How Melburnians and Sydney siders are embracing the Spanish fashion chain, Zara, in the midst of a retail ‘crisis’…

In order to understand the enormous impact Zara, owned by Spanish corporation Inditex, has had on the Australian retail industry in this ‘doom and gloom’ time we must look back at the official opening of Melbourne’s first Zara store in June of this year.

Hundreds of shoppers queued in freezing winter temperatures (some since midnight the previous night) and cheers roared as the Zara boutique officially opened its doors on the iconic Bourke Street Mall strip.

The Zara chain has 1,900 stores worldwide, two of which are now in Australia. Sydney’s opening was equally as chaotic two months earlier, however, can Zara defy the Australian retail industry and flourish in a time of retail decline?

Purely for research purposes of course, Mkt. staff periodically pop down to the Melbourne store to gauge traffic numbers etc.…and are amazed to report that months after the store opening the boutique is still bustling with fashion savvy shoppers looking for catwalk worthy trends on a budget.

Zara’s philosophy…? Little to no paid for media advertising. As quoted in a recent edition of Marketing magazine, and published in the Harvard Business Review “Zara’s practices may seem questionable, if not downright crazy” and go against its competitors tactics which include heavy media advertising and celebrity endorsement.

How is Zara getting it right and why are they performing so well globally? Most of its manufacturing is high quality, made in Europe, and they offer limited numbers of designs (including best sellers, almost encouraging stock-outs). This leads to shoppers having an overwhelming urge to quickly snap up their ‘exclusive’ pieces as they wont make it to a sale rack…a practice unfamiliar to local Australian retailers.

What can we learn from this as marketers…? Advertising alone is never enough. “Advertising is about building expectations, and telling customers what to expect and what we can deliver. At Zara, we want expectations to come from the in-store experience, and to come from the customers journey and satisfaction from shopping at Zara,” said Jesus Echevarria, Chief Communications Officer at Zara.

Note to the Australian retail industry… start brainstorming ways to build your customers expectations we say!