for
men, women and children. Further offers the trendy items to young audience. Zara has become
global because of it core values and has 2,264 stores located in cities across 96 countries. The
company from its beginning maintained a gap in order to become an effective brand. The
company acquires sustainability in the market by keeping up the pace of current trends and the
brand offers the clothing of high quality with an affordable price. It creates the new designs and
portrays them into retail stores within two weeks. The reason behind being a favorite brand is its
strategy to meet the trendy demands of the consumers. Zara became successful globally in short
period of time because its products are not associated with a particular country's image. The
company's culture is to encourage risk tasking and fast implementation of its strategies. The
company manages its international stores according to the cultural diversity and thus, operates
best in hard situations (Jørgensen and Pedersen, 2019).
Thirdly, is the impact of COVID-19 on UK retailer companies. Previous year was very
hard to survive especially for non-food retailers in the crisis. Fashion chain was broken during
the pandemic situation as the lockdown kept the retail sector shut. Meanwhile, the owner of Zara
Inditex, an giant apparel company, announced its fall of 14 percent sale as compared to last
years. Further the company announced to close some of its stores and boost online sales amid
COVID-19 (Ivanov, 2021). The company borne a net loss of €409m during its first quarter. The
pandemic led a pace of online shopping. Inditex shifted its supply chain of production to face
masks and gowns used in hospital. The strategic partnership with the government helped the
company to overcome its costs. The company accelerated the online shopping in order to sustain
competition in the market.
Questions derived in respect of the current trends discussed above is firstly, in respect of
strategies which the company will opt after getting affected from the pandemic situation.
Secondly is the impact of fast fashion on the criticized group and thirdly, effect of the company
of small medium enterprises. Further the main objective is to analysis the current and upcoming
trends in the retail industry. Thus, such trends need to be entertained by the company in order to
achieve its goals effectively and efficiently.
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A Five Forces Analysis (Porter’s model) of the company helps to analysis and prioritize
the competition and the bargaining power of buyers and suppliers in the industry environment.
To ensure whether or not a company can be profitable in relation to other competitors in the
industry (Mulders, 2019). For long-term success, the company must address the issues related to
these forces. In Zara’s Five Forces Analysis, market position and organizational strengths are
adequate to address such forces.
Competitive Rivalry (Moderate), the first of five forces refers to the number of
competitors and their ability to intensify the competition. The biggest rivalry brands are H& M,
Benton and Gap. Zara focuses and devise effective strategies in response to the supply chain
management. Also the company launches its new collection and make its availability within two
weeks in the local retail stores while the other companies spend months to do. Zara holds
maximum net margin as compared to others because of its limited stock editions.
Bargaining Power of Buyers (Moderate), this force examines the power of customers
and their ability to drive prices and quality. Zara being the global icon in the market formulates
unique strategies such as limited stock availability, etc. in order to sustain in the competitive
market. The strategy of Zara of making data available through magazines and other in order to
upgrade the market and influence the buyers towards the brand. The company invest most on R&
D to acknowledge the trendy needs of the customers and accordingly make it available in the
stores. Thus, company along with high quality offers the product at an affordable prices.
Bargaining Power of Suppliers (Moderately High), this force analyses how much power
a business's supplier has and how easily they can drive up the cost and affect the profitability.
This power of the company is quite strong as switching cost is very high and the brand values to
create good and stable relation with the suppliers in order to achieve quality product. Thus the
suppliers takes the advantage of different prices for the material (Csaszar, 2018). Thus, the
company offers suppliers with the licensed contracts which helps to eliminate the factors which
lessen the market position.
Threat of Substitutes (Moderate), according to research it is human factor to try new
and alternatives products. H& M is the only brand which can compete Zara in terms of quality
and price. Thus, the rivalry company, H&M likely to take the competitive advantage by spending
huge amount on advertisement and other sources. Thus, the supply chain of management is quite
responsive and effective in case of Zara as compared to others.
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Threat of New Entrants (High), it also affects the power of company. Zara overcome
the problem by availing the goods at low price. The company sustains effectively in the market
where trends changes in weeks. Zara parent company Inditex inaugurated 500 plus stores across
the world. Based on analysis such threat is a minor concern in Zara's industry environment. The
strategies of the company make rigid for new entrants to acquire global market.
Accordingly Primary research is conducted in which questionnaire is framed involving
the questions in respect of current trends in the market (Florenthal and Ismailovski, 2019). The
survey is conducted among ten individuals. The interpretation in respect of survey is, 5
individuals out of 10 devise online shopping strategies as people prefer to shop online rather
going to store amid COVID-19 while the rest suggested the norms in respect of social distancing.
For second question, 6 out of 10 favored the fast fashion as the consumer want high fashion at
affordable price while other criticized in respect of quality as the company engages local labor to
meet demands. 5 out of 10 gave positive response for third question as they thought that global
brand may create a challenging and motivating path for SMEs while the rest thought that it
would be hard for SMEs to sustain in the competitive market. For fourth question positive
responses were 7 as the demand for sustainable clothes may increase in future. Lastly all
individuals were excited in respect of the coming throwaway strategy of the company as it was
created keeping environmental factors (Pettey, Bracken and Pask, 2017).
On analyzing the research as well as the questions illustrated, it is found that the impact
of COVID-19 can redressed as the company pace the online shopping by opening its app in
developed countries, for example Zara launched its online app in 2017, which is useful for the
Indian users in the pandemic situation. Also the company may follow the norms regulated in
their retail stores. Further the fast fashion is trendy in the youth audience as they want catwalk
fashion at retail stores accompanied by low price. Also the trend may likely to increase in the
future. Fast Fashion is one of the factors making Zara a leading brand. Yes, the company has
great impact on SMEs because of its global appeal yet the company invest less in advertisement
which can give competitive advantage to the SMEs. The throwaway strategy which the company
is likely to adapt will help to achieve the desired goals. As the strategy of the company to reuse
and recycle the old clothes in order to produce new ones seems effective as it promotes the
environmental factors (Rahman, 2019). The company in its strategy is giving great emphasis on
the environmental factor which made the brand win the hearts of the consumers.
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Generally, to continue the good practices in respect of retail success the retailer is
required to train the employees during work hours i.e. on job. The practical implication will be
easier for them to understand. Also the retailer in order to expect more required to pay more to
its employees without any discrimination or partial practices. As the effective training led the
trainers to represent retail store best and able to attract consumers easily. Further healthy
competition is also one of the practices retailers need to acquire in order to achieve the desired
goals effectively and efficiently (Haryudo and et. al., 2018). The retailers can monitor their
consumers so that they can sell more and will also help to eliminate unnecessary cost of
inventory.
CONCLUSION
From the above essay it is concluded that the organisation is required to be updated with
the current trends. The essay examined the research of current trends in respect of the Spanish
apparel company, Zara. The trends which are discussed above is in respect of fast fashion,
globalisation of its products and the impact of COVID-19 on UK retailers. Analysis of factors
affecting the retail trends is done by using Porter's Five Forces model. Further primary research
is conducted among ten individuals by framing a questionnaire involving questions related to
current retail trends of the company. The research questions are further examined and answered
in general after analysing the data. Also essay contains the suggestions in respect of good
practices which need to acquired by the retailer to achieve success for long term.
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REFERENCES
Books and Journals
Csaszar, F.A., 2018. What makes a decision strategic? Strategic representations. Strategy
Science. 3(4). pp.606-619.
Florenthal, B. and Ismailovski, A., 2019. Case Study Methodology: An Analysis of Effective
Methods in Business Cases. In Case Study Methodology in Higher Education (pp. 60-
82). IGI Global.
Haryudo and et. al., 2018, October. Development of Learning Tool Control Techniques using
Matrix Laboratory Software with Inquiry Based Learning To Improve Student
Orientation Motivation Learning Industrial Needs. In registration.
Ivanov, D., 2021. Supply chain viability and the COVID-19 pandemic: A conceptual and formal
generalisation of four major adaptation strategies. International Journal of Production
Research. pp.1-18.
Jørgensen, S. and Pedersen, L.J.T., 2019. Toward smart and sustainable business models in
retail. In Innovation for Sustainability (pp. 177-192). Palgrave Macmillan, Cham.
Keane, D.N. and Clements, C., 2017. Building Student Confidence through a Discipline-Specific
Inquiry-Based Learning Project.
Mulders, M., 2019. 101 management models. Routledge.
Pettey, G., Bracken, C.C. and Pask, E.B., 2017. Communication research methodology: A
strategic approach to applied research. Taylor & Francis.
Rahman, M., 2019. Introduction and Methodology. In Homicide and Organised Crime (pp. 1-
24). Palgrave Pivot, Cham.
Sleeter, N., 2019, August. Two Places At Once: Inquiry-Based Learning In A Hybrid Course.
In Innovations in Teaching & Learning Conference Proceedings (Vol. 11, pp. Hall-
Hall).
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APPENDIX-I
7

APPENDIX-II
QUESTIONNAIRE
Name-
Age-
Gender-
1) According to you , what strategies the company will opt after it gets affected by the
pandemic situation?
a) Digital Space i.e. online shopping
b) Visiting stores by following government norms
2) What is the impact of fast fashion trend adopted by the company ?
a) Positive
b) Negative
3) Is the effect of company on the working of Small-medium Enterprises ?
a) Positive
b) Negative
4) According to the promise made by company, will the demand of sustainable clothes
increase?
a) Yes
b) No
5) Are you excited in respect of the coming throwaway strategy of the company, is it
favorable ?
a) Promotes environmental factor
b) Contrary to consumer needs
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