D. How people were combating the situation.

(3/4)

The impact of COVID-19 on consumers around the world has dramatically changed their behavior and
demand. Many of these changes—such as the unprecedented growth of online shopping over the past year
and shifts in brand loyalty—have major implications for the fashion industry. Meanwhile, supply-side
adjustments have limited new product launches. As the industry begins to emerge from the pandemic, the
big questions now are which behavioral changes will persist and how fashion retail players should adapt
to new customer demands. To adhere to these changes, retail industry would require to adapt with the fast
fashion trend. Key important parameter would be to improve inventory turnover, leverage consumer data
to improve their shopping experience and increase consumer hold up.

Name Links for the section

Sakshi [Link]

Kevin

Agil [Link]
[Link]
[Link]
 2020_Inditex_Annual_Report.pdf ([Link])

Rohit

Srishti [Link]
[Link]

5. A glance at the Pre-Covid Business Model

B2C Elements of value in the retail industry

It is crucial to realize that the 'take the goods and be happy' approach no longer meets the expectations of
contemporary consumers. Customers desire to identify with the brands and seek for greater value as the
emphasis on experience changes and intensifies. Exhibit 5a, which references Bain's B2C aspects of value
in the garment business, reveals the five factors of value that customers presently prioritize. Today, value
is determined by factors other than the few bills that individuals pay; these include quality, variety,
design, timeliness, and convenience.

1. Quality : Quality is the first and most important quality that buyers take into account before
making a purchase.
2. Variety: Customers frequently choose to visit stores with a wider selection. For various
requirements and settings, people desire different kinds of clothing.
3. Reduce hassles: Customers desire individualized services, conveniences like home delivery and
simple returns, among other things. They favor companies whose products can adapt quickly to
their shifting needs and which provide them with a one-stop solution for everything.
4. Design: Comfortable clothing is encouraged. Customers are accepting of distinctive styles.
Customers want to have access to international designs and patterns, even in niche products like
wedding clothing.
5. Saves time: People do not want to spend a lot of time selecting the appropriate clothing and want
a wide variety at their fingertips.

Replacing the famous 4Ps of marketing model—Product, Price, Promotion and Place—that focussed on
company and the brand , Zara were functioning around the new 4Es of marketing strategy—Experience
replaces Product; Exchange is new Price; Evangelism is now Promotion; and Every Place is new Place—
that puts the customer at the center. This shift in perspective enables them to deliver core elements of
value better than others along with some other values as well through the following business model(Refer
Exhibit 5b)

First and foremost, Zara prioritizes quality. This has been made feasible by their vertically integrated
supply chain, quality control in the logistics centers, and supplier clustering. Due to Zara's very adaptable,
vertically integrated supply chain, which delivers parcels to each store twice weekly, clothing may be
exported all year long. Due to their control over all operations, from manufacture to inspection, Zara has
greater standards throughout all disciplines, from distribution to sourcing. At Zara, distribution is
primarily automated and they distribute roughly 60k items every hour. Additionally, by grouping
suppliers and combining specialized quality control with a logistics center, end-to-end quality assurance
is maintained.
Second, due of its ability to keep up with the most recent fashion trends, Zara has developed a reputation
as a leader in the industry. As a result, Zara has created their business strategy in two different methods to
make sure there is an unending range of designs available. Fast fashion is one example; by lowering the
amount produced, they artificially create scarcity, which causes customers to continually experience "fear
of missing out" and ultimately purchase more. For more options and a considerably higher chance of
finding a spot in at least one shopper's wardrobe, Zara produces over 12000 styles each year.
Additionally, shorter lead periods enable Zara to maintain stock levels based on current occasions and
trends. Typically, Zara's items are only available for 3–4 weeks at a time. The second i s their co-creation
strategy with customers. The customers are constantly heard by Zara. They have a system in place that
requires personnel in different stores to maintain reporting daily customer insights to the main office. To
identify what is trendy and what is out of style, Zara's managers carefully assess customer opinions and
insights as well as the new clothes they are wearing. This makes sure that information in Zara spreads
quickly from the bottom up and is reflected in their goods. Additionally, businesses track customer
demand using cutting-edge RFID technology, making clothing easily accessible in areas with higher
demand. Correctly estimating demand also enables them to lower the cost of maintaining inventory,
improves their ability to respond quickly to consumer needs, and provide agility.