Trader Joe’s specializes in being an affordable gourmet store. They eliminate the middle man by producing their own foods with vendor partners. If the food does not meet their quality standards, they have no problem with axing it or making it unavailable until they find a new partner. They carry very few brand names and will often carry a brand name until they can clone it to their standards (like Nutella). The shocking thing is that the industry average for product development is 9 months. Zara is rumored to be able to develop a product and get it to market in 2 weeks. When I first read about Zara, I thought not only is this a fantastic model, but it is a lot like Trader Joe’s.

Zara’s founder, Armancio Ortega, had a dream. He wanted to knock the fashion world on its ear with the idea of “instant fashions”. In retail, attempting to predict what consumers will buy is a difficult road that often leads to unsold inventory. Ortega wanted to spot the trend, get it to his design team and have it distributed to his stores. This way he would always be sure to have the things in his store that would be appealing and sell. Trade Joe’s keeps people coming back by carrying the foods that people demand at reasonable prices. They do not bloat their inventory with products that they are not interested in carrying. Zara is similar. They only carry what they think they can sell. Mark-downs account for a very low percentage of their sales.

Zara uses technology to gain a competitive edge. They track daily quantitative metrics such as orders and sales trends and use qualitative methods to uncover product buzz. The headquarters, which is the home of the designers, is in constant contact with the stores to keep in touch with what is hot so that they know what is working and what they should be producing next. Technology and analytics in action! Delicious!

It is one thing to read about Zara, it is another to experience. After reading case studies, blog posts and even a Harvard Business Review article, I was excited to learn that there are now two newly-opened stores in my area. I went to one over the weekend. I immediately thought that it felt like a combination of Nordstrom and H&M. They have both business and casual attire and there is a certain attention to detail without making any of the fashion over-the-top. Sizes run a size smaller for Americans and feature primarily athletic cuts. I did run into a problem with a shirt that I liked not being available in my size, but I found enough things there to keep me busy. Also, I expected the prices to be ridiculous, but they were incredibly reasonable. I felt like it was a place that I could keep coming back to to keep my wardrobe current. I’m sure that’s exactly what Armancio Ortega had in mind.

What is your experience with Zara?