Zara | Ecommerce | Growth strategy

Introduction to the problem

Zara is a high end clothing brand in a lot of geographic locations. Zara clothing brand must keep up with the changing consumer behavior patterns especially during the covid times having many stores and e-commerce websites

Impact created by solving this problem

1. Over 90% of the US population prefer shopping online
2. Over ~1 billion market potentially through online channels
3. By 2030 96% of the US population will prefer shopping online

Key performance Indicators

1. Number of new customers placing an order through the application
2. Number of repeat purchase orders from old customers
3. Number of customers buying the newly launched product
4. Number of dresses/accessories available in stock
5. Amount of time spent on the application per customer
6. Average revenue per user

Competition:

Zara’s competitors include H&M, Uniqlo, Gucci, Mango, Everlane, FashionNova and Zara’s biggest threat is H&M , which has over 5000 stores in 70 countries

What makes H&M better?

1.Operates in more locations

2.Has more retail experience than Zara

3.Thrived in difficult situations in different countries

Market Drivers

1. CAGR of 1.53%
2. Ease of predicting future trends
3. Faster technology changes making it easier to streamline

What is happening now?

a. Zara’s main search traffic from YouTube (52%)

b. Direct and search are the top two digital marketing channels driving traffic

c. Average visit duration of a Zara customer is of 7 minutes

d. Average customer bounce rate about 30% Source

Growth strategies

1. Increase marketing channels

• Associate with more distributors locally
• Increase marketing through digital platforms such as Instagram/Facebook
• Promote your products through influencers and celebrities

2. Diversify services and products

• Include services such as salon and spa
• Beauty, pampering and detox sessions
• Train interns for the services
• Include beauty products such as face creams, body creams, hair oils and masks

3. Venture into Educational sector

• Start educational institutions in fashion technology (Zara institution of fashion technology)
• Hire local and international staff/faculty from fashion industry

4. Enter modelling industry

• Build own studios and enter modelling industry
• Train models for the shows
• Tie up with other brands and production houses
• Advertise your products through these models from our own studio

5. Diversify services and products

• Include services such as salon and spa
• Beauty, pampering and detox sessions
• Train interns for the services
• Include beauty products such as face creams, body creams, hair oils and masks

Prioritization and key parameters

Prioritization table

Smart advertising

Zara can Display ads in the YouTube, Instagram content to monetize from the content streaming service on Zara. It can place products available on their platform in YouTube videos or Instagram reels users stream from their app. Users interested in Zara’s products can find relevant information such as brand, type and the size along with the link to purchase the product by hovering the mouse over. This makes the product purchase very convenient and tracking of impressions, CTR and conversions very easy for Zara’s product. Ads can also be personalized according to your past views/purchases and will constantly update based on the time spent viewing the product

Note: Studies show that 50% of ad space is usually not relevant for the customer and that this space can be used to relevant ads by analyzing user’s data to understand user’s context and sentiment, an effective way to increase monetization. Source