LOCATION STRATEGY

Store Locations

Zara leads the world's fashion with its over 2,200 stores in 93 countries around the world.Zara added a

net of 65 stores in 2015, plus 50 Zara Home locations. Spain is the biggest market with 436 stores,

followed by China (193 stores), France (129), Italy and Japan (100 each). The U. S. has 78 stores as of

January 2017. It operates 8 stores in the Philippines located at some of the well-known and business-

friendly cities such as Makati, Mandaluyong, Quezon, Pasay, and Cebu.One of their stores is situated at

premium wing, also called the Mega Fashion Hall, of SM Megamall at Mandaluyong City, one of the most

popular malls in the Philippines. This mall attracts an average of approximately 500,000 people a day.

Zara Stores around

the World 2015

Zara focuses on choosing the correct

area district for their stores in each city they decided to target. Moreover, Zara believed in settling their

stores in a high population and traffic areas in each particular city. Zara knew the importance of

establishing the recognition, thus, they always attempted to arrange their shops in prestigious districts

neighboring other high clothing manufacturers. As explained by Masoud Golsorkhi, editor of Tank. The

retail strategy for luxury brands is to try to keep as far away from the likes of Zara. Zaras strategy is to get

as close to them as possible.Their favourite type of marketing is creating exceptional stores .Since Zara

does not do much of advertising, the management is focusing more on the appearance and location of
its stores The company invests heavily in the beauty, historical appeal and location of its shops, like the

$324 million invested to buy space at 666 Fifth Avenue in New York, within the famed Tishman building.

Comparing with H&M, or other similar companies, Zara does not spend much money on promotion. It

spends 0.3 per cent of sales on advertising compared to average of 3.5 per cent of competitors.Zara

spends its money on opening new stores instead of spending a lot on ad campaigns. Zara thinks that the

store windows and the content is the most necessary advertising for them. Moreover,Zara only allows its

designs to remain on the shop floor for three to four weeks. This practice pushes consumers to keep

visiting the brands stores because if they were just a week late, all the clothes of a particular style or

trend would be gone and replaced with a new trend.In fact Zara's customers visit its shops an average of

17 times a year.At the same time, this constant refreshing of the lines and styles carried by its stores also

entices customers to visit its shops more frequently.

A woman dresses a

mannequin at Zara's headquarters in Spain.

The company has put itself at the forefront

of an increasingly popular trend in the fashion

industry, opting for larger and more prominent

stores in prime locations.The rise of e-commerce has also led the company to experiment with new ways

to make physical retail stores more relevant to e-commerce savvy shoppers.The group has currently 4.4

million square metres of selling space in prime locations. The store network is being constantly improved
to expand the companys footprint through the well-known flagship format which can be recognised by

its larger scale and the focus on interior design.

The launch of the new 6,000 sq mt store in Madrid coincides with the reopening of the iconic Zara store

in Paris Opera. The French flagship is Inditexs third largest outside Spain and its revamp marks another

milestone in its store refurbishment programme.

Zara in Copenhagen -

Inditex

Investment in the store estate was a

key priority for Inditex in 2016 as

Zara flagship stores account for two

thirds of the groups sales. The plans

included new openings and expansion of existing sites located in priority areas.As part of this, the brand

launched in November a 3,000 sq mts newly-refurbished flagship in Tokyo's Shinjuku, and opened in

Plaza Catalua a 4,500 sq mt space.

In addition to Barcelona and Madrid, the chain opened in 2016 the doors of another iconic flagship store

in Spain. Located in calle Compostela de A Corua, the new store measures 2,400 sq mts, rivalling in size

the iconic 2,500 sq ft flagship on Serrano in Madrid.

 Zara in Chicago -

Inditex

In total, between 2012 and 2016

the group carried out a total of 1,882

store upgrades, including 763

upsizes, across all five continents. In

the companys latest financial report, CEO Pablo Isla talked about a new major store opening in India this

year. The Zara flagship will be located in the Ismail building in Bombay and occupy a space of 4,645 sq

mts, becoming the countrys largest international high street store.

In Europe, other recent openings include a 4,500 sq mt flagship on Oxford Street, London, and a 5,000 sq

mt Via del Corso, Rome. The UK capital is also set to see the expansion of Zaras existing store at

Westfield White City.In the US, Zaras largest store is located in one of the most iconic areas of New York

on Broadway and features 4,400 sq mts of space. The store was opened in March 2016, surpassing in size

the former largest US store, a 3,000 sq mt shop located on Fifth Avenue.This year, Inditex plans to add

320,000 sq mts to key locations across all fascias. The group also intends to maintain the accelerated

growth trend in the coming years.

Factory locations
Zara keeps its headquarters in La Coruna (originally based), in addition it fixes its prices by the

management team settled in La Coruna as well.In addition, Zara tends to rent/purchase locations that

are mostly occupied during the day. This areas can be historical or highly traffic areas.Zara on average

gives a time spam of 8 hours between the finished good and the good shipped to its final

destination.Zaras main factory of production is located 10 minutes away from the La Coruna airport.

The complex in Arteixo, Spain, that

houses Inditex headquarters and

some Zara factories.

The 11 Zara owned factories are

connected to the Cube by underground

tunnels with high speed monorails

(about 200 kilometers or 124 miles of rails) to move cut fabric to these factories for dyeing and assembly

into clothing items. The factories also use the monorail system to return finished products to the Cube

for shipment to stores.

Zara competes on flexibility and agility instead of low cost and cheap labor. They employ about 3,000

workers in manufacturing operations in Spain at an average cost of 8.00 euros per hour compared to

average labor cost in Asia of about 0.40 euros per hour.Zara factories in Spain use flexible manufacturing

systems for quick change over operations.50% of all items are manufactured in Spain,26% in the rest of

Europe and 24% in Asia and Africa

Zara uses Asian manufacturers to produce clothing staples such as plain t-shirts, which are not sensitive

to fashion trends and the use of lower-wage labour with larger contracts makes sense.The manufacturers

used for the more time sensitive high-fashion items are located near Zaras Spanish headquarters.

Workers collect and separate cloth pieces

that were trimmed by an automated machine.

Two tiers of the companys suppliers

are located in areas close to the headquarters,

mainly Spain, Portugal, Morocco, Turkey and

other European countries (55 percent). In

comparison, H&M has the majority of its products produced in Asia.This use of close proximity

manufacturers allows for greater flexibility and for Zara to fulfil its aim of creating customer driven

designs to customers as fast as possible, while also incorporating any fashion trends as they see fit.The

delivery time is then also made as short as possible. With the proximity of these producers used for high

fashion and time-sensitive clothing located in and around Europe, they can be rapidly delivered to Zaras

central distribution centre in Spain and shipped to stores around the world twice a week.

Factories can increase and decrease production quickly, thus there is less inventory in the supply chain

and less need to finance that inventory with working capital. They do only 50 60 percent of their

manufacturing in advance versus the 80 90 percent done by competitors. So Zara does not need to
place big bets on yearly fashion trends. They can make many smaller bets on short term trend s that are

easier to call correctly.

REFERENCE:

http://brandaditofexchanges.blogspot.com/2013/12/marketing-communication-promotion.html?m=1

http://uk.fashionnetwork.com/news/Zara-intensifies-expansion-with-new-flagship-

stores,814648.html#.WdSuqKDmjqA

https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-success-a-culture-of-customer-co-

creation/
https://www.targetmap.com/viewer.aspx?reportId=45366

https://www.google.com.ph/amp/s/internetmarketingkao.wordpress.com/2012/10/18/zara-marketing-

strategy/amp/

https://mobile.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashion-

retailer.html?referer=https://www.google.com.ph/

https://www.forbes.com/companies/zara/

https://www.retail-week.com/sectors/fashion/inside-inditex-how-zara-became-a-global-fashion-

phenomenon/5065325.article