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H&M and Zara: 2 Business Models That Have Led to Global Success

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H&M and Zara are two of the world’s most famous retailers. They have landed spots in the top 20 of Interbrand’s best global companies. How did clothing retailers join the likes of Apple, Google and IBM? Their business models and utilization of digital marketing catapulted them into success but with contrasting strategies.


Inventory


Zara

  • High turnover rates, smaller order size
  • Frequently stocks new designs

H&M

  • Two main collections each year
  • Restocks same designs

With Zara’s strategy more items are sold because of the continuously changing items and manufacturing less. This allows to frequently have new items on the floor increasing overall sales to a smaller market. H&M’s strategy saves on designers with only releasing two collections. Customers are more likely to find items in store more reliably.


Depending on the business you have, you can consider stocking the Zara or H&M way depending on your audience!



Identify Your Target Market


Zara and H&M know what they make and who to make it for. Both companies’ target markets are 50-60% women, the rest are made up of menswear and children. H&M targets 15-30 year old females in school or early in their careers, they break it down further by a segmented strategy. They focus their prices and designs on people who fit this criteria. Zara targets 18-40 year old females who want to be runway ready at a moderate price, young professionals essentially. Knowing their target market helps them find what pieces to create and and prices are appropriate.


Establishing a target market narrows down the decisions making process and gives your customer what they are looking for.


Campaigns


Both H&M and Zara have utilized social media since the 2000’s. Instagram, Twitter and Facebook were quickly gaining users so Zara and H&M had to jump on board. Both companies have millions of followers and streamlined campaigns throughout all platforms that flow.


Zara has had success in collaborating with influencers such as bloggers and YouTubers while H&M uses a more traditional approach by working with designers and celebrities. Try out different ways to market your company. Work with big names in your field or have them host a podcast.

 

Topics: Business

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