Inditex is a mammoth retailer, producing over 840 million garments in a year, the majority of which are sold by Zara (2). Every item of clothing is tagged with an RFID microchip before it leaves a centralized warehouse, which enables them to track that piece of inventory until it is sold to a customer (3).
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What type of technology does ZARA use?
Clothing comes to life with AR
Zara was recently one of the first mainstream retailers to launch an AR app, which is designed to bring clothes to life in-stores. By pointing cameras at sensors installed in windows, users of the app can see virtual fashion models strutting their stuff.
How does ZARA use Analytics?
ZARA captures data from e-commerce sales, PDA devices and RFID tags on the clothing, POS terminals, and customer surveys. Customer preferences are captured by store employees in their PDAs in details: cut, colour, buttons, zippers, and more. Zara has constructed its business on RFID tags as per the Wall Street Journal.
How has technology helped ZARA?
From this headquarters, technology allows Zara’s executives to monitor each store’s ambient temperature, energy consumption, and much more. Indeed, this is one of the keys to Zara’s success: big data. Thanks to data analysis, the company even knows the average weight of residents in each store’s neighborhood.
How has information technology IT enabled ZARA’s strategy?
Zara uses information systems for customer profiling, to analyze the purchase patterns and direct targeting. The company quickly respond to fluctuating customer demands in fashion trends.
How does Zara manage inventory?
Zara has 12 inventory turns per year compared to 3 – 4 per year for competitors. Stores place orders twice a week and this drives factory scheduling. Such short term focused order cycles make forecasts very accurate, much more accurate than competitors who may order every two weeks or every month.
How does Zara use RFID?
RFID tags allow Zara to track items across countries and run an smooth organized clothing empire. The biggest advantage is to manufacturing where RFID tagging allows for an agile and accurate operation. When it comes to inventory management, RFID is the most accurate system out there.
How is data captured in Zara stores How does the firm use this data?
Data is captured from POS terminals, e-commerce sales, customer surveys, PDA devices and RFID tags on the clothing. Store personnel are trained to capture customer preferences in their PDAs on ever detail: buttons, zippers, color, cut and more.
What is Zara marketing strategy?
Zara focuses heavily on their product, place and pricing as opposed to promotion. Zara rarely advertises any store sales or have sales promotions other than sale items unlike other retailers. It is also interesting to note that Zara never places their brand or logo on their products.
What is the competitive advantage of Zara?
Zara’s generic strategy is cost leadership. The brand holds a competitive advantage in the market by offering products similar to high-end fashion and designer brands’ styles at modest prices.
How does Zara use artificial intelligence?
Like its competitor, the Spanish fashion outfitter Zara has turned to artificial intelligence to further its goals. The company uses it in a number of ways, including employing AI robots to fetch requested orders for customers using its Buy Online, Pick-Up in Store (BOPIS) or Click and Collect options.
Does Zara use e-commerce?
Zara’s eCommerce strategy uses an automated marketing platform for sending relevant and timely emails notification to shoppers regarding everything from order status updates to back in stock notifications, and so on.
Should Zara upgrade its information technology?
The company should upgrade the POS terminals to a modern operating system because it would enable it to operate in accordance with the modern requirements and avoid the necessity of changing the entire network in several years when the company would implement other processes into operation.
What hardware does Zara use?
Every store of Zara is equipped with the PDAs and DOS based point-of-sales (POS) software so that every order from customer will transfer directly to the head-quarter for analysis purposes.
How does Zara forecast demand?
Their high product mix and vast global network makes demand forecasting for Zara a challenging endeavor. This thesis sets out to incorporate the effects from seasonality, product lifecycle, and cannibalization into a long term aggregate demand forecast and a short term SKU replenishment forecast.
How does Zara innovate?
Innovation at Zara does not apply only to products. They have used creative approaches to streamline and optimise manufacturing, supply chain management, data tracking, inventory management, store layout and staff operations. Designs and ideas are tested quickly.
What type of distribution channel is Zara using?
ZARA is following vertical integrated distribution strategy which allows ZARA to enjoy benefits like strong control, cost control, competitive advantage and differentiation.
Does Zara use a centralized inventory system?
Centralized Inventory management
Zara designs thousands of products every year and delivers them to their stores twice a week. It adopts an inventory management tool that makes it easy for them to determine what products, how many, and which sizes should it be delivered to the stores.
Which sourcing strategy does Zara use?
Zara‟s method of sourcing product is very different from the traditional methods used in the fashion industry because the company controls every part of the supply chain. Instead of using an outsider to design the clothes, the firm uses 300 in-house designers and relies heavily on store managers‟ input.
Who uses RFID technology?
I recently read that a number of companies have adopted RFID as a way to control inventories. Leaders include Target TGT -1.3% , Macy’s M -4.5% , Zara, H&M, Uniqlo, Nike NKE -2.5% , Adidas, Footlocker, Lululemon, Levi’s, Ralph Lauren, Tommy Hilfiger, and Victoria’s Secret.
Deployment of RFID technology in ZARA stores enables the separate identification of each clothing products through radio signals. The chip of RFID tags has a memory storage and security alarm to install the product ID. ZARA makes use of this RFID mechanism in; Efficient distribution of products.