We visited H&M and Zara to see which was a better fast-fashion store - and the winner was clear for a key reason (2023)

FAQs

How is H&M better than Zara? ›

Opposing discounting strategies

A key differentiator between the retailers is their approach to sales. Zara has traditionally taken a subtler approach to reductions, only discounting during key sales periods while H&M takes more frequent and aggressive markdowns.

12-8. The most appealing case about fast fashion brands such as Zara and H&M is their short lead time. The time of designing the garment, manufacturing it and then packaging and shipping it is very fast and so they are able to reach to the customers …

Zara's strategy is to offer a higher number of available products than its competitors. While most clothing retailers manufacture and offer to the public for sale 2,000 to 4,000 different articles of clothing, Zara's production has been markedly higher, at over 10,000 pieces produced per year.

Ultimately, while Inditex and H&M are both fast-fashion retailers, “Zara has been coming back to having a pretty strong product in store,” Ramirez said. “And I think when you look at H&M, we really haven't seen anything very strong come from them.” “At a time when there is inflation and…

The secret to the success of H&M and its rivals like Zara and Forever 21 can be attributed to the fast fashion business model. Fast fashion relies on moving a large volume of merchandise from the designer table to the showroom floor in the shortest amount of time possible and at a reasonable price.

Zara's success is based on its ability to adapt quickly. Unlike many clothing brands, whose designs are stagnant for the season, Zara is constantly assessing and reacting to the environment in a matter of weeks. The brand designs new styles and pushes them into stores while the trend is still at its peak.

Because Zara's items are priced based on market demand, not on manufacturing cost. Plus, 85% of its items are sold at full price compared to the fast fashion industry's year-long sales and discounts. With billions of dollars worth of annual profits, it was honored as the 41st Most Valuable Brand by Forbes in 2020.

over 450 million items per year and 500 new designs each week. This fast turnover is the reason why it's recognized as one of the largest retailers in fast fashion.

When other companies were manufacturing their collections once per season, Zara was adapting its collection to suit what people asked for on a weekly basis. The idea was to offer fashionable items at a fair price and faster than everybody else. Part of its cost-cutting strategic priority was its marketing strategy.

Adopting everyday low pricing strategy, H&M makes fashion buyers to rather buy H&M low-price brand-name products than wait for department-store salesIn addition to the prices, H&M changes customers' behavior by creating an exciting and interesting shopping experience when the company restocks its store inventory daily.

What is H&M competitive advantage strategy? ›

H&M's business model specifically is to sell at relatively low prices, which in turn will enable the company to be able to compete with the fashion industry by offering similar fashions, but at lower prices, saving money on the design process.

Positioning of Zara

Zara's target demographic is between the ages of 20 and 35, and they are fashion-conscious but unable to afford expensive labels. As a result, to fulfill consumer demand for this client base, Zara develops a quick fashion strategy, which is a huge success in today's market.

Scoring even lower than H&M on the Rank a Brand sustainability scale, Zara received a 14/36 - also a C. Taking a look at the report, we see that Zara has implemented policies for the reduction of hazardous chemical use, but none that have to do with carbon emissions or the usage of sustainable raw materials.

While H&M does make good promises and sustainability commitments for the future which include using recycled and sustainability-produced materials only by year 2030, the fast fashion business model per se isn't sustainable in itself as it supports the “buy-and-throwaway” consumer mentality and still produces waste.

In the 1980s Zara disrupts the fashion industry by radically reconfiguring the supply chain and creating the fast-fashion category. It is able to almost instantly react to fashion trends by vertically integrating its supply chain.

We believe in people. We are the best we can be and bring out the best in everyone and the business. We empower and trust others to take ownership and embrace diverse perspectives. We listen to and learn from our colleagues.

With 3 billion garments produced a year, H&M is one of the top polluters in the fashion industry. That means for H&M to be considered a more sustainable brand they must take a good hard look at their business model and their excessive rate of production.

In-House Production

While the likes of H&M, Gap, and Uniqlo outsource their production to third parties, Zara keeps the production process in-house. Rivals outsource to Asian countries for lower labor costs, however, Zara keeps factories near its Spanish headquarters (mainly Spain, Portugal, and Morocco.)

The success of the brand lies where customers appreciate and desire the brand, which is over and above product level benefits and strongly driven by the brand experience. Zara uses its store location and store displays as key elements of its marketing strategy.

3. Zara's Mission Statement. In brief, Zara's statement is "to give customers what they want, and get it to them faster than anyone else." An effective mission statement is something clear and concise, and Zara's mission statement definitely gets a check-in both these criteria.

How is H&M better than its competitors? ›

The H&M brand emphasizes offering their quality products cheaper as a means to keep customers trooping into their shops. They are known to offer huge discounts very often, unlike most of their competitors.

Unlike H&M, whose maximum prices do not differ between premium and regular collections, ZARA has a higher maximum price for its premium collection. Within its regular collection, ZARA continuously keeps its prices higher than its Swedish competitor.

H&M's business idea is to offer fashion and quality at the best price in a sustainable way. With a broad and varied product range, H&M makes it easy for anyone who is into fashion to express their own personal style.

With more than 5,000 stores worldwide, H&M is one of the many fast fashion companies known for copying high-end fashion, rapid clothing turnover, unsustainable practices including the use of harmful chemicals in its products, as well as inhumane working conditions.

It's no secret that Zara is one of the largest fast-fashion brands on the planet. And much like all fast fashion's major players, the way they are treating their workers in the supply chain is as terrifying as their blatant environmental negligence.

H&M has become one of the leading fast fashion companies using its supply chain and techonology as core competitive advantages. H&M's business model consists of creating value for customers by offering fashion and quality at the best price.

The company's business model is centered around fast fashion, which involves quickly moving new styles from the catwalk to retail stores. By focusing on efficient supply chain management, design, and production processes, H&M can offer new items at competitive prices.

Competitive advantages are attributed to a variety of factors including cost structure, branding, the quality of product offerings, the distribution network, intellectual property, and customer service.

Apart from being agile, its supply chain and production system are efficient and designed to deliver results faster. Another attractive aspect of ZARA's business model is the in-store experience. These stores are designed to offer a great in-store shopping experience and create highest satisfaction for customers.

Gap is an omnichannel retailer of clothing, accessories, and personal care products for men, women, and children. Fast Retailing is a retail holding company. Uniqlo is a casual wear designer, manufacturer and retailer. Inditex is a company operating as a clothing and fashion retailer.

Why is Zara expensive for fast fashion? ›

Unlike most fashion brands, its products are not that cheap. Because Zara's items are priced based on market demand, not on manufacturing cost. Plus, 85% of its items are sold at full price compared to the fast fashion industry's year-long sales and discounts.

At H&M Group, we consider the needs of present and future generations, and conduct our business in a way that is economically, socially and environmentally sustainable. This is why we set clear ambitions and bold goals.

Challenges − Despite its success, H&M has faced challenges, such as increased competition from fast-fashion and online-only retailers, changing consumer preferences, and the impact of the COVID-19 pandemic.

H&M set a goal to have 100% of their garments made from recycled components by 2030, and they claim that, as of recently, that figure was already at 65%. Having a goal of 2030 may seem like a good thing, however, there are many brands already using 100% sustainable fabric in 2022.