Zara, the lion’s share of the Inditex Group, the world’s biggest apparel merchant by sales, is considered a master at fast-fashion, churning out catwalk-inspired looks via a sourcing model that is the envy of its runway-to-rack rivals.
But it’s a latecomer to the ship-from-store retail movement.
Following in the footsteps of retailers from Walmart and Target to Macy’s and J.C. Penney, Zara will convert 2,000 stores in 48 countries to fulfill online orders in an effort to reduce out of stocks on e-commerce orders, boost sales of full-priced items, and better compete with the speed and convenience of Amazon, which is quickly gobbling up apparel market share, the Wall Street Journal reported.
Retailers have been scrambling to wring profits out of online sales, which notoriously crush margins.
Now the big merchants are working to transform what had once been considered a liability in competing against online retailers — unencumbered by store-operating costs — into an asset: their fleet of physical locations.
Zara’s ship-from-store program also coincides with shoppers’ mounting demand for faster and faster delivery, including same-day delivery and even two-hour delivery.
The argument for ship-from-store posits that retailers with a critical mass of stores can deliver online orders from a location near a shopper’s home more quickly than is possible from a limited number of far flung warehouses.
And they can theoretically do so more profitably. Ship to store holds the potential to not only deliver orders faster but also reduce shipping costs for retailers.
The ship-from-store push supports accelerating growth of Zara’s online business: Zara.com went live in India, Thailand, Malaysia, Vietnam and Singapore in 2017, and in Australia and New Zealand this year.
At Inditex’s annual general meeting last month, Pablo Isla, CEO, dubbed the company’s integrated store and online model the “strategic cornerstone” of the retailer’s sustained growth.
The model is laying the foundation for what he called “100% customer focused” innovations.
These include same-day delivery service in seven cities (Madrid, London, Paris, Istanbul, Shanghai, Taipei and Sydney); a next-day delivery option available in Spain, France, the UK, China, Poland and South Korea; new automated in-store pick-up points for orders placed online; and plans for the integrated management of stock in all 48 of the markets where Zara has an online presence by the end of 2018.
“All of Inditex’s brands benefit from a robust integrated store and online platform,” Isla said.