Abstract
This chapter will address the issue of online sales in the fast fashion sector, specifically Zara, the flagship brand of the Inditex textile group. Since 2012, Zara has been working on a plan to close, restructure, and optimize its physical shops, a process that was accelerated in 2017, and which has been affected by the global pandemic that began in early 2020. These two events have caused online sales to exponentially rise with, in turn, the percentage of returns. This is the objective of this chapter: to analyze where Zara is in terms of online sales and returns and how, through digital marketing and the application of tools such as big data, it can reduce the large volume of online returns that it has to deal with.
TopTheoretical Framework
Since 2012 Zara has been working on a plan to close, restructure and optimize its physical shops, a process that was accelerated in 2017 (Contreras, 2019), and which has been affected this year by the global pandemic.
In June 2020, three months after the pandemic broke out, with the consequent temporary closures of shops around the world, Inditex announced a loss of 409 million euros in the financial year from February to April of the same year. It was the first time in the group's history that it made a loss. Consequently, the plan was accelerated and it was announced the closure of between 1,000 and 1,200 shops worldwide during 2020 and 2021, and the opening of another 300.
With these closures and openings, the aim is to gain in sales area but reduce the number of shops, thus continuing with the plan to update the spaces already defined in 2012, where larger shops with a greater possibility of customer flow, spaces already prepared and designed to work with the latest commercial integration technology, and of course, always under the concepts that define their shops and online platforms: beauty, clarity, functionality, and sustainability.
With this plan, the company also announced the investment of 1,000 million euros to boost online sales so that they account for 25% of the company's total sales, through a strategy of anticipation of digital transformation. And 1,700 million euros to update the integrated platform from which the shops, the head office and the distribution centers work, its own technological base called Inditex Open Platform (IOP), which is being updated and on which all the company's digital operations are carried out, from orders and distribution management, inventories, purchases, etc. (Neira, 2019).
The company's objective with the implementation of this plan is to advance the total implementation of the so-called integrated shop, a concept in which the customer can have a continuous and permanent link with the shop, wherever he is, whenever he is, and from any device.
Key Terms in this Chapter
Ecommerce: is the sale of goods and services through the Internet, requires companies to tailor their business models to capture Internet sales.
Big Data: refers to massive complex structured and unstructured data sets that are rapidly generated and transmitted from a wide variety of sources. Will play a key role in the future of fast-moving industry like fashion (Kim & Lee, 2018).
Internet of Things: IoT refers to management and collection of daily use data from connected devices. This also includes order and identification of new features that help personalize and offer new products and services and to create new needs (Saura, 2020).
Cross Selling: is a technique that offers or shows the customer products related to each other, it is widely used in ecommerce as it is very easy to apply it in a very visual way on the web.
Omnichannel retailing: omni-channel means establishing a presence on several channels and platforms and enabling customers to transact, interact, and engage across these channels simultaneously or even interchangeably.
Marketing Strategies: a business's overall game plan for reaching prospective consumers and turning them into customers of their products or services.