Inditex is positioning itself to win in a digital future
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Inditex is positioning itself to win in a digital future

Inditex, the Spanish fast-fashion giant behind popular high street brands like Zara, is looking to the future. As powerful Ecommerce forces like Amazon look to muscle in on new markets, the only way for organizations to protect themselves from disruption is to embrace modern technology and innovation. And that’s exactly what Inditex is doing.

Inditex’s share price has surged over the past five days

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SOURCE: Yahoo Finance

Over the last few months, Inditex has been rolling out new technology at select Zara locations around the world. Amongst these innovative updates are augmented reality and holograms, which let users get a feel for which styles will work for them without having to strip down and check them out in person. It’s yet another step towards the company’s goal of blending its online and offline operations into one, seamless, customer experience.

To accomplish this, Inditex is spending big. The company has started operating online sales in Australia and New Zealand, and it’s planning to start operating a new 90,000-square-meter distribution center down to the road from its headquarters in Artexio. The center is expected to open this summer, and won’t be Inditex’s only new property – the company is also planning to create a new logistics hub in the Netherlands. Taken together, all this inward investment will come with a price tag that exceeds €150 million. Still, if it continues Inditex’s 15 year run of revenue growth, it will be worth it.

graph 1506 indietex 2

Inditex is working hard to conquer the new retail spaces opening up online and between the online and offline worlds. And it’s succeeding. The company said it saw a 41% increase in online sales last year, and it will replace an outgoing board member with Pila Lopez Alvarez – the head of Microsoft Corp. in Spain.

For a company that made its name disrupting the traditional fashion world with lightening fast supply chains and instant in-store feedback systems, that might not be surprising. It is, nonetheless, great news for investors.

Disclosure

Dominion holds Inditex in its Global Trends Luxury Fund.


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