How does Zara survive despite minimal advertising?

Zara is known for capturing fashion trends from the catwalk and putting them into their global store network quickly. However, unlike many other fashion retail giants, it doesn't rely on promotional marketing or advertising. So how does it still grow?

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Zara

There’s no doubting Zara’s status as an international fashion retail giant.

The fast-fashion experience it provides could be one of the many reasons why it has consistently remained popular among consumers worldwide, especially those who constantly seek the latest fashion trends.

However, there is much debate on whether Zara advertises much. After all, how does a retailer survive without advertisements? And if Zara doesn’t advertise, how does it keep up with its main competitors – namely H&M?

“Here’s what makes Zara truly unique: the company only spends about 0.3 per cent of sales on advertising, and doesn’t have much marketing to speak of,” Pietro Barbieri-Hermitte, planner at customer engagement agency TMW Unlimited, told Retail Gazette.

One of Zara’s key strengths, according to Barbieri-Hermitte, is its ability to put its customers first and its determination to receive customer feedback.

“Asking for customer feedback is more than lip service at Zara,” he said.

“When a customer says she loves (or hates) an article, this gets reported back to headquarters, and communicated to in-house designers, who apply the feedback to future work.

“And its store managers are far from minimum-wage employees. They’re experts in fashion and observation, and are taught how to pay attention to what customers are saying and doing to reflect what moves the brand needs to make next.”

“Zara only spends about 0.3 per cent of sales on advertising.”

Barbieri-Hermitte added: “By including customers in the design and improvement process, Zara builds massive brand loyalty.”

Rodrigo Perez-Vega, a lecturer from Henley Business School, elaborated further on the way the Spanish retailer used its stores as a source of information.

“This is a smart strategy, as it is harder to replicate by competitors,” he told Retail Gazette.

“It would require a change not only in their marketing communications strategy but also in their supply chain management and might be beyond the scope of many marketing managers behind other high street brands.”

It could be argued that Zara’s success can be credited with its store locations, as many are situated in city centres where footfall is consistently high. And while it is a fast-fashion brand, its stores are usually located in places where high-end shoppers are likely to visit.

Seb Dean, managing director of Imaginaire Digital, agrees with the store location strategy.

“This, coupled with their products which look premium, with the high street price tag, is likely what powers their marketing as people are likely to ask where their customers have bought items of clothing,” he said.

“It’s clearly working, their brand name gets over one million searches per month in the UK.”

It could also be argued that Zara gets away with minimal advertising thanks to its reputation. Either way, the fashion retailer still invests marketing and advertising despite the belief that it doesn’t at all. Nonetheless, it usually depends on social media to accelerate sales, rather than traditional forms of advertising such as billboards or magazine adverts.

“Before most brands had embraced social media… Zara was already building up significant fan bases and investing in high quality social content.”

Senior account executive at W Enterprise, Georgina Ince, believes Zara’s advertising efforts are limited, which is what helps it stand out from its main competitors.

“Zara embraces the luxury brand ethos ‘less is more’, with most of their content displayed through images and videos on their website and social,” she said.

The Inditex-owned retailer was one of the first in the fast-fashion industry to invest in building a sizeable online fan base. It currently boasts over 30 million Instagram followers and 28 million Facebook fans. Alistair Green, chief strategy officer at creative agency Studio Blvd, said this was evidence that Zara was a pioneer in its use of social media and influencers.

“Before most brands had embraced social media as a platform that could tick all the boxes – reach, frequency, engagement and purchase – Zara was already building up significant fan bases and investing in high quality social content,” he told Retail Gazette.

“That has put Zara in the position that their owned social channels are really the only channels they need to use and invest in.”

Green added: “Zara invested in high quality online content while most other brands were under the illusion that online content could be done quickly and cheaply while traditional print and TV still required huge budgets.

“Zara also was the pioneer in influencer marketing, using influencers and their reach and engagement potential before most other brands, they now focus on using influencer models as the traditional influencer marketing approach has become saturated.”

Indeed, marketing from social media influencers may be one of the most critical ways in which Zara partakes in advertising. It’s also arguable that the recent rise of Instagram shopping has made things even easier for the brand, especially how users can now use the platform to “swipe up” or click through “shoppable” images to purchase a featured item straight away when pops up while viewing a story or as a post on the discover page.

Edward East, founder of influencer marketing agency Billion Dollar Boy, said: “If a TV campaign drives people into the store, influencer marketing delivers those shoppers right to the checkout. It has become window shopping 2.0.

“Zara also was the pioneer in influencer marketing.”

“Shoppers can be inspired by their favourite fashion consultants and can go from seeing a product to learning about it, to choosing to buy and then actually buying it in just a few clicks.

“Everything is being driven towards driving sales in a way that more traditional approaches struggle to do.”

Jen Musgreave, strategic insight director at marketing agency RAPP, said Zara’s advertising also extends to customers’ email inboxes.

“They are a digital brand in the same way that Asos is: they subvert digital channels to do the awareness job that other brands use ATL advertising to do (press ads, posters),” she said.

On the flipside, experts have argued that there is an imbalance in terms of how much both fashion and luxury spend on print advertising compared to how consumers shop. Tom Holt, chief executive of consumer strategy consultancy Pragma, said this was outdated for the common consumer journey, which often starts digitally.

“For Zara, a brand that prides itself on turning around key fast fashion trends, printed media lead times are often too slow,” he told Retail Gazette.

“They need the immediacy and the impact of the Instagram influencer to reach their audiences, while items are still in stock.

He added: “Creating seasonal must-have items also adds a scarcity affect, which is a perfect storm on social media.”

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