Zara bets on faster deliveries from stores to boost online growth
Zara knows something about speed. The fast-fashion retailer has grown its business into an international powerhouse by quickly responding to the ever-changing preferences of consumers. Now, it is turning to fulfilling online orders from its stores in an effort to get products, preferably at full retail, to its customers more quickly.
The Wall Street Journal reports that Zara plans to ship online orders from around 2,000 stores located in 48 countries.
Pablo Isla, chairman and chief executive officer at Inditex, Zara’s parent company, told investors at the company’s annual shareholders meeting last month, that he sees the integration of stores and online as the “strategic cornerstone” of the retailer’s plan to achieve sustainable growth going forward.
“All of Inditex’s brands benefit from a robust integrated store and online platform,” Mr. Isla told shareholders. “In 2017, online sales already accounted for 12 percent of the total in the 47 markets in which e-commerce platforms are available, representing annual growth of 41 percent.”
Zara’s decision to use stores to fulfill orders follows earlier moves by a wide range of retailers including Target, Zumiez and others.
Target fulfilled nearly 70 percent of its online orders during last year’s Christmas holiday season from its stores. Executives at the chain have said that using stores helps it deliver orders faster and at a lower cost than shipping from regional distribution centers.
Back in 2016, Zumiez closed its e-commerce fulfillment center in Edwardsville, KS as part of the chain’s shift to a “fully localized fulfillment model” by which stores handle all online orders including deliveries and in-store pickup. Zumiez integrated its online and in-store POS, order management and transportation management systems to give associates the tech tools needed to do their jobs.
- Out of Stock Online? Zara Hopes Shipping From Stores Will Boost Sales – The Wall Street Journal
- Pablo Isla highlights the integrated store and online model as the “strategic cornerstone” of Inditex’s sustained growth – Inditex
- Target sees stores as key to meeting its distribution challenges – RetailWire
- IRCE recap: Retailers claim ship-from-store successes – RetailWire
- Should all online orders be fulfilled by stores? – RetailWire
DISCUSSION QUESTIONS: Will using stores as distribution centers for online orders become the norm in retailing? What do you see as the pros and cons of this strategy for Zara and others?