Excerpt From: Duncan J. Watts's Everything Is Obvious. A book I'm currently reading, and highly recommend if this subject matter is of interest to you: How Common Sense Fails Us.
Beginning of chapter 8:
Of all the prognosticators, forecasters, and fortune-tellers, few are at once more confident and yet less accountable than those in the business of predicting fashion trends. Every year, the various industries in the business of designing, producing, selling, and commenting on shoes, clothing, and apparel are awash in predictions for what could be, might be, should be, and surely will be the next big thing. That these predictions are almost never checked for accuracy, that so many trends arrive unforeseen, and that the explanations given for them are only possible in hindsight, seems to have little effect on the breezy air of self-assurance that the arbiters of fashion so often exude. So it’s encouraging that at least one successful fashion company pays no attention to any of it.
That company is Zara, the Spanish clothing retailer that has made business press headlines for over a decade with its novel approach to satisfying consumer demand. Rather than trying to anticipate what shoppers will buy next season, Zara effectively acknowledges that it has no idea. Instead, it adopts what we might call a measure-and-react strategy. First, it sends out agents to scour shopping malls, town centers, and other gathering places to observe what people are already wearing, thereby generating lots of ideas about what might work. Second, drawing on these and other sources of inspiration, it produces an extraordinarily large portfolio of styles, fabrics, and colors—where each combination is initially made in only a small batch—and sends them out to stores, where it can then measure directly what is selling and what isn’t. And finally, it has a very flexible manufacturing and distribution operation that can react quickly to the information that is coming directly from stores, dropping those styles that aren’t selling (with relatively little left-over inventory) and scaling up those that are. All this depends on Zara’s ability to design, produce, ship, and sell a new garment anywhere in the world in just over two weeks—a stunning accomplishment to anyone who has waited in limbo for just about any designer good that isn’t on the shelf.