Zara Case Study Analysis - Identify and Suggesting Emerging Technologies to Zara

Zara Case Study Analysis – Identify and Suggest Emerging Technologies to Zara

Change is inevitable which in the business world plays a very significant role. with the emergence of new technologies in the market, the need to bring changes in the business model, operations, planning, and decision-making is taking place. Competition is the primary concern because of which companies are willing to invest more in the utilization of new technologies. Companies with the motive of long-term survival and obtaining competitive benefits ensure to adapt to the recent market trends which highly include the technologies as well. also, the world is now heading towards tech-relied living where every other thing will be functioning using several technologies. Therefore, it has become significant for companies to meet the market needs by introducing emerging technologies in business practices. The report here will emphasise identifying and suggesting emerging technologies to Zara to increase competitiveness.

Task 1 Emerging Business Technologies

Overview of the company

Zara is one of the leading global fashion brands of Inditex Group established in 1975. The company is widely operating on an international platform with a vast network having approximately 5815 stores. In Spain where the company originated has 1225 stores which shows its leading value in the market of fast fashion industry. The agility as well as the vertically integrated supply chain operations carried out by the company is one of the reasons Zara is successful in the competitive market. Responding to the swiftly changing fashion trends is allowing the company to successfully its overall operations across the globe (Inditex, 2022). A wide range of products is offered by the company which includes footwear, accessories and clothing for children men and women. The offerings are upgraded as per the changing preferences of the customers and to meet the sustainability market needs.

Operating in the fashion industry Zara makes sure to carry out its operation in a well-structured and coordinated way. For this, the company focused on several aspects which include an effective and fast responsive supply chain process. It assisted the company with long-term sustainability as it ensured the company came up with creative designs and obtained competitive benefits in the market. The company is less reliant on external suppliers because it has an in-house production and design system (Ha, 2021). Having direct control over its supplies and production procedure makes it to step ahead as compared to all its competitors in the market.  The effectiveness of the company’s operation also lies based on the creative ideas brought into the design and production of the clothes. This is allowing Zara to stabilise its market value on top and set fashion trends in the market. The global presence of the company also makes it successful and accepted by the people of the society due to its white as well as customised offerings in the different parts of the world.

 

Key Innovative Technologies

Innovative technologies are emerging in the market giving the opportunities for the company to grow and explore with the newness and changes. with the emergence of technologies, companies can also attract new customers by approaching them through different means of technology (Jin and Shin, 2020). Some of the key technologies are as below-

Sustainable Supply Chain Technologies

IoT and Blockchain systems are two significant approaches and technologies that Zraa can adopt to carry out its operations supply chain effectively and sustainably. The use of IoT can be done by the company in its supply chain operation for augmented traceability as well as visibility. Ethical as well as sustainable practices can be obtained by the company with the help of IoT and Blockchain as it will help in providing real-time information about the production process (Kouhizadeh et al., 2021). These technologies will help in transparency in the journey of product tracking. This will help in sourcing ethically and attaining the commitment of sustainability helping to develop trust in the society (Nižetić et al., 2020).

Virtual Fitting Rooms with Augmented Reality (AR)

To attract customers and develop a strong relationship with them Zara can effectively come up with augmented reality approaches to enhance the shopping experience of the customers. Virtual fitting rooms have awesome creative ideas that will help attract customers as they will get the opportunity to choose the right product for themselves. Customers without being physically available at these stores can virtually access the right fitting and colour of the clothes online before making a final purchase decision (Werdayani and Widiaty, 2021). This creativity is an effort to attract new customers as well as increase the demand for existing customers as well. The digital shopping experience can be improved by Zara by building confidence as well as satisfaction amongst the customers as they get real-time experiences.

AI-powered Personalization for Customer Engagement

Companies to attract new customers can also come up with customised offerings using artificial intelligence as part of customer engagement. By studying the information and data of customers through its online websites the company can use that information to understand the needs and requirements of the people and produce offerings that are customised based on specific needs. Retaining existing customers and attracting new customers can be the potential outcome of these engaging processes (Khan and Iqbal, 2020). Customer loyalty can be enhanced as well and a strong connection can be developed between the people of the society and the brand. Unique and distinctive customer shopping experiences can be curated which in the long run assist Zara company to obtain competitive benefits sustainably.

 

 

Task 2 Using Emerging Technologies

Emerging Technologies to Monitor and Detect Changes

Changes in the market are taking place on a very frequent basis especially in the fashion industry because of the changing customer preferences and evolving trends in the industry. This is leveraging the opportunity for organisations to come up with emerging technologies to effectively monitor as well as protect the changes. It is significant for Zara company to make sure to timely monitor and detect market changes which at the current time is best performed through emerging technologies (Ahmad et al., 2020).

Artificial Intelligence (AI)

A game-changer approach for the changing market detection and monitoring is artificial intelligence technology. This has the potential to assist Zara with a large pool of information and data discerning intricate patterns.  With the effective application of artificial intelligence, the company can process the information based on real time and understand the activities of the competitors, gain information on current market trends and changes as well as the behaviour of customers (Akram et al., 2022). One of the elements of artificial intelligence is sentiment analysis which will help Zara to assist with the opinions of people in the market with the help of social media mediums. This sentiment analysis of artificial intelligence provides insight into current trends as well as a sentimental approach associated with the brands. Zara can effectively make informed decisions with the help of such unstructured data processing through artificial intelligence. Predictive analysis through AI can also be performed with the help of this Zara company can proactively make decisions regarding managing its resources and strategies. The company can refer to Netflix which also adapts AI to monitor and detect market changes and bring customised offerings (Akram et al., 2022).

Machine Learning (ML)

A machine learning system is another method that can be used by Zara to monitor and detect market changes. Algorithms of machine learning help in analysing these sales data, external factor influence, customer behaviour and market trends of the past. Understanding the historical information and data will assist Zara company to recognise the market patterns and predictively make decisions (Banerjee et al., 2021). Demand forecasting can be made accurately, market fluctuations are well identified, and effective utilisation of inventory levels are some of the outcomes that Zara can obtain through machine learning. Amazon company is an effective example of this as it uses machine learning to analyse the purchases made in past so that predictive demands can be fulfilled.

Augmented Reality (AR)

Augmented reality allows Zara to understand the shopping experience of the customers through virtual tries. This method is effective as it assists in enhancing interaction as well as customer engagement with the brand. Marketing campaigns carried out through AR assist the company with real-time information and understanding of customer behaviour. The monitoring and detection of market changes become easier to perform by Zara with the help of AR technology (Fani et al., 2023). For instance, IKEA a furniture brand uses augmented reality applications allowing customers to visualise virtual furniture settings at their homes before their purchases making it easier to make decisions. This enables Zara company to understand how the customers behave to certain offerings. The monitoring and detection of the behavioural pattern will aid in providing customised offerings.

Internet of Things (IoT)

The Internet of Things has brought a revolution in the market by monitoring the changes and detecting them with the help of connecting physical objects with the Internet and enabling data collection and information gathering through real real-time approach. RFID as well as smart shelves are some tools of the Internet of Things that will assist in monitoring the levels of inventory, call it information about the customer foot traffic as well as product movement tracking (Pal, 2020). This technology helps in understanding the behavioural aspects of customers who visit this store. Based on their decisions as well as their pattern of buying can help in making proactive decisions so that changes in the market can be handled effectively. Walmart also ensures to adapt the IoT technology for its monitoring and detection of changes that take place in the physical stores.

 

 

Value Addition of the Digital System

Enhanced Operational Efficiency

Zara with the help of artificial intelligence as well as machine learning can effectively add value to its digital system because it will help in enhancing the efficiency of its overall operations. Demand forecasting, predictive decision-making as well and management of the inventory can assist Zara sustainably survive in the competitive market. The reduction of stock-outs as well as stalking situations can be handled smartly by the company which enhances the supply chain operations effectively along with this the company can also align the product offerings with the customer’s demands (Valaskova et al., 2022). Tesla as a result of utilising AI and ML has enhanced its operational efficiency, Zara can also utilise it for its sustainable growth.

Elevated Customer Experience

The incorporation of augmented reality adds value to the company’s digital system because this helps in elevating the experiences of customers’ shopping experience. This technology also provides the company with the assistance of building a strong relationship with the customers as customised offerings are availed as an option for the customers. The technology offers distinctive as well as memorable interaction between customers and the company allowing people of the society to get personally engaged with the contents offered by the company (Hoyer et al., 2020). It is true to say that the more customers are engaged with the brand the level of satisfaction and experience is our high. As Sephora utilises augmented reality to elevate the experiences of the customers Zara will also benefit from this technology.

Data-Driven Personalization

The value that Zara company obtained from integrating and utilising artificial intelligence is the data-driven customised approaches. The product offerings to the customers can be more realistic and satisfactory based on artificial intelligence algorithm because it provides deep insight into individual’s tastes and preferences, patterns of behaving as well as prior purchases made. Based on the analysis through artificial intelligence the company can offer customised products improving the shopping experience of each individual associated with the brand (Valdez Mendia and Flores-Cuautle, 2022). This will help in increasing the value as well as Zara’s market presence. For instance, Spotify allows customers to choose their playlists based on their taste of music.

Operational Insights

The proper understanding and current state of the company’s operational activities can also be obtained with the effective application of IoT. The real-time insight of the situation will enhance the company’s performance efficiency as well as also assist in the improvement of the customer experience. Improvement in the operational performance is the added value provided by IoT in Zara’s digital system (Huynh, 2021). The operational efficiency of Coca-Cola is highly aligned with the utilisation of IoT sensors in its vending machines.

 

 

Task 3 Security Threats

The emerging online security threat

Ransomware Attacks

ransomware attacks are very common and over time have become a sophisticated risk impacting the routine activities of businesses in various industries. Cybercriminals encrypt the data and information of organisations by deploying malicious software systems so that they can demand ransom in return for releasing this threat (Permana et al., 2022). This kind of security threat is one of the challenges that could be faced by Zara company which can influence its financial as well as confidential information.

The 2017 WannaCry ransomware attack is one of the security threats that influenced the global information system. Over 150 countries were influenced, and 230000 systems were affected by it (Saha, 2023). This is a historical moment to record which can be referred to by Zara company to ensure that technologies with benefits bring a lot of challenges as well. The company needs to understand the pros and cons of the utilisation of technologies.

Cybercriminals directly attack the system and affect the organisation’s confidential information and data especially when there is a poor and effective security system installed. Therefore, company like Zara needs to develop strategies and allocate the resources in such a way that the system/central database is protected against such malicious software.

Zero-Day Exploits

This is another security threat that could be faced by Zara company as zero-day exploits directly target the system of the companies where unauthorised reach to the information and data access is preceded. System compromises as well as breaches of data are the potential outcome of these kinds of security threats. These are vulnerable because the software developers may confront challenges in understanding what actual problem has been caused which makes it challenging to defend the impact of these security threats (Ali et al., 2023).

NotPetya malware a zero-day vulnerability that occurred in 2017 in Ukraine which was a talk across the globe. This cyber attack has highly affected the companies in Ukraine which as a result disrupted several companies’ operations and activities (Greenberg, 2018). This has also affected the financial information of several companies which complicated the survival as well as regular operations of businesses in various industries. The company must ensure to overcome such threats by regularly assessing the vulnerabilities as well as investing in a system that detects such malware.

Cloud-Based Threats

Data breaches, access to data with no authorisation and misconfigured settings are some of the cloud-based threats which most companies are confronting due to the high reliability of cloud systems (Abdulsalam and Hedabou, 2021). For instance, in 2019, The Capital One cloud data breach occurred which was configured from the Amazon Web Service firewall cloud. This has affected the private information of the customers causing damage to the company of $200 million (Furman, 2023). Considering such a situation there is a high potential for Zara to also confront such a situation thus it needs to have robust measures of security in the cloud system. A data governance strategy is to be introduced to look into the security needs of information on the cloud.


 

Conclusion

From the aforementioned discussion, it has been identified that Zara being one of the top fashion brands has the potential to utilise several emerging technologies for its sustainability, customer attraction and long-term retention. The technologies are supporting the company in adding value to its digital system as well as making a strong presence in the market by developing healthy relationships with prospects. Although there are benefits associated with the emerging technologies there are threats which can affect the smooth operations of the company. cyber threats are very challenging as they are unpredictable.

 

 

References

Abdulsalam, Y.S. and Hedabou, M., 2021. Security and privacy in cloud computing: technical review. Future Internet14(1), p.11.

Ahmad, S., Miskon, S., Alabdan, R. and Tlili, I., 2020. Towards sustainable textile and apparel industry: Exploring the role of business intelligence systems in the era of industry 4.0. Sustainability12(7), p.2632.

Akram, S.V., Malik, P.K., Singh, R., Gehlot, A., Juyal, A., Ghafoor, K.Z. and Shrestha, S., 2022. Implementation of digitalized technologies for fashion industry 4.0: Opportunities and challenges. Scientific Programming2022.

Ali, S., Rehman, S.U., Imran, A., Adeem, G., Iqbal, Z. and Kim, K.I., 2022. Comparative Evaluation of AI-Based Techniques for Zero-Day Attacks Detection. Electronics11(23), p.3934.

Banerjee, S.S., Mohapatra, S. and Saha, G., 2021. Developing a framework of artificial intelligence for fashion forecasting and validating with a case study. International Journal of Enterprise Network Management12(2), pp.165-180.

Fani, V., Antomarioni, S., Bandinelli, R. and Ciarapica, F.E., 2023. Data Mining and Augmented Reality: An Application to the Fashion Industry. Applied Sciences13(4), p.2317.

Furman, D., 2023. Capital One’s $200M Cloud Catastrophe. Linkedin. Available at: (6) Capital One’s $200M Cloud Catastrophe | LinkedIn. [Accessed: 5th January 2024].

Greenberg, A., 2018. The Untold Story of NotPetya, the Most Devastating Cyberattack in History. Wired. Available at: The Untold Story of NotPetya, the Most Devastating Cyberattack in History | WIRED. [Accessed: 5th January 2024].

Ha, J., 2021. Zara Strategic Analysis.

Hoyer, W.D., Kroschke, M., Schmitt, B., Kraume, K. and Shankar, V., 2020. Transforming the customer experience through new technologies. Journal of interactive marketing51(1), pp.57-71.

Huynh, P.H., 2021. Enabling circular business models in the fashion industry: The role of digital innovation. International Journal of Productivity and Performance Management71(3), pp.870-895.

Inditex., 2022. INDITEX GROUP ANNUAL REPORT 2022. Inditex. Available at: https://static.inditex.com/annual_report_2022/pdf/Inditex-group-annual-report-2022.pdf. [Accessed: 5th January 2024].

Jin, B.E. and Shin, D.C., 2020. Changing the game to compete: Innovations in the fashion retail industry from the disruptive business model. Business Horizons63(3), pp.301-311.

Khan, S. and Iqbal, M., 2020, June. AI-Powered Customer Service: Does it Optimize Customer Experience?. In 2020 8th International Conference on Reliability, Infocom Technologies and Optimization (Trends and Future Directions)(ICRITO) (pp. 590-594). IEEE.

Kouhizadeh, M., Saberi, S. and Sarkis, J., 2021. Blockchain technology and the sustainable supply chain: Theoretically exploring adoption barriers. International journal of production economics231, p.107831.

Nižetić, S., Šolić, P., Gonzalez-De, D.L.D.I. and Patrono, L., 2020. Internet of Things (IoT): Opportunities, issues and challenges towards a smart and sustainable future. Journal of cleaner production274, p.122877.

Pal, K., 2020. Internet of things and blockchain technology in apparel manufacturing supply chain data management. Procedia Computer Science170, pp.450-457.

Permana, G.R., Trowbridge, T.E. and Sherborne, B., 2022. Ransomware Mitigation: An Analytical Investigation into the Effects and Trends of Ransomware Attacks on Global Business.

Saha, S., 2023. “WannaCry Unveiled: A Comprehensive Analysis of the Ransomware Attack that Paralyzed Global Systems”. Linkedin. Available at: (6) “WannaCry Unveiled: A Comprehensive Analysis of the Ransomware Attack that Paralyzed Global Systems” | LinkedIn. [Accessed: 5th January 2024].

Valaskova, K., Nagy, M., Zabojnik, S. and Lăzăroiu, G., 2022. Industry 4.0 wireless networks and cyber-physical smart manufacturing systems as accelerators of value-added growth in Slovak exports. Mathematics10(14), p.2452.

Valdez Mendia, J.M. and Flores-Cuautle, J.D.J.A., 2022. Toward customer hyper-personalization experience—A data-driven approach. Cogent Business & Management9(1), p.2041384.

Werdayani, D. and Widiaty, I., 2021, March. Virtual fitting room technology in fashion design. In IOP Conference Series: Materials Science and Engineering (Vol. 1098, No. 2, p. 022110). IOP Publishing.

 

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Zara Case Study Analysis - Identify and Suggesting Emerging Technologies to Zara
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Zara Case Study Analysis - Identify and Suggesting Emerging Technologies to Zara
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