Zara’s in-store automation drives eCommerce sales

2 minute read

40%

eCommerce growth in 2018; 10% of Inditex’s total sales

20%

of company investments are dedicated to upgrading technology

100%

Zara’s site traffic is 100% organic

In July 2019, a $69.90 polka dot dress designed by the Spanish retailer Zara went viral, managing to break the internet and European fashion in one spotted swoop. An Instagram account called hot4thespot emerged to document the seemingly countless sightings of the dress. The Telegraph created a guide for frustrated fashionistas titled “Fed up with seeing everyone in your Zara dress? 5 ways to find fashion that nobody else is wearing,” while the BBC offered tips for what to do with a dress that everyone else already seems to have.

More than a passing trend, the famous Zara dress tells the story of a retailer that succeeds in unconventional fashion... if you will: As The New York Times noted, Zara managed its coup “without conspicuous help from royals, social media influencers or celebrities.” Though style may be fickle, Zara’s success speaks to its constant calibration of fast fashion, omnichannel savvy, and technology, none of which would be possible without a focused investment in its digital operations. Through networks of consumer data, “click-and-collect” innovation, speedy delivery, and a quick-firing design and assembly line, Zara has become known for being nimble, which has rightly scared its more expensive rivals.

[Zara is] possibly the most innovative and devastating retailer in the world.

DANIEL PIETTE, the chairman of Louis Vuitton

Fast fashion meets speedy delivery

Source: Zara's instagram

Part of what carried Zara profitably through a tough phase in retail is the company’s lightning quick production line, which eliminates the traditional lag time between the catwalk and the store shelves. Nearly 60% of what Zara brings to market is produced in facilities near its headquarters in northern Spain, shortening the entire supply chain to just a few weeks.

Then, there is Zara’s all-important eCommerce arm. The constant creation of new items drives countless consumers online, where they can view the latest offerings and order them to be shipped or picked up in a nearby store. Heightening the stakes even more, in 2018, the brand announced it would introduce same-day shipping in several major metropolitan areas, along with next-day delivery in all of its markets by 2020.

The benefits of Zara’s quick production turnaround, rapid-fire delivery options, and pulse-of-it-all dynamic mean that the company doesn’t have to devote resources to online ads or targeted listings.

Source: Zara’s website

How robots make “click and collect” quick

When one-third of your online orders are placed ahead of time to be picked up in stores (BOPIS), you better give customers what they want - a fast, smooth, worthwhile experience. Having to wait in line at a store for the items, or to undergo identity checks, can defeat the purpose of buying online. Last year, as Zara shoppers arrived at stores to collect their purchases, robots were waiting to assist them in their pick-up journey. 

The automation of this service speaks to how merchants are adapting to new eCommerce technology. Rather than wait in a line, a customer arrives at a store, heads to a collection point, and scans or enters a code. This process triggers a robot to locate the customer’s package in a small warehouse, and then deliver it quickly to a drop box. Shoppers picks up the package and go on their way. Or stays in-store. As our consumer data already shows, arriving in-store to collect a purchase often leads customers to make an additional purchase.

These advances create the perfect pairing for a retailer that already sends data from stores to the headquarters, helping the company make strategic decisions. Meanwhile, the robots represent the full integration of Zara’s online and in-store services — this time for the immediate benefit of the customer. While other retailers are still getting their “click-and-collect” infrastructure off the ground, Zara offers the service in 44 of the 94 countries where it has a presence.  

Source: Zara’s facebook

Zara today: 

A loyal shopper visits a store four times a year; a loyal Zara shopper visits the website 17 times a year

Offers click-and-collect in 44 of the 94 countries where it operates

Riskified’s fraud insights

Friction

Premium shipping, especially when it serves as the default setting, means that merchants often streamline fraud review by turning to automation. In 2017, the average North American merchant manually reviewed 8% of their orders (and 11% of orders for over $100). The chance of an order being manually reviewed makes the guarantee of next-day shipping very risky.

As Zara show us, the click-and-collect (BOPIS) option presents a great opportunity to boost revenue. But it can also present a challenge in both quick execution and the avoidance of fraud.

One of the main issues with click-and-collect is that customers choosing this option do not provide a shipping address when they pay. For many merchants, one very common fraud review method requires a shipping address when checking for a billing/shipping address mismatch, using third party data sources to verify the homeowner at an address, or measuring the distance between the shipping and IP addresses. 

As a result, many BOPIS orders are verified through a manual review process, which is costly, time-consuming, and creates friction in the purchase journey. Another reality is that when fraudsters buy stolen credit card details online, they also receive the billing address associated with the card. This can include the house number and ZIP code – information that allows fraudsters to trick AVS filters or select a store in the same area for pickup. For a safe and comprehensive way to make click-and-collect pay dividends without the fear of fraud and friction, check out our guide here.