Last weekend I walked in a recently opened Zara Home Shop. I had seen it before as a section of Zara, but this was the first time I actually looked around.
As a customer it didn't take long to become quite confused. The shop didn't look like Zara, of course it had nice linen and small decor items. But still my thought was "I can probably find some decent stuff here at good prices" and that was my biggest surprised. I felt that all items were not cheap at all. Certainly not what I would expect from a Zara brand. So I was wondering is Zara changing prices now? or Zara Home is something else? but if it is why is it called Zara anyways?
Nowadays is pretty well known that there are two extremes of brand portfolio models: House of brands and branded house. Most companies however use some kind of hybrid model. Take Inditex for example who possesses eight fashion brands, the major one being Zara (about 60% of the group revenue). Others include Massimo Dutti and Bershka. This would typically indicate a house of brands where you have a number of different brands with many in the same category. That makes sense for Inditex as each brand exists on its own and have different positioning. For example, Zara's is something like "fashionable product line for moderate costs and good quality". Massimo Dutti on the other hand "classic/office wear with good quality" and focus on an older and more affluent demographic.
The advantage of the house of brands is that the customer targeting and positioning of each brand is clear and independent. Of course one of the downsides is the lack of synergy and scale.
However, with the launch of Zara Home 10 years ago, the company went into a hybrid model by extending the Zara brand into a different segment, home décor and linens.
The brand experienced significant growth in 2013. Zara Home has been opening several stores globally and online sales channel. This all sound very positive, however its revenue is a mere fraction of the main brand Zara,
In principle wxtending the Zara brand makes sense, Zara is probably the attention focus of the company since most revenue comes from it. This also maximizes scale as many Zara Home shops are extensions of a Zara shop. So it's understandable the pressure to leverage the existing brand. But the question is: Does it fit under the primary brand and share a common positioning statement? Based on my personal experience, I'm afraid it doesn't.
With that said, one can argue that they went with the Brand System Approach in which you can, based on some similarity ( a shared brand experience/perception), establish a brand positioned differently in different categories. Take for example the heavy band Iron Maiden that has launched a beer under its brand.
As a customer it didn't take long to become quite confused. The shop didn't look like Zara, of course it had nice linen and small decor items. But still my thought was "I can probably find some decent stuff here at good prices" and that was my biggest surprised. I felt that all items were not cheap at all. Certainly not what I would expect from a Zara brand. So I was wondering is Zara changing prices now? or Zara Home is something else? but if it is why is it called Zara anyways?
Nowadays is pretty well known that there are two extremes of brand portfolio models: House of brands and branded house. Most companies however use some kind of hybrid model. Take Inditex for example who possesses eight fashion brands, the major one being Zara (about 60% of the group revenue). Others include Massimo Dutti and Bershka. This would typically indicate a house of brands where you have a number of different brands with many in the same category. That makes sense for Inditex as each brand exists on its own and have different positioning. For example, Zara's is something like "fashionable product line for moderate costs and good quality". Massimo Dutti on the other hand "classic/office wear with good quality" and focus on an older and more affluent demographic.
The advantage of the house of brands is that the customer targeting and positioning of each brand is clear and independent. Of course one of the downsides is the lack of synergy and scale.
However, with the launch of Zara Home 10 years ago, the company went into a hybrid model by extending the Zara brand into a different segment, home décor and linens.
The brand experienced significant growth in 2013. Zara Home has been opening several stores globally and online sales channel. This all sound very positive, however its revenue is a mere fraction of the main brand Zara,
In principle wxtending the Zara brand makes sense, Zara is probably the attention focus of the company since most revenue comes from it. This also maximizes scale as many Zara Home shops are extensions of a Zara shop. So it's understandable the pressure to leverage the existing brand. But the question is: Does it fit under the primary brand and share a common positioning statement? Based on my personal experience, I'm afraid it doesn't.
With that said, one can argue that they went with the Brand System Approach in which you can, based on some similarity ( a shared brand experience/perception), establish a brand positioned differently in different categories. Take for example the heavy band Iron Maiden that has launched a beer under its brand.
So I suspect Zara is trying to relate the two different positioned brands by using the same essence, arguably, "fashionable product lines". But in my own experience that didn't work as I don't see Zara having its essence on fashionable items. The affordable part of Zara positioning is key and apparently missing in Zara Home.
For more info on Brand Systems and Brand Innovation check "Kellogg on Marketing" by Alice M. Tybout (Editor), Bobby J. Calder (Editor), Philip Kotler (Foreword)
For more info on Brand Systems and Brand Innovation check "Kellogg on Marketing" by Alice M. Tybout (Editor), Bobby J. Calder (Editor), Philip Kotler (Foreword)
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