Zara, a clothing manufacturer and retailer based in Spain, is unique for providing just-in-time low-cost fashion. The company designs new collections in only four or five weeks, quickly reacting to trends, such as what is stylish on a music video, in magazines, at shows, and in fashionable cafes, restaurants, and bars. A collection can be manufactured in a week, at its modern facility in northwestern Spain or at 400 cooperatives run by local seamstresses. This compares to the typical competitor's six-month design phase and three-month production period.
A new collection is test-marketed in a selection of stores around the world, and sales are monitored carefully using computer technology. If the sales are brisk, more items are produced and distributed. Deliveries are made twice a week, and clothes rarely remain on the shelf for more than a week. This just-in-time delivery system means that inventory costs are low.
Models are changed, updated, and mixed and matched frequently. This attracts consumers on a regular basis because they can buy something different each time. They are also under pressure to buy because they are unlikely to find the same item at a later date.
(Updated July 1, 2001)
Source Carlta Vitzthum, "Just-in-Time Fashion," The Wall Street Journal, May 18, 2001.
Questions:
Explain what form of non-price competition the firm uses to gain an edge on its rivals.
What other clothing chains serve the market of teenagers and young adults? How do they compete? Price? Something else?