World’s biggest clothing retailer Inditex reveals digital revolution

Inditex

Inditex, the world’s biggest clothing retailer and the owner of brands Zara, Massimo Dutti, Bershka, Oysho, Pull&Bear, Stradivarius and Uterqüe, is spending billions on a new sustainable future.

Inditex, whose flagship store is Zara, said in a statement on Wednesday that it will invest €2.7 billion over three years to develop a “fully integrated store and online model”.

The strategy includes investing in its digital platform. Inditex, based in Arteixo, Galicia, in northwestern Spain, also plans to close as many as 1,200 stores over the next two years, while opening 450 higher quality, larger outlets in premium locations.

Zara, Inditex

An upcoming highlight is the opening of Zara’s new store in WangFujing, Beijing, China.

Not only will this be the largest flagship store in Asia, it will also be the most advanced Zara store in the world, featuring the latest technology and services to offer a seamlessly integrated shopping experience. Also scheduled to open are the Zara Place Vendome in Doha. Qatar, as well as newly extended and refurbished Zara stores on Paseo de Gracia in Barcelona, Spain, and the Calle 82 store in Bogota, Colombia.

Massimo Dutti has openings planned in Amoeiras, Portugal; Shanghai, China, and Barranquilla and Medellín in Colombia. Bershka is opening in Brasov, Romania, and Belgrade, Serbia. Stradivarius is moving into Rotterdam, Netherlands. Oysho is setting up in Moscow, Russia, and the Chaoyang district in Beijing, China. Uterqüe is reopening in Almaty, Kazakhstan.

By 2022, Inditex expects online sales to account for over 25% of the total, compared with 14% in 2019. In the coronavirus pandemic, Inditex saw online sales recorded strong growth of 50% between 1 February and 30 April, specifically increasing by 95% year-on-year in April. Inditex recorded a 44% decline in revenue year-on-year to €3.3 billion during the first quarter of 2020.

Inditex’s Executive Chairman, Pablo Isla said the company will accelerate and broaden its forward-looking digital transformation strategy. Isla committed to invest €1 billion in bolstering the online business and a further €1.7 billion in upgrading the integrated store platform, deploying advanced technology solutions.

“This strategy is a culmination of the project the company has been investing in steadily and significantly since 2012, a project that will transform its profile notably. The overriding goal between now and 2022 is to speed up full implementation of our integrated store concept, driven by the notion of being able to offer our customers uninterrupted service no matter where they find themselves, on any device and at any time of the day,” said Isla.

Massimo Dutti, Inditex

Inditex’s digital platform, the configuration of which dates back to 2018, has had a staggered implementation. It is currently 60% operational and will be fully deployed between now and 2022. Inditex claims it is one of the most technologically advanced platforms in the retail world.

“From the customer standpoint, an important development in the pipeline is the ‘Store mode’ concept thanks to which the brands’ mobile apps and websites will provide customers with new services such as the ability to consult store stocks in real time for online purchase and immediate collection, and pinpoint the precise location of a specific item within a given store,” Inditex said.

“In parallel with all these technology developments, the company remains strongly committed to its environmental sustainability strategy: all of its stores will be equipped with the proprietary Inergy environmental control platform, use renewable sources of energy only, apply the ticketless e-receipt system as the norm; and recycle or reuse all surplus incoming materials such as cardboard, plastic and packaging.

“Inditex will have eliminated all single-use plastic from its in-store customer interfaces and emphasise and facilitate clothing circularity by collecting clothing after its initial use. The idea is to reuse or recycle all of the garments collected through the channels Inditex has been rolling out globally alongside organisations such as Caritas and the Red Cross while financing research into new recycling techniques, such as the project being coordinated by MIT in Boston.

“Those measures will be accompanied by the strategic raw material initiatives committed to at the 2019 AGM: the majority of fabrics used to make clothing sold by any of Inditex’s eight brands will be sustainable, organic or recycled by 2025; that target will be delivered sooner for fibres such as viscose, which will be 100% sustainable in 2023.”

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