THE “FAST FASHION” RISK FOR SLOW RETAILERS – A VIEW (Devangshu Dutta)

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September 9, 2008

Fashion is, by definition, perishable. Like bread, eggs and milk. Or is it?

When bread turns stale, eggs turn rotten or milk turns rancid, you do have to throw it away. Fashion is different, because its perishability is artificial, driven by popular perception that something is “out-of-date” or that something else is “the look of the day”. You don’t really have to throw that blue peasant skirt out in the garbage or in the Salvation Army bin…but you do anyway, because it is so yesterday…or that’s what everyone else is saying.

Earlier, perceptions took time to spread, today they can be spread instantaneously through the web, TV and cell phones, and pretty quickly, even through slow media like print magazines.

So ‘Fast Fashion’ is really a product of fast media and communications technologies.

Having said that, it is here to stay, and regular (mainstream) slow-coaches do need to be worried about customers being seduced away by the ever-fresh look of a Chico’s or a Zara.

I can’t even begin to estimate the millions of dollars that must have been spent on “studying the Zara model”. However, while Zara’s model seems to scream “best practice” and everyone wants to emulate it – is it really for everyone?

Inditex (Zara’s parent company) has grown over 40+ years of evolution, in a specific market and business context. It may have “exploded” on the global scene when it floated its IPO in 2001, but the business model has been brewing a long time.

It has such significant investments in production that Inditex is as much a manufacturer as a retailer.

Its people and process model are almost diametrically opposite the command and control, “buying director – driven” model of other retailers. Its technology investments are focused better than most of its peers.

Would your company’s DNA allow you to invest in and manage fabric and apparel manufacturing? Would it allow young people to be sent out to take bigger-ticket purchase decisions with fewer approvals than they do now? Would your design team really trust your frontline store staff with feeding them relevant trend information every day?

And yet, and yet…As labour costs rise in Europe, Zara is also being forced to rethink its model of local or regional production. As it does move more production to places like India and China, the big question is whether it can maintain the sanctity of its business model.

I won’t advise other retailers to breathe easy, but they don’t need to roll over and die just yet.

Other articles on Zara (all in Acrobat PDF format):

( A Request: These articles have been placed for open access on our website due to the overwhelming interest in Zara around the globe. If you wish to use any of these articles for distribution in your company or in industry workshops, or wish to quote from the articles, please provide full credit to the source. Thanks!)

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