Times are tough for UK retailers so it’s all too easy to focus on failure but we mustn’t forget there are still some big successes.
The research undertaken to determine the winner of the Zolfo Cooper Growth Retailer of The Year Award, revealed last Thursday at the Oracle Retail Week Awards, has focused on the biggest strengths of some of the UK’s most promising retailers.
After examining the 10 companies on the Zolfo Cooper Growth Retailer of the Year Award shortlist, we have determined that the (theoretical) perfect retailer would have several key attributes: a clear understanding of its customer and their shopping habits, a high-quality product at a competitive price point, and a joined-up multichannel strategy that encompasses an appropriate and well-merchandised store portfolio.
Although ‘perfection’ would be unlikely, if not impossible, to attain, there is one global brand that is coming pretty close at the moment: Zara. Whilst Zara does not qualify based solely on its activity in the UK, if we were overlaying these same characteristics on a global scale, Zara would be the outright winner for sure.
Zara has rightfully earned its position as the king of international retail. Parent company Inditex yesterday posted a 22% rise in 2012 net profits, shining a ray of light on an otherwise gloomy high street.
The retailer has continued to perform well in the face of subdued consumer spending in Europe by expanding into Asian markets and has consistently outperformed rivals in the midst of the financial crisis. Also, in an indication of the growing importance of online sales for the company, Zara revealed that the number of visitors to its website has nearly doubled in the last 12 months, and that the site now gets around 2 million hits a day.
By the end of January, its parent company Inditex had more than 6,000 stores across 86 countries and said it expected to launch flagship brand Zara online in Russia over the autumn-winter season. The company has already seen its shares triple in value in the past five years and has outperformed its European peers by more than a third over the last 12 months. Also, in spite of a comparative previous financial year that pushed the company’s shares to an all-time high, Inditex has also shown signs that it is protecting its high gross margin.
But the company’s success does not stop there: the world’s biggest clothing retailer is also one of the most nimble. By manufacturing more than 50% of its products itself, Inditex’s brands can respond quickly to changing tastes – a model that seems to be working everywhere from China to Russia to the US, even with the recession in Europe and lingering economic woes elsewhere.
It’s also just been revealed that the company’s founder, Amancio Ortega, has just leapfrogged Warren Buffet as the world’s third’s richest man – so he clearly must be doing something right. So could this be the world’s best retailer? Well, no business is perfect of course, but it’s certainly hard to think of anyone better at this current moment.