Fast fashion is increasingly technologically advanced: the Inditex case

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In its latest press releases on its 2017 business, the Inditex fashion retail group - most commonly known for the brands it owns, including Zara, Pull&Bear and Massimo Dutti – announced that it closed the year with a 7% net profit rise to 3.4 billion euros, and 25.3 billion revenues (+9%). The company posted growth in all geographical areas and in all sectors and, despite a reduction in its gross margin and profit due to unfavourable currency effects and infrastructural investments, EBIT reached 4.3 billion dollars, posting +7% compared to 2017.

Growth continues to be driven by the e-commerce channel that is worth 10% of Inditex’s sales and has risen by 41%. The e-shop of its key brand, Zara, was initially launched in Singapore, Malaysia, Thailand, Vietnam and India, and this year it will also be active in Australia and New Zealand. The reasons for these figures undoubtedly include its significant investments in innovation and technology, which have enabled the group to distance itself from its first direct competitor, the Swedish H&M, which now intends to devote 2018 to rethinking its digital strategy.

To lure millennials, for instance, about 120 Zara stores will feature displays for augmented reality to attract this target. Looking at the company’s growth, the many technologies that have always been exploited by the group include RFID, used not only to trace products from manufacturing to sale, but also to reduce to zero any errors in order preparation and shipping. The company’s project is ambitious: to make RFID technology active across all the group’s brands by 2020. The investment is impressive: Inditex has already invested 1.8 billion dollars.