Inditex invests in technology to merge online with in-store shopping

MADRID (Reuters) – Zara owner Inditex unveiled a 2.7 billion euro ($3 billion) investment in technology on Wednesday to make it easier for customers to track the items they want, blurring the lines between online and in-store shopping.

Using the fashion retailer’s app, shoppers will be able to browse a specific store’s stock to buy items for collection the same day, reserve a changing room, find garments in store via a map and self check-out using QR codes.

The idea is that sophisticated control of stock and high-tech tools for shoppers to locate items both in store and online will lead to more sales at full-price.

The technology will be rolled out across Inditex’s stores over the next three years, a company spokesman told Reuters.

One billion euros of the investment is earmarked for a proprietary technology platform, the company said.

Inditex uses radio frequency technology, attached as a chip to the alarm on clothing, to keep track of stock. This tracking technology, already in use for some time at its brands like Zara and Massimo Dutti, will be used across all the group’s brands by the end of 2020.

Although Inditex reported plunging first-quarter sales on Wednesday as physical stores were forced to shut, resulting in its first ever loss, it managed to keep inventory 10% lower – a testament to its short lead times and ability to react quickly to changes in demand.

In contrast, H&M said its stocks of unsold goods had grown to just above 41 billion Swedish crowns ($4.2 billion) at the end of April, from 37.2 billion at the end of February and 40 billion a year earlier.

Inditex made a 287 million euro write-off on unsold spring/summer stock due to the coronavirus lockdowns at the time of its full-year results in March.

(Reporting By Sonya Dowsett;Editing by Elaine Hardcastle)