Retail Digital Transformation: Spanish firm Inditex
Inditex opened its first Zara store in 1975. In the following 4 decades, this vertically integrated apparel manufacturer and marketer expanded throughout the world into more than 120 countries with 10,000 physical stores. Any company undergoing such dramatic brick-and-mortar expansion might be at risk of failing to adapt quickly enough to the digital revolution. In the apparel and footwear retail sector, about 9% of the dollar value of sales takes place over the internet, with this growing at 24% a year; traditional channels are growing at less than 4%.
Inditex decided a decade ago to transform its entire value chain, not just the retail end of it. It invested heavily in an integrated platform covering relationships with suppliers, factory management, distribution logistics and sales. The benefits have been diverse:
• More efficient inventory management and logistics
• Faster customer feedback
• Overall optimization of assets.
As an integrated platform, Inditex capitalizes on omnichannel sales, including physical stores, department store corners, catalogue sales, telephone sales, online stores, mobile apps and a social media presence. By 2019 about 14% of all sales were digital in the markets in which it had already rolled out this strategy.