Zara Parent Invests in Tech as Sales Climb

Fast fashion giant Inditex is investing in technology after reporting strong 2022 sales.

The Spanish clothing company, whose brands include Zara, said in its yearly earnings report Wednesday (March 15) that sales had risen 18% year-over-year.

And to help drive sales in the year to come, Inditex will invest in increasing its logistics capacity with a special focus on automation, as well as other new technology, as the brand finds itself fighting for space in an increasingly crowded fast fashion sector.

Among the company’s planned tech innovations is the debut of new security technology in its stores to eliminate the need for hard tags.

“This new technology will allow a significant improvement in customer experience, facilitating interaction with our products and improving the purchasing process,” the earnings report said, adding that the new system would “be the basis for us to continue deepening the digitalisation of stores and their integration with online platforms in the coming years.”

Inditex says it will also introduce tools for its eCommerce channels, such as a “new size recommender and a real-time personalisation model that will facilitate the search.”

The company is continuing with the sustainability push announced last year, which includes projects like Zara Pre-Owned, a service that lets consumers prolong the usable life of garments by either having them repaired, reselling them or donating them.

Inditex isn’t the only fast-fashion player targeting the resale space. This week also saw rival H&M — which also announced earnings Wednesday — launch a partnership with reCommerce platform thredUP.

“We need to take responsibility for the impact fashion has on climate and the environment,” H&M North America Head of Sustainability Abigail Kammerzell said in a news release.

“Circular business models can help us reduce and limit this negative impact, while continuing to deliver fashion and style for our customers. With the launch of our first resale model in the U.S. market, we’re taking the next big step in that direction.”

As PYMNTS has written, both Zara and H&M are under threat of seeing their sales dwarfed by Shein, a Chinese fast fashion brand and a relative newcomer on the scene.

Last month, Shein — which is planning to go public soon — said it plans to double its revenue by 2025 while projecting its gross merchandise value (GMV) will climb 174%. The company’s annual revenue forecast of $58.5 billion would top combined sales for H&M and Zara.

In 2022, thredUP asked customers to boycott a Bay Area popup by Shein, according to a report from Fast Company.

“This is definitely a first for ThredUp,” Erin Wallace, the company’s vice president of integrated marketing, told the publication. “It’s an indication that we think Shein is a real problem.”

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.