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AM 270 Week 8

by: luke koppa

AM 270 Week 8 AM 270

luke koppa
GPA 4.0
Merchandising processes
Ruoh-Nan Yan

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About this Document

this week of notes just covers Taylor Sloan's presentation on Zara and its unique business plan regarding fast fashion
Merchandising processes
Ruoh-Nan Yan
Class Notes
AM 270, merchandising, Zara, Fast Fashion
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This 0 page Class Notes was uploaded by luke koppa on Friday March 11, 2016. The Class Notes belongs to AM 270 at Colorado State University taught by Ruoh-Nan Yan in Winter 2016. Since its upload, it has received 30 views. For similar materials see Merchandising processes in General at Colorado State University.


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Date Created: 03/11/16
AM 270 Week 8 Zara Taylor Sloan general ideas s and such not important Fast fashion quick response supply chain to keep up with trends Minimal lead times one month as opposed to 412 months Zara has become the major leader in fast fashion 0 Opened in 1975 0 More than 2000 stores worldwide I On every inhabited continent I US agship in Soho NY 0 Most stores on east and west coasts O Belongs to InditeX one of the largest distribution groups in the world 0 Sales have been going up substantially since the 1990 s Business model 0 Vertically integrated O 3 goals for operations I Short lead times I Decrease quantitites produced to decrease inventoroy risk I Increase of styles 0 Competitive advantage in I Product development 0 12000 new styles per year 0 Retail average 3000 0 34 weeks from design to production I Cost of production 0 Supply chain I Strategic ownership and control over production I No Asian outsourcing I 80 done in Europe I Utilizes other InditeX companies for manufacturing and raw materials 0 Purchase half of fabric in greige goods 0 Flexible 0 Quick colorprint response I Ad and marketing I Only 3 of total revenue on advertising and marketing 0 Competitors 34 0 Instead use store locations and layouts to act as marketing tool 0 fashion street used to test store layouts in controlled environment I Information and communications tech 0 Spends less than 5 on information tech 0 Competitors 2 0 Human intelligence and IT hybrid model 0 HI store managers and market research 0 IT use of electronic devicessystems I Competitors mostly just use IT I Results in well managed inventories linkage between supply and demand reduced cost from unsold merchandise Design and merchandising 0 000 0 Instead of forecasting trends they react to current needs I Recreating rather than creating first Broad rapidly changing product lines Avoid collaborations cut costs Reasonable but not excessive physical quality Design team young and ambitious Market research 0 0 Daily info from stores send to head office Looking at sales reports database designers use info to create new lines and modify existing ones Manufacturinglogistics 0 Highly automated factories 0 State of the art distribution facility I 5 million square foot distribution center near headquarters I Minimal human intervention 0 Place to move rather than to store it 0 Clothes ironed in advance packaged on hangers and affixed with security and price tags Managers 0 Responsible for placing orders 0 Audit inventory every 2 weeks 0 Headquarters sends an order form to manager s PDA devices 24 hours prior to due date 0 Deliveries made every 2 weeks I Europe trucks I International planes Customers 0 Managers gather customer input daily 0 Staff always seeking customer feedback I Leads to more realistic trend demands 0 Staff meets to find consistent customer demands relay to headquarters Inventory 0 Limit product availability through short renewal cycle I Design stock for a total sellout within two weeks I Exclusivity of offerings I Constant new styels I Encourage customers to visit and buy frequently I Exciting I Reduces discounting 0 it s like you walk into a new store every 2 weeks 0 Varies by location I Localizes product I Staff uniforms match socioeconomic status of customers 0 Discounts 0 Rare 0 Move unsold items after 23 weeks 0 18 of products is marked down I Normal 3540 0 Failure to sell rate is 1 I Industry 10 0 Zara gross margin percent is 60 I Normal range 3045 I Criticisms 0 Higher production costs 0 Capital intensive machinery 0 Oil prices and transportation costs 0 European wages compared to Asia 1720 times higher 0 Innovative design protection and piracy prohibition act IDPPPA 0 Purpose to prevent fast fashion companies from stealing high fashion designs 0 3 year protection term for new and original designs I How to determine new and original Anything that is substantially identical Designers must prove that their design is a different variation over prior designs 0 Products must be extremely unique to be protected 00


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