Marketing Communication – Strategy

H&M and Zara, are well known reputed fashion designing and manufacturing companies in fashion industry. They are two of the world’s largest fashion retailers and engaging in fast fashion market.

Fashion product may have a shorter product life-cycle and fickle consumer preferences. And the fast fashion market is the market closest to the latest trends. The process time of products, which from design to manufacture and on sell, is shorter and products can be sold at a relative low price. Fast fashion targets the mainstream consumers who want to be able to buy the things celebrities are wearing or be able to buy into trends that may see from the catwalk as soon as possible. H&M and Zara are typically fast fashion brand.

ZARA

Zara has spread a common concept of fast fashion. New style ranges are frequently introduced in market and thus Zara is moving parallel to market trends. Zara has an efficient and continuous communication system with its customers and thus changes in markets and streets flow directly to the designers and this information is depicted to be used in next range of designs.

Such rapid and fast paced response has created competitive advantage and other companies that take six months to take a design from idea to realization form are now moving towards this continuous and consistent communication with market. The basic concept behind this strategy was to stay in contact with the customers, the real target of a company, taking their feedback and then changing the products according to the demands. Zara is successful in creating an edge for itself and dominating its competitors as no other firm can reach this level of fast delivery of inventory in store. Zara has focused customers with short term needs and the reason behind was to minimize the operating capital.

What sets Zara apart from many of its competitors is what it has done to its business information and business process. Rather than concentrating on forecasting accurately, it has developed its business around reacting swiftly. As far as finished garments are concerned, rather than forecasting, it just quickly produces the least amount possible of what is hot with consumers, and moves to the next hot style fast. With its range of clothes constantly being updated, one or two slow-selling items are unlikely to hurt profits. Customers are also more likely to visit its shops regularly to see new stock.

H&M

H&M offers two main collections each year, one in spring and one in fall. Within each season, there are several sub-collections so there are always new products in the stores.  The main collections are the traditional long-lead items, and the sub-collections are the trendier items with short lead times. It relies on understanding what their customers want and have built systems for identifying consumer preferences.

Zara may have a slightly faster lead time, but H&M uses a different strategy. Apart from the fast fashion product, some products with long-lasting and ongoing styles have not yet tried by the company and are a domain where customers are still willing to pay. There is a market segment that needs stylish fashionable clothes over a longer period of time. That is same style, with a brand name and renowned design of that particular brand. So, introducing some designs that change over a period of a year or six months and that remain available throughout the year can open a new dimension for business.

Around one quarter of their stock is made up of fast-fashion items, but they also keep a large inventory of basic, everyday items sourced from cheap overseas, mainly Asian, factories. For this reason, we feel that H&M will be more appealing to the masses in the teen and young adult segment. Some consumers might be afraid to go too fashion-forward, so those that have a more reserved style may also find something at H&M.