Zara launches online boutiqueMonday, 06 September 2010
Of Inditex’s eight store brands only one – housewares retailer Zara Home – has sold online. Asked recently about the company’s late arrival to internet retailing, Pablo Isla, chief executive, said: “For us, now is the right time to go online.”
Some analysts venture that Mr Isla, who has made Inditex the world’s largest apparel retailer by sales since taking the helm five years ago, wanted to concentrate on Asian expansion and cost controls before turning to new sales formats. Others point to relatively low broadband and online buying penetration in the Spanish market, which still accounts for about a third of total group sales.
With its focus on fashion-conscious teenagers and young people, Inditex has long used the internet to promote its various lines and corporate image and is also popular on Facebook, where it has 4.5m fans.
Its smartphone application, launched about a year ago, has been downloaded by 2m people. “The internet and the world of social networking are indispensable tools and extraordinary channels for communication and fit perfectly with our group’s philosophy,” said Mr Isla on Wednesday.
Inditex, whose brands also include Massimo Dutti and Pull and Bear, is at the vanguard of computerised ordering and dispatching systems, with managers in each of its 4,700 stores providing daily updates on sales and taste trends.
However, Mr Isla says Zara, its flagship brand, had been waiting for online demand to build before launching into cyberspace.
The fact that clothes are not as easy to sell online as, say, books and music – people generally like to try on garments and there is a high return rate – also made the venture less urgent. He told analysts in July that he expected the web sales service to be “complementary”, rather than cannibalistic.
Analysts are upbeat about the possible impact of internet sales on Inditex’s results, with some suggesting a 10 per cent boost to next year’s profits. Group net profits were €1.3bn ($1.7bn) in 2009, up 5 per cent year on year, with Zara accounting for about one-third of group sales of €11.1bn in the six countries where online sales begin on Thursday.
Inditex said on Wednesday that all items on sale at its Zara outlets would be available online and at the same prices. Customers can choose from the usual range of paying methods and opt either for a free store pick-up or paid-for postal delivery.
The online return and exchange policy is identical to the store system, with shoppers given 30 days to change their minds. Queries will be handled by customer service operators or via e-mail or chat messaging.
Inditex said on Wednesday that iPhone and iPad applications that allowed purchasing would “soon be available”.
Image: Zara Fall10
Source: Financial Times