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The Inditex Group is a Spanish enterprise that is one of the biggest global players of today. Just recently Inditex biggest subsidiary company Zara outstraped the swedish giant H&M in terms of sale. With eight sales concepts Zara, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Kiddy’s Class  Inditex had (2006) 3,701 stores in 68 countries. The company claims that „Inditex’s philosophy -creativity and quality design together with a rapid response to market demands- has resulted in fast international expansion and excellent response to their sales concepts.”

 I find that especially interesting after I realized that although addressing pretty much the same target group, both companies follow entirely different marketing strategies. Zara and H&M are both huge European clothing retailers and each others’ biggest competitors. Meanwhile it’s publish knowledge that Zara’s secret to success is it’s short response time in terms of fashion moods. It implements fashion trends the fastest in the whole industry since the factories are located relatively close by. They forbear from cheap eastern Asian salaries to produce faster in Europe.  The price for that kind of customer convenience is more expensive cloths. This sometimes cuts of the rather price-conscious H&M clients from the Zara followers.  Personally, I was wondering when I read some of the numbers, which IT systems a retailer like Zara, or rather its mother company Inditex would use to keep track of all the customer needs, design specification, delivery and so on. There will be more things to consider than I can think of as an outsider.

I found information that Zara for example currently uses POS systems in its retailer. POS means point-of-sale. I found the following Wikipedia definition the most helpful, so please: The retailing industry is one of the predominant users of POS terminals.

A Retail Point of Sales system typically includes a computer, monitor, cash drawer, receipt printer, customer display and a barcode scanner, and the majority of retail POS systems also include a debit/credit card reader. It can also include a weight scale, integrated credit card processing system, a signature capture device and a customer pin pad device. More and more POS monitors use touch-screen technology for ease of use and a computer is built in to the monitor chassis for what is referred to as an all-in-one unit. All-in-one POS units save valuable counter space for the retailer. The POS system software can typically handle a myriad of customer based functions such as sales, returns, exchanges, layaways, gift cards, gift registries, customer loyalty programs, BOGO (buy one get one), quantity discounts and much more. POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types.

The POS unit handles the sales to the consumer but it is only one part of the entire POS system used in a retail business. “Back-office” computers typically handle other functions of the POS system such as inventory control, purchasing, receiving and transferring of products to and from other locations. Other typical functions of a POS system are to store sales information for reporting purposes, sales trends and cost/price/profit analysis. Customer information may be stored for receivables management, marketing purposes and specific buying analysis. Many retail POS systems include an accounting interface that “feeds” sales and cost of goods information to independent accounting applications“

In addition to the POS system, an (rumors say OUTDATED) DOS system is also used by Zara. Vital information on the DOS system are as follows: „DOS Stands for “Disk Operating System. DOS was the first operating system used by IBM-compatible computers. It was originally available in two versions that were essentially the same, but marketed under two different names. “PC-DOS” was the version developed by IBM and sold to the first IBM-compatible manufacturers. “MS-DOS” was the version that Microsoft bought the rights to, and was bundled with the first versions of Windows.

DOS uses a command line, or text-based interface, that allows the user to type commands. By typing simple instructions such as pwd (print working directory) and cd (change directory), the user can browse the files on the hard drive, open files, and run programs. While the commands are simple to type, the user must know the basic commands in order to use DOS effectively (similar to Unix). This made the operating system difficult for novices to use, which is why Microsoft later bundled the graphic-based Windows operating system with DOS“

So knowing that Zara apparently uses an outdated IT system and STILL records enormous sales, makes me either doubt the theory of new IT systems being super-important for a company’s succes, OR makes me take into consideration that even a bigger range of sales for Zara. Either way, further investigation might be interesting….

by Inga  Z.