Zara owner gives big boost to digital payments and recycling

Inditex_zaraCompany AGMs are usually, well, boring. Occasionally they’re love-ins (when the company concerned is hugely successful). Occasionally they’re snipe-fests (when shareholders are moaning about executive pay like at BP or yet another disappointing year and “not enough simple classics” like at M&S).

But at other times they actually turn into something worthwhile with a) interesting news and/or b) some good announcements. Yesterday, Inditex’s AGM did both.

The wildly successful retailer’s annual get-together saw chairman and CEO Pablo Isla unveiling a number of strategic initiatives.

On-the-go payments

Firstly, it was all about mobile payment. In Spain, the company is going to allow its customers to pay for goods in-store either via its brand apps or its in-house developed application, InWallet.

OK, I can see the drawback there if you don’t happen to be in Spain but I’m sure that where the company’s home country leads, the rest will follow, soon-ish.

It also means customers can get electronic receipts, which is a bit of a pain if you’re self-employed and need to print out a paper receipt for your accountant on your dodgy home printer. But I suppose it will save a lot of time, paper and ink in general).

The new service has been designed to enhance the shopping experience and aims to significantly simplify the purchase and returns process. Customers can activate the service directly from the online apps, adding the payment cards they want to use on the account in a safe and secure way.

Recycling rules

Next up, Isla also presented the next phase of Inditex’s 2016-2020 Environmental Strategy Plan, which sees the launch of an ambitious recycling programme to enable the free collection of customer’s unwanted clothing when shopping online. The company said it’s committing to sustainability in all phases of the product cycle.

What does that mean in practice? Launching in Madrid in September, star brand Zara’s customers will be able to take advantage of free at-home collection of used ‘end-of-life’ clothing when their online orders are delivered. The initiative is being conducted in a deal with charity Cáritas and transportation firm Seur and should roll out to the rest of Spain (assuming it’s seen as successful). Again, let’s hope it moves beyond Spain at some point soon.

There will also be up to 2,000 clothes collection containers installed in several Spanish cities while Zara will continue installing containers in its physical stores. By September, all Zara stores in Spain will have a container for recycling.

“The charity will sort the clothing to further the garment’s life through its distribution channels or allow for recycling for the development of new textile raw materials,” Inditex said, adding that it’s giving the charity €3.5m over two years to modernise its garment sorting and treatment plants.

Recycling rocks

And to add to this, Inditex has signed an exclusive deal with fibre supplier Lenzing for the production of “premium textile raw materials” made from the fabric waste Inditex generates. To start, it will provide Lenzing with around 500 tons of textile waste, that figure rising to 3,000 tons in a few years and allowing Lenzing to make around 48m new garments.

Any more? Yep. Index will support research into recycling and fibre tech alongside MIT and certain Spanish universities.

The company, which made profits approaching €3bn last year from its 7,000-plus stores in 88 countries, is such a major player in the industry that initiatives around mobile payment and sustainability really can make an impact.

Only last week, as was named by Greenpeace as top dog on its Detox Catwalk 2016 list that rates clothing industry players with standard-setting practices in their use of sustainable chemical products. Greenpeace said Inditex has ‘avant-garde’ status “with the safest and most environmentally-responsible production chains.” Tick, VG.

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