Inditex or how to become even bigger

Changing the strategy is as important as communicating it. And the story being built here is essential. We should not forget that Marta Ortega, the non-executive chairman of communications, made a change of course without fanfare but very relevant to what Inditex wants to be known for. She did this at the first general assembly meeting in July last year. I was used to the Pablo Isla era, when all that mattered was tough talk about operations and numbers. “Integrated business model”Ortega preferred intangible elements such as fashion, beauty or people to create an image closer to the big brands in the industry. Inditex: “The constant desire to bring the excitement and beauty of fashion to millions of people around the world”, summarized. A few minutes later, Óscar García Maceiras reinforced this message with a similar statement: “We are a fashion company. “We appeal to our customers’ emotions with creativity, design, quality, sustainability and the beauty of our stores.”

To change

This shift in narrative, this turn from what was always a fashion brand but to a more diluted fashion brand, was supported by actions, some more relevant than others but all important in bringing the discourse together. For example, a new corporate image of the group. A renewed website with emphasis on images and videos and it’s visually closer to the seven chain’s online stores, or a new logo that leaves behind red in favor of stark black.

Inditex’s new speech and new image is accompanied by a president who, unlike his predecessors, is close to the fashion world, frequently attends fashion shows of luxury brands and steps into the fashion world. greater public visibility. We should not forget the actions supported by the foundation, such as the exhibitions of fashion photographers in A Coruña.

In addition to the communicative approach, the appointment of Maceiras to the CEO position in November 2021 and Ortega to the presidency in April 2022 means the return of Inditex – although it has never given up on this and has not been insisted on that much. was coming. in-store shopping experience; as the most important vector for the product differentiationand after all, customer. The customer is at the center of the business.

American professor in 1960 Jerome McCarthy Reducing the marketing concept to four elements ( 4P): product (what do you want to sell); price (money to be paid for the product or service in question); square (where it will be sold) and promotion (any communication made by a company to sell that product). So everything was focused on the product and the company. While looking at someone’s navel. The client is nowhere to be seen. Thirty years later, American professor Robert Lauterborn brought up the concept 4C Against McCarthy’s 4Ps: Customer instead of product (You should not sell products without knowing the needs of the public). Cost rather than price (We must go beyond price and keep in mind that customers are looking for more than a good price because they also consider the time and effort it will take to purchase a product). Convenience instead of plaza (the important thing is not to take the product everywhere possible, but to take it where the customer wants to buy it) and communication rather than promotion (listen to the customer and communicate face to face without trying to sell directly).

“It is very important to listen to the customer. This is what allows us to diversify and adapt to trends,” Maceiras argues. “As global as possible” What you need to do, he insists, is “know your customers’ behavior.” It’s like traditional commerce based on knowing the customer and what their tastes are. In this context, Inditex realized that in order to continue to grow, it had to respond to new consumer habits that are increasingly digital. The famous omnichannel is nothing but the customer uses both the physical store and the online store and provides them with the best experience regardless of the channel they use. Consumers now prefer both showrooms (they use physical spaces as dressing rooms and buy online) and web room (They see a product online and go to a physical store to buy it). This is why full integration between both channels is so important in Inditex’s business.

Within this permanent customer listening process, various projects such as mirror stores stand out. Since last year, each Zara store has been assigned another store of the same brand with a similar profile and compared to improve the display of products, stock management and increase your sales

Inditex also uses data on previous sales and stock availability, as well as daily orders from those responsible for each organization. Last year, it developed a model that calculated the optimal number of units for each first shipment of a new product, based on the latest developments. annual report of the company.

The integration between the physical store and the online store is key to the company’s current business model, but we must not forget that the former brings just over 70% of the revenue, so the A Coruña multinational takes care of them very well. Moreover, “The physical store is an important support”, He appreciates the CEO for the fact that Inditex generates two-thirds of the return on online shopping worldwide from its own businesses, and that one-third of the purchases made on its websites are collected from its stores.

Inditex became the first brand to prefer large stores, known as flagships in the industry. These are large areas that are intended for the customer to own. the best possible shopping experience and Additionally, each brand can showcase more of its clothes. And it’s a very important thing. It allows chains to have larger warehouses in these stores in order to respond to the intense demand for online shopping and to offer the same service quality in the physical channel as in the online channel.

In this shift, Inditex wants fewer stores but increasingly larger stores to continue growing. The textile company was opening 500 units every year. since that time maximum 7,490 Moved to its current location in 2018 5,743 current (1,700 less). The multinational company’s goal is to reorganize the network to eliminate smaller ones that do not adapt to its new strategy. It covers selling points but does not reduce surface area. His goal is to finish this year with 3% more gross sales area than last year.

This entire new strategy would not be possible without a well-oiled logistics and transportation model. “You can have the best stores and online platforms, but it is very important to be able to carry the product and what they want, when they want and how they want,” recalls García Maceiras. And to make all these changes you need money. Marketing strategy consultants in 1994 Al Ries and Jack Trout they published 22 immutable laws of marketing. The last one is the Law of Resources, which provides: “An idea cannot be realized without sufficient financing”. The multinational company announced a $1.6 billion investment this year that will focus on improving physical stores, logistics and digitalization. There is also 10.546 million inbox.

Zara stores and other brands of the group are in constant transformation. They are introducing new features that make purchasing in these businesses easier. Strategies such as eliminating physical alarms and replacing them with new alarms alarmed so as not to be detected by the customer or self collection. The group already allows customers to shop at some of its most modern stores without having to check out. They are also trying to increase deliveries at selected Zara locations, from four to four in the traditional fortnight, for greater clothing rotation.

Another measure that advances this change is Zara Second HandSecond-hand clothing platform about to come to Spain. The company has already launched it in the UK and France and is expected to launch in its major markets in 2025. It’s also starting to use artificial intelligence, and it’s being done “with reasonable care so that something positive doesn’t turn into something else.” A risk or threat according to the CEO.

While Zara continues to be an affordable fashion brand, it is also taking steps to expand its price range towards luxury rather than luxury. premium sector. Although it did not work, Uterqüe did not rule out attacking the public sector with greater purchasing power. An example of this is collections of superior quality and price. capsules) that you work with designers, photographers or influencers to launch new and different products. In this way, it increases the brand’s positioning and has more expensive clothes, but without losing its regular customers who continue to buy clothes at the usual affordable prices.

So where can Inditex continue to grow? Since taking office, Óscar García Maceiras has insisted that the group still has a lot of room for improvement. He assures that the fashion industry is very fragmented and that even in markets where Inditex is a leader, its share is relatively low. It also recognizes that it has room to continue to grow geographically. Proof of this is its commitment to the United States, its second market after Spain: it has thirty openings and expansion plans there over the next three years.

Inditex’s only rival that continues to grow is Inditex. And the only way to avoid becoming complacent is to constantly reinvent yourself. And that’s what Amancio Ortega has been doing since he founded it. 1985.