Zara Marketing Analytics: Performance Metrics and Recommendations

This report provides a comprehensive marketing analytics overview of Zara, a leading international fashion company and flagship store of the Inditex group. The analysis covers various aspects of Zara's business, including its organizational structure, target customer base, and current marketing approaches. Key performance metrics such as traffic by individual channels, bounce rate, revenue, footfall, and click-through rate are examined to evaluate Zara's marketing effectiveness. The report offers strategic recommendations based on the data, aiming to improve Zara's online presence, customer engagement, and overall marketing ROI. Furthermore, it briefly discusses the impact of the pandemic on Zara's performance and compares its strategies with competitors like H&M. Desklib offers this report as a resource for students studying marketing and business analytics, providing insights into a real-world case study.

mk567 marketing analytics
ZARA REPORT

Table of Contents
1. Organisation Overview...............................................................................................2
1.1 Introduction to the organisation......................................................................................2
1.2 Type of organisation........................................................................................................2
1.3 Size of organisation..........................................................................................................2
1.4 Range of products/services..............................................................................................2
1.5 Customer base.................................................................................................................3
1.6 Current Marketing Approaches..............................................................................................3
2. Metrics + Analytics Recommendations.......................................................................3
2.1 Traffic By Individual Channels..........................................................................................4
2.2 Bounce Rate.....................................................................................................................4
2.3 Revenue...........................................................................................................................5
2.4 Footfall.............................................................................................................................5
2.5 Click-Through Rate...........................................................................................................6
3. Justification................................................................................................................8
References.......................................................................................................................10
1. Organisation Overview.
1.1 Introduction to the organisation
Zara is one of the largest international fashion companies operating in the
standard fast fashion retail structure, and the flagship chain store of the Inditex
group.
1.2 Type of organisation
Inditex is a Spanish multinational clothing company, due to over 7200 stores
being operated in 93 countries globally. It is an overarching textile company
which has 8 brands in its portfolio; Zara, Pull and Bear, Massimo Dutti,
Stradivarius, Bershka, Zara Home, Oysho, Uterque. Each of their subsidiaries had
their own distinct personality, style, and design team with an integrated and
directly managed sales model across physical and online stores.
(static.inditex.com, n.d)
They believe the customer is at the centre of their unique business model, which
includes, design, production, distribution, and sales through their extensive retail
network (Zara,2022).

Zara customers value their unique identity as they are highly style conscious and
tech savvy individuals who want to express their individuality and enjoy a
personalised shopping experience. They deliver powerful emotional elements,
like attractiveness and customer intimacy which is why their target market is
continuously attracted to the brand (Start.io, 2022).
Zara has become one of the largest and best-known retail brands globally, also
account for more than 75% of total Inditex sales, referred to as their largest
division with a value of more than $23 million in 2021 (Pratap, 2020).
1.3 Size of organisation
Zara now has a total of over 2220 outlets globally and is estimated to have
75,000 employees (Business of Fashion, 2019).
Sales in 2022 reached €14.8 billion, up by 24.5% in constant currencies from a
year earlier. The company's gross profit increased to €8.6 billion, and its gross
margin increased to 57.9%, the highest level in 7 years.
Inditex shares were also up 2.8% at 12.30 (Pons, 2022).
1.4 Range of products/services
Zara designs, manufactures, distributes, and markets clothing and accessories
for men, women, and kids. Their product portfolio includes coat, jeans, knitwear,
shirts, t-shirts, shoes, handbags, lower garments, upper garments, coats, jackets,
dresses, skirts, trousers, cosmetics.
1.5 Customer base
Zara's customer base can be examined using four different types of
segmentation: geographical, demographic, behavioural, and psychographic.
Geographically, Zara targets mostly cosmopolitan cities in developed countries,
where fashion plays a large role in their culture. Their largest customer group is
in Europe, even though the brand is popular globally (Keller, 2012). The largest
market for the Zara brand is Spain, with 547 stores, and the smallest market is
England, with 57 stores.
Their target demographic includes women and men, mostly younger adults in
the age range of 18 to 40, which places Zara’s segmentation strategy as largely
focusing on both fashion-conscious and tech-savvy Millennials and Gen Z. They
tend to skew more female than male. as their female customer count is over 4
million, whereas the male customer count is only around 2.4 million. The Zara
Kids line also taps into the parents’ market.
Customers who shop at Zara want a fast-changing wardrobe that is in sync with
the latest trends while also being of high quality and reasonably priced. Zara has
loyal customers due to their higher ranking compared to their competitors on the

Net Promoter Score. Currently, Zara has 30 million followers on Facebook, 53.1
million on Instagram, and 3.9 million on TikTok.
1.6 Current Marketing Approaches
Zara has no conventional advertising methods, as no commercials,
advertisements, or billboards would be seen. Their advertising makes up less
than 0.3% of their company’s revenue. Their marketing strategy is built on the
promise of instant fashion; giving customers the styles they want at a quicker
rate than competitors but at an affordable price.
Zara did not include them in any celebrity or brand collaborations until recently.
It is mostly based on the customer experience; listening attentively to customer
demands and requests, as well as employing in-store technology to enable the
best shopping experiences (Start.io, 2022).
2. Metrics + Analytics Recommendations
This section of the report will further analyse 5 metrics will consider the
relationship between the metrics and tools that will offer an overview of Zara’s
marketing performance.
2.1 Traffic By Individual Channels
Direct, organic, referral, and social media traffic are the top four sources of
traffic. It is important since it makes the biggest contributions to Zara's
campaign to increase traffic and because it uses up funds without producing any
results. The number of visitors and their methods of access are displayed in the
online shop sessions by traffic source report.
These data will allow you to determine which marketing avenues are most
effective for your company and which ones require additional adaptation
(Shopify, n.d.). High organic search engine traffic indicates that Zara has a
strong, developing online presence that appeals to search engines.
High direct traffic indicates that Zara has a strong level of industry brand
recognition, which they do (evenbound.com, n.d.). The average percentage of
direct traffic is 20% when examining total website traffic. This percentage will be
higher than what can be seen because of the significant web changes that
prevent marketers from identifying the real source of traffic.
The greatest approach to quantify the performance of the Zara website and
marketing efforts is through traffic statistics, which can be utilised to monitor
results and link these efforts to actual ROI (Kemmis,2019). The data can be used
to compare platforms and track the effectiveness of advertising efforts through
organic traffic, but with direct traffic, it cannot be pinpointed which sites are
giving the most visitors (compose.lu, n.d).
2.2 Bounce Rate

Bounce rate refers to the number of site visitors who arrive but then exit without
taking any further action. As a "bounce" reveals how the user experience is, a
high bounce rate is typically a sign of two things: bad targeting and an
inadequate landing page.
The site's published content's relevance can be determined by looking at bounce
rates, as well as the impact of other elements like links, call-to-actions,
aesthetics, and peak hours. Below 40% is the suggested ideal bounce rate.
Zara's website should have user-friendly and attractively designed to lower
bounce rates and make merchandise available as soon as visitors arrive at the
site (Shopify, n.d.).
It is crucial to identify which page on Zara's website—possibly the landing page
or the product page—attracts customers in the first place when monitoring the
bounce rate. However, if the bounce rate is significant, a low click-through rate
may be a contributing cause (CTA). This can be due to the website's content
being updated frequently for user convenience, which might not be consistent
with the organic search trends (Net and Price, 2016). The pages load slowly, the
content may not be relevant to search terms, it may be of poor quality, and the
website design may be unreliable or overly complex (Sickler, 2021).
Bounce rate is important as it can be used as a Google ranking factor. If a
consumer can be kept from leaving the website, the conversion rate can be
raised. Additionally, a high bounce rate informs Zara if there are problems with
the website's content, user experience, or page structure (Backlinko, 2019).
Measuring the bounce rate is essential to determine which region of Zara's
website attracts customers initially, such as the landing page or the product
page, since the bounce rates explain why customers are primarily purchasing
from the retailer online (Peyton, 2017).
2.3 Revenue
Sales growth is quantified by revenue to determine if sales are rising or falling
over time. Either monthly or year-over-year revenue growth tracking is an option
for businesses, although monthly growth is only useful if the company is not
affected by seasonal influences.
While Zara is one of the highest-earning firms in the fast-fashion industry with a
market share of 11% in the global apparel industry, companies should look to
their industry to assess if their revenue growth is in line with others in their field
(InterObservers, 2022).
Zara would be able to determine which market segments have continuously
increased their sales, which ones are consistent, and which ones are dropping
through assessments of revenue growth by customer or customer type. With this
knowledge, Zara can focus their efforts appropriately and make intelligent
judgements (portebrown.com, n.d.).
Zara has the disadvantage that businesses exist to earn profit and not to make
revenue when using revenue as an indicator. If a company places too much
emphasis on revenue growth, it may cause employees to prioritise businesses,
market segments, or customer experience improvements that increase sales but
not profitability (Watermark Consulting,2015).

2.4 Footfall
Footfall, which is referred to as the volume of customers visiting a store, is a key
indicator of how effectively a company markets to attract customers.
Retailers may better understand how people move about their stores by using
video cameras, thermal imaging, and facial recognition software. This
information allows them to capture the flow of potential customers and spot
consumer buying trends (Localistico, 2019). It can be used to locate stock levels
and availability, as well as high-interest products and fashion trends.
Low foot traffic areas may indicate underutilised space; stores can be redesigned
to tempt customers to stay longer and visit more locations, which will raise the
average value of their baskets (Clough, n.d.).
Measuring foot traffic provides Zara with better indicators for evaluating the
efficacy of your advertising expenditure and making sure you get the most out of
your investment. This will help you understand which media are most effective
and how to make the most of them.
2.5 Click-Through Rate
Zara's keywords and advertising can be evaluated based on their performance
using click-through rates, a universal metric that counts the number of clicks that
advertisers obtain on their ads relative to the number of impressions. Because
advertisements are "push campaigns," their CTR is typically quite low (Mackey,
2021).
Any form of CTR, including posts with hyperlinks attached, will be measured by
Zara's advertising platform, which is their own customer base, and the
percentage of users who click through will be calculated.
The CTR is determined by dividing the number of clicks an advertisement
receives by the number of times it is displayed. 200 impressions and 10 clicks
would indicate a 5% CTR.
A high CTR might sometimes result in a low conversion rate, thus it is not always
a reliable indicator that people are interested in the brand and will buy. Users
can contribute to this by clicking more frequently, albeit this does not always
mean they intend to make a purchase.
CTRs vary depending on the brand's worth and where it is positioned in the
market. The money and Zara's capacity to purchase visibility are additional
factors. If a user's expectations aren't met after clicking the link, even a high CTR
is useless (Klipfolio, n.d.)

ZARA’S
2021-
2022

3. Justification
This briefing paper's goals are to offer potential strategic marketing decisions
based on the information in the dashboard shown above and to identify the most
successful marketing tactics used by Zara's rivals.
The pandemic described fast fashion as the tenacious conditions in early 2020
that were abruptly terminated by the spring lockdown regarding the UK fast
apparel industry and Zara's rivals. Customers continued to buy into their online
network despite the closure of their physical stores, but their preferences and
spending habits had changed. The emphasis on basic goods had caused a 14%
decline in Zara app downloads. They were ready for a significant portion of their
clients to convert to online shopping thanks to their long-established digital
strategy and early investments in online fulfilment. (Shabir and AlBishri, 2021).
Their rival H&M rebounded slowly, and H&M doesn't provide these fulfilment
choices. Although the shop allows customers to view local store inventories,
there are no modern self-checkout options (Barkho, 2021). H&M is still more
upbeat when there are discounts. Its broad brand stance in the market appeals
to families and draws in Gen-Z buyers drawn to the excitement surrounding
designer collaborations and affordable costs (Marci, 2020).
In the past, Zara had routinely increased its net sales at rates that were in the
double digits year over year. 2017 set a record for growth. additionally, a gain of
43% year-over-year, but only up until the onset of COVID-19. This percentage
was exceeded by Zara.com in 2020, which saw an astounding 64% growth in
online net sales over the previous year (Leenders, 2021).
In the dashboard mentioned above, the bounce rate was 31%, and it is stated
that a bounce rate between 26 and 40 is ideal, while between 41 and 50 is
normal. Lack of click-through rate may be one of the influencing variables if the
bounce rate is high. This can be because the website is challenging to use and
falls short of client expectations, which might be in odds with current organic
search trends.
The competitor H&M’s bounce rate is relatively similar but higher of 37%
(SimilarWeb, 2023) which is an improvement as it was higher before and this
was achieved by increasing their online conversion rates and reducing the
bounce rate for their website.
The click-through rates are 3%, and depending on the industry, a respectable
CTR ranges from 2-5%, according to Campaign Monitor.
If a consumer clicks through an email, that is an indication of interest, and as a
result, a metric that can be measured and improved upon with optimization, CTR
should be taken into consideration for Zara to measure their performance. It is
obvious that Zara's consumer base has a poor CTR, which can mean that Zara is
aiming its advertising at the incorrect demographic. You may find the perfect
clients that want to make the most of your company and are most likely to
become devoted repeat customers by using this CTR metric (Hotjar, 2020). A
high CTR, however, can suggest that their clients find their website to be useful

and attractive. For a company like Zara, who don’t market to customers, their
visits will be due to known reputation or recommendations.
For Zara, tracking the volume of traffic on various channels is crucial since it
enables the company to determine which ones perform best, identify its target
market, and modify its project development plan. A strong benefit for the final
consumer is what keeps people's attention. producing aesthetically pleasing,
high-quality goods that consumers demand. Having these excellent items makes
it simpler to benefit from traffic and SEO efforts (Regex SEO Blog, 2021). Zara
doesn't directly profit from social media, but it does succeed in creating and
capturing customer value. With more than 33 million followers, Zara's Instagram
account demonstrates their expertise in marketing to millennials (Instagram,
2019).
Zara also encourages impulse purchase by adding an additional fee to some
locations with high foot traffic. It's critical for Zara to effectively interact with and
contact their customers to provide these services. They do this as an
omnichannel retailer using e-commerce, websites, apps, newsletters, social
media, YouTube, and other platforms. Social media makes it simple and
affordable to advertise, and it also makes tracking their target market simple.
Having said that, Zara must use caution to avoid offending clients or making an
undue effort to appeal to a certain target market (Edubirdie, n.d.). Marketing
professionals can match draw rate and conversion KPIs to promotional periods by
tying campaign periods to foot traffic. This enables the removal of less effective
in-store ads where there is a high volume of passing traffic (Kpfit, n.d).
Additionally, Zara showcases its most recent collections via advertising
campaigns and fashion shows. Compared to more conventional strategies like TV
commercials or online marketing, these are excellent ways to promote the new
apparel lines in a morally upright manner. Zara spends only approximately 0.3
percent of its sales on advertising, which is significantly less than what Zara's
rivals spend. (Nazir, 2019)
By breaking down income, Zara can comprehend the size and demographics of
the audience for their website.
The overarching strategy of Zara is cost leadership. By selling goods like
designer brand clothing and high-end fashion at affordable costs, the company
enjoys a competitive advantage in the market.
One of the top revenue brands is Zara, especially when compared to HM, a direct
rival. Due to the restricted supply of each style of goods in each store, which is
refilled in response to demand, they have strong pricing power. New fashions
based on the newest trends are always being introduced. As a result, unlike most
fashion businesses, Zara rarely offers clothing discounts. They continue to
frequently run out and need to run more stock (AG, 2020).
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