Why doesn't Zara need advertising campaigns
If you ask young people in Germany where you can get chic fashion at low prices, you are often sent to Hennes & Mauritz. According to the ideas of the company Inditex from Spain, this will soon change in Germany as well. Who is Inditex? Perhaps you've heard of this fashion house's most famous brand, Zara.
The H&M competitor's numbers are definitely convincing - there are currently over 3,000 stores in 62 countries. With annual sales of EUR 6.74 billion, Inditex has surpassed H&M for the first time. The high sales are not at the expense of the return: The net profit last year was 12%! The stock exchange honors these economic successes with a market value of EUR 22 billion. The owner Amancio Ortega still owns 60% of the shares, making him one of the richest Spaniards. Because he is very public, he is even less well known than his company.
The above-mentioned results appear all the more remarkable when you consider that the Inditex company completely dispenses with classic advertisements or commercials on television. What factors are now responsible for the unstoppable success of Inditex:
- The offer is lucrative. Chic fashion from the catwalks is “copied” and sold at low prices.
- The shops are in the best central location in many European cities.
- In the first growth phase, Inditex benefited from the tourism boom in Spain.
- Most of the production in Spain (and not in Asia) means that Inditex is faster than the competition and is therefore “trendier”.
- Many items of clothing are offered for a limited period of 2 weeks. This encourages customers to report quickly about their bargains and accelerates word of mouth.
- Depending on the region, Inditex offers a variety of options in order to optimally meet the local taste.
- Inditex is strengthening its growth with new brands such as Massimo Dutti (luxury fashion for the “more mature” women and men), Oysho (underwear), Zara-Home (interior decor), ...
Overall, the Inditex success story began very slowly. Only three stores opened in the first four years, 1975-1979. After separating from his partner, Ortega's company grew organically but rapidly. In 1988 a branch was opened for the first time outside of Spain, namely in Portugal. By 2008, Inditex wants the 4,000. Opened business and thus outstripped the global market leader Gap. Germany is to become a growth engine for this. After Inditex bought 28% of the shares in the German company from its equal partner Otto Versand, the “post” is now set to go off here too.
You can read more about this growth story without traditional advertising in faz.net, which has just started a series about strong brands without traditional advertising.
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