Carramba! Does Spain have the answer to our rag trade pain?

Melbourne Herald Sun, Friday July 22, 2011

A winter weekday in Bourke Street can be deathly quiet as shop assistants lean on the counters of fabulous department stores hoping for business. No wonder their managements are bewailing the drop in retail sales this past half year.

But wait a minute. One store is bustling with customers. Young and old, women and men, dart in, check out the racks, pick an item, try it and buy it. The card swipers hum with warmth as the transactions flow through.

Can it be? Ah yes. It’s Zara. The newly-opened store that proved from its first day that there’s nothing wrong with Australian retail that good products and marketing can’t fix.

Zara is smart marketing, nothing more. The designs are fresh, current - but not over the top. The manufacturing is good quality, both fabrics and finish, but nothing exotic.

The prices are: “Hmm I like this - and I can just afford it”. Not Swanston Street bargain basement, but not Collins Street boutique either. They fit comfortably within the paypacket’s disposable income segment.

Since he started in 1975, Amancio Ortega knew his customers intimately. He understood what they wanted, how much to charge, their desire for freshness and innovation - without theatrics. He now provides this to 5157 stores in 81 countries. And that’s not counting online.

But you don’t get the feeling that your item is off the production line. Zara make their garments in fairly small batches, for example 30,000 jackets with blazer buttons. By the time they have been divided between 5000 stores worldwide, you’re pretty safe to think that you won’t run into another one at tomorrow’s event.

Styles are changed quickly. Customers learn that if they don’t buy it now it won’t be there next week. This creates a “grab it while you have the chance” spirit in the store.

Staff are encouraged to report requests. There is a system that passes the information to their huge design section at company headquarters in Arteixo, north-west Spain.

Sometimes the choices find their own fame, like the $75 blue dress recently donned by Dutchess Kate and instantly flashed around the world. In fact Ms Middleton is very much the typical customer Zara are targeting. Or was, until a couple of months ago.

So what is it about our Spanish newcomer that causes other retailers so much grief? It’s certainly not million-dollar advertising campaigns. Most of what they have achieved in the past few months in Sydney and now Melbourne has worked through word of mouth. Which was enough to have crowds on the pavements waiting for the first opening day.

It’s not innovative design - a big world-wide complaint has been that they cherry-pick the best ideas of other designers and quickly created their own versions.

But speed is important. They can spot a trend and hit it quickly. What would take other designers half a year, they get done in two months. Draw up a design, find the fabric, cut, sew, and put it out into the supply chain to stores all over the world.

And having done it once, they discard the design and start working on the next one.

This store has pinpointed the modern soul. They have understood that these are the days of instant gratification via the web. Instant communication through twitter, “How do you like my new dress?” on Facebook with photo taken minutes before with the mobile phone.

Today’s consumer is fed a continuous tide of entertainment, concepts and visuals through phones, freeview, cable and internet. Fashions change with the blink of an eye.

Businesses, too, have to learn a new speed and nimbleness in what they provide and how they respond. Maybe Zara is telling us that the prep-a-porter fashion showings six months ahead of the season just aren’t on any more. There’s a whole new product cycle coming through.

Certainly if you are looking for an example of who’s doing it right, you’d better go loiter in the Zara store for an hour.

ray@ebeatty.com