Faced with fierce online competition from the likes of Amazon affordable fashion giants Zara and Hennes & Mauritz AB (H&M) are shoring up their defenses, trying to use their stores to boost Internet sales. Separated by thin partitions, 15 little photography studios are used exclusively to update the Web site line-up in a corner of Zara’s huge headquarters near Corunna in Spain’s northwest.
Under a constant barrage of camera flashes, models strike pose after pose to get seven photos showing the piece of clothing under all angles. In total, 1,500 photos are put online twice a week to match the speed at which articles of clothing are replaced in-store.
Last year, these represented 10 per cent of sales, a figure unveiled last week after years of secrecy over a crucial sector that Inditex only entered in 2010, on the late side. Gaining more visibility online was the main challenge for Inditex if it wants to remain competitive in the long term, says IG Markets analyst Sergio Avila Luengo. The retail giant started having trouble clearing stocks for the first time last year due to competition from Amazon.
On its part, Sweden’s H&M has recognized that a drop in profits last year was due in large part to online competition. Faced with this threat, H&M devoted 45 per cent of its investment to Internet sales last year, or about €600 million, for a new photography studio and personalized apps for its clients.
Inditex has opened 19 warehouses in the world dedicated to online sales. H&M is soon to follow suit. Both are also taking advantage of their thousands of stores, including for client delivery. Both groups are implementing systems to avoid missing out on a sale if for instance the size is not available for a customer, by pointing the customer to the item online. Their strategy was to combine both sales methods, says Gildas Minvielle, head of the economic observatory at the French Fashion Institute.
