Online retail apparel stores fueling growth in China.
More than a third of Inditex’s sales are in Asia and America, up from 29% a year earlier, while Spain generated 22%, down from 26% a year earlier. The emerging-market expansion has allowed Inditex to grow faster than H&M and Gap Inc. in recent years.
“Inditex has low penetration in the vast majority of its 85 markets, which means that online is giving customers access to Inditex’s concepts for the first time as large numbers of them won’t be able to access a store easily,” Société Générale analyst Anne Critchlow said. Chief Executive Pablo Isla said the retailer’s flagship site zara.com gets 1.3 million visits per day, up from 1 million at the beginning of the year. The online stores are helping draw more customers to physical stores, because that is where many pick up their purchase and return items that don’t fit, he said. Inditex launched Zara online in China September 5.
It is investing in its home market and plans to spend €450 million this year on commercial and logistics operations to support international expansion. These logistics hubs are at the heart of the retailer’s fast-fashion business model, along with use of information technology to track data on consumer tastes from all its stores.
Online strategies have become an integral part of gaining market share. It’s still important to carefully plan a network of physical stores and even more so now that retailers are leveraging their online stores to drive greater traffic to them. Mapping the information gathered from physical and online stores together will be one of the keys to leading the competition in targeted marketing and higher sales.