My recent posts on Under Amour try to explain why companies have an obligation to fix production in their local communities. Localism is a moral claim relevant to discussions of business organization and strategy, as well as debates about trade, globalism, and offshoring.
Chapters 3 and 7 of V&R are critical of Fast Fashion for a number of reasons and one is the lack of localism. Zara is a fast fashion leader and no stranger to bad press. It has been criticized for its indifference to the full range of women’s bodies (see my discussion of Adam Smith and plus-size women http://www.ethicsoffashion.com/adam-smith-on-corsets/) and the bizarre episode over its sale of pajamas with a big yellow star (inevitably recalling Nazi persecution of the Jews). However, Zara is impressive in its localism.
The founder of the company, Amancio Ortega, began working at 14 delivering shirts for a shirtmaker and subsequently built the world’s biggest fashion retailer by sales. An analyst summarizes its business edge: it is not a brand but a chameleon adapting instantly to fashion trends (http://www.wsj.com/articles/fast-fashion-how-a-zara-coat-went-from-design-to-fifth-avenue-in-25-days-1481020203). Zara can design and deliver to shops a new item in two weeks. The American retailer J.C. Penny takes 10 months. The difference?
At Zara, design, manufacturing, and demand are local.
In the small Spanish industrial city of Arteixo (http://spain.places-in-the-world.com/places-in-the-world-map-l.php?lat=43.3048200&lon=-8.5074900) design and manufacturing work side-by-side to respond to what store managers around the world are relaying about customer wants. Shop managers send along desires/ideas they are getting from their customers and the design and manufacturing teams in Spain set to work. Localism gives Zara its highly envied commercial nimbleness.
In moral terms, Zara’s business model exhibits solidarity at home and subsidiarity for its customers world-wide (for a refresher on the moral concepts of solidarity and subsidiarity see V&R Chapter 3). Cunningly, this subsidiarity also aids Zara in crafting some exclusivity as its products are not global and are limited run.
Zara’s localism has already solved a problem facing other global fast fashion companies. The return to craft traditions in beer and food is actually a far-reaching demand for local consideration (the political face of this in 2016 was Brexit and the US presidential election). Retailers are trying to respond and moving away from a universal experience to a relevancy model, where they try to integrate their shops into the local culture and high street experience (https://www.businessoffashion.com/articles/intelligence/glocalization-localization-retail-lululemon-uniqlo-nike?utm_source=Subscribers&utm_campaign=87303c4347-&utm_medium=email&utm_term=0_d2191372b3-87303c4347-417297929). Organizing running-clubs, hosting yoga, supporting cultural partnerships, and shop managers also paid to be ambassadors to the community are some ideas companies have come up with. Some remain frank that as the goal is money these “localist” gestures are a bit of colour added to otherwise global operations for the sake of economies of scale.
Zara shows them all that high morals and high profits can go hand-in-hand.