Abstract
From an international business risk management perspective, the widespread and catastrophic implications of the COVID-19 pandemic on the performance of Zara (Parent company Indetex) are studied and analyzed to contribute to ongoing research on the conventional brick-and-mortar retail business. Brick-and-mortar retail has headed into decline over the last several years, and e-retailing has grown exponentially during the lockdown period of the COVID-19 pandemic. The objective of this study is to understand and highlight the impact of the coronavirus (COVID-19) crisis on the performance of Zara in Saudi Arabia. It was found that consumers’ preferences and purchasing behavior experienced a paradigm shift from the earlier behavior patterns. Because this crisis has caused many businesses to collapse altogether, this study tries to understand the specific factors that were responsible for affecting the overall performance of Zara. This helped generate several key findings. This study also aims to identify the main challenges relating to sustainable retailing at Zara and review how Zara has incorporated sustainability into their business. The concept of sustainability has gained widespread appeal due to growing concerns over environmental externalities. The results from this review also indicate that there is a lack of research on sustainable retailing with respect to Zara in the global market. Further, this review proposes potential digital strategies for Zara to maintain their performance in the global market during the COVID-19 pandemic.
Highlights
The sudden outbreak of a coronavirus strain, which outbroke from the city of Wuhan, China, and subsequently spread across the world in a short span of time, negatively impacted economies around the globe
The results from this review indicate that there is a lack of research on sustainable retailing with respect to Zara in the global market
This study focuses on how the pandemic has impacted consumer behaviors and how ZARA’s state-of-the-art sustainability initiatives have helped it to survive the competition in the global market
Summary
The sudden outbreak of a coronavirus strain, which outbroke from the city of Wuhan, China, and subsequently spread across the world in a short span of time, negatively impacted economies around the globe. Consumers are likely to cut back on accessories, jewelry, and other discretionary categories before reducing their spending on apparel and footwear this is why the fast fashion industry was held back for a shorter span of time (Kohan, 2020). The aim of this study is to highlight the overall performance of Inditex-Zara’s unique operating model during the COVID-19 pandemic, focusing on the business’ three pillars: flexibility, digital integration, and sustainability. Inditex-Zara’s agile supply chain, production, and retail network, which aim to create ‘world-class’ responsiveness to changing customer demands, are the main reason for their success even during the pandemic. Zara’s holistic approach has, to a great extent, improved its performance in terms of its competitiveness and customer satisfaction; it has helped it be rapidly responsive to shifts in the ever-changing fashion apparel industry, even during these exceptionally turbulent times.
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