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Posted by : haxm rana Friday, 30 November 2012
Normally any proposed item (apparel) is made in bulk, which carries the risk of failure. Zara reduces this risk by producing in lesser quantity, instead of going for bulk production, Zara prefers fewer items. This approach gives Zara's double benefit, such as lesser risk and creating more demand by making artificial scarcity, which means it can charge more and earn extra profit.
It is natural with all objects especially fashion products; they become more desirable making them more profitable for the company. Normally it is very rare to find a product in its early launch days, a customer has to request such item, which is taken into notice by the store manager and produced within a shortest period of time. Another benefit of this approach is that if the product does sell well, it can be easily scarped back due to lesser quantity, which is not possible for other retailers or in some cases it is moved to another location, where it is selling well.
Retailers foresee profit in mass sale and bulk production. Zara instead produce more styles (new items) than any other retail store; generating profit through greater number rather than bulk production. For example Zara produces about 12000 items per year, the sooner one item is sold next is on the offer. This innovative technique makes Zara different from other retailers who plan for months and years, yet they come up with few items and limited choice, while Zara offers more choices to consumers to choose from. This also helps in pulling the consumers to visit store more often, as there is always some thing new on offer, compared to its competitors who will sell similar items for months.