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Zara's Business Model

Why We're All Addicted to Shopping at Zara

I habitually click over to Zara at least once a day, stocking my virtual cart — removing things on occasion, but usually completing the transaction and ending the week with at least one new Zara purchase. The reason is simple: the design is on-point, affordable, and, maybe most importantly, readily available. It seems Zara is actually always out to make it easier to shop — and that's not an accident.

Even while similarly priced brands like Gap struggle year over year, Inditex, Zara's parent company, continues to exceed profits and analyst expectations, climbing 15.4 percent to $22.9 billion in 2015. So clearly, I'm not the only one shopping.

At the crux of its business model is a tightly focused team of designers and product managers that oversees specific production of a single category. As Forbes points out, tighter integration means a faster response time and more flexibility responding to demand. Translation: it's hugely cost saving. As opposed to a retailer like Gap that receives a single delivery at the top of each season that sits on shelves for months, Zara gets both a fresh seasonal delivery and new inventory constantly, which is produced in real time, based on how consumers are shopping, which also means you'll see new things almost every time you click over to its site or step foot in stores. That seems to be Zara's secret sauce.

Beyond that, Zara is also not spending on advertising, relying instead on the allure of their stores, the fact that consumers are naturally drawn to shop because they know they'll see new inventory every time they do. That's some good incentive, as is the brand's ever-expanding new categories, most recently with a buzzy "ungendered" collection, which features unisex tees, loungewear, and jeans, and its own line of athleticwear. Both indicate a smart response to consumer interests and industry trends, namely androgynous fashion and athleisure.

You can't discount the style or quality of the pieces, either. Some fast-fashion brands are flimsy versions of the runway's trends. Zara's costs are comparable to H&M's and Gap's, but you have a sense that you're getting something more — a sharper cut, a better fit, a closer interpretation of the runway model. At the end of the day, it's great clothes that keep us coming back for more — and thanks to more of them, coming back more often.

With that in mind, we're shopping our favorite pieces now.

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