This is what allowed Zara founder, Amancio Ortega to become the richest man in the world (for at least a couple days).
Fast fashion: Customers wanted the latest fashion, yesterday. Zara’s competitors were taking too long bringing the latest designs to market. Other retailers try to decide what to make, then produce it. A push-model of product development. For example, GAP and H&M will take 5 months to make, design, and distribute new products. Zara listens to what their customers are asking and buying. A pull-model of product development that takes Zara 3 weeks.
Of course it’s not as easy as just asking what each customer wants. Lots of times, people don’t know what they want until it’s shown them. Henry Ford once said if he asked what his customers want, they would’ve responded with, “a faster horse.” Also, changing from a push-model to a pull-model requires overhauling a company’s supply-chain. Raw materials purchases buy 6 months out or more. Trying to get a refund on 100 gallons of dye is not as easy as it sounds.
Although Zara is not considered inexpensive, lower-market competitor Forever 21 has taken it to the next level.
Cheap: In addition to fully embracing fast fashion, Forever 21 offers their products at very low prices. This has allowed Forever 21 to have revenues of $4.4 billion in 2015.
So how do you incorporate market feedback in your business? Generally, smaller companies have an easier time making adjustments because it is a more agile company with more one-on-one contact with vendors and customers. In business school I asked billionaire Leonard Lavin, founder of Alberto-Culver (maker of Alberto VO5 hair products) about his education background. He said he had an MBWA. Master By Walking Around. This meant, he walked around his business and talked to his employees, his customers, his vendors. He conducted market and industry research everyday. If you don’t take the time to talk to your customers, it might be detrimental to your company’s success further on down the road.