Zara: Retaining product integrity

In a market plagued by overstock and consequent persistent promotions, protecting margins where possible is integral for survival in fashion retail. So how does one of the leaders in the market enhance the probability of full-price sell through in the most discount heavy week of the retail year – Black Friday?

Unlike other retailers, Zara restricts marking down in the lead up to Black Friday, limiting discounting until the day itself. The retailer is also selective in regards to categories it discounts, avoiding the blanket discounting that has plagued the market, turning the attention to particular categories it knows its consumer has demand for.  In doing so, Zara demonstrates belief in product, limiting discounting and fueling full-price sell through.

When comparing the retailer’s strategy across both the UK and US, it is evident that Zara demonstrates a localised approach, discounting more categories in the US than the UK despite carrying the same scale of inventory due to Black Friday’s proliferation in the US.

Zara’s sale success is due to its time-bound and selective strategy, generating hype and pent-up demand for selected items to come on discount. Limiting the time of sale not only generates a time bound exclusivity, creating a sense of urgency for consumers but also signals integrity of product, contributing to long term positive perception for the Zara brand as well as protecting margins.

You won’t know what your competitors have up their sleeve for this November, but seeing what they did last year can help you prepare. We’re offering exclusive reports from our daily e-commerce platform, Instock, to help you benchmark strategies against competitors.

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