A page from Zara's playbook


To enjoy strong market share and customer advocacy, companies in any industry can take four lessons from Zara.

Invest in digital tools to glean critical customer insights

Firms of the future will increasingly rely on automation to deliver customer intimacy. Zara’s automated replenishment system uses point-of-sales data to accurately forecast local consumer demand by style, color and size. The system also shares real-time inventory updates with the production team to influence design decisions. In addition, Zara carefully tests these decisions on consumers. The retailer releases minicollections in between traditional seasons and collects data to gauge shoppers’ changing preferences.

Combine advanced analytics with qualitative data

Leading firms supplement big data with human intelligence from frontline interactions with customers. Zara’s clear communication lines from customer to store managers to production teams ensure that feedback makes it to the top, no matter how large the firm grows.

Provide speedy corrections to system-generated decisions

Along with human input, firms relying on automation and data-driven operations will need quick response times to prevent costly mistakes. Zara’s supply chain is designed to react rapidly to human override. This protects the company against data errors, as in the Cape Town store opening, or external circumstances that affect consumer behavior. For example, in countries that observe Ramadan, store hours and inventory are manually flexed as shopping activities fluctuate.

Develop a repeatable model for customer intimacy

In the next decade, some businesses will create enormous variety, tailoring each offering carefully to target customers. Zara not only targets consumers through data-supported inventory, but also through its repeatable model for local expansion. When Zara opened in France in 1990, it started with a flagship store in Paris to develop an understanding of local shoppers. Only after it gained sufficient experience in local operations did it continue to expand, reaching 128 stores in the country by 2018. Zara has employed this model again and again to reach shoppers in more than 90 countries.

As the pace of change continues to accelerate, the most successful firms will balance scale and customer intimacy—and deliver them better and faster than their competitors. Like Zara, these insurgents of the future will rely on technology and critical talent to achieve customer advocacy and leadership economics in their industry.