The buyer model has gained widespread popularity around the globe, revolutionizing traditional enterprise models with its simplicity, efficiency, sensitivity, and professionalism. Companies that embrace this model are unified by a core principle: all operations and developments revolve around buyers and the services they receive. Only by deeply understanding and meeting buyer needs can businesses truly capture the market and connect with consumers. This chapter explores how leading global fashion brands like ZARA and GAP have leveraged the buyer model to thrive, evolve, or even rise from weakness to strength.
ZARA’s continued success has been nothing short of remarkable. In 2005, rumors of ZARA entering the Chinese market sent shockwaves through the local apparel industry, leaving many professionals both intrigued and apprehensive. What makes a clothing brand capable of instilling such fear in established players? Let's look at some impressive data:
On February 23, 2006, ZARA opened its first store in Shanghai, and on its opening day, sales exceeded one million yuan—equivalent to the total daily sales of 100 Chinese clothing stores combined. While the average inventory turnover for domestic brands takes 180 days, ZARA can design and deliver the latest trending clothes to Chinese consumers in just 7 to 12 days. Additionally, while most domestic apparel companies enjoy profit margins of only 5% to 6%, ZARA sells garments costing as little as 20 to 30 yuan for hundreds or even thousands of yuan, achieving profit margins that can reach tens or even hundreds of percent.
This is an astonishing difference. ZARA’s cost structure for each item can be broken down as follows: fabric costs (6–8 yuan per meter) + production costs (around 8 yuan for Chinese-made garments) + shared operational fixed costs (estimated at no more than 5 yuan per item), totaling approximately 18 to 25 yuan. Most items in ZARA stores rarely exceed 25 yuan, though high-end fabrics may cost more. However, the average retail price is at least 80 yuan, with some items reaching into the thousands. Notably, even the most expensive pieces still cost less than 100 yuan to produce.
Compared to domestic competitors, ZARA’s greatest advantage lies in its buyer-driven model. This approach allows it to be agile, flexible, and highly responsive, making it difficult for rivals to keep up. So, how did ZARA use the buyer model to grow rapidly and become the world’s top clothing retailer?
Product development is the heart of any apparel company, and ZARA has mastered this process. By focusing entirely on buyer needs, ZARA ensures its designs remain relevant and in demand. This buyer-centric development model is key to its success.
Here’s a brief overview of ZARA’s buyer development model:
First, ZARA store staff gather input based on customer demand and the products needed for the next quarter, submitting their requests to regional buyers. These buyers then refine and consolidate the plans before sending them to the headquarters.
Next, the headquarters buyer analyzes the plans, sets the direction for the upcoming season, and determines color schemes and display styles.
Then, the design team works on developing the product further, passing it to the technical department for pattern-making and production specifications.
Once the design is finalized, the production committee places orders. The technical department determines the cutting layout, and after cutting, the pieces are sent to the tailoring workshop.
At the same time, the required fabrics are sent to the cutting workshop, where up to 500 new patterns are cut daily.
Afterward, finishing and quality checks are carried out, followed by packaging and labeling with country-specific trademarks and retail prices.
Finally, stores are restocked. According to reports, ZARA’s logistics center handles 2.6 million items weekly, meaning each store receives shipments twice a week. For ZARA’s buyers and developers, the job is complete only when the products are perfectly displayed on the shelves.
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