Inditex's late entry into e-commerce was a good thing, says Pablo Isla

Inditex chairman Pablo Isla said on Tuesday that the company’s late e-commerce launch allowed it to develop a business model that has positioned it more strongly than otherwise.

Inditex chairman Pablo Isla said on Tuesday that the company’s late e-commerce launch allowed it to develop a business model that has positioned it more strongly than otherwise.

Speaking at the CEO Council event organised by the Wall Street Journal in London, Isla stressed that the group behind Zara had no e-commerce operations until 2010, when it integrated its digital business with its stores.

The fashion giant has designed an online strategy that takes advantage of its fast production and distribution capabilities to use its stores and pick-up and return points for online customers.

If Inditex had entered the online race five years earlier, things would have been different, Isla explained.

"It's much more difficult later on to try to move to an integrated business than from the very beginning," he said.

Although the company bases its sourcing and distribution decisions on algorithms and data, it continues to depend largely on store managers to make decision, he noted.

“We always try to manage data but without losing at the same time the human touch,” he explained.

He added that globalisation and interconnectedness led by social media has made local trends take on a wider significance.

Mobile payments, cashless stores and orders placed in store but with home delivery are some of the behaviours Inditex is observing in China and will likely emerge in other markets.

Isla reassured that the trade war is having no effect on his business, as the company is diversified enough to handle the tensions.

It will be key to cut lead times, he said, explaining that this will allow Inditex to better respond to fast-changing trends and avoid taking big risks.

The company manufactures many of its products in Portugal and Spain, where it has opened various headquarters and fulfillment facilities.

This approach gives it an advantage over rivals because of the speed with which new products arrive in store, he said.

“If you have to take decisions 12 months in advance you run a huge fashion risk,” he concluded.