Le blog de Nestore

Innovation at the heart of Zara's strategy

In 2022, the brand's profits were more than 4 billion euros, with a increase of 27% compared to 2021. This remarkable growth even though the point of sale experience is, more often than not, the perfect example of all the possible points of friction in stores: sales staff that are rarely available (we even wonder if antipathy is a recruitment criterion), endless queues in booths and at the cash register or even permanently disordered shelves. If the black spots of the experience don't seem to repel consumers of the brand, imagine its level of performance if it improved its customer experience! And Inditex understood that.

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

Brand member of the Inditex group (Pull&Bear, Massimo Dutti, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home), Zara in France is: 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 the conclusions of 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 is a juggernaut in the ready-to-wear (and fast fashion) market.

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

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

Flagship here, flagship there... we get a bit lost in all this. So, for those who are wondering what the difference is with a simple store, let's take stock of the definition of a flagship. 👇

A bit like the flagship of a brand, the flagship acts as the main store. It thus becomes the window for everything. What the brand knows how to do best in terms of customer experience. The crème de la crème of salespeople, the best technology at the service of the customer, the best of its product and service offering or even merchandising worked down to the smallest detail.

In short, the flagship is a real Seduction operation with customers. Originality, memorable experience and a differentiating effect are the key words.

And in this area, luxury brands serve as examples. Ralph Lauren, Dior, The Kooples or 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 retailers have adopted to improve their image and play it: luxury home (hello) H&M, Uniqlo And of course Zara).

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

Let's talk little, let's talk well, and let's 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 every sense and a melting pot of tourists busy shopping... No doubt, we are on the Champs-Elysées Avenue! And for the Zara brand it's a double: a store at number 92 and a flagship at 74. Caprice or master stroke?

At a time when the ready-to-wear sector is Shaken for several months, with a succession of store closures, liquidation or receivership (Camaïeu, Go Sport, Gap, Kookaï, San Marina etc.), weakened by inflation, but especially by their inability to adapt to new consumption patterns, Zara shows no signs of weakness and even nuances the news.

Offering a wider product range, a new strategy for social networks, offering additional services or even new store concepts, the brand was able to “recreate attractiveness” for its brand with more premium codes, all inspired by 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 own on the most beautiful avenue in the world.

A vast space of 2,700 square meters, huge bright screens, premium materials, light colors and lighting... everything refers us to Lux codese. Not to mention 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 straight out of showrooms of luxury brands, as did Sézane or Balzac Paris before her. While 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 are surprised by its ability as a fast fashion brand to take up the codes of luxury, including with a repositioning of prices.

Gone are the days when you could buy Zara dresses for €19.99, with items now often well above €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 rely instead on the use of cognitive biases on the perception of product value/price.

Technological innovations at the point of sale and their use by customers to be strengthened

New technologies at the heart of Zara's strategy, We were already talking about it in 2018 but at the time it was for the short term. Not anymore!

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

As a result, its flagship on the Champs-Elysées is a Cradle of technological promises :

• QR codes to more easily locate the various departments on a store map;
• The possibility of booking, from its mobile application, a fitting room and products, or to check 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 2nd generation automatic cash registers, tested in stores in Madrid and London.

If on paper the promise is beautiful, in fact we can say that the experience is rather disappointing. No QR code sign or mobile application at the service of the experience... but indeed the classic pattern that can be known in other stores.

A fact that cannot be denied: the presence of automatic cash registers to facilitate the checkout process and limit waiting lines. Enough to cry out for digitalization and innovation? In reality, it will take more to surprise us.

Salespeople in number but not very involved in the customer experience in stores

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

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

Everyone is aware of that, and there was a kind of acceptance around the experience. As for the waiting in the cabin and the difficulty in finding a product elsewhere. But in a in order to improve the customer experience, in this new Zara flagship, we were promised a more personalized experience.

Missed, we find the same team as at 92 de l'Avenue no longer trained to be an ambassador.

Omnichannel services and experience, between attempt and success

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

In short, let's get back to our sheep. Finally, one of the motivations of consumers to buy online is to avoid all the points of friction mentioned above, including waiting lines. Ironically, they still have the right to queue at the counter if they want to pick up or return an item... God, how does Zara manage to retain its customers.

Recently, Zara has therefore been trying to improve its omnichannel experience by creating a special counter for customer returns and another for withdrawals of online orders. Rather practical for the field team. And on the client side? The queue is finally longer at the checkout than at the regular cash register (hello new habits)... It makes you wonder if we will ever see the birth of shops dedicated to withdrawals...

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

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

So, are it just the products that are holding consumers back? Between the heritage of a success built over the years, strength of its point of sale network, the capacity for innovation or loyalty or simply the lack of competition capable of matching the weight... we are still wondering about the reasons for its success.

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