The lingerie brand revealed to analysts that it is working on speeding up its design and restocking processes.
“Basically almost all of our panties today are on some kind of speed program,” CEO Sharen Turney said in a conference call. “And those speed programs allow us to read the business on a Monday and be back in stock in the stores within 15 to 25 days.”
They are also working to trim the time between when products are designed and when they hit stores.
“We’ve already taken probably four months out of our development time and believe there is probably another two months to continue to work in,” Turney said.
We’ve seen other brands go to fast fashion like Zara, where they are rapidly expanding while other specialty retailers struggle to get customers in stores.
Why are fast fashion retailers are challenging traditional ones?
“Unlike fast fashion retailers which have buying teams sourcing current trending fashion from third-party vendors, traditional specialty retailers have design teams creating product they believe is going to be trending 12-months out,” the researchers write.
The risk of trying to predict fashion trends a year in advance is weighing on the success of retailers like Gap, Abercrombie & Fitch, Ann Taylor, American Eagle, and others, according to Goldman Sachs.
If retailers miss that fashion trend, it will mean markdowns, which hurts profits.
Zara’s unconventional business model eliminates this risk.
The company’s strategy involves stocking very little and updating collections often. Instead of other brands that only update once a season, Zara restocks with new designs twice a week, reports Suzy Hansen at The New York Times. This is how they keep staying fresh and they lose very little if indeed they miss that fashion trend.
At first, they encourage customers to come back to the store often. It also means that if the shopper wants to buy something, he or she feels that they have to buy it in order to guarantee it won’t sell out.
Zara has already changed the fashion industry.
“They broke up a century-old biannual cycle of fashion,” an analyst told Hansen. “Now, pretty much half of the high-end fashion companies” — Prada and Louis Vuitton, for example — “make four to six collections instead of two each year. That’s absolutely because of Zara.”
Specialty retailers will need to follow suit in order to succeed.
Source: Business Insider