Nowadays such term as fast fashion is far not new, it combines enhanced design and quick response systems. In 80th and 90th in order to get more profit brands shifted to the low-cost high fashion oriented on people who not willing to spend a lot of money however in love with fashion and instead of selling them two standard collections per year making them come back to shop and buy clothes every two weeks as collection changes and rarely repeated. Zara, H&M and Benetton are three of the most major fast fashion brands, however some of their steps from the “supplier of raw materials to the end-customer” in this case these steps are designing, manufacturing, distribution and retailing not always same. “All stages in chain must include consideration of the final customer; moreover each operation in chain should be satisfying its own customer.”
First was Benetton, created by Luciano Benetton during the time, when knitted clothes were expensive in or handmade by old people in boring colours. Once when his sister made for him bright yellow sweater and it attracted attention of young generation he got an idea to create a brand focused on young population who will love bright colours. Now Benetton is famous brand known all around the world for selling casual garments, its designers focus more on materials’ quality, technologies and colours, than on variety and complicated designs and prices in Benetton more expensive than in H&M or Zara. Stores of Benetton usually very big 1500-3000sq meters, so they can display full range of products, moreover they have one small collection that remain the same throughout the season. Dual supply chain system helps to keep the supply up with demand and satisfy customer’s needs.
H&M (Hennes & Mauritz) was in the beginning just Hennes what means “for her” in Swedish. This shop of clothes for women was opened by Erling Persson in 1947, later after buying new shop which name was Mauritz Widforss, after expansion he decided to add products for men and children at his stores and to change name to Hennes & Mauritz (H&M). In 1976 elder son of Erling Persson to attract more customers decided to give away discs of ABBA, it attracted loads of customers to their shop.
The main idea was to keep prices low and their slogan “Fashion and quality at the best price”. Nowadays H&M can be found in 39 countries all around the world, prices are still affordable and collections frequently changes following last fashion trends, since 2004 in H&M regularly appears collections designed by stars or famous designers to attract more people by loud name (like in case with ABBA in past), however this collections are very limited and usually much more expensive than ordinary H&M products. Such collections were Versace by H&M, Marni by H&M, Jimmy Choo by H&M. The company’s design marketing and advertisements created and governs centrally in Sweden, however products produced on contract factories in some countries in Europe Asia and China, as H&M doesn’t own any factories. However near factories they located offices to control production process and easily communicate with factories and reduce misunderstandings, after garments goes to transit hubs where decides their destination.
Zara brand built on copying high fashion trends and sell it in store to middle-class people 15 days after it was shown on fashion week in one of the fashion capitals. He noticed that to earn more money and don’t make prices high all stages in supply chain must under total control, it’s the only brand among similar ones which still produces most of the products in Spain and Portugal where they own around twenty not big factories, when other “fast fashion” brands moved their productions to developing counties.
Another idea is that Zara doesn’t have central warehouses in each country and usually just 10% to 0% products’ excess when for H&M and Benetton number increases to 14-15%, Zara’s strategy is to produce small collections which change every two weeks and never repeated to make people come back to the store frequently with a thought if they won’t buy it now, tomorrow they might don’t find it anymore, Zara’s unique selling proposition USP moreover creator of Zara persists on no marketing, the only item they spend money on is bags with Zara name on it, it helps to save a lot of money as for marketing they spend up to 0,3%, when brands like H&M and Benetton spends around 5% from its income. It helps Zara to get highest income as in 2001 net income of H&M was 9,5%, Benetton 7% Zara 10,5%.
1.at least 4 weeks to design, produce and start to distribute15 days from catwalk to final customers20 days from designers to customers 2.Factories in North Africa, Asia, Eastern Europe.
2.Production mainly in Spain on 20 small factories owned by company Contract factories in Europe, Asia and China
3.Have controlling share in its main suppliers to ensure fast supply and possibility to decide final look of collection on later stage, as colouring and cutting, reduces risk to buy a wrong thing. 4.Highly automated warehouses located close to their main production centresCall-off warehouse 5.Flash collections during the season can be found in storesSeasonless cycle, designs are never repeated, collections in limited amount 6.Designers who responsible for researching of new materials and clothing conceptsDesigners, market specialists, buyers who place orders on to suppliers and customer’s reaction50 patern designers, 100 designers in Stockholm, a number of budget controllers and 100 buyers 7.1500-3000sq meters
Such a huge size of stores let display the entire range of products800sq meters Variety changes frequently to make people buy a product now, because tomorrow they might not find it.1300 sq meters “create comfortable and inspiring atmosphere in the store that make it simple for customers to find what they want and to feel at home”. Decentralized distribution system and controlCentralized distribution system and controlDecentralized distribution system and control Vertical integration strategy
Multi-sourcing systemDual-sourcing system, additional orders with quick-response suppliersSingle-sourcing system, ( H&M (2009), p. 26: “We strive for long-term relationships with our suppliers. When it comes to production rate, delivery reliability, eciency and price, we work with our suppliers to create production plans spanning several years.”)
1.http://about.hm.com/content/hm/AboutSection/en/About/Sustainability/Commitments/Responsible-Partners/Supply-Chain.html; viewed on 9th of January
tstream/2099.1/9620/1/67041.pdf ; “Benetton and Zara comparison of two business models”; viewed on 13th of January, 2013
3.http://188.8.131.52:82/1Q2W3E4R5T6Y7U8I9O0P1Z2X3C4V5B/www.utdallas.edu/~metin/FuJen/Folios/scnewsvendor_s.pdf ; “Optimal Level of Product Availability”; viewed on 10th of January, 2013
4.http://184.108.40.206:81/1Q2W3E4R5T6Y7U8I9O0P1Z2X3C4V5B/webprofesores.iese.edu/valbeniz/SourcingStrategies_web.pdf; “Sourcing Strategies and Supplier Incentives for Short Life-Cycle Goods”; viewed on 13th of January, 2013
5.http://220.127.116.11/1Q2W3E4R5T6Y7U8I9O0P1Z2X3C4V5B/www.gallaugher.com/Zara%20Case.pdf; “Zara Case: Fast Fashion from Savvy Systems”; viewed on 13th of January, 2013
6.http://18.104.22.168:82/1Q2W3E4R5T6Y7U8I9O0P1Z2X3C4V5B/www.gsom.spbu.ru/files/upload/niim/publishing/2010/wp_krotov.pdf; viewed on 10th of January, 2013
7.http://22.214.171.124:83/1Q2W3E4R5T6Y7U8I9O0P1Z2X3C4V5B/opim.wharton.upenn.edu/~cachon/pdf/FastFashion_R2_v3.pdf; “The Value of Fast Fashion: Quick Response, Enhanced Design, and Strategic Consumer Behavior” ;viewed on 13th of January, 2013
8.http://www.library.fm/index.php?option=com_content&task=view&id=1704&Itemid=30; viewed on 10th of January, 2013
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 23 October 2016
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