Zara owner Inditex ramps up digital assault
The window of a model Zara store in Arteixo, in north
-
west Spain, is
curiously empty.
That is, until you point your mobile phone at it and load up the Zara app.
Then it springs to life on the mobile screen with augmented reality images of
models wearing the fashion chain’s latest designs. Customers can click
through on the
app and order the clothes online.
The technology, which launches in 120 stores later this month, may seem like
a gimmick, but it is just one example of how Zara’s owner Inditex is ramping
up its online efforts amid changing consumer habits and the threat
of nimble
online
-
only retailers targeting millennials.
The accelerating shift towards internet shopping, combined with increased
competition from online entrants such as Asos, Zalando and Amazon, has
wrongfooted many of Inditex’s rivals
—
most notably H&
M Hennes &
Mauritz.
The Swedish company last week reported a 60 per cent slump in first
-
quarter
profit after a 32 per cent fall in the fourth quarter. H&M chief executive Karl
-
Johan Persson admitted “mistakes” by not adapting fast enough to the web.
Indi
tex is the world’s largest fashion retailer by sales and considered best
-
in
-
class in terms of its bricks
-
and
-
mortar operations by analysts. It is
determined to avoid the problems dogging H&M, while maintaining its
dominance as consumers shift online.
With
eight brands including Pull & Bear, Massimo Dutti and Zara Home,
Inditex launched online relatively late in 2010, say analysts, but has since
been using its size and market heft to grow fast.
“Inditex has been pushing hard into online and with a lot of s
uccess,” says
Anne Critchlow, retail analyst at Société Générale. “It has quickly launched
free returns as well as next day delivery, and is powering ahead.”
Last month, Inditex revealed the fruits of this labour for the first time: online
made up 10 per
cent of its €25.34bn group sales in 2017 with 41 per cent
year
-
on
-
year growth.
Monday, 16 April 2018