Trends in Retail: Analysis and Recommendations for Zara

This report discusses the trends in the retail industry and their impact on Zara. It includes an analysis of Zara's market standing using a PESTLE analysis. The report also provides recommendations on strategies for Zara to expand its business and increase profitability.

Inquiry Project

Table of Contents
INTRODUCTION...........................................................................................................................3
TRENDS IN RETAIL......................................................................................................................3
ANALYSIS......................................................................................................................................5
RECOMMENDATIONS.................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Retailing is a process in which goods and services are sold to consumers through various
channels of distribution in order to earn profit. This process is usually explained with the help of
a supply chain. There are some functions in retailing which includes sorting, storage, channels of
communication and transportation. For the following report Zara is being chosen which is a
brand of apparels from Spain. It was founded in 1945 and today has more than 10000 stores
worldwide. In the following report trends in retail, analysis and recommendations on the basis of
analysis is done.
TRENDS IN RETAIL
Every industry in today’s world have been seeing a number of dynamic changes. These changes
are a cause of changing perception and tastes of people. Retail industry have seen tremendous
growth in past few years ((Pantano and Vannucci, 2019)). It is now the fifth largest sector among
all the industries. It is also expected to grow more in coming years. Due to changing consumer
behaviour this industry is rapidly changing. Below mentioned are some of such trends in retail
sector:
 Rise in E-Commerce:
E-commerce have been seen to be helpful for consumers in order to save their time as well as
efforts while purchasing any product. There are a number of mobile apps and another social
media platform which make customers to conduct their shopping productively setting in their
comfort zone. It has been noticed that social shopping is rising rapidly there are a number of
shopping platforms in a social media account. They are also show a great way to promote
products to public. Various such medias use in today’s world are Facebook, Instagram, Twitter
etc. Recently e Instagram have made it possible for buyers to tag brands of their products in the
pictures they post. This have helped companies to promote their products without any extra cost
involving (Giri, Thomassey and Zeng, 2019) . There are also number of ways through which
customers can pay while buying their products. They do not always need to A pay cash for their
products. Omni channel retail industry

Mini retail industries have adopted Omni channel of marketing. There is existence
of retail in both online as well physical terms in this channel. This is very different from
conventional marketing as in this optimisation of resources is done to the fullest in order
to reach their customers with their products in the best possible manner. This also helps
to know about various people on social media who are buying your products and take
reviews from them. When talking about offline channels of physical stores company can
take customer reviews there as well. Some of the benefits of social media platforms on
this are that they provide 24-hour access to their customers and also give them an
experience of digital world. It has been analysed that nearly 25% of consumers these days
have mobile phones it becomes easy for them to get to all those customers. In an Omni
channels solution, a software is created which has one centralised location from where II
all the commands are given. This helps in providing good services to consumers as well
as good reputation of form in the market. Customisation of products
Customisation in shopping refers to you giving a a personal touch tour product in order to make
it special for consumer when they buy it. Customisation can be in terms of quotes, size, shape,
colour etc (Karmy and Maldonado, 2019) . This provides maximum satisfaction to consumer and
leads the company towards higher conversion rate. This rise in demand of personalized product
have been proved together a number of customers even from its competitors. The customers are
now grown enough to demand what they need and get it customise from the market if it is not
available. Also, it has a great effect on profits of a firm because consumers want personalized
products now. When talking about Zara company only focuses on their collection. They do not
allow customizations of products for their clients. This trend is proving to be a threat for
company in coming future as the company does not personalize products for its customers. Brand a culture
Along with all the technological changes and business activities it is also necessary for a
company to critically analyse and emphasize on all the ethical practices. customers these days
pair lot of attention on a company's brand name and its brand awareness. there are a number of
customers who focus on brand before buying a product and also the practices which company
followers in order to run its business in the society. It is also noticed that the companies who
follow ethical practices have great turnover and good reputation in the society. Brand image of a

company is another recent Trend which has been seen in retail industry. When talking about Zara
company have manage to retain its brands name in the society e from long period of time.
Millennials who use this brand also focus on how company contribute towards the betterment of
society (Naqvi and Manzoor, 2019) . This is a great way to engage customers and attract them.
As much as social works and ethical practices adopted by a company the more is there brand
name. in this way companies can take positive advantage of this recent change in trend in retail
industry.
ANALYSIS
PESTLE analysis
With the help of PESTLE analysis current market standing of Zara can be known through its
political, economic, social, technological, legal and environmental factors can be done.
Following is the pestle analysis conducted for Zara
Political factors
Being a Spanish brand Zara is seen to take advantages of all the benefits provided in order to
run a business in European union. One of the major benefits is country's extensive trade
agreements. This makes it easy e for company to deal in foreign markets. The disadvantage
which comes to the company with this is that company have to sell its product at lower cost
in the overall world. However, company managers to gain profits from free trade policies in
European union. It is expected that company thrive in market with the benefits provided a
wing a Spanish company and working under union.
Economic factors
There are a number of economic factors as well which are proving to be a great advantage for
Zara. Spain has one of the highest unemployment rates when compared to rest of the world
which is a cause for low cost of labour in the country. Zara manufacturers most of its
products in Spain so it has to pay very less to its labours who are doing their work with
utmost quality e and saving time as well as money of the company. Other than this its
association with European union also allows it to lower the cost of this product which make it
really or affordable for customers overall.
Social factors
there are a number of such factors related to social norms believes and values in a society
which are proven to be of a great help for Zara. Millennials these days are moving towards

fashionable brands and Zara is providing them fashion along with affordable prices. Online
shopping Trend is another social factor which is seen to have great impact on Zara. These are
major social factors which are proving to be reasons for increase in profits of the company as
well as customer satisfaction they provide.
Technological factors
There are also a number of technological factors which have great impact on Zara and other
retail industries (Aldous and Soares, 2020) . It has been seen that big data is a new operation
which is followed by companies worldwide. Company can gain both money as well as audience
from this data. it helps company to analyse a number of data within seconds and create their
strategic plans which help them to achieve its aims and objective in a given time frame.
Legal factors
like every other company in the market it is also required by Zara to work within the
boundaries of a law. While talking about fashion industry copyright law is one of the major
legal part which every company needs to fulfil. While making its branded company
affordable company also need to pay attention towards its qualities and that they are not
accused of stealing copying any designs by any other brand. Company uses copyrights for
such problems. This help them to take precautions for any future problem that may occur.
Environmental factors
Every company functioning in an environment needs to take care of its surrounding. In fast
fashion it has been seen that it a lot of waste is thrown away while producing a product. All the
products manufactured by Zara are affordable but they also need to be affordable for
environment. Deccan note hum environment while producing the products and extract extra
resources from the surrounding. This factor may lead to depletion of its goodwill and brand
image in the market (Jawabri, Rehman and Alarmouti, 2019) . So, company needs to be more
eco-conscious in order to have a positive name in the market.
RECOMMENDATIONS
From the following analysis that can be made some changes in strategies for Zara in order to
grow its business in terms of revenue as well as profitability. Below mentioned are some of such
strategies and recommendations with Zara can follow in future

Company is not that active in South African market these days. Zara can think of market
development in those untapped areas (Moudrý and Thaichon, 2020) . this will help company to
increase its brand awareness as well as expand its business in different parts of world.
Company is only dealing in fashion clothes these days. Deccan expand their product line by
introducing active wear in their business as well. This will help them to attract more customers
and grab more market share in the industry.
another great recommendation for Zara can be that in South African market they can start their
E-Commerce sites. Along with opening physical stores this will be of a great help in order to
increase brand awareness of company in those markets. Also, it has been seen that consumers
these days prefer online shopping due to the is provided by this medium. Company can take
advantage from this.
Zara can also create more interactive fitting rules which will help them to indulge
customers in conversation with their staff which will create a positive buying environment and
also help in increasing the name of company. it will create a healthy environment between
employees and customers also various queries by customers can be easily solved with the help of
these interactive rooms. In this way Zara can easily increase its customer loyalty. It is a great
way for Zara as a retail brand to provide something which is different from its competitors and
thrive in today's competitive era.
Brand extension is another great recommendation for Zara they can easily attract more
customers by incorporating more products which are differentiated in their brand name. Zara
already has a very large base of loyal customers introducing a new product in market it will be
beneficial as company will already have customers present in market for the product. loyal
customers will make sure that they also get the new introduce products by the company the
market. this will prove to be beneficial for the company as they will increase their brand and
incorporate more products in that and also while launching the products, they will already have
already customer base to buy the products. Failures of such products in the market is very low.
Therefore, the risk attached to this extension for Zara is almost minimum.
CONCLUSION
From the following report it can be thus concluded how Zara is a retail company
successfully e conducting its business activity in the market and earning profits out of it. The

report tells us about all the present trends in the market which are having huge impact on
functioning and activities carried out by Zara and other retail companies. An analysis on factors
which are external affecting Zara is also done in this project. At the end some recommendations
are provided for company in order to expand their business and increase profitability in near
future.

REFERENCES
Pantano, E. and Vannucci, V., 2019. Who is innovating? An exploratory research of digital
technologies diffusion in retail industry. Journal of Retailing and Consumer Services.49.pp.297-
304.
Giri, C., Thomassey, S. and Zeng, X., 2019. Customer analytics in fashion retail industry.
In Functional Textiles and Clothing (pp. 349-361). Springer, Singapore.
Karmy, J.P. and Maldonado, S., 2019. Hierarchical time series forecasting via support vector
regression in the European travel retail industry. Expert Systems with Applications.137. pp.59-73.
Naqvi, S.S.A. and Manzoor, S., 2019. Effects of Logistics Outsourcing and Service Quality in E-
Commerce Retail Industry. Research Journal of Supply Chain & Business Management, 1(2).
Aldous, R. and Soares, A., 2020. Ethical purchasing behaviour in retail: Food versus
clothes. Journal of Research Studies in Business and Management, 3.
Jawabri, A., Rehman, W. and Alarmouti, A., 2019. Role of logistics and SCM management
practises in improving operational efficiency in the retail industry in the UAE. International
Journal of Business Performance Management. 20(4). pp.313-329.
Moudrý, D.V. and Thaichon, P., 2020. Enrichment for retail businesses: How female
entrepreneurs and masculine traits enhance business success. Journal of Retailing and Consumer
Services.54. p.102068.