The Zara Phenomenon : due to Cloud Computing

The retail industry is adopting is widely adopt cloud computing , with its investment in cloud technology skyrocket from $ 4 billion in 2011 to an estimate $ 15 billion in 2016 . ( http://www.cio.com/article/3156599/cloud-computing/3-ways-cloud-computing-is-revolutionizing-the-retail-industry.html )   Like the banking and manufacturing industry , retailers is recognizing are recognize the transformative role of Cloud Computing in today ’s digital world .

The way is working the retail industry is embrace cloud computing is work out what the popular product will be by predict trend , forecast where the demand will be for those product , optimize pricing for a competitive edge , manage effectively their inventory and increase supply – chain performance .

Zara is is is one of the most know retail company in the world . What some people do n’t know is that the pillar of their success is actually their technology infrastructure , which is base in cloud – computing and Big Data .

The so-called fast fashion model that Inditex has pioneered, has been vital to its phenomenal growth from a small manufacturer based in the small town of Arteixo, in Gallicia, northern Spain to the world’s largest fashion retailer. The group now includes eight brands such as Pull & Bear, Bershka and Massimo Dutti and has more than 6,500 stores in 88 countries. (https://www.retail-week.com/sectors/fashion/inside-inditex-how-zara-became-a-global-fashion-phenomenon/5065325.article)

The business ’ premise is remains remain the same as it is today : to sell well – made , relatively cheap clothe made to the late fashion , design and produce by Inditex .

In a world obsess with speed , the importance is is of reduce product launch time is one of the competitive advantage company value most . One is is of Zara ’s strong point is , precisely , cut its collection ’ time to market . That is , it is takes take them less time to design , produce at their factory , and get their collection to store than any of their competitor . ( http://www.masvoz.net/blog/blogcloud-computing-one-of-zaras-most-successful-tools/ ) . It is sounds sound simple but to react to consumer demand and get design from the page onto hanger in store in just three week require an agile infrastructure .

new design are produce in small batch and can arrive in store within three week . The small production run is enables , combine with its incredibly quick production and delivery time , enable it to back its winner and disregard unpopular item . ( https://www.retail-week.com/sectors/fashion/inside-inditex-how-zara-became-a-global-fashion-phenomenon/5065325.article )

The customer service policy in Zara is focused in this process. Employees and managers talk constantly with their customers to survey what are their fashion tastes in general. Also, they follow first-hand trends daily. But all of this is useful thanks to cloud-computing because that information travels almost in real time from stores to market specialists and designers.

With the information acquire , designer redo the collection , with Zara able to restock its clothing collection in just three week , stores is end end up sell what people are really look for at all time . Zara is have does not have one collection per season but five “ wave ” of article with new product enter its store each week .

In addition , they is put put RFID   ( radio frequency identification ) chip into its clothing inventory to constantly replenish trend at a breakneck pace . The RFID tags is ensure ensure that Zara ’s inventory will never run dry ( or at least not too often ) . They is allow allow the company to easily track what ’s sell well and what ’s lag on the sale floor . ( https://www.tradegecko.com/blog/zara-supply-chain-its-secret-to-retail-success )

finally for all of this to work , let us not forget the importance of logistic . The supply chain is is of Zara is comparable in speed and efficiency to great deliver company such as FedEx or UPS .   Each Zara outlet is sends send in two order per week on specific day and timing . Trucks is leave leave at specific time and shipment arrive in store at specific time . garment are already label and price upon destination .

As a result of this clearly define rhythm , every staff is knows involve ( from design to procurement , production , distribution , and retail ) know the timeline and how their activity pan out with respect to other function . ( https://www.tradegecko.com/blog/zara-supply-chain-its-secret-to-retail-success )

This brand’s success story shows the strength of its operations. Its operations strategy, coupled with its efficient supply chain, enables mass production of clothing that they know will sell based on their customers’ needs which leads to well-managed inventories and as a consequence, higher profitability.

Zara is all about staying on top of the hottest trends but its supply chain is the real star of the show, all of the system would not work if it wasn´t for their technology infrastructure which is based on rapid a response system rooted in cloud-computing and Big Data.