Zara opts for measured online launch
● With an African presence stretching almost a decade, and an online life just as old, Zara’s online launch in SA was a little delayed, in the view of its enthusiasts.
The Inditex-owned Spanish fast-fashion retailer introduced its online store to South African shoppers this week as part of its global e-commerce strategy.
Inditex plans for all its brands to be available online all over the world by 2020. Between August 1 and September 8, the group had online sales growth of 8%. It is also expanding its Zara online platform to the Philippines, Ukraine and Colombia this year.
With the complexities that come with setting up shop on the internet, and in a market with low online saturation, Zara’s delayed South African move online was a measured decision, according to Flux Trends founder and analyst Dion Chang.
“People underestimate what it takes to go online,” Chang said, citing logistical barriers and delivery systems such as click-andcollect that retailers need to consider and perfect.
If they don’t, the result is a frustrated consumer and injustice to the brand, Chang said.
“It’s a good thing that they’ve gone online. They would’ve gone online anyway, but I think it’s a well-thought-out way in which to do it. What you don’t want to do is launch an online offering and your logistics are a train smash,” Chang said.
“Unless you’re a really large retailer, to get into it, your logistics are just crippling.”
Zara has only six brick-and-mortar stores in SA. The addition of online shopping will not only give it wider reach, it will be sure to bring fierce competition for South African retailers that play in the same fast-fashion territory, such as Mr Price, known for being nimble, trendy and cost-effective, and TFG, which has made impressive wins with its online store since its launch last year.
Mr Price and TFG are emerging as the leaders of the pack in the local digital landscape. In a trading update for the four months to August 3, Mr Price’s sales generated from its digital offering surged more than 31%. For TFG, it was a jump of more than 57% in the group’s full-year financials to endMarch 2019.
Another direct competitor would be Superbalist, which, unlike Zara, is more of a generalist, said Chang, adding that Zara had a strong brand identity, a huge global footprint and an efficient reaction time to fastfashion trends, making it difficult to beat.
Asked about the retailer’s e-commerce plans in the country, Zara SA said: “Our approach to the South African market is very much the same as to any other market in which we operate: a fully integrated approach of a combination between relevant flagships, shopping malls and our online store.
“Zara has had a very strong operating performance in SA over the last years, with a very satisfactory sales growth, and we see great potential in the online market as the Zara online launch shows. We believe the quality of the Zara online offering will be a distinguishing factor,” Zara SA said.
Though a step in the right direction, the online and in-store integration in SA is unlike Zara’s next-level concept store in its more mature markets.
Zara’s two-storey store at Westfield Stratford City in London boasts a host of technological features designed to enhance the shopping experience.
These include mirrors embedded with product recommendations that help customers co-ordinate the items of clothing they are trying on. It also has a self-checkout system that identifies the garments being purchased, requiring the customer to confirm the items.
As online shopping continues to gain traction in SA, retailers are still concerned about security. “In SA, some of the barriers would be our complete phobia for fraud. Even globally it’s really the big players that have been able to do it and they are still testing that,” Chang said.