Zara: Fast Fashion from Savvy Systems
Introduction
Key Takeaways
- Zara has used technology to dominate the retail fashion industry as measured by sales, profitability, and growth.
- Excess inventory in the retail apparel industry is the kiss of death. Long manufacturing lead times require executives to guess far in advance what customers will want. Guessing wrong can be disastrous, lowering margins through markdowns and write-offs.
- Contract manufacturing can offer firms several advantages, including lower costs and increased profits. But firms have also struggled with the downside of cost-centric contract manufacturing when partners have engaged in sweatshop labor and environmental abuse.