Best known by its Zara brand, Spanish company Inditex is a finely tuned retail engine that gives customers around the world exactly what they want before anyone else. Now one of the world’s largest fashion retailers, it is a pioneer of fast fashion offering stylish, affordable clothes through brands including Zara, Pull & Bear, and Massimo Dutti. Inditex’s super-efficient supply chain process delivers new designs in less than three weeks compared to the industry average of six months, and does it at a lower cost than its competitors. Daniel Piette, fashion director at Louis Vuitton, notably described Zara as ‘possibly the most innovative and devastating retailer in the world.’
From its origins in 1963 when Amancio Ortega started a small company in Spain manufacturing women’s clothes, Inditex has grown to encompass over 100 companies operating across textile design, manufacture and distribution, and is the world’s second-biggest fashion retailer after The Gap. With an average revenue growth for the past five years just shy of 15% and, over the same period, net profits more than doubling to over €1.7 billion it now boasts stores in over 400 cities worldwide.
Outside the high-end luxury segment, competition for the mass market is today fought on two levels: getting the basics at the right price and providing customers with the latest styles as quickly as possible. With an industry average design-to store time of six months, Inditex and its main competitor, H&M, are pioneers of fast fashion, regularly achieving less than three weeks. More than anyone else, they have focused on getting the latest designs to their customers as quickly as possible.
While Inditex could just be seen as a very slick global logistics machine, there are many other things that it does well. These include the way its designs are created and materials are sourced, how it works with suppliers and subcontractors, the way its stores are designed, how its people communicate and are rewarded, and, above all, how its customers are served. Underpinning all of this is the effective use of technology targeted on where it can make the most impact. And it is the combination of these different capabilities that make it a successful growth story. With a culture that encourages autonomy, fast decision making and incessant continuous improvement, Inditex has the scale and the speed to continue to deliver growth