INDITEX SA has increased the frequency of truck deliveries to some Zara stores in its home market, as part of a trial that could signal a further acceleration in the retailer’s supply chain.
Zara has increased truck deliveries to a handful of stores in Madrid to four times per week from the traditional two, according to two people familiar with the matter, who asked not to be identified because the information isn’t public. The Arteixo, Spain-based fashion company already carried out a first test in the spring, according to the people.
More frequent deliveries allow companies such as Zara to cut the number of so-called lost sales due to unavailable stock, as it allows to make more products available to clients.
Inditex’s unique logistics set-up is one of the pillars on which it has become the world’s largest fashion retailer by value. While most big apparel and sportswear companies rely on distribution centers in different parts of the world to ship items to nearby markets, most of Inditex’s products are centralized in Spain for distribution and then sent in small packages to stores across the globe twice a week, allowing it to replace stocks faster than its rivals.
To optimize stock allocation according to the needs of each of its 5,745 shops, Inditex uses past sales data and current stock availability as well as daily orders from store managers. Last year the company developed a new model that calculates the optimal number of units for every initial shipment of a new product, according to the company’s latest annual report.
A spokesperson for Inditex declined to comment.
To be sure, just running the trials doesn’t mean that the company will necessarily make the new delivery system permanent or expand it more broadly. In the past, other initiatives, such as same-day deliveries, weren’t widely rolled-out or have been shelved.
Depending on product type, Zara shops in Madrid are stocked from logistics platforms in the cities of Arteixo, Zaragoza, and Meco. Zara accounted for about 32% of Inditex stores globally, and 73% of sales. There are 13 Zara stores in Madrid, including the brand’s largest. — Bloomberg