Nestore's blog

Innovation at the heart of Zara's strategy

In 2022, the brand's profits were more than 4 billion euros, with an increase of 27% compared to 2021 . Remarkable growth even though the point-of-sale experience is, most often, the perfect example of all the possible points of friction in store: sales staff rarely available (one even wonders if antipathy is a recruitment criterion), endless queues in cabins and at checkouts or even permanently disordered shelves. If the negative points of the experience do not seem to repel consumers from the brand, imagine its level of performance if it improved its customer experience! And Inditex has understood this well.

An extensive store network to test and offer a new customer experience

Member brand of the Inditex group (Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home), Zara in France has: 111 physical stores and 1.278 billion euros in turnover.

On April 8, 2022, Zara opened its large flagship laboratory in Madrid. Between luxury codes, shop in shop and technological innovations... A year later, it was in Paris that she drew conclusions from her Madrid store.

Although the brand has been at the heart of numerous scandals in recent years (the exploitation of Uighurs, we do not forget), we are forced to recognize that it constitutes a juggernaut on the ready-to-wear market ( and fast fashion).

So, if we try to ignore its production practices, and focus more on its retail strategy, we find some interesting points. Illustration with its new flagship on the Champs-Elysées.

Flagship definition: more than a point of sale, a brand showcase

Flagship here, flagship there…we get a little lost in all that. So, for those who are wondering what the difference is with a simple store, or taking stock of the definition of a flagship. 👇

A bit like the flagship of a brand , the flagship plays the role of main store. It thus becomes the showcase of everything the brand does best in terms of customer experience. The crème de la crème of salespeople, the best of technology at the customer's service, the best of its product and service offering and even merchandising worked down to the smallest detail.

In short, the flagship is a real operation to seduce customers. Originality, memorable experience and differentiation effect are the key words.

And in this matter, luxury brands serve as an example. Ralph Lauren , Dior , The Kooples and Jacquemus all have common denominators: a premium location, refined and minimalist spaces, an enriched product and service offering and a personalized experience.

Codes that mass market brands have adopted to improve their image and play the role of luxury brand (hello H&M , Uniqlo and of course Zara ).

The customer experience at the new Zara Champs-Elysées flagship: decryption

Let's talk little, talk well, and see what happens directly on the premises of the Zara flagship on the Champs Elysées.

The Champs-Elysées: a premium location and a tourist clientele

People in all directions and a melting pot of tourists loaded with shopping... No doubt, we are on the Avenue des Champs-Elysées! And for the Zara brand it's a double: a store at number 92 and a flagship at 74. Caprice or masterstroke?

At a time when the ready-to-wear sector has been shaken for several months , with a succession of store closures, liquidations or receiverships (Camaïeu, Go Sport, Gap, Kookaï, San Marina etc.), weakened by inflation, but above all by their inability to adapt to new consumption patterns, Zara shows no sign of weakness and even shades the news.

Wider product offering, new strategy for social networks, proposition of additional services or even new store concepts, the brand has been able to “recreate desirability” for its brand with more premium codes, straight from luxury.

Dedicated corners and spaces to streamline the customer journey

If the risk of cannibalization with the store at 92 Champs Elysées seems quite high, we are forced to recognize that once inside, the brand holds its place on the most beautiful avenue in the world.

Vast space of 2,700 square meters, huge bright screens, premium materials, light tones and lighting… everything takes us back to the codes of luxury . Without forgetting the presence of mini lounges with armchairs for its corner dedicated to shoes; marble displays for its accessories and perfumes area or even a corner dedicated to lingerie.

In short, merchandising directly inspired by the showrooms of luxury brands, as Sézane and Balzac Paris did before her. If there was nothing surprising in this for these DNVBs, already capable of bringing their community together around a philosophy of life and values, for Zara, we let ourselves be surprised by its capacity as a fast food brand. fashion to take up the codes of luxury, including with a price repositioning.

Gone are the days when you could buy Zara dresses for €19.99, with items now often well over €40. And not sure that this increase is justified by better sourcing of its raw materials and better remuneration of its workforce. For our part, we focus more on the use of cognitive biases on the perception of product value/price.

Technological innovations at the point of sale and customer use to be strengthened

New technologies at the heart of Zara's strategy were already being talked about in 2018 but at the time it was ephemeral. Not anymore !

Far from being left to chance, its point-of-sale digitalization strategy is above all a way for the brand to respond to points of friction in the customer journey in store and shopping cart abandonments. Items that cannot be found on the shelves, sellers rarely available to customers, an endless wait to collect your order (or how to lose all the advantage of click and collect), not to mention the hell of the fitting rooms.

As a result, its Champs-Elysées flagship is a cradle of technological promise :

• QR codes to more easily locate the different departments on a store map;
• The possibility of reserving, from its mobile application, a fitting room and products, or of checking their location and availability;
• More than 40 cabins equipped with an RFID terminal, capable of recognizing the number of items selected by the customer;
• 25 second generation automatic checkouts, tested in stores in Madrid and London.

If on paper the promise is good, in reality we can say that the experience is rather disappointing. No sign of a QR code or mobile application serving the experience... but indeed the classic pattern that we can see in other stores.

A fact that cannot be denied: the presence of automatic checkouts to streamline checkout and limit queues. Enough to cry out for digitalization and innovation? In reality, it will take more to surprise us.

Many salespeople but little involved in the in-store customer experience

If I tell you “Zara seller”, what do you think of? We see your little smile, we may tend to believe that their primary mission is to avoid any contact with the consumer and above all not to smile at them (it's free).

In fact, Zara salespeople are simply not trained to sell or advise but rather to keep the store's products organized. Customers are now 100% autonomous in their experience.

Everyone is aware of it, and there was a kind of acceptance around this experience. As for the wait in the cabin and the difficulty in finding a product elsewhere. But with a view to improving the customer experience , in this new Zara flagship, we were promised a more personalized experience.

Failed, we find the same team as at 92 avenue, no more trained to be ambassadors.

Omnichannel services and experience, between attempt and success

The Zara experience also means ordering on the internet, trying it on at home, and then returning it to the store. We won't deal with Zara logistics here, but we can imagine hell pretty well.

Anyway, back on topic. One of the motivations for consumers to buy online is ultimately to avoid all the points of friction mentioned above, including queues. Ironically, they still have the right to queue at the counter if they want to collect or return an item... Good god, how Zara manages to retain its customers.

Recently, Zara has been trying to improve its omnichannel experience by creating a special counter for customer returns and another for collecting online orders. Rather practical for the field team. And on the client side? The queue is ultimately longer for withdrawal than at a traditional checkout (hello new habits)... One wonders if we will one day see shops dedicated to withdrawals emerge...

Zara, the undisputed king of ready-to-wear?

A point-of-sale experience that is still just as irritating, prices that are ultimately not so attractive, production methods that are still just as questionable... how can we explain the craze for Zara? If we draw a parallel with other ready-to-wear brands, such an experience would have already scared away customers a long time ago.

But then, is it only the products that attract consumers? Between the legacy of a success built over the years, the strength of its point of sale network , the capacity for innovation or loyalty or simply the lack of competition capable of making its mark... we still wonder about the reasons for its success .

‍