UNIT 10: GROUP TASK PESTLE; Political, Economic, Sociological, Technological, Legal, Environmental Cost of living is more expensive, living wage isn’t applied to all retail businesses. Working people are worse off. More people signing up to a credit card, more debt, but still a need to spend money and keep up their social status with brands.
Increase in interest rates leads to slow economic growth, therefore preventing the growth of British business.
Economic
Sociological
VAT rises; it undercuts the value retailer and their ideology.
The career aspirations of the customers. Who do they aspire to be? Does this affect how they buy clothes. Are they into trends?
Wage rates, different levels for different age groups. Median age of staff has reduced; a risk by hiring ‘kids’.
Zero Hour contracts; allows employers to pay less money on wages each month, without having a contract dictating how many hours each employee must work.
The location you choose to place your business. Is it in a well off area? Or a poorer area? Does this reflect you business customer profile?
Unstable wage rates, lack of motivation for the workforce.
Will it be in a retail park closer to a local community? Or will it be in the city centre where it will attract tourists, and students?
Is it a family company? Will this affect the price points, and the style of the clothing? You have to cater to different ages.
Can you keep it ‘on trend’? Whilst appealing to elderly ladies, young people, and working mothers etc.
Athletic wear, people want to be thinner and fitter. Some customers just want to look like they’ve come from the Gym etc.
Social Issues In Retail In retail, you have to know who your customer is. Many retailers have a profile of their customer, and decisions are made based on what their customer income is, and if they are affected by any change in government policies; Tax, VAT. Culturally inappropriate clothes will affect how your brand can expand. If you want to open a store in the Middle East, you have to respect their religious beliefs surrounding modesty. If you want to appeal to a woman who is married, and has a family, in Qatar, then you need to build a range that is respectful of that customer. If you don’t research and understand your customer in each market in the global arena, you could suffer heavily. A lot of retailers now have sections dedicated to athletic wear, even in high end stores. There has been such an increase socially in the anxiety surrounding weight management, and healthy eating. It’s a fad they can no longer ignore. Wherever you go in the city centre, you will see women wearing sports leggings, sport tops, and trainers. With an increase in the population, there are more customers that you need to advertise to. Loyalty in retail no longer exists, customers will happily go to a store where they can get better value for their hard earned money. Young families are getting younger; children’s clothes have to look more on trend, and similar to that of ladies clothes. Young women want their children looking better than the other child in school, but at a family conscious price. Different ages can come into the store, and buy the same outfit. The way it is displayed in the window, and how it is shown on adverts, has to be attractive to numerous ages. The younger customer wants to be on trend, whereas the older customer wants something that looks comfortable. To make your range appealable to them all, you have to use comfortable materials, but with an on trend shape or print. The career attitudes affect what people wear. Women will generally pay more for a key item, that reflects the main trend of the season. You have to show your range in a way where the customer aspires to be like that woman in the advert. This can be seen in adverts for Marks and Spencer, and H&M; they use supermodels, and extraordinary people, to show that you can be like that too (if you wear their clothes). They are selling a lifestyle completely different to your own, and one that you want. Health and safety is a huge deal for every retail business. Their clothes have to be made from materials that are not flammable, and non-toxic. A lot of companies have now become ethically aware of their manufacturing project. They now consider every part of the process important for their brand, and their consumer. Using child labourers has been phased out in the majority of retailers, and so has sweat shops. The good thing about focusing more on eco-sustainable materials is that you can pay a high price, and people will buy it because it reflects their personal beliefs. This affects my role as a buyer, because the consumer needs to know that the brand is conscious of the world around them, and want to be transparent with them. For example, I couldn’t sell real fur coats as an ethically conscious brand; because they will not trust my company again. I have to be aware of what materials I should use, and not make any shortcuts. I also have to understand what country, and what city, would need in their unique environments.
Economic Issues In Retail In every country, economic growth is affected by so many markers; government, population growth, confidence in the economy etc. Anything that seems small, can have a rippled affect across the retail sector. For example, VAT. VAT, or value added tax, is a tax on every item of clothing that the government controls. Currently, as of October 2015, the VAT is 20%. However, it has been less than that. VAT can undercut a lot of smaller businesses, who are trying to grow bigger, because it can prevent them from selling clothes at a lower price because their profit margin becomes squeezed. Although, for bigger retail businesses, they can afford to not worry about VAT, because they have an established brand, and can charge a higher price so their profit margins are not as affected. In 2008 there was a recession, and it caused the downfall of smaller businesses, and established brands like Woolworths. This catastrophic economic downturn slowed the growth of every country globally, and the lack of growth lead to people losing their jobs and with slashing of jobs meant a lot of consumers could no longer spend their money on what they wanted, because they were not as well off as they were pre-2008. When the country comes out of austerity, there will be more people in work, and more people spending. Retail businesses have to ‘ride the wave’, and come out the other side un-scathed. More and more people want to live a better lifestyle, like on the television and on social media. Some consumers will apply for credit cards, and loans, and not have the means to pay it back. A lot of families go into debt, so their families have the best clothes, and aren’t cast aside from their social circles. This can include credit cards in certain retail stores. The tantalising offer of a 40% discount from their purchase is too much for some consumers, and before they know it they have signed up for a credit card and have to pay back that purchase over a number of months, with interest. With inflation, people start to think about what they need and not what they necessarily want. They have to think about what car they have to downgrade to, and how they are going to pay their children’s dinner money at school. They can’t afford to go shopping, because they are always working; trying to make ends meet. This constant struggle (between drowning in debt, and just breathing on the surface) can be seen in the major group of consumers, the working class. Wage rates don’t align with what the living wage actually is. Only a handful of employers pay the living wage. The minimum wage for a person between 16 and 17 years old is £3.87 an hour, for an adult the minimum wage is £6.70. This vast space between wages can affect who gets employed. For example; a retail business will hire a young inexperienced boy or girl, over an adult man or woman with experience, because they can pay them less money and give them more hours. This prejudice is not seen as a bad thing, it is not even recognised as bad business at all. However, this affects a lot of working class families, especially mum’s who want to get back into work after looking after the children until high school age. Stores no longer close on a Sunday, and as of 2015 there is intense discussions about whether ‘Sunday trading laws’ should be scrapped and retailers given free reign of when they open and close on a Sunday. Retailers are opening as early as 8am, and closing as late as 10pm, just to get as much traffic through their store. This is great because there are more hours, and therefore more jobs, to be given to prospective job seekers. However, it is also adding to the struggle of employees who work hard for a long time and don’t seen enough affect to their wages. If the unemployment rate rises, it is bad news for the retail sector. They need more people to be in work, so they can spend their money with the retail businesses. That is why there are so many incentives in Government for ‘back to work’ schemes. They are joining forces with the big businesses to help job seekers get off benefits e.g; subsidising their job interview outfits, or even giving employers cash incentives to hire people. This positive coalition between government and retailers helps them both. Like I mentioned before, there is a huge increase in loyalty cards, and credit cards, associated with retailers. It is another way for retailers to encourage further spending with their company, by offering early sales, and vouchers every other month, so they can have the edge over their competitors. This is a great way, as it is a win-win for the customers and the retailers. However, store cards have detrimental affects, and can be another loan to add to the numerous loans they already have. Increase in prices for food, petrol, and transport, makes it harder for retailers to entice new customers into their ‘family’. They sometimes have to give a little more, to get the customer on the hook. Using sponsored posts with famous celebrities, and paid advertisements on television, can make their brand look better than paying the electric bill. It’s playing devils advocate, but it’s a dog eat dog world in retail and in business especially. This affects my role as a Buyer, because I need to know what will sell in any economic weather; and if it will be good for my consumer. For example, I can’t buy £300,000 worth of fur coats, when everyone wants a basic anorak. You have to know what style your customer has, and what their price points are.
Social Issues: Matalan Cost inflation There is an increase in British companies outsourcing manufacturing, and selling it cheaper in the store because of this, however the increased costs of transporting the products from overseas and the importing and exporting of those materials during pre-production, has caused greater costs. Corporate Social Responsibility Stakeholders in retail companies are more aware that the public, their consumers, want transparency. They want their money to be involved in ethical business practices; responsible sourcing, understand the environmental risks of importing and exporting materials across the globe. Buying Behaviours What do consumers want? Do they prefer value shopping, high end products? This will affect the cost of the materials and how high the price margin will be when we sell them. They have to appeal to a customer where their spending habits aren’t consistent. Human Resources Not only do they have to be aware of environmental factors, but also sociology factors; pension schemes, bonuses, rewards for boardroom staff etc. They have to appeal to their workers by paying them a decent wage, and give them a decent retirement fund, but they also have to provide value for their customer. Taxes VAT increases, can this affect a value retailer? If you want to provide on trend products cheaper than your competitors, then you have to take into account any increase in VAT. In 2011, the government increased VAT from 17.5% to 20%. This affected the lower income families more than anyone.
Matalan.co.uk, (2015). About Matalan - Matalan. [online] Available at: http://www.matalan.co.uk/corporate/about-matalan [Accessed 21 Oct. 2015]. BBC News, (2015). VAT rate rises from 17.5% to 20% - BBC News. [online] Available at: http://www.bbc.co.uk/news/business12099638 [Accessed 21 Oct. 2015].
Matalan is a value retailer. Their slogan ‘Made for Modern Families’ is used in cross-promotion on television, and newspapers. They appeal to working class families, and young families. They keep on trend, and have a constant range of basic essentials like vest tops, blouses, and work wear. They also are affiliated with local job centres across the country, and provide a ‘New Deal’ for job seekers who can’t afford to buy an outfit for an interview or a job. They frequently have sales, and send out vouchers in ‘mailers’ every season, encouraging shoppers to buy into their new designs with 20% vouchers as part of their free ‘Reward Card’ that rewards customers for shopping with them. You can also recoup the VAT off the clothes you buy if you are a tourist. Matalan was involved in the Bangladesh factory collapse, and have since partnered up with the Hope Foundation, and have built a School of Hope that provides education to children in Bangladesh. They were not involved with the Ranza factory collapse, they had only used it to create a small amount of samples. However, they knew that any affiliation would be bad, and they decided to release a statement conveying their distress and how they would offer financial help, and charity, to the families involved.
Economic Issues: Matalan Unemployment Rate Retailers find it difficult during uncertain times, because they need customers to buy their products. After the recession in 2008, when unemployment rates where high, a lot of establish retailers were swallowed up, e.g Woolworths. It is important for retailers that people have jobs, and have money to spend. E-Commerce With retailers like Matalan, who have been around for thirty years, there is an increase in online shopping. In 2011, Matalan hired a new head of online, to expand their ranges that are available on their online store. Online shopping is a lot easier for consumers, and they can purchase items at anytime of the day, not within set store hours. Retailers have to open longer, and earlier, to accommodate the new behaviour of consumers. Data Tracking A lot of stores now have apps that can be downloaded in store, and the consumer can order something the store doesn’t have with the touch of a button. In Matalan, they encourage shoppers to download the reward app in store, to get an instant 10% code to scan that day at the till. Getting data about their customer to analyse, helps them track the buying habits and lifestyle habits of their customer. Family Values No matter what the economic weather, Matalan and other value retailers have to keep their prices low, and therefore they must keep their costs low. This could mean hiring more young workers on zero hour contracts; they can hire a 16 year old on £3.87 an hour, as opposed to an adult at £6.70 an hour (as of October 2015). They can keep their costs down doing this, however customer services, and reliability of the workforce can decrease.
Insightdiy.co.uk, (2015). Matalan announces new hire to maximise ecommerce revenue. [online] Available at: http://www.insightdiy.co.uk/news/matalan-announces-new-hire-to-maximise-ecommerce-revenue/1242.htm [Accessed 21 Oct. 2015]. Gov.uk, (2015). New National Minimum Wage rates announced - Press releases - GOV.UK. [online] Available at: https://www.gov.uk/government/news/new-national-minimum-wage-rates-announced [Accessed 21 Oct. 2015]. Baker, L. (2000). Matalan aims to maintain unrivalled growth. [online] The Independent. Available at: http://www.independent.co.uk/news/business/news/matalan-aims-to-maintain-unrivalled-growth-623589.html [Accessed 21 Oct. 2015].
Matalan is the most highly rated company in the retail sector; In 2011, they had a 60% increase in growth, and it is still growing as of 2015. Matalan is the sixth most valuable retail company in the UK, their clothing sales make up for over 80% in group profits. They’ve gained market shared from retail giants like Marks and Spencer. Matalan continue to increase the stores they open, and in 2012 opened their first ever high street store in Liverpool Williamson Square. This levelled their competitors, and has increased interest in investment outside the UK. They also opened a store on Oxford Street, London, in 2014. Growing online, and using technology, is where they are focusing their efforts currently. They are boosting the British economy by hiring more staff, and developing new products. They recently opened an second online site that specialises in bathroom and bedroom furniture at low prices.
eHow writer Oteia Bruce, talks about how age range is important for any retailer. They must know what products will appeal to different ages, and what products and services they should offer. Knowing who their customer is, and their lifestyle, they will know what style of adverts will attract them, and how the store layout affect their buying behaviours. Knowing trends, and what’s popular in social media, will help them stay on the pulse. Understand health and safety, and how protecting their customer is important, especially when children are involved. If the retailer needs to appeal to a family, and families with low incomes, they have to provide quality products with a price range that isn’t too high, but not so low that they think they are buying cheap products that will not last. The retail business is a competitive market, and they need to monitor the social factors that could easily dissolve their company; low pay, increase in taxes and income. If the economy is on the up, and social circumstances improve, then it adds less risk to the company if they want to expand in the UK or abroad. Social factors like the Bedroom Tax, and how that affects families in council houses, can affect retailers whose customer target are working class families.
Small Business.com in their article written by Lauren Treadwell, talks about the factors that can help or hinder a retail business. The economy, and how inflation can affect consumer confidence in buying, can make or break a company. If taxes rise, it slows down the whole economy, and when an economic crash occurs like in 2008, many businesses begin to crumble unless they keep their niche in the market. For a value company this can be difficult. If your whole USP is selling value, and suddenly nobody has the money to spend, you will have a short fall in profits. This depression can continue for a lengthy amount of time, unless the government help the unemployed, and help grow the economy again. VAT can be manipulated to help out businesses and consumers alike; increasing VAT during growth can help grow the economy at a faster rate, if unemployment decreases in correlation with business growth. Decreasing VAT during tough times can have a similar affect. If any government decision is made on the economy, it can affect how the world views that countries businesses. Any change of expansion to other continents can be called into question, if customers stop buying into the company back at home. Increases in minimum wage gives people more opportunities to spend, and spend more.
eHow UK, (2015). Social factors affecting retail business | eHow UK. [online] Available at: http://www.ehow.co.uk/info_8483338_social-factors-affectingretail-business.html [Accessed 21 Oct. 2015].
Small Business - Chron.com, (2015). The Role of Macro Environment in the Retail Industry. [online] Available at: http://smallbusiness.chron.com/role-macro-environment-retail-industry-33419.html [Accessed 21 Oct. 2015].
Political Many political factors can affect a retail business, such as tax policies, employment wage and the introduction of the workplace pension scheme mean that this laws, and the political stability of a country. All organisations must obey the law, amount continues to grow. While these factors mean better rights for workers, they and companies must try and predict how future legislation might affect business. tend to mean bigger costs for companies, and this often results in businesses Organisations are also restricted by the rules and regulations of both the country in making redundancies in order to cover this cost. High street stores such as Matalan which they operate and also any countries with which they trade. Other policies also have a habit of hiring younger staff, as they are able to pay them less, although that have no direct effect on organisations can still have an indirect effect via their unlike other stores they steer clear of using zero hours contracts, as these are seen effect on the consumers themselves. as exploitative to workers. The Bedroom Tax Tariffs The bedroom tax was introduced in 2012 and reduces the amount of housing A tariff is a tax imposed on imports and exports, known as VAT (value added tax). In benefit a person receives if they are deemed to have more bedrooms than England this tax is 20% standard rate since 2011. The standard rate used to be necessary in their household. If a person has one spare bedroom in their house 17.5%, and in 2008 it was lowered to 15% in order to help stem the decline in their benefit is reduced by 14%, and if a person has two or more spare rooms it is consumer confidence during the recession. It was returned to the original rate in reduced by 25%. More than half a million claimants have been affected by this tax, 2010 but was then raised to 20% in 2011 in an attempt to lower the UK’s deficit. with many people being forced to move home. Others have claimed that they have The tax a company charges on their goods and services is their output tax, whereas been unable to afford food, electricity or heating due to the rise in the amount they the tax the company pays their suppliers for purchases and expenses is their input have to pay. This obviously means that there is an affect on the retail business. tax. Matalan will not only pay tax on the clothes they order to sell, but also on the Matalan, for instance, is a shop specifically aimed at families on a budget. If raw materials they use, business equipment, business phone calls and professional thousands of Matalan’s customers are affected by the bedroom tax to such an services such as accountants’ fees. extent that they struggle to get by, then this has an effect on the company’s sales. As a result Matalan will have had to account for this decline in sales, either through Political Stability buying in less stock or sourcing and selling at a cheaper price in the hopes of still A lack of political stability in a country can affect businesses not only in that country but also worldwide. Factors such as the price of oil can affect a companies ability to bringing in the customers. move products, and the political stability of a country can also have an effect on Employment Laws workers’ rights, which may lead to extremely cheap labour in some countries. Since Employment laws are put in place by the government to ensure that workers have the collapse of the Rana Plaza factory, Matalan have actually invested in a number access to certain rights in the workplace. These directly affect companies such as of initiatives to help families living in Bangladesh. They worked in partnership with Matalan as all companies have to adhere to these laws. Factors such as the nationalBRAC to support the families involved in the incident, providing medical insurance minimum wage, holiday leave and the workplace pension scheme all mean that and also contributing to a Monthly Reserve Fund in order to ensure a regular companies are obliged to pay a certain amount, and the rise in national minimum income for the families.
This was part of our group project. Matilda focused on the Political and Technology part of the PESTLE. This was her research.
Technological Technology plays a huge role in the retail business nowadays. With the rise of social Matalan, for example, now offer Matalan Direct, which is online only and stocks a media society today is saturated with advertisements, and advances in technology wide range of homeware such as household furniture and decorative items such as over the last few years have meant that it is now possible to access the retail rugs and curtains. This also drives online sales because consumers find themselves environment and make purchases anywhere and everywhere with considerable on their website as they are unable to browse these products on the high street. ease. Things such as video blogs, Instagram and Twitter are now a part of every day life for many people and can have a massive impact, either positive or negative, on Reward Card App Matalan now offer an app that, for many customers, replaces the need for a plastic the retail sector. Even aspects such as payment are now becoming even more technological, with contactless cards and mobile payments becoming increasingly reward card. This means that customers can access discounts and excusive offers popular. All these aspects, however much they appear to ease the experience of on the go, without the need to remember to bring any paper vouchers from home. It also reduces the level of clutter a customer might have in his or her purse, which buying and selling, seem to also make it a less personal experience. Technology will ultimately mean the customer is happier. This maximises sales for the company seems to speed everything up these days so that people are living faster, busier as it is easier for customers to take advantage of the offers available. lives each day while reducing social contact to a minimum. Social Media Social media’s role in retail sales is growing, through aspects such as embedded ‘buy’ buttons on posts that drive direct sales, or through referring traffic to retailers’ websites. Matalan have effectively utilised social media to drive sales in campaigns such as the Alphabet Scarf, whereby all the proceeds from the sale of these scarves went to Alder Hey Children’s Hospital, and various celebrities posted photos of themselves wearing the scarves on social media sites to promote the campaign. Abbey Clancy also promoted her collaboration range with Matalan on Instagram, another example of how social media has aided the retail sector. Social media is beginning to play such a big role within the retail sector that Matalan, like many other stores, now have dedicated employees working with social media sites such as ‘PR & Social Media Manager’.
Online Shopping Online shopping is now a massive part of the retail industry, with many online only retailers now on the scene. Matalan have taken full advantage of the popularity of online shopping, offering home delivery, free click and collect and easy returns either by post or in store. All this aims to make the online shopping experience as easy as possible. Revenue from online sales means that more money is coming in where no money is needed for rent or utility bills, and this means that shops are often able to branch out into areas that their high street stores usually restrict.
This was part of our group project. Matilda focused on the Political and Technology part of the PESTLE. This was her research.
This research and report was conducted by Daniella.
This research and report was conducted by Daniella.
ENVIRONMENTAL The environmental factor of a PESTLE is important as it is the effect that industry can have on the environment and the effect the environment can have on the industry and a company. Now a days companies are being more environmentally aware of the effect there business may have on the environment. The carbon foot print is something that is bought to companies attention as it is produced through everything from transport, electricity and manufacturing. One of the main producers of carbon dioxide into the atmosphere is travel. So companies will have to ask them selves, which form of travel is best? Whilst it might be cheaper to send products by boat and larger quantities being able to be shipped at once, it takes a longer time and might cause more harm than a plane. An old article from the Guardian newspaper asks weather cruising is any greener than flying. Looking at some of the facts from the article, it turns out that travelling by boat produces more carbon emissions than flying. Along with the carbon emissions also come the effect that the boat has on the ocean.
Deciding on which form of transport to take is something that a company should be more considerate of. Not only does their decision affect the environment from the ocean to its inhabitants, along with affecting the atmosphere from planes, but they could also face back lash if something was to go wrong. For example if the boat transporting goods was to have a fuel leak, it could lead to negative reports and raise questions like, why were they using that form of transport? This could then affect any future sales and business plans.
http://www.theguardian.com/travel/2006/dec/20/cruises.green
Other major environmental factors that companies should take into considerations, especially in the fashion industry, is the way in which they dye their materials. This research and report was conducted by Alice.
One of the largest problems the fashion and textiles industry has, is in the way that fabric is dyed and the effect that it has on the environment. The textile industry causes a large amount of water pollution. According to this article by Fathima Quaraishi, the textiles industry is responsible for up 20% of global industrial water pollution. An article in the guardian talks about this issue and how it can be combated. There is a way of dying fabric that uses less water. It also uses less chemicals. This new eco friendly way of dying is by using air to disperse the dye and is called dry dye.
https://prezi.com/rvvpesph3k5g/the-textile-industry-and-its-impact-on-the-environment/
Leading sporting brand Addidas has jumped on board with dry dye, which uses less chemicals, less energy and less water. Other ways in which Addidas are working forward to produce environmentally friendly clothing is by avoiding oil based plastics and using thinner or lighter materials which produces less wastes and a lower carbon emissions.
http://www.theguardian.com/sustainable-business/dyeing-textile-sector-water-risks-adidas
This research and report was conducted by Alice.
Group Evaluation: MATALAN PESTLE Tilly’s PESTLE was written about Matalan, and how their technology has changed their company for the better, and they stand in the political arena regarding their ethical issues and socio-economic issues in the UK.
In her report about the political issues Matalan faces, she spoke about how the bedroom tax has affected the Matalan customer buying clothes and homeware, because they have less money to spend with an extra tax they have to pay every month. The Matalan customer is looking for good quality, low cost products, and so when the political environment changes and more taxes are introduced, it is the Matalan customer that suffers. Therefore, Matalan has to introduce more sales, more discounts and rewards for their valuable customers, and also lower their cost prices across the board so they can sell their clothes at a lower price to compete with Primark. Another issue that tilly researched was how the employment new people in Matalan included a majority of younger people who the company do not have to pay as much as an adult. For example, the minimum wage for anyone 21+ is £6.70 and hour, as opposed to a teenager of 17 years old who only has to be paid £5.30 an hour. This gap is useful for store managers, as they can hire younger people, and make them work longer hours. This affects adults in a huge way, as they will lose out on hours and jobs because of their age. This is more common on the high street.
Tilly also researched technology in regards to Matalan, and how they are driven towards online sales, and their reward card app, to gain new customers. Stores are given targets to reach regarding signing up people to the reward card app, as it is another way for them to communicate with their customers and know what they are spending and encourage them to spend more with more vouchers, and discounts. Matalan also uses social media to encourage customers to shop in store, with each store having their own Instagram account, and with online adverts for their charity beanies and scarfs with famous celebrities. All of this helps matalan to continue to grow, and to keep their name out there so people do not forget they can shop at Matalan for all their needs at a low price.
Daniella’s pestle was written about Matalan, and she focused her research on the legal part of the pestle. Matalan has been accused of breaching copyright laws in the UK, when in 2006 they were found to have copied Primark's kids wear range. This was settled, and they have since have had no further legal issues. However, this research shows how close the two companies are in regards to target market, and price range. Fast fashion brands like Primark and Matalan are constantly searching for more customers, and they drive to grow further with every year. It is important for a fast fashion company to be aware of the legal side of fashion design as they make large orders in huge quantities from abroad so they can sell their items before their rivals, and make a bigger profit. However, if they are ever found to be breaching copyright laws, they end up losing money as the stock has to be removed from the shop floor and orders cancelled. Daniella has also research and found that Matalan has been accused of using sweat shops, and notably was involved with the Ranza plaza building collapse. This is detrimental to any retailer, especially one that requires customer trust and loyalty to keep their business growing. Matalan was quick to disassociate themselves from this
event, and did not seem to catch as much of the heat as Primark from the public.
Alice talked about the environmental part of the pestle in regards to the retail industry in general. Alice found that many companies are now moving away from poisoning the local communities that surround their sweat shops abroad. They are more concerned with the environment, as public opinion has been more focused on this aspect of the fashion industry than ever before. Companies like Adidas and river island are getting involved in initiatives were they are taking their responsibilities for past mistakes, and talking about community projects and charities that they are getting involved in to prevent any toxic leaks, human rights breaches regarding child labour, and also preventing their employees from living in poverty by giving them a minimum wage. This research is important in highlighting the changes that are taking place in the fashion industry,
and how the retail industry is moving forward.
PRIMARK PESTLE: POLITICAL
News.bbc.co.uk,. 'BBC News - Primark Linked To UK Sweatshops'. N.p., 2015. Web. 3 Nov. 2015.
Protests in Cambodia led to Primark, as well as other low cost retailers, to go to the Cambodian Government and pledge to raise the minimum wage they pay their workers in the factories. The protests were bad PR for Primark, as it highlighted the affect low cost fashion has around the world. A lot of families cannot live on the wages they are paid to create clothes that many people in the UK would throw out and think nothing about the pain it took to create it. Primark was one of the major retailers to be affected after the Ranza Plaza building collapse, as it showed how little we care for human rights as long we have cheap clothes we can wear and throw it on a whim. So, when it came to light that Primark had suppliers in India that were employing child workers, they were very quick to cut ties with them. This is both good and bad, because they are showing they no longer want to be associated with shady suppliers, but the people who depended on their supplier having the Primark contract to make a living, will now have less money in their wage. As a fast fashion company, Primark has to be involved in the political world of their suppliers. They need to know if they have to intervene when anything illegal occurs in their factories, or in the community where their employees live. They also have to know when they should increase wages, or help their employees if there is any unrest in their countries. As a buyer, you need to know where your products are made, and who they are made by. They may be thousand of miles away, but they are employees of the company, and deserve to be seen as that. So visits are vital. Brignall, Miles. 'Fashion Retailers Agree To Raise Minimum Wage In Cambodia'. the Guardian. N.p., 2014. Web. 3 Nov. 2015.
PRIMARK PESTLE: ECONOMIC “Research, conducted by Markit for KPMG, shows 43% of part-time workers earn less than the living wage, compared with 13% of full-time employees.” (The Guardian, 2014)
In the retail sector, high unemployment is a problem; mainly because with high unemployment comes lack of quality. It is harder for companies in the retail sector to find people who are good enough, and have the skills, to be hired for the job. The longer someone has been out of work, the harder it is for them to get back into work, because they may have lost a few skills, got older, and slower. Retail businesses need confidence in their workforce so they can meet targets. With campaigns to increase the minimum wage, to meet the national living wage, it is hard to understand a company like Primark being able to pay the living wage for their employees if it comes to pass. They may not pay any money for advertisement, and buy huge amounts of clothes from their suppliers well before any other retailer places an order, but the cost of paying wages is becoming progressively difficult, especially with the expansion into department stores in America.
News.bbc.co.uk,. 'BBC NEWS | UK | Primark 'Is Probing Law Breaches''. N.p., 2015. Web. 3 Nov. 2015. BBC News, (2015). Economy tracker: Unemployment. [online] Available at: http://www.bbc.co.uk/news/10604117 [Accessed 22 Oct. 2015]. Allen, K. (2014). Living wage increases to £7.85 an hour. [online] the Guardian. Available at: http://www.theguardian.com/society/2014/nov/03/living-wageincreases-hour-minimum-pay-20p [Accessed 22 Oct. 2015]. Wallop, H. (2011). Wages fail to keep track with inflation. [online] Telegraph.co.uk. Available at: http://www.telegraph.co.uk/finance/economics/8385489/Wagesfail-to-keep-track-with-inflation.html [Accessed 22 Oct. 2015].
PRIMARK PESTLE: ECONOMIC Primark has managed to overcome a lot of bad publicity regarding their employment of illegal immigrants in their Manchester knitwear suppliers ‘TNS’. In 2009, it was found that their supplier had employed a majority of illegal immigrants and did not pay them the minimum wage. This oversight of retail suppliers is happening in every retail business. It was only after a BBC external investigation that they found out about the illegal immigrants. This lack of ethical concern is shocking. If I was a buyer in this company, I would know from my training to be aware, and look out for, illegal happenings in my suppliers buildings; whether it is at home in the UK or abroad.
In January 2015, The Guardian reported that over Christmas their sales were ‘boosted’ by their European performances. Primark expanded across Northern Europe, with new stores opening in France, Germany and The Netherlands. A lot of retailers over Christmas slash their prices, especially during the American-imported ‘Black Friday’, the last Friday before Christmas where shoppers spend the most money. However, Primark were the only retailer to forgo this new tradition, and it didn’t affect their profits; in fact it increased them dramatically. They bet on the turn in weather, to increase the footfall into their high street stores; thus not decreasing their profit margins with heavily discounted products. The role of the buyer in this success is holding their nerve, and believing in their customer, and the loyalty they have for the low-cost brand. This is done by fully understanding their market.
The cost of living in the UK is continuing to rise throughout 2015, and this is because their has been no increase in the minimum wage that can significantly counter balance the cost of living for the average family. Private sector wages will hold stead at 2% throughout 2015, and there is no sign in a further increase. However with Primark and their cheap goods, it is helping the average working family not give up their weekly shopping trip, and treats of new clothes. Buyers buy in large volume, and at a good price, because there is a constant range that they buy from their suppliers abroad, and it is made cheaper by the materials which are sourced close to the supplier in their respective countries. The need to stay a high value retailer, and the need to keep their prices low, inadvertently protects their average customer from getting into debt with credit cards, and store cards elsewhere. http://www.ibtimes.co.uk/uk-cost-living-real-wages-not-expected-rise-next-year-1471585 controversy, P. (2015). Primark in employment controversy - Leads - News. [online] Fashionunited.co.uk. Available at: http://www.fashionunited.co.uk/news/leads/primark-in-employment-controversy-200901126636 [Accessed 22 Oct. 2015]. Kollewe, J. and Butler, S. (2015). Primark sales boosted by European performance. [online] the Guardian. Available at: http://www.theguardian.com/business/2015/jan/15/primark-sales-rise-christmas-new-stores [Accessed 22 Oct. 2015].
“The average worker is suffering from the equivalent of a £650 cut in their annual pay, as figures showed that wages in Britain were failing to keep track of the cost of living.” (Telegraph, 2011)
PRIMARK PESTLE: SOCIAL “…Of course, such low prices may raise some eyebrows, but Primark maintains that its "prices are low because Primark operates differently than other retailers, reducing its costs by working smart and lean," as a spokesperson told Buzzfeed. "In turn this saving is passed on to its customers.” (Business Insider, Oct 2015) Primark’s main competitor is Forever 21. They attract the same customers, and they share the same competitive price points. When Primark opened it’s first store in America, the media was in a frenzy about their profit margins, and how they were selling t-shirts for $1.60. Primark is after the teen market jugular; their attractive prices, and fast fashion, is what young people want and need right now in such a constant change of trends every season. Buyers have a responsibility to keep prices low, and be quick to recognise trends that the young people want tomorrow, before they even know it themselves. They have to be able to forecast, buy, and sell and a quicker rate than any other retailer.
The Telegraph conducted a mystery shopper experiment in September 2012; and found that there was no distinct age range in the flagship Primark store on Oxford Street. Damian Reece writes, ‘…Primark had a much greater age range, including mothers with children at all stages of growth…’. This cross over into different social classes, ages, and race, makes Primark the perfect case study for how successful PESTLE’s are conducted. Their buyers are wizards at finding what every single person, from every country, really wants. They must conduct intense market analysis, and trend forecasting, in every social structure, to get the profits that they have.
Schlossberg, M. (2015). This cheaper version of Forever 21 that sells shirts for only $1.60 is trying to take over teen retail. [online] Business Insider. Available at: http://uk.businessinsider.com/primark-is-going-to-dominate-teen-retail-2015-10?r=US&IR=T [Accessed 22 Oct. 2015].
Reece, D. (2012). It's no mystery why shoppers choose Primark's flagship store over M&S. [online] Telegraph.co.uk. Available at: http://www.telegraph.co.uk/finance/comment/damianreece/9559156/Its-no-mystery-why-shoppers-choose-Primarks-flagship-store-over-MandS.html [Accessed 22 Oct. 2015].
PRIMARK PESTLE: SOCIAL Primark has a lot of charitable organisations that it supports, whether they are big or small, throughout the UK. They support their local communities, and offer advice to employees who may want to develop their training further, and gain new skills. They don’t discriminate within their workforce based on intelligence, they give everybody a chance to move up in their organisation. Primark works with Job Centre Plus, to offer work experience to job seekers who have been out of work for a long time, and to get their confidence and desire to be in the work force. They offer financial help to those who can work, and those who can’t work because of disabilities. For the conscious shopper, their clothes are packed into recyclable paper carrier bags. This reduces the amount of packaging waste in landfills that add to the pollution of our environment. They have a strong social standing in the retail sector. Buyers who work for this company must keep in mind the regulations of each country they work within, and that includes the countries where their clothes are manufactured. The Renza factory collapse killed thousands of illegal, and underpaid workers. Primark was one of the proponents of sweat shops before this tragedy, and has since, with other retail businesses, has made their company more transparent, and allowed outsiders to learn how they are changing their habits. As a buyer for Primark it is important to understand the ethical concerns of retail manufacturing, and also about the customers welfare; they don’t condone animal testing in their retail environment. Also, they train their buyers to source materials ethically, and they run dedicated training programmes for their buyers, and use a database developed by the British Standards Institute, to enable their buyers to get regular updates on all of the suppliers that have contracts with; it tells them about results of recent audits, any outstanding noncompliance, and key sourcing date. It allows the buyers at Primark to make informed decisions.
Primark.com, (2015). Primark - Frequently Asked Questions. [online] Available at: http://www.primark.com/en/our-ethics/resources-for-students-andPrimark.com,. 'Primark - Our Responsibility'. N.p., 2015. Web. 3 Nov. 2015. teachers/faqs [Accessed 22 Oct. 2015]. Primark.com, (2015). Primark - Our Responsibility. [online] Available at: http://www.primark.com/en/about-us/our_responsibility [Accessed 22 Oct. 2015]. Primark.com,. 'Primark - Our Ethics'. N.p., 2015. Web. 3 Nov. 2015.
PRIMARK PESTLE: TECHNOLOGY Primark achieved 1.7 million Facebook liked in 6 months. They advertise their low offers on their Facebook page, and also have a Snapchat account now to interact with their young customers. They sell their clothes at such a low price, they don’t need to advertise on television, and they don’t even have a Primark website. They rely on people walking into their stores, and buying heaps of clothes. Their adverts are in schools with friends talking about what they bought on the weekend, or in other stores where they can tell people they got the same dress but for a fraction of the price at Primark. Social media is used by consumers to talk about the deals they found, and how it compares to other stores that sell the same products at a higher mark up. Only recently did Primark use ecommerce site ASOS, as a platform to advertise their brand to the global online market. This was only a pilot scheme, but was effective in advertising their brand to people who may not have wanted to visit a Primark store. As a buyer, it is useful to know what product is selling well, and how the public’s spending behaviour changes depending on who is wearing the clothes. Having an up to date opinion on trends helps buyers know what to buy for next season.
Engage Customer,. 'Primark Now A Social Media Hit Too - Engage Customer'. N.p., 2014. Web. 13 Nov. 2015.
Facebook.com,. 'Primark'. N.p., 2015. Web. 13 Nov. 2015.
PRIMARK PESTLE: LEGAL
Primark has been caught out with copyright issues. They are a fast fashion company, and therefore can use cheap manufacturing processes to bring high end designs that take longer to manufacture, very quickly to their fast fashion consumers. In 2004, Primark was involved in a court battle with Monsoon, because they copied their designs and made more profit because they could produce it quicker than Monsoon; in an article in The Independent, Monsoon claimed ‘that the copies, which sell for a quarter of the price of the real thing, are of much poorer quality and are damaging to the Monsoon brand…’ Low cost retailers like Primark are under-cutting their high end competitors by using cheap labour, and cheap materials. Consumers are not as loyal as they used to be, and will easily be swayed by Primark, Matalan, and ASDA, for on trend fashions at a cheap price. This is damaging for high end retailers who sell high quality products, with a high price tag. Buyers need to be aware of legalities when they purchase huge volumes of a design they know is easily recognisable as another brands product. It is tempting to want to sell cheaper versions of highly sought after clothing, but the cost of legal process is too much for any retail company. Maxine Frith, Social Affairs Correspondent. 'Monsoon Sues Primark For 'Copying Designs' As Cut-Price War'. The Independent. N.p., 2005. Web. 3 Nov. 2015.
Arnott, Sarah. 'Primark Drops Three Indian Suppliers For Using Child Workers'. The Independent. N.p., 2008. Web. 3 Nov. 2015.
Mail Online,. 'Primark Forced Into Out-Of-Court Settlement After ANOTHER 'Insulting' Design Plagiarism'. N.p., 2011. Web. 3 Nov. 2015.
PRIMARK PESTLE: ENVIRONMENTAL
Primark are a proponent of fast fashion, and this is damaging to the environment. Through their manufacturing process they may unknowingly employ illegal workers in their manufacturing plants overseas. They may also be contributing to the global pollution with any excess produced from the manufacturing plants being ‘dumped’ and ‘leaked’ into local water supplies etc. However, Primark have overshadowed the negative affects they create with their fast fashion, with their focus on using 100% recycled paper bags, and joining up with Greenpeace to mange how they contribute to global warming, by ‘detoxing’ the environment. This is a good step in the right direction for Primark, as it will help shine a good light on their processes, and create a transparency for their customers who believe in ethical projects, as well as soon to be new customers who don’t think Primark care about the environment. This is a great way to protect the environment, as well as gain new customers. The Buyer needs to understand how their products affect the world. They have to know the materials, and whether they are toxic, and if their manufacturing process is destroying a communities water supply etc. The public need transparency, and as a buyer, you can’t be blind to any issues.
The Independent,. 'Chic & Cheerful (But Not So Great For The Environment)'. N.p., 2007. Web. 3 Nov. 2015
PRIMARK PESTLE: QUESTIONS Are there any Fairtrade products in your store? Currently we don’t. We plan to in the future. What are your thoughts on the living wage? Does the cost of living affect you? Primark currently don’t pay the living wage. I have found during my secondary research that Primark have the capability to pay the living wage, but have not committed to a date to implement the living wage in their stores. Do you consider different cultures when buying products? Primark care about providing the new trend quickly to their customers, regardless of controversy it may cause. You have a lot of copyrighted images? Is this ever an issue? Primark has had issues with copyright. They have had to settle out of court with Monsoon in 2004, Superdry in 2010, and British textile company Ashley Wilde Boulevard in 2011. Primark copy the designs of expensive brands, and put them into quick production so they hit the market sooner and ride the coat-tails of the products popularity. Do you still use illegal sweatshops, and illegal labour, during the manufacturing process? Primark has been associated with illegal labour in the UK, and abroad. In the UK they were found to be using a manufacturing company called TNS Knitwear in Manchester, and they were using illegal labour in their production process. Primark has also been associated with high profile investigations abroad about their manufacturing process. How do you keep your prices low, and keep up with different trends that pop up every season?
Primark can keep their prices low because they don’t advertise, and they buy their products in huge volumes even before they know if the product is selling well. This allows them to purchase the products at a lower price than their competitors. References Labourbehindthelabel.org,. 'Primark | Labour Behind The Label'. N.p., 2015. Web. 3 Nov. 2015. Mail Online,. 'Primark Forced Into Out-Of-Court Settlement After ANOTHER 'Insulting' Design Plagiarism'. N.p., 2011. Web. 3 Nov. 2015. News.bbc.co.uk,. 'BBC News - Primark Linked To UK Sweatshops'. N.p., 2015. Web. 3 Nov. 2015. Primark.com,. 'Primark - How Can Primark Offer The Lowest Prices On The High Street?'. N.p., 2015. Web. 3 Nov. 2015. squirrell,. 'On Cultural Appropriation, Or, Is Your Primark Cardi Racist?'. N.p., 2015. Web. 3 Nov. 2015.
PRIMARK PESTLE: CONCLUSION Creating this Primark PESTLE was interesting, because I found out information about being a Buyer that I didn’t really know before. For example, copyright issues. It seems to happen regularly with Primark, and I think this is because they only have a 6 week period from design, production, and having the product on the shop floor. There is a lot of corners that are cut, and they don’t have a conscious when it comes to what brands they undercut by recreating a replica for a cheaper price. Primark is very focused on the environment, and they show this with their recyclable paper bags, which are infamous. However, they fall short with their overseas factories; the bi-product of clothes production is toxic to the global environment, as well as the local communities. They have started to co-operate more with the Ethical Standing Initiative, more so than they used to, because consumers are becoming a bit more savvy with where they purchase their products and big brands like GAP have faded into oblivion because they haven’t pushed to rectify their public image since they were ousted as using child labour in their factories overseas. What is unique to Primark is their lack of marketing on television and in magazines. They seem to rely on the fact people know who they are and what they represent; they don’t have to prove themselves to anyone. They are confident in their ability to appeal to the wider market, just by word of mouth. They are active on social media, and show a lot of their clothes online in a way that is easier for customers who get frightened by their stores on a weekend which are incredibly busy and hard to navigate. Primark are good at contributing positively to the local community where they have their stores. They provide work experience and a good wage to school leavers. They don’t discriminate when hiring people for their stores either, they are an equal work place. With the cost of living rising in 2015, it has become more necessary now for consumers to place price over quality when it comes to buying clothes. They have attached themselves to an market that not a lot of stores buy for. Primark has everything a family needs; essentials, and special outfits, without the huge price tag. You can buy it all together, without leaving to go to another store. It’s convenient. They have been involved in getting pay rises for their factory workers in Cambodia, and held talks with the government to get better workplace safety legislation put in place. This concern for their employees around the world has had a positive affect on their company.
MARKS AND SPENCER PESTLE: POLITICAL Marks and Spencer are a ‘green’ retailer, and have pushed the UK government to implement a 5p charge on plastic bags, and have criticised the UK government for not helping retailers go ‘green’ like they promised they would in their manifesto’s. The UK government set up a scheme where retailers would pay a lump sum of money to the government, a kind of tax, and if they ‘reduced their emissions’ would get that money back. This is a scheme that has had ups and downs, and forced retail directors into a political mudfight, but I think it has a good basis. If there was legislation that proposed all UK retailers ‘go green’, it would greatly help the environment. Corporate tax, and cost of the rise of minimum wage in the UK has caused many retailers over the past decade to find suppliers and manufacturers in other parts of the world, where it is cheaper. Marks and Spencer moved 16,000 textile jobs to countries like Morrocco and Indonesia, where they can legally use cheap labour and produce more for a lower cost. This is a good thing for their business, as they can grow bigger by reducing costs, and provide more clothes that are on trend for their loyal customers and people they wish to turn into loyal customers. This is a political mind field, because at the same time they are cutting jobs in the UK, and adding to the unemployment numbers and in theory they can dismantle a whole community who may have spent their whole lives working in that textile factory. Buyers need to know about government involvement in the company, and how it affects their jobs. Any switch in supplier needs to be thought out thoroughly, and the affect on the workers lives too.
MARKS AND SPENCER PESTLE: ECONOMIC Marks and Spencer have concluded they will most likely pay their workers the living wage by 2015. They have a ‘Plan A’ commitment that states they will ‘implement a process to ensure our clothing suppliers are able to pay workers a fair living wage in the least developed countries we source from, starting with Bangladesh, India, and Sri Lanka by 2015…’ They may well pay their impoverished workers in third world countries a living wage, however they are no where near offering their retail assistants a living wage in their stores. The hours that Marks and Spencer workers can vary, depending on whether you work in a high street store, or a store in a retail park. Most stores close at 8pm, and some stores can close as late as 9pm. They can open as early as 7am or 8am. Their M&S chief, Marc Bolland, was accosted by a retail worker complaining about the lack of wage rises in M&S despite the retail company executive’s pay totalled £2.1 million in 2015. This inequality, and lack of concern for their sales assistants, has painted the family company a dark shade. The sales assistant’ Oliver Knowles, handed the executive a t-shirt with the slogan ‘Simply pay your M&S staff a living wage’. The FTSE 100 company has a minority of employees who claim benefits on top of their monthly pay, because they can’t live on the minimum wage. The company has a store card that promotes the use of putting items bought on credit, and paying them off in the same way a credit card is. This was not always the way, they used to have a reward card that was free and had no risk to the customer. Now, a lot of the customers will hand over their store card because of the vouchers associated with it, but they can end up with a huge bill at the end of the month that they are unable to pay off. A lot of elderly people shop in M&S, and have been loyal to the brand for many years, and this can be a problem since some may be retired, or on a government pension. The company doesn’t consider this an issue. As a buyer, I must be aware of the ethical concerns, and M&S do make their buyers attend ethical training courses before they start to buy for their company. One of the issues that the Marks and Spencer buyer comes across, is a lack of urgency when buying from a supplier. With retailers like Primark buying huge volumes of clothes, knowing they will sell them, there isn’t that confidence in the Marks and Spencer’s head office; Katie Bostock, a Buyer at Marks and Spencer’s explains, ‘…The most famous example of this was when Bostock managed to source a cheap but soft cashmere. ‘We ran out so fast I could have kicked myself for not having ordered more…’. Marks and Spencer’s are of the old guard, and have been left behind in recent years with their trend forecasting, but in 2015 they seem to be getting up to speed with what the modern woman wants, and how fast they want their fashion.
“The executive, whose pay package this year totalled £2.1m, was presented with a T-shirt on Friday bearing the slogan “simply pay your M&S staff living wage” by 27-year-old shop worker Oliver Knowles. Bolland declined to wear it, but did take it with him.” (The Guardian, September 2015) http://www.theguardian.com/society/2015/sep/19/marks-and-spencer-marc-bolland-london-living-wage
http://fashion.telegraph.co.uk/news-features/TMG3365520/Kate-Bostock-Marks-and-Spencers-fashion-buyer.html http://www.labourbehindthelabel.org/news/item/879
MARKS AND SPENCER PESTLE: SOCIAL As this article in The Independent (Katy Guest, Nov 2013) points out, Marks and Spencer are far away from knowing who their target market is. The Marks and Spencer buyer seems to struggle with who to appeal to, when they have so many older customers who are loyal to the brand, they find it hard to connect with the ever growing young woman who reads Vogue, and wants the latest fashion trends every season. Their adverts on the television, and in print media, show Rosie Huntington Whitely, a supermodel who is young and pretty; Is this what the average Marks and Spencer customer looks like? I don’t believe it is. This mistake in the supply chain; buying for whoever you feel your customer is, can only come down to not completing a PESTLE about your brand. Other brands have a clear view of their customer, and how their range should look every season; what should always be in stock, and what might be an on trend piece that you invest in. In September 2015, Marks and Spencer was in the news because of their suede skirt that was on sale for £199. This was a key piece in the winter collection, and was worn on stylish celebrities Alexa Chung, and Olivia Palermo. Using these modern women is a great PR move, and attracted the fashion magazines like a worm on a hook; everybody wanted the skirt, and subsequently it was sold out. The buyer at Marks and Spencer with full knowledge of the PR behind the suede skirt, did not correctly estimate how much stock they needed. This lack of awareness was detrimental to the company. The only positive was that their price point was expensive, and made it a luxury item that the fashionista had to invest in. It was real suede, good quality, and on trend for the season. In 2006, Marks and Spencer launched their ‘Fairtrade range’, that is still produced today. The example I found was a Fairtrade cotton vest; it is ‘…Made from 100% Fairtrade cotton, guaranteeing farmers and workers in developing countries a fair price and a Fairtrade Premium for investment in community development projects…’. As a buyer for a Fairtrade range at Marks and Spencer, being informed about the process in the factories and in the community that surrounds the factory in the county your product is produced, is a necessity. Any mistake can be a PR nightmare. The amount of visits you have to complete, and analysis, is vital to keeping your company transparent to the consumer.
http://news.bbc.co.uk/1/hi/business/4660410.stm http://www.independent.co.uk/voices/comment/marks-spencer-your-average-customer-does-not-look-like-rosie-huntington-whiteley- http://www.look.co.uk/fashion/the-ms-skirt-olivia-palermo-and-alexa-chung-both-rocked 8930813.html http://www.marksandspencer.com/fairtrade-cotton-rich-strappy-vest/p/p22198159
MARKS AND SPENCER PESTLE: TECHNOLOGY
Marks and Spencer have an in store ordering service in their Church Street branch. This allows people to scan the item they want to buy, and if it isn’t in stock in the store, they can buy their size online and have it delivered instead. This is an innovative idea for customers who may not have the capability to order things online because of their age or where they live. M&S have also been investing in social media platforms, like Pinterest, and Facebook. This makes it easier for customers to ask questions, and get an immediate answer. It’s also good for the company to hear out complaints about delivery, or stock control, in their stores. Marks and Spencer have used social media most recently to promote their clothes, by having famous models and celebrities like Alexa Chung wear their clothes and promote it on their social media websites. They have had successful viral campaigns this season with the £199 suede skirt, that became a must have item for every fashion conscious woman.
Marketing Week,. 'M&S Invests 20% Of Media Spend In Social Media As It Ups Focus On Storytelling'. N.p., 2015. Web. 3 Nov. 2015.
ComputerWeekly,. 'M&S Uses Social Media To Make Customers Happy And Drive Sales'. N.p., 2015. Web. 3 Nov. 2015.
As a Buyer, understand the quick paced and ever changing world of fashion is important. So using Pinterest to collate ideas, and reading social media will help the buyer make important decisions based on what is selling, and where it is selling, and why. Corporate.marksandspencer.com,. 'Our Stories'. N.p., 2015. Web. 3 Nov. 2015.
MARKS AND SPENCER PESTLE: LEGAL Marks and Spencer have had a few legal issues over the years. During a refurbishment of their store, they were fined £1 million over asbestos not being removed safely, causing a health and safety risk to their staff and customers. A company as big as Marks and Spencer should be aware of the dangers of asbestos, and this could cause a lot of legal issues in the future if staff do develop cancer. M&S have also had issues with copyright, they were sued by a small English company that specialises in print work; Marks and Spencer won the dispute. Also, they have had to recall the ‘Twist and Turn’ baby rattle because of it becoming hazardous for young children. This product cost £12, and they had to recall over 400 of them. This causes a dent in their profit, and also in their profit forecasting. They may have lost trust with their customers, who have never had a problem like this with another retailer.
BBC News,. 'Marks & Spencer Fined £1M Over Asbestos Risk - BBC News'. N.p., 2015. Web. 3 Nov. 2015.
The buyer has to be aware of any toxic or hazardous materials that are in their products, and also what risk it has on the customer; especially if it is a children’s product. Halloween costumes and their materials have been in the public eye recently; they don’t come under the same scrutiny as everyday clothes. This has to change, because it is a danger to the public.
MARKS AND SPENCER PESTLE: ENVIRONMENTAL
Smithers, Rebecca. 'M&Amp;S Becomes 'Carbon Neutral''. the Guardian. N.p., 2012. Web. 3 Nov. 2015. Kaye, Leon. 'The World’S Most Sustainable Retailer? Marks & Spencer’S 2013 Plan A Report'. Triple Pundit: People, Planet, Profit. N.p., 2013. Web. 3 Nov. 2015.
Brignall, Miles. 'Fashion Retailers Agree To Raise Minimum Wage In Cambodia'. the Guardian. N.p., 2014. Web. 3 Nov. 2015.
‘Plan A’ is an initiative that Marks and Spencer have with their ‘Simply Food’ brand, and their clothing brand. In every store they have a place where you can recycle the clothes you no longer wear. They also have a fair trade cotton section online, where you can buy essential t-shirts and vest that are made from 100% cotton farmed from communities that are paid a good wage, and aren’t hustled into a factory; they produce the materials in their local communities. Marks and Spencer are also involved with a lot of charities, like ‘Marine Conservation’ which can affect their clothing production; when they have to transport their clothing from one continent to another, they must do it in a nontoxic way. Regional stores are also in competition with each other, and are praised when they follow the company ethics and raise the most money for charity, and collect the most clothes to be recycled. The buyer must know how their products affect the world. Marks and Spencer are at the forefront of environmental change in the retail sector; so knowing everything about it is vital for the buyer.
Fran Abrams, Westminster Correspondent. 'M&S Switch To Foreign Suppliers Threatens 16,000 UK Textile Jobs'. The Independent. N.p., 1999. Web. 3 Nov. 2015.
Elliott, Larry, and Juliette Jowit. 'Green 'Stealth Tax' Attacked By Business Groups'. the Guardian. N.p., 2010. Web. 3 Nov. 2015.
MARKS AND SPENCER PESTLE: QUESTIONS During our visit as a group to Marks and Spencers on Church Street, we were able to ask a manager some questions to help us complete our PESTLE. How many staff are in this particular branch? “We have 25 managers, 25 section codes, and 23 sales assistants.” What is the age range of the staff in this store? “They are mostly over the age of 21, and the majority have 40 years service with the company.” Do you advertise fair trading in your store, and internally? “Yes. There are competitions within each region, to see who is the best on environmental safety; promoting the fair trade brand to customers. We also don’t conduct any animal testing on any of our products.” Do you think you are paid fairly? “We used to have the living wage, but as the years have gone by our wage has been overpassed by the national minimum wage. However, they do have pay increases every year for staff who have worked here longer, and for those who have higher qualifications. We also have our pay increased in line with our competitors. So, if john Lewis were to increase their wages in 2016, our pay would be increased to match theirs in 2016 also. Has your company ever had to recall products due to health and safety? “Only twice in twenty years, whilst I have been here.” Do you think the company is socially conscious? Providing store cards to people who may not be able to afford them, like pensioners? “Pensioners, surprisingly, are the customers who spend the most money and have the most money to spend. Also, we check to see if they can sign up to our store card, we make sure they have the capability to pay it off every month. We conduct vigorous credit checks. It is the hardest store card to get in the retail sector.” Do you stay up to date with technology in each branch? “Yes. Every sales assistant, and manager, is trained with an iPad, and other technologies. We carry the iPads around the store; we help women with their bra fittings using the iPad. They can find our their size, and immediately see what bra styles we can offer them, using the iPad. Then we send this information to their email address. It’s a tailored customer service.” Do you use social media in your work? “Yes. We have a Marks and Spencer own Facebook style website, where we can ask questions for head office and get answers back straight away and also talk to other stores and show them visual merchandising stands and ask their opinion, etc.” This was an interview conducted by Tilly, Danielle, and Abi on 23/10/2015, at 3:00pm. We interviewed Lynn Matthew (Section Manager of Beauty and Lingerie) of the Church Street branch, she has worked for M&S for over 20 years.
MARKS AND SPENCER PESTLE: CONCLUSION A buyer in Marks and Spencer has huge retail giants to compete with, their biggest competitor being John Lewis. They are constantly trying to match them on wage rises, and adverts during the golden quarter in retail business; Christmas time. They have spent a lot of time and effort to create a dossier about how they advocate for the environment; affiliating themselves with numerous ecological charities, and asking the UK government to implement the 5p plastic bag charges so they can prevent people from adding further damage to our planet. They haven’t had a lot of clothes recalled due to safety, but have had the odd toy or food item. As a buyer in their clothing department, it is important to notice when people are not happy with their clothes because of safety or faults on the garment that could be a risk to the customer. The only legal argument they have come up against has been due to copyright issues. They have copied designs from smaller boutiques, maybe not on purpose, but it underlines that point that research as a buyer is important. You need to know from start to finish of a product, that there is nothing illegal involved during the process. It can have detrimental affects on the company financially, and maybe your job as a buyer could be on the line. Marks and Spencer have not yet raised the minimum wage, to match the living wage. This has been promised to be rectified by their chief executive, but has yet to be changed in late 2015. In the Marks and Spencer store in Church Street, Liverpool, they have a huge iPod computer screen that sales assistants help shoppers to use so they can order an item that is not in stock in the store, but is online. This is helpful for the customers who don’t have access to online at home, so they can have their products delivered without having to worry about how to do it. This helps the buyer as well, as they can find out in real time which products are selling well, and where about. Marks and Spencer have a fair trade line online, where they have basic essentials curated from humane cotton. This is great because as a buyer, it can be fulfilling to see something that took so long to produce ethically online, however I think they should start to place this line in store; when I was in the Church Street store, I couldn’t find the fair trade line, which I felt was poor. It should be at the forefront of the business, since they have so much information on their website about their work for the environment. Using celebrities as a platform on social media, to garner attention for certain items has worked this year, with Marks and Spencer’s on trend suede skirt. They jumped on to the ‘It’ girl of the moment Alexa Chung, however they didn’t project the sales affectively; they ended up selling out and not having any stock to replenish the shop floor. This caused a lot of upset amongst die-hard fashionista’s. Another issue for the buyer is the fact that Marks and Spencer are outsourcing for certain lines, and this makes it harder for their buyers to check up on the factories because they are now on the other side of the world, making quality control difficult. This distance can affect how products are ordered, and the amount that is ordered at a time.
MARKS AND SPENCER & PRIMARK: EVALUATION Marks and Spencer and Primark are both giants in the retail industry; they each have a unique customer that they buy for, and market towards. They both suffer the same difficulties with the new modern age of outsourcing factory productions. It’s harder for them to compete, because they can either cut their quality and lower their prices to undercut the competition, or they can go to the other end of the spectrum and increase quality and increase prices. This has happened at Marks and Spencer, with their £199 real suede skirt. They are investing in high quality, high end pieces, but for their high street consumer. They believe that the consumer wants quality, and would pay for a better long-lasting item, as opposed to Primark products that you wear once and can throw away without any guilt. As a buyer for a low price company like Primark, I would find it extremely stressful to have just under 6 weeks to forecast, agree on a design, and buy a huge volume of an item. You have to have an innate sensibility about fashion as a whole, and know it from the inside out. There are no room for mistakes, because the business depends on satisfying their customers who want their fashion today. With Marks and Spencer, as a buyer there is the same pressure but it comes from the heritage and needing to win in the retail wars. You have to know the customer, and the customer is not one dimensional; they are young and old, and have stark differences to what they need from Marks and Spencer. This is why they have different brands within Marks and Spencer, like Per Una; Indigo, and Classic. They have these separate lines so they can fulfil different customer profiles of the range of customers who shop with them. The difficulty in this is knowing what could sell well, and what might not. I think this has become their greatest issue over the last few years; they don’t have a strong customer identity. Both Marks and Spencer and Primark are never going to go out of fashion. They have been welcomed with open arms by the fashion hierarchy at Vogue and ELLE, and are frequently mentioned every season with key pieces in each companies arsenal finding its way onto the red carpet, or becoming a viral hit through social media. The role of a buyer is to cultivate the customers every season, growing the target market, and making sure the brand stay alive for another year; because in this retail business today, there are so many more brands that are fighting for your customer. It is so easy to be forgotten amongst the crowd.
ROLE OF A BUYER: RESEARCH The range I build for footwear, for example, will have to relate to the range on womenswear. The VM team have to pair items up with outfits, and guide customers.
Liaising, and presenting ideas with other departments. Making sure that our range is focused towards the target customer, and all the prices are in line with one another.
Communicating with other departments
Do they follow the company mission statement about safety; are they legal, do they pay a good wage, is the product of good quality. Are they reliable. Do other competitors manufacture products there?
Suppliers
RESEARCH
Will the supplier allow negotiation, and provide us with a reasonable price that is equal to or better than competitors?
Buy the most consistent line in a higher volume, and the newest line buy less of; if it proves to be successful, buy more.
Bestselling products
Who is the target customer? What is their lifestyle, and who is the brand to them. We have to know them inside and out.
Primary research, on the street; taking street style photographs, finding inspiration, and what consumers are currently loving.
What are the trends for next season?
WGSN trend forecasting, and visiting trade shows in Paris, New York, Milan, and London. Looking at the catwalk, and finding out what our customer would wear, and what designs would be worth investing in-they must prove to be successful.
Using the company intranet to find out what products were the bestselling last season, and update that item to make it more current.
Fashion Blogs
Using WGSN and trend forecasting to find out what will be the trends for next season, and the colours that will be on trend as well as textiles, and patterns. Using social media, and fashion blogs; The Sartorialist is a successful fashion street style and catwalk blog, that includes both male and female street style photographs. This is a great portal to find out the trends in different cities, and how the individual style is taken from the street and onto the catwalk. The comparisons of both worlds is informative. WGSN has articles, and look books, describing in great detail what their research is showing as the popular design and colour for the season. Pantone forecast colours for future seasons, and this is helpful for retailers who may not be able to change up their designs every season, but will update their colour palettes which are on trend in their competitors also.
Forecasting
This affects me as a buyer, because I need to know what to buy and how much is needed. If I miss out on a trend, or I miscalculate an order with the merchandisers; I could be left with not enough products to sell and miss out on a huge percentage of profit, or I could be left with unsold stock that will have to be heavily discounted, or worse, it would be left untouched in the stock room of every store and their price becoming worthless. This will affect our percentage of profit in the next quarter of the financial year, it can become a domino affect. Going to trade shows like Premiere Vision in Paris for fabric and textiles, Pure in London for Womenswear brands, and Magic in Las Vegas for everything retail related regarding the US brands, all of this travelling and research equates to a focused vision for the next season, and helps solidify who the target customer is for the buyer.
Industry articles
Trade Shows
The buyer must know who their target customer is; their age, income, style, beliefs, and lifestyle. This will help them build a range around that customer, so they don’t isolate them. Not all the trends can be included, and that is okay, as long as the trends that fit the brand and the pen profile are pinpointed quickly, it will make the buyers jobs easier.
ROLE OF A BUYER: SOURCING The sales executive will give you a price based on his calculations. Do your own, and never accept the first price they offer. There will always be a lower price available.
Find out through coerce mystery shopping, and researching competitors, and suppliers, and find out what they pay, and negotiate a lower price for a greater volume.
Negotiating
The supplier must follow health and safety legislation, and no illegal workers must be working in the factory. It must reflect our company.
Are the suppliers reliable? Will they give us the same contract as last time, or do I have to negotiate a better contract because of financial issues within the company?
Suppliers
SOURCING
Travel
Create a prototype of the designs we wish to include in the range; can changes be made to them, and can they lower the cost of production?
If I successfully negotiate a lower cost of production, I can increase my ‘mark up’, and increase profit. This will be useful for bestselling items. The mathematics have to be exact, and I cannot be a decimal point off.
Pricing
Travelling to the different factories, and meeting the employees, will help me understand the process. I will be able to negotiate face to face, and hopefully make long lasting business connections. I can also find out what goes into our product, and feedback to other departments.
Can I keep the quality of the product high, and keep the cost low. This will be down to how I negotiate, as opposed to what materials I use.
Sourcing the materials involves visiting the factories, and negotiating prices face to face with the sales executive. It’s best for the buyer to see who the employees are, and the conditions they work in. This can help in the negotiation process. The buyers also have the opportunity to feel the materials, and look at the prototypes and send feedback to head office. Buyers will also liaise with departments who spend their time forecasting, and finding out information about their competitors; how much they spend on their manufacturing process, and where they get their materials from, etc.
FACTORY
Also the taxing and exchange rates in the countries where you are buying your materials from, and importing and exporting them from. This adds to cost, time, and can affect the overall delivery. You also have to make not of any delays in production due to political protests, elections, religious holidays etc.
SWEATSHOP
CATWALK
As a buyer, it is integral to find a balance between low cost, high mark-ups, and good quality. The information that is fed back from the shop floor is included in this; if a certain product is being returned at a great volume because it is faulty, then it must be fixed by the buying team. A dress may cost £3.36 to produce, and if you include the time and money it costs to transport it from supplier to the store, it could be sold to the customer for £30. Therefore, to get that customer to buy the product, you have to make sure the design looks good, feels good, reflects the current trends, and is in magazines and press about the new season. Anything can affect the profits of a company; the biggest issue today is transparency. Companies who do not follow health and safety legislation, or even the most basic of human rights, will be found out and it can be detrimental to their business. It can have a domino affect on their profits in the next financial quarter. So, as buyer, it is very important to be specific and correct with every prediction. You have to hit the bulls eye every time, even a millimetre off the mark can cause problems for any business. Visiting the factories allows me as the buyer to see the way the clothes are made, touch the synthetic and natural materials. I can see if they look better in person, than if a photo was sent to me through an email further down the line, with little time to change anything. Researching the latest catwalks, and seeing what style or design was present in every catwalk, is a good indicator of what could trickle down into the competitor high street brands. It’s a great beginning for how your range will end up; you have to start from somewhere. The customer profile is integral for the buyer, as it helps them focus on what designs should be included in their range. They must be the eyes of the customer, and not let their personal style overtake the range. This is a difficult process, but for a buyer; once they know their customer, it will be easier to buy products that will fit well within the store.
When I buy branded products, they must be authentic, and not fakes. This can cost the company a lot of money if they have to be recalled.
ROLE OF A BUYER: COMMUNICATION Ladies wear and Footwear, for example, have to have cohesive ranges, that can be put together by customers, and VM teams in store. Buyers must liaise with designers, and make sure it is possible to produce their design whilst keeping costs down, and not sacrificing the mark-up. It can be tricky.
Buyers have to have a unanimous decision with every designer, and merchandiser, when it comes to what designs should be bought. It is stressful, because you have to fully understand your market.
Designers
Buyers need to follow every production step with a toothcomb, and make sure nothing is overlooked.
Departments
Communication
Quality Control
Products have to be released at the same time; you can’t have a dress in a magazines, and not have it in store.
Getting new season designs in store at the right time is important; when summer sale is starting there should be autumn/winter products ready to be put out in every stock room.
Marketing
If a dress has been refunded more often that expected, then you have to research to see if there was any issues with the manufacturing process, and make sure that any further productions are of a better quality.
Using social media to get interest in new collections, and celebrities to wear your clothes on the red carpet.
Buying teams delegate their time, some may do market research, collect data about competitors, and conduct trend forecasting. It is important for buyers to be on the same page with the other departments; quality control (QC), design team, and fabric technologists. This is because they all have to come to an agreement over what designs to invest in, and the date they should be delivered. If the timing is off, it can result in a loss of profit, and it takes a long time to crawl that profit back. Ladies wear and Footwear have to have cohesive ranges, that flow well together, and outfits can be created from and shown to the public by the visual merchandising team. If a product comes back faulty more than the average amount, that product might have to be recalled, and re-made to a higher quality. This adds to the cost, and the amount of time it is off the shop floor the company is losing money. This is why it is important for their calculations to be correct, and specific. Communication with the suppliers helps the buyer keep track on the progress of their garment. They can find out if there are any issues if they email, phone, on a daily basis, or visit the factory ever two weeks as the deadline date gets closer. In some cases, there could be environmental factors that could inadvertently push back the arrival date of the clothes into the stores. This has to be fed back to the store manager if this is an issue, as it can affect how they promote a new line, or inform customers etc. Surveying store department managers about what the best sellers where, and how they positioned the products with the help of the visual merchandisers is useful in case any issues may arise, for example if the products didn’t sell well because of how they were placed within the store, and how this can be changed for the next delivery. The ‘Golden Quarter’ between November and January, is when retailers claw back any profit they may have lost that year. To be successful, the buyers and merchandisers have to be in constant communication with the store managers, so they know what are the best sellers so they can get their sales assistant to promote the specific products and add on sales.
Our Oxford Circus flagship is a mecca for cool girls, whether they ’re holidaying in London or living in the capital, and we’ve spread the love across the pond with flagships in C h i c a g o a n d N e w Yo r k ! O X F O R D S T R E E T
K AT E
M O S S
T O P S H O P U N I Q U E L O N D O N FA S H I O N W E E K
ROLE OF A BUYER: TOPSHOP TASK
Knowing what sells best in different stores, and what volumes the merchandisers send to them.
The Topshop girl has fun with clothes, and would wear a key piece for the season alongside charity shop t-shirts, and Primark jeans.
Location of each store, reflects the customers who shop there; cities like Liverpool and Manchester, will attract different customers compared to London.
The lines have to be cohesive, and versatile; customers must be able to style them in their own personal way, as do the VM team in-store.
Fashion conscious, aware of key trends of the season. Has a very British style; it’s funky, and fresh. Visiting fashion weeks, not just the main ones, because different cities in the UK have their own; new designers can be found there.
Customer Pen Portrait: 18-30 year old age range, women, students and working women.
Customer Demand
Prices have to evoke a high-end high street quality. Entice customers to invest in key pieces.
Essential items would be around £18, dresses close to £60, and coats over £100.
Some products will be more expensive because they are Made in Britain, which is important to our customers. We are a quintessentially British brand.
Since 2013, around 15% of British retailers have been bringing their production back to the UK, this includes Topshop amongst their competitors like River Island.
The Topshop customer is between the ages of 18-30, they love fashion and follow the trends, but most likely can’t afford to dress in a complete Topshop outfit; so we have to accommodate their price range, and the fact they love good quality clothing. To overcome this obstacle, as a buyer I have to think about investment pieces. An investment piece can be a dress for the Spring/Summer season, and a coat for the Autumn/Winter season. To forecast what the key trend for summer dresses are, I must go out and do a competition shop, and find out what the other competitors are pushing in their stores and in their campaigns. This research can be conducted the previous season, in preparation for when I pick designs from the design team and purchase the fabric and volume of units to have imported from our factories abroad. Over the years, we have built up our brand so we are able to follow the shopping behaviours of our customers, whilst offering them clothes for the current season; the Topshop Quiz is an interactive questionnaire that asks their age, height, weight, style preferences, and celebrity of choice. Using their answers, we can offer them a tailor made edit of our current range, so they can feel happy in their purchases, and happy knowing that we as a company care about them as a customer. Different cities have different trends, and therefore we have to know what store might need more of one style than another. For example, Liverpool is a glamourous city where the women will wear pricey dresses, and sky scraper heels, and so we have to think about how we can add more of that style into our upcoming ranges; depending on how much is spent in certain cities. Appealing to consumers this way can increase our profits in those areas, thus making our brand more current.
ROLE OF A BUYER: TOPSHOP TASK Catwalk
Trend Ashish London, a/w ’15. The trend is parkas with fur trim, the added detail is leopard print fur. The oversized hood, and longer length; adds an edge to the outfit.
Sophia Webster, London, a/w ‘15. The embellishment trend on flat shoes was popular in every fashion week. Sophia Webster’s young and colourful take is very British. Alberta Ferrettii, Milan, a/w ’15. The Italian lace design, and bright red colouring can be seen in a lot of Italian shows. This style is great in the autumn/winter because it’s sexy and comfortable to wear for any woman.
Topshop
Price
£70
£28
£120
Topshop Girl The Topshop girl is funky, and will want the simplistic design of a parka, but with the cute and punky colour popping at the hood. The cobalt blue is perfect for windy days, and rainy nights, and still on trend.
Glitter flat shoes, great addition to a plain co-ord suit, adds a youthful slant on the a/w trends. The pom pom on the top is fun, and can be worn at any age.
The price point for this dress is high, but the detail is very close to a catwalk piece. This would be an ideal outfit for the Topshop girl to wear on a night out, or a date.
ROLE OF A BUYER: TOPSHOP TASK When are they putting out their sales, their new season items, how are they placed in store. Use WGSN to find out what cities are wearing what right now, and how their style has filtered into the catwalk, and if anything particular is consistent in their markets?
Directional Shop; what is selling the most in each city, and in different regions; what does that tell us? We have to move with the trends.
Competitive shop; find out what Zara and River Island are selling, and their prices.
Market Trends
Online shopping; what are their best sellers, what is in their ‘back in stock’ range. Product materials, and country of origin.
Who is wearing their clothes on social media, what celebrities are affiliated?
Street style blogs, around the world; The Sartorialist, and Instagram famous fashion stylist; Polyvore website.
ROLE OF A BUYER: TOPSHOP TASK £120 £49.99
£165 £85 £79
£89.99
£29
£75
£32
£29.99
£29.99
£52 £30 £25
C o m p a r i n g t h e c u r r e n t To p s h o p r a n g e f o r a / w ‘ 1 5 w i t h t h a t o f R i v e r I s l a n d a n d Z a r a , y o u c a n s e e t h e s i m i l a r i t i e s . To p s h o p i s m o r e c o n t e m p o r a r y, a n d c o m p a r e d t o R i v e r I s l a n d i s m o r e versatile and can be worn separately or altogether as a c o m p e t e o u t f i t . Z a r a i s o u r m a i n c o m p e t i t o r, p r i c e w i s e a n d s t y l i s t i c a l l y. T h e y o f fe r n e a r e n o u g h t h e s a m e fa b r i c c h o i c e s , and shape of clothes, but for a lesser price. Our task is to prevent this from happening next season, by introducing higher quality rangers, ‘Made in Britain’ tags in the press and inside our clothing labels. We are a proud British brand and we need to make this a lot clearer in our marketing campaigns.
£19.99
ROLE OF A BUYER: TOPSHOP TASK
To p s h o p A u t u m n / W i n t e r 2 0 1 4 h a d s o m e k e y p i e c e s t h a t sold well, and were in a number of top ten lists in fashion supplements and fashion magazines. Clean, simple lines, with detailing and embellishment w e r e p r o v e n t o b e p o p u l a r a s w i n t e r g r e w d a r k e r. C o m f y knits and shawls became necessities. Key trends for Autumn/Winter 2015 include:
TOPSHOP A/W ’14 C A M PA I G N FLASHBACK
TA I L O R I N G
MARY JANE
S AT I N
NUEVO CLASSIC
FLARES
COLOUR POP
CO-ORD
EUDON CHOI
ISSA
T E D D Y C O AT S
KNITS
BRIGHT
L AY E R I N G
OVERSIZE
MOODY TEXTURE MARGARET HOWELL
ASHLEY WILLIAMS
BUTTON/POCKET D E TA I L
Free standard delivery on all orders over £50. This promotes increases of add on sales
Topshop supports Fashion Targets Breast Cancer, Teenage Cancer Trust, Age UK, Age Concern, Help The Aged, and Centrepoint.
REACH regulation training for all Buyers since 2007; informing them of safer manufacturing processes with safer chemicals and materials.
Topshop are continuing to invest in their ‘Made in UK’ clothing range
STORE POLICY
Topshop aims to improve the sustainability of its clothes across its ‘lifecycle’. Topshop will aim to reduce their carbon emissions, and their clothing footprint by 2020.
Topshop has a 30 day refund policy, as along as it is unworn and unused, and can be resold.
EU customers have 14 days to cancel their contract with Topshop after the purchase date.
‘Better Cotton Initiative’ Topshop have signed up to this campaign, to help produce ethically manufactured cotton products.
A rc a d i a ’s w e b s i te h a s a l l t h e e m p l o y e e g u i d e b o o ks o n l i n e , and are translated into Bangla, Chinese, Hindi, Romanian, Tu r k i s h , a n d U rd u . T h i s re f l e c t s t h e e m p l o y e e s t h e y h a v e around the world in their stores on different continents and in factories. They also have a code of conduct that they use to inspect factories and places of work around the world. They base it on the International Labour Organisation (ILO) conventions, and their recommendations.
References Arcadiagroup.co.uk, (2015). Code of Conduct & Guidebook / Arcadia Group. [online] Available at: https://www.arcadiagroup.co.uk/fashionfootprint/code-of-conduct-and-guidebook [Accessed 3 Dec. 2015]. Arcadiagroup.co.uk, (2015). Our Employees / Arcadia Group. [online] Available at: https://www.arcadiagroup.co.uk/fashionfootprint/our-employees [Accessed 3 Dec. 2015].
I n t h e i r f a s h i o n f o o t p r i n t p r o g r a m m e To p s h o p t h e y e n g a g e their customers as well as their employees in their commitment to making a change in the environment within t h e re ta i l i n d u s t r y. T h e Fa s h i o n F o o t p r i n t A d v i s o r y Pa n e l conduct meetings to ‘refresh’ and ‘invigorate’ their social responsibility as a popular brand.
References Arcadiagroup.co.uk, (2015). Our Environment / Arcadia Group. [online] Available at: https://www.arcadiagroup.co.uk/fashionfootprint/our-environment [Accessed 3 Dec. 2015]. Arcadiagroup.co.uk, (2015). Our Products / Arcadia Group. [online] Available at: https://www.arcadiagroup.co.uk/fashionfootprint/our-products [Accessed 3 Dec. 2015].
To p s h o p h a s l o n g - t e r m c o m m i t m e n t s , and are continuing to reduce their energy consumptions and CO2 emissions in regards to logistics and their carrier bags. As a company they audit their factories abroad, and identify issues, and come up with ways to reduce these problems to make it a safer environment; sometimes the problems they identify are due to the inadequate safety requirements of the countries they are based in, and so they sometimes go to governments, or create their own health and safety departments to help the sales executives in their factories update their policies and protect their workers. In the 2013-14 financial year To p s h o p w e r e n o l o n g e r c a u s i n g substantial effects to the environment, but were now low enough that they were no longer high risk issues, but are still issues that c a n b e l o w e r e d f u r t h e r. T o p s h o p highlight in their report that for the sixth consecutive year they have managed to reduce their CO2 emissions, and have brought their total CO2 down to 38,000 since 2008.
To p s h o p c o l l a b o r a t e w i t h K e y To F r e e d o m . I t i s their third collaboration as of 2014. They have hand-crafted kimonos, sarongs, and make up bags. They are of limited availability because of the way they are produced, they aren’t produced i n a f a c t o r y. I t i s p r o d u c e d b y v i c t i m s o f domestic abuse, and in some cases victims of h u m a n t r a f f i c k i n g . K e y To F r e e d o m o f f e r s a f e h o u s e s , a n d w i t h t h e c o l l a b o r a t i o n w i t h To p s h o p provide them with a minimum wage that can help their situation. They are taught sewing skills, and textiles printing, and this helps them become economically independent; it allows them to grow their wealth in a stable environment that doesn’t add to the traumatic nature of their past.
References Arcadiagroup.co.uk, (2015). KEY TO FREEDOM FOR TOPSHOP / Arcadia Group. [online] Available at: https://www.arcadiagroup.co.uk/press-relations/press-releases-1/key-to-freedom-for-topshop [Accessed 3 Dec. 2015].
To p s h o p a l s o w o r k s c l o s e l y w i t h t h e I n d i a n communities and they help them develop their technical skills, allowing them to negotiate their o w n d e a l s a n d b u s i n e s s e s i n t h e f u t u r e . To p s h o p also donates all their money they make back into t h e K e y To F r e e d o m p r o g r a m m e , k e e p i n g i t g o i n g for as long as possible.
ROLE OF A BUYER: TOPSHOP TASK
Turnover; net profit and gross profit. Net profit is the profit after VAT, and tax. Gross profit is the whole profit before tax.
Keep an eye on the daily projections of flagship stores around the world; and why it is changing, or call up the store manager for a report on why stock isn’t selling.
Budget is split into two seasons. Topshop is at the forefront of contemporary high street fashion; the trend forecasting has to be precise. RRP: £995 - 60% (MARGIN) / 1.2 (VAT) = £331.66 (COST PRICE) Topshop in Liverpool 1 have made £77 million in a year (as of 2015), and with increased sales, means increased responsibility for this store to keep hitting targets.
Has the Topshop customers budget changed since last season? It will affect profits. VAT on clothes, this can change depending on government. Costs have to be lower, to take into account tax.
The mark up has to be forecast correctly. If you misinterpret any market analysis, and buy too much of one line, then you will be stuck with it, and lose that prospective profit margin.
Financial Budgets
COO (Country of Origin)
Knowing the bestsellers for Topshop, and why they sold well last season; it can be because of a fleeting trend and so ordering more for this season could be a disaster, or it could be because of utility reasons; it was a necessity, and might be again this year.
Be aware of sales, and how much you should discount a product. If it’s selling well, hold off on the discount for as long as possible.
If a product is always at the top of the bestsellers list then you can try to negotiate a fairer deal for the production and import of that product, with your supplier.
RRP: £48 - 60% (MARGIN) / 1.2 (VAT) = £16 (COST PRICE)
Stock control, audit store’s so they are all selling the same items in line with the company sales dates etc.
ROLE OF A BUYER: TOPSHOP TASK Arcadia’s releases website includes all the press office from their Topshop brand. This includes their financial information for the completed last financial quarter of 2013-2014. They include all the profits, and breaks it down for each brand that Arcadia own.
E-Commerce sales grew by +13.4%, and like for like sales across all of the brands that Arcadia own (including Topshop, Dorothy Perkins etc) Topshop also write that in the first 10 weeks of 2015, total VAT inclusive sale profits were down -1.2% versus last year, due to wet weather. As a buyer this can affect the budget for next A/W because the company is unsure about what will actually sell. These tighter constraints for the buyer makes it more important than ever to be focused and make successful decisions that are in line with the companies customer profile. Topshop’s retail margin was down -0.6% from last year; this means that the mark up for their products generated a loss of profit of -0.6% this year. This could be down to the prices buyers set their items, and misjudged what the price points should be. This could also be a manufacturing issue, because they did not negotiate the best deal so they could sell it for less while keeping their mark ups high. Arcadia group expenditure was £105 million. This shows a strength in the company; they are pushing for expansion into different markets around the world, and they can afford to do this. As a buyer, this gives me great sense of security surrounding my position within the company. In the press release they discuss how they are focusing on tightening their stock control; intensifying their audits of suppliers, to reduce cost prices. They continue to be passionate about delivering ‘…a relevant, exciting, well priced range…’
References Arcadiagroup.co.uk, (2015). Arcadia Group Financial Results 2013 - 2014 / Arcadia Group. [online] Available at: https://www.arcadiagroup.co.uk/press-relations/press-releases-1/arcadia-group-financial-results-2013-2014 [Accessed 3 Dec. 2015].
They are hoping that with the next release of their athletic line with Beyoncé, they will continue with further research for future collaborations with partners.
ROLE OF A BUYER: TOPSHOP TASK The Kendall + Kylie collection was a mini collaboration that was released online, and in their stores across 40 countries. On Topshop’s website they talk about how many pieces the collection consists of, the price range, and when it is available and where you can get it. This information is clearly presented, and focused. As a buyer, I would write this information and present it for the head buyer, and the other departments. The fact that it is a collaboration with the biggest celebrities of the moment, and would be highly sought after, but only had 15 pieces, means that they are betting on customer interest to be high. The designs may take a long time to manufacture, and they are only going to make one order with a supplier for each country. Keeping it small, and focused, makes sure each piece is relevant to Kendall and Kylie, and their fans. Making it a limited collection also creates a buzz, the clothes, even if their fabrics are basic, and th relatively similar to Topshop’s own lines. It keeps they can have a higher mark-up because the buyer fans of Kendall and Kylie would pay more. This can explanation for every collaboration.
£70
References Arcadiagroup.co.uk, (2015). KENDALL + KYLIE COLLECTION LAUNCHES / Arcadia Group. [online] Available at: https://www.arcadiagroup.co.uk/press-relations/pressreleases-1/kendall-kylie-collection-launches-exclusively-in-topshop-stores-worldwide [Accessed 3 Dec. 2015].
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References Forbes, J., Forbes, J. and articles..., R. (2015). See Kendall and Kylie's Collection for Topshop theFashionSpot. [online] theFashionSpot. Available at: http://www.theukfashionspot.co.uk/buzz-news/latest-news/598049-kendall-kylie-collectiontopshop/ [Accessed 3 Dec. 2015].
£35
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£38 Ke n d a l l a n d Ky l i e ’s collection from this summer is a peculiar range that has been put t o g e t h e r b y t h e To p s h o p buyers and Kendall J e n n e r a n d K y l i e J e n n e r. It doesn’t necessarily f i t t h e ‘ To p s h o p G i r l ’ customer profile, but because of the name attached to the range, it sold out and sold really well.
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TBA
References Mail Online, (2015). Kendall and Kylie Jenner unveil collection in Topshop. [online] Available at: http://www.dailymail.co.uk/femail/article-3102637/Kendall-Kylie-Jenner-unveil-collectionTopshop.html [Accessed 3 Dec. 2015].
A s a b u y e r, t h i s w o u l d be disconcerting because you have lost the identity of the b ra n d , s o i t ’s h a rd e r t o grow
ROLE OF A BUYER: TOPSHOP TASK Topshop has a blog, with updates daily on trends, and events on red carpet.
Conducting compshops, taking pictures of displays, and layouts of stores. See what lines are gaining the most traction.
Attending trade shows around the world, and gaining information about upcoming designers, fabric innovation and technology.
Using WGSN for secondary research on street style around the world, and going out to different cities for primary research photographs and interviews.
Visiting fashion weeks, predominately in the UK so that you can bring in British designers to collaborate with in-house designers to add to the Topshop identity.
Topshop has a quiz you can take that you give them your age, weight, height, style, and they deliver an edit to your email.
Trend Research and Analysis
Topshop app so it is easier to connect with the customer, and find out their buying behaviour.
There is also an employment app, where VM staff can get help on ideas for store displays.
Collaborating with magazines, and getting the marketing department to get the buyers picks for future bestsellers into magazines when the products are on the shop floor. Using social media to find out who is the hottest celebrity, and who can advertise our brand with the greatest audience. Alexa Chung, Kylie Jenner.
Conduct marketing surveys, and trend analysis on Twitter, Facebook and Tumblr.
ROLE OF A BUYER: TOPSHOP TASK
The Topshop app is useful to track buying behaviour a lot quicker. Merchandisers can gather data about what lines need restocking, and Buyers can find out what hasn’t sold as well as expected.
Using WGSN to trend forecast from the industry experts, and at the same time finding materials, colour pallete, and concept art.
Topshop have their own WGSN style blog, where they track current trends, trends they think will be big, and guiding customers to similar products straight away.
Using social media, finding popular models, and ‘It’ girls of the moment. Using them in advert campaigns, and online to entice customers.
References Grazia_Live, (2015). Gigi Hadid On Being The New Face Of Topshop. [online] Available at: http://www.graziadaily.co.uk/fashion/fashion-news/gigi-hadid-topshop-campaign-interview-20150749071 [Accessed 3 Dec. 2015]. Topshop Blog, (2015). Topshop Blog. [online] Available at: http://insideout.topshop.com [Accessed 3 Dec. 2015]. topshop.com, (2015). Topshop On the Go. [online] Available at: http://www.topshop.com/en/tsuk/category/topshop-on-the-go-2175609/home [Accessed 3 Dec. 2015]. WGSN Fashion Trend Forecasting and Analysis, (2015). WGSN Fashion Trend Forecasting and Analysis. [online] Available at: http://www.wgsn.com [Accessed 3 Dec. 2015].
ROLE OF A BUYER: TOPSHOP TASK
In 2014, Kate returned for another collection with To p s h o p , t h i s t i m e t h e d e s i g n s w e r e s l e e k e r, a n d r e f l e c t e d t h e up and coming generation of young women who wanted fashion straight from the r u n w a y, a n d w e r e p r e p a r e d t o p ay.
Fashion United, May 2007
The designs included more going out dresses, suits, and shoes. It was more sophisticated, and the line chosen for the collection s h o w e d t h e g r o w t h i n To p s h o p and how much their design team had developed the ‘ To p s h o p g i r l s ’ i d e n t i t y .
In 2007, Kate Moss was one of the first celebrities to collaborate with a retail b r a n d . H e r s t y l e s y n o n y m o u s w i t h ‘ c o o l ’, h e r c o n t e m p o r a r y c a s u a l w e a r, i n c l u d i n g leather jacket, denim jeans, corsets, and t-shirts, was a major success. It spawned numerous other brands to collaborate with other celebrities, but none of them were as big a name as Kate. It increased To p s h o p ’s p r o f i t s , w h i c h w e r e w a n i n g , b y £3 million in sales alone.
Topshop Blog, 2013 References hit, K. (2015). Kate Moss for Topshop a financial hit - Collumns - News - Fashion Jobs, News, Business, apparel industry platform, Fashion New York, Los Angeles, Miami. [online] Fashionunited.com. Available at: https://www.fashionunited.com/news/collumns/kate-moss-for-topshop-a-financial-hit-200721050074 [Accessed 3 Dec. 2015].
References Arcadiagroup.co.uk, (2015). KATE MOSS RETURNS TO TOPSHOP / Arcadia Group. [online] Available at: https://www.arcadiagroup.co.uk/press-relations/press-releases-1/kate-moss-returns-to-topshop [Accessed 3 Dec. 2015].
ROLE OF A BUYER: TOPSHOP TASK Motel, £38
Liaise with up and coming designers, and print makers. Make new contacts.
Each department has a wealth of trade shows to choose from for their forecasting and purchasing budget.
Concessions can be small companies, and are at risk of going into administration. The financial risk may be too much.
Different types of trade shows relating to different departments; accessories, footwear, sunglasses, womenswear. Etc.
Concession brands. If they fit with our customer profile, keep in contact with them and understand their manufacturing process, pricing, and customer profiles before negotiations begin.
It is a good way to gauge the RRP, and the cost price. Seeing new fabrics, and new technology for manufacturing.
Trade Shows
Competitors; finding out what styles they are putting their weight behind, if our trends are similar; if they are, we may need to increase our tactics to get the best prices.
Catwalk, see the styles for that city, the culture, anything that stands out that reflects the Topshop Girl
Different trade shows in different countries, reflect their unique market standing. Can’t paint them all with a broad brush.
Talk to the competitors, understand their method of negotiation, and buying habits. Does Topshop need to improve?
Glamourous, £78
Rare, £45
ROLE OF A BUYER: TOPSHOP TASK A s o f O c t o b e r 3 1 st 2 0 1 5 , T o p s h o p h a s bought into numerous fair trade concessions for their flagship store in London. Ethical clothing brands, People Tree, Hug, and Gossyplum, have already been in their stores since May 2006. Now, in 2015, Topshop have committed to a Fairtrade collection, and are celebrating a ‘Fairtrade Fortnight’ on their Topshop blog. This shows that increased press about transparency and eco-clothing, has affected how buyers buy their materials. Trade shows are a great way to source new companies who may specialise in this particular fabric technology. The growth of Topshop, and their net turnover over the past fifteen years has allowed them the freedom to become leaders in the eco-clothing market. Without trade shows, and meetings with new suppliers and bringing in young and new designers, this may not have been possible.
Financial Times, 2006
The Telegraph, Oct 2015
References Financial Times, (2015). Topshop to sell clothes by Fairtrade companies - FT.com. [online] Available at: http://www.ft.com/cms/s/0/20d39636-a991-11da-9f4e0000779e2340.html#axzz3qhwBLC6P [Accessed 3 Dec. 2015].
ROLE OF A BUYER: TOPSHOP TASK Can you negotiate a better deal with your supplier, if not you must find a better supplier for Topshop.
Conduct and audit for the executives at Topshop, so they trust your decision on contracts with factories overseas. They must comply to the Topshop company policies.
Arcadia Group Ethical Audit process
RAGS (responsible accountable garment sector) fund. Working with factories in Bangladesh and India to give workers stable working environments, enhancing workers pay, avoid excessive working hours, improving productivity and quality in long term.
Country of Origin, the laws, import and export tax. Human rights issues, political issues that can affect the negotiating.
Raw materials, ethical materials, cheap materials. Which would suit the range or line? Will the customer purchase poor quality materials even if they are cheap?
Topshop collaborated with PETA in 2013 against the use of real fur in the fashion industry. This was met with wide acclaim.
Sourcing and Negotiation
For the Fairtrade line at Topshop, conduct thorough research, and liaise with the company bodies regarding environmental safety, equal pay rights, and health and safety of factories and workers.
References Fashion.telegraph.co.uk, (2015). Topshop reveals new Fairtrade collection - Telegraph. [online] Available at: http://fashion.telegraph.co.uk/news-features/TMG8309339/Topshop-reveals-newFairtrade-collection.html [Accessed 3 Dec. 2015]. References Arcadiagroup.co.uk, (2015). Ethical Trading / Arcadia Group. [online] Available at: http://www.arcadiagroup.co.uk/fashionfootprint/our-products/Ethical%20Trading [Accessed 3 Dec. 2015].
Jersey Bolero, ÂŁ25
Denim Hotpants, ÂŁ32
ROLE OF A BUYER: TOPSHOP TASK
Buyers are consistently trained on ethically sourcing materials, and following the company code of conduct. Through out the stores, they have ‘Fashion Footprint Focus Week’, where employees can offer ideas to save energy, and stop waste within their stores. The store who changes their store the most, and raises the most awareness is rewarded. In 2014, 400+ employees received ethical training. Josephine Barratt, and Assistant Buyer for BHS, joined the Fashion Footprint Advisory Panel when she joined Arcadia Group. Employees from every brand under the Arcadia Group umbrella can join this panel and offer ideas to grow their awareness of their fashion footprint. A lot of the ideas are about sustainability, and conservation within stores. Topshop has clear lines of communication with their employees around the world, and their inclusion of employees in their factories in the far east, and letting them ask questions and ask for better health and safety and wage rises, is also a good thing because some of the countries Topshop have suppliers in do not have a democracy. They care about the employees, and the community. References Anon, (2015). [online] Available at: http://www.arcadiagroup.co.uk/fashionfootprint/A000736_ResponsibilityReport2014FINAL.pdf [Accessed 3 Dec. 2015].
Topshop release a Responsibilities Report every year that can be read and downloaded on their Arcadia Group website. This report is detailed, and is written for the casual customer, and not a detailed a comprehensive dossier. It includes imagery, and goes into great depth about their sourcing of materials, and how they are improving their ethically sourced materials every year. They want to be at the forefront of Fairtrade cotton, and have put auditors in place in their factories, alongside supply managers, who keep an eye over health and safety, and production quality. They are involved in the JTP (Joint Turkey Project), where workers could represent their workforce through a free democratic election. This would improve representation of workers, who can convey their issues directly to management from Topshop. They have an interview with Shaheda Begum, the Ethical Trading Coordinator, in the supplier management department. She talks about their code of conduct, and the new online database (Valid8) that implements this code of conduct. It’s good that the company is introducing it’s employees to the customer, creating a wider transparency over their supply chain. 3,212 factory ethical audits were reviewed during 2014, keeping their supply chain clean and completely transparent to consumers.
ROLE OF A BUYER: BUYER JOB DESCRIPTIONS Researching the role of a buyer online, I have found numerous adverts for different entry levels in the retail buying sector. On the postgraduate website, I found career information about a retail buyer. They include managing financial budgets, customer demand, quality, availability, and following store policy. Starting salaries can be £19,000 a year, and can increase with experience. Some retail head offices are not in your local area, so moving to another city may be necessary. This can be good for young people who want to pursue their dream career, and can afford to move to another city without any fear. As a buyer you rarely get holiday’s and career breaks, it’s a stressful job that can take you past the traditional 9-5 working hours. They have a high level responsibility, and nothing can come between their tasks, they have a minimal social life. As a buyer you have to travel abroad a lot, and visit trade shows on different continents, and this will take you away from your family, and friends. If you can’t be alone, and work alone the majority of the time maybe the role of a retail buyer isn’t the right career. With retail depending on financial markets, government elections, and change in executives, you have to be aware of current affairs and how there can be a chain reaction if certain shuffles are made in the job positions above you. Maybe one day your company is focusing on the young teenage market, and then decide to expand into the womenswear sector, and soon a menswear department. You have to be fluid, and willing to change with the times.
ROLE OF A BUYER: BUYER JOB DESCRIPTIONS
This advert for a senior role at Accessorize explains the most important role in buying; they have the most responsibility. They can include a lot of traveling, and important meetings with different departments. You have to present your ideas, and believe that they will work. There is a lot of trust involved. You have to have excellent skills.
This NEXT retail buying advert uses comprehensive English, and highlight the importance of the role. They have to be able to focus on the candidates who definitely want this job, and will sacrifice their time and social life to succeed in the tough world of fashion retail. A lot of open questions are asked of the candidate.
ROLE OF A BUYER: BUYER JOB DESCRIPTIONS
Internships are great for students who are currently studying at University, and are taking sandwich courses. This Mothercare is an internship within a sandwich course, they do two years at University, a placement year at the industry they want to work in, and then do their final year at University. This is great to get all the knowledge, and understand the working environment of the business you want to join once you graduate. It is also a great opportunity to make contacts with people in the business, like senior buyers and merchandisers, who you can get in contact with after you have completed your degree, and ask if they have any opportunities internally.
ROLE OF A BUYER: BUYER JOB DESCRIPTIONS
ASOS are a global e-commerce brand, that is expanded a lot since they first started selling celebrity style clothes and accessories. This buying admin advert is all about developing the intern into a fully rounded buyer, with numerous responsibilities. Working for a giant company like ASOS, even if it is only for 12 months adds a lot to your experience, and will look good on a CV.
ROLE OF A BUYER: BUYER JOB DESCRIPTIONS
Nike have an advert for a work internship at their Netherlands head office. This is an internship that is open to people from other countries. This would be a fantastic opportunity, and would look great on a CV, because you will have the knowledge of a global company and the experience of working in a head office in a different country. They want people who are creative, and open to new ideas. The duration is between 6-12 months, so you will not be away from home for too long. You will gain experience in presenting to a large group of people, and learn from a fast paced environment, that works to targets and works quickly. This internship contains a lot of responsibility, and there is a lot of trust with the student that gets this internships. The most important thing you must have is a desire to succeed, and have a passion for fashion.
ROLE OF A BUYER: BUYER JOB DESCRIPTIONS High Street Chain
This NEXT advert for a role in their Buying department is a long winded explanation about the role of a buyer in general, however, if you read it all, you will notice the key skills they want in their ideal candidate; • • • • • • • • • • • •
Great responsibilities Excellent communication skills Delegate Leadership qualities Organised Think outside the box React quickly to change Self motivated, and able to motivate a team Mathematical comprehension Confident in your own ideas Observational Able to handle a pressurised environment
A high street chain is looking for someone to be committed to their brand, and will follow procedure and structured role. Their head office will be vast, and in a central location. You must understand the customer profile, and the company and what they sell. As a high street chain buyer, it requires up to date knowledge of the competitors, and even in your free time you may have to visit the other stores on the street to see what they are doing with their visual merchandise, layout and seasonal sales. This is a pressurised environment, and hitting targets is the main role of the buyer, you have to have the best range on the high street, and find the next trend fast so orders are swift and a delivered quickly to stores.
ROLE OF A BUYER: BUYER JOB DESCRIPTIONS Department Retailer This John Lewis advert for a Graduate Buyer position at their head office in London explains in specific detail what is required of a successful candidate. It clearly states what hours you will work, salary per annum, and benefits. The skills they require include; • • • • • • • • • • •
Leadership qualities High communication skills Follows direction, and company procedure Attend meetings, and proactive in negotiations Can adapt to problems relating to trading issues; delays in production, suppliers Quality control Good response to customer complaints Confident person Understand price points, and range planning Good at developing professional relationships Degree level comprehension, communication
As a prevalent department store in the UK, John Lewis has a stringent list of requirements for their graduate programme in Buying. This is understandable, considering how structured their company is, and the many different routes you can take in their business. They have buying departments in household and electrical goods, as well clothes and accessories. The requirements are extensive, it is a job role for a business savvy graduate who may not enjoy nor follow fashion but who has an analytical mind, and is a problem solver. This position is more so about quality control, stock control, and communication with suppliers from different countries.
ROLE OF A BUYER: BUYER JOB DESCRIPTIONS Brand Retailer Selfridges’s advert for an assistant buyer in their menswear department. They buy big designer brands like Mulberry, Paul Smith, and Givenchy, as well as high end brands like All Saints, Ted Baker, and Karen Millen. It’s store infamous for it’s high end concession areas on every floor, so to be a buyer for their menswear department requires the buyer to understand who their customer is, for numerous designers. The key skills they look for are; • Tenacity • Resilience in adversity • Able to form strong relationships with merchandisers, and colleague within the store itself (sales assistants and managers) • Conduct trend research, and have great insight into the seasonal trends. • Confident in offering recommendations for where their next range is coming from. • Forward thinking • Strong influencing skills • Attention to detail • Innovative ideas • Find new designers, and products, that fit the store Selfridges is a high end brand, and so there is a lot more room for creativity in their buying department. You can take more risk, and introduce the team to up and coming designers that their customer might like. It has a lot more freedom, and is less structured. The candidate doesn’t have to have a lot of experience, but has a willingness to learn and engage with the future of the industry. It’s not a comfortable position, it requires a lot of focus and confidence in making your own decisions.
ROLE OF A BUYER: BUYER JOB DESCRIPTIONS Compare and contrast high street retailer, department store retailer, brand retailer: High street retailers have their own customer profile, and have a focused idea of what their ranges will look like in every coming season; some products that were highly successful last spring/summer might be brought back into the fold for next spring/summer. The trends may influence the colour, print, and styling, but the shapes stay constant. The customer is loyal to the high street retailer, and is afraid of change. The department store has less fluidity, they must stick to a highly structured office setting, with buyers being delegated specific departments, like; footwear, accessories, homeware, menswear, sunglasses, swimwear etc. There are many tiers to the department store structure, and they must understand how different brand concessions have different customer profiles. They might not all gel together on the shop floor, but you have to make sure that as a department store you are representing that high street brand or boutique brand in a positive and intelligent way. The brand retailer has many brands that can be alternative, designer, or high end. They will all share a similar path to the store; high quality production, exclusivity, and customer profile. The customer profile of a brand retailer is someone who follows fashion shows, trends, but who isn’t afraid to change their style every season and experiment with something new. This is great for the buyer, as they have a flexible space to be more creative than the other retailers. They can research new and up and coming designers, and know that someone in their market will buy it. NEXT has Marks and Spencer as a main competitor, and they both have a share in the same lucrative market; 18-49 year olds. They must appeal to a broad age group, and style aesthetic. This can be difficult to achieve because trends may not be suitable for every age. They must focus on their own identity, and what their best sellers are, then introduce the trends into those lines, updating them every season. John Lewis’s graduate programme is more about the business side of it, and less about the creative fashion side. You must have in-depth business knowledge, and the ability to communicate with a wide range of people on all levels within the company. This job requires logical reasoning, and analytical skills that can only be developed with a degree, and a business focused one at best. This narrows the movement that you would expect in this career field, as they will give you a role in a department and expect you to do that every day, with no flexibility. Selfridges’ buying role is the most creative out of the three; they expect you to have an understanding of the fashion weeks around the world, and know who will be the next best thing, before they become the next best thing. This allows them to negotiate good contracts with unknown brands and designers that have the same high quality as their other brands, and that will sell well with their customer profile. This requires a fashion intelligent, not so much a business intelligence, which is great for a buyer who wants to progress higher in the retail and fashion industry.
ROLE OF A MERCHANDISER: MERCHANDISER JOB DESCRIPTIONS Merchandiser’s have to make sure the right amount of stock get delivered to every store. This can’t be decided based on a small amount of data, because any excess is a loss of profit. Anything that sells out, and isn’t replenished quick enough, is a loss of profit. It is one of the most important roles in the retail industry. They control the budget, and the order volumes. They have to be logical, rational, and low risk.
ROLE OF A MERCHANDISER: MERCHANDISER JOB DESCRIPTIONS
Pro Direct is an online sports specialist retailer. They have long standing relationships with well known brands around the world. They are successful because of their knowledge of sports, and their passion about sports. They understand their customer because their customer is most likely similar to them. The key responsibilities, and skills for this job include; • • • • • • • •
Monitor the flow and the release of products online Mathematical skills, confidence in analysing data Products must be up to date. Work closely with colleagues within your department, and across the business as a whole Organised Highly logical Enjoys working with numbers Genuine interest in sports like football and rugby
Daily task will include making sure that there is enough stock, and that you purchase more of the products that are constantly in the best sellers list, and aren’t popular because of a small fad or blip in the market. This ability to distinguish between product longevity is highly sought after.
ROLE OF A MERCHANDISER: MERCHANDISER JOB DESCRIPTIONS
Farfetch is a brand retailer, they sell designer brands direct from boutique stores around the world, making it easy for their customers to find certain designer products that may be out of stock in their department stores. The key responsibilities of their merchandiser role include; • Able to understand key performance indicator (KPI’s) about customer loyalty, and product sales, and translate them for different tiers of the business to understand. • Able to provide insight to the wider commercial team, so they can use that information for their own departments. • Motivated • Inspiring ideas • 3+ years in a retail analytical merchandising role • Strong excel skills • Hard working • Fluent in English, and a second language
Farfetch is a company that needs a high level of communication, and fluency in different languages to talk to the small European boutiques that have concessions on Farfetch. Stock control is important, especially since they are designer brands so there aren’t going to be a lot of them available. Pricing has to be correct, and the ability to move
Chief Executive
IT
Technicians
Customer Service
Design
Buying
Merchandising
Marketing
Accounting
HR
Customer Service Manager
Head of Design (Womens/Kids/ Mens/Home)
Head of Buying
Head of Merchandising
Head of Marketing
Head of Accounts
Logistics
Customer Service Advisor
Junior
Junior
Junior
Junior
Assistant
Complaints
Assistant
Assistant
Assistant
Assistant
Secretary
Advisor
Trainee
Trainee
Trainee
Trainee
Regional Manager Store Manager Customer Service Manager
Duty Manager
Department Manager
Trainee Manager
Admin Assistant
Full time sales assistant
Part time sales assistant
Security
Cleaners
ANALYSE THE SIGNIFICANCE OF DIFFERENT BUYING ENVIRONMENTS AND CRITICAL EVALUATION The significance of a head office, is that all the departments are in one building, making communication easier with other departments and also with communicating with stores across the globe. The significance of the buying department in a Head Office environment is how they are able to interpret detailed data they receive from the merchandising department, and disperse this information in layman’s terms to store managers across the globe. The buying department has to research trends around the world, according to the different seasons in different countries, and what
pieces have sold well in the stores globally. Buyers must utilise this information to be able to make important and specific volume orders from suppliers across the globe. As well as liaising with the merchandisers, the buyer must also communicate with the marketing department. If any products are placed in advertising campaigns, and in press releases, they must be known as best sellers for the target market. It is a waste of money and productivity to include a velvet dress in an international campaign, if there is no evidence that the key demographics would consider buying it this season. Using retro forecasting to highlight pieces that could sell more than others, will entice customers into stores and online, to view other products that are riskier.
As a branded buyer, it is vital to know about new designers, and upcoming collection previews and fashion shows, so that the buyer knows who the fashion magazines are hedging their bets on, and also what brands are growing in popularity. There is a nuance in making these decisions, before the price of purchasing these items gets too high. As a wholesale buyer, the buyer will order products in enormous quantities, and has to buy products that appeal to a wider range of boutiques and companies. Understanding mass market appeal, and trends, is crucial. Any unused stock adds a deficit to the next seasons budget. Online buyers have to be on the ball, and have the exact number of sizes in stock at any time of the day. Any new products must be photographed, and uploaded online on a daily basis, sometimes hourly. The craving for new products to appear online is bigger than in the high street environment. A buyer for an online company like ASOS must have their ear to the ground and ready to pounce on any trend. Using social media is important to bring in customers for when new collections go live online, and also to spread the word of sales, promotions, and collaborations. A high street buyer may be delegated a role within a department, for example lingerie, jersey basics, footwear, formal etc. Their role is more specific, and their trend forecasting could be directed towards on trend colours and prints as opposed to shapes and embellishment. Not only does the high street buyer have to understand the bestsellers, and their customer profile, but also know when is the right time to introduce a new product to the collection; whether that is an update on a bestseller, to improve it’s quality, or to cut costs etc.
The role of a buyer involves communicating with designers, and making sure they stay on brand. Creative teams can easily forget the target customer, and it is the role of the buyer to reign in their designs, and bring it back to the customer profile. The same goes for the merchandisers with the buyers; they have to control the budget, and stop the buyer from buying too much and stop them from getting involved in risky behaviour. The technologist will have swatches, and archives of fabric on hand to help the buyer decide what materials will work for certain designs. They may choose to use 100% cotton, therefore they will have to conduct meetings with the technologists to find what supplier can get that quality of cotton, and if they can negotiate a low price. Then the buyer must go to the design team, and tell them what design should be manufactured from the cotton, and if it is feasible; will it bring the quality down, or raise the costs. The buyer will then have to be unanimous with the merchandiser as to how much money can be spent, and how much volume of each product can be bought.
A buyer must be able to understand audits of the company factories, and if they comply with the ethical policy of their company. All buyers must be organised, and good at estimating delivery times, and also to forecast if any issues may arise due to political unrest or economical downturn, and what to do should any problems arise. Fabric choice, quality, must also be considered. If the fabric is cheap and easily worn out, will decrease the life cycle of the clothing. This will affect customer satisfaction, and also affect the length of time until the items have to be put on sale, or reduced by department sales assistants due to faults. Even though it is important to keep costs low, the customer is more important. If the same item is being returned due to a fault, or poor quality, the buyer has to decide alongside the customer service department, whether to pull them all from the shop floor, or to push them in the oncoming sale. Either way, it is a loss of profit. The designer department includes a team of people who design CAD’s and have access to prints and colours from WGSN, and use this to present to the buying departments their ideas on what the
company should invest in for the next season, they will also have the knowledge to keep costs down with their block pattern choices. The buyer must then condense the CAD’s that are presented to them by the buyers, and create a range based on their designs and fabric choices. The buyer will then liaise with the merchandising department, and be given a budget to spend on that season. The buyer must then decide where they will contract the manufacturing process to, whether it will be in cheap factories abroad in Asia; which will be cost effective, but the quality could turn out poor and cause problems with customer service in the future, or they could decide to reduce the range, cut the fat, and have a smaller range produced in a country closer to home; which could mean the product is of better quality, and will last longer in a customer’s wardrobe. The head office buyer might communicate with the regional managers, and pass on important information in regards to store layout, what products to push towards customers, and how ranges are compiled together. The buyer might not talk directly with any store manager, which is why it is important that the regional manager conducts conference calls, and keeps store managers aware of what head office requires of their brand or concession. A company intranet is used for all managers to find out any information that could help them understand what the main trend for the season is that the store is taking on board. The store might get a huge delivery at the beginning of a new season, and the manager’s will need to inform their visual merchandisers on what the theme is. This can be communicated by the visual merchandisers in head office, along with the buying team.
The merchandisers will be able to find out through sales reports from individual store whether or not stock of a certain product needs to be replenished, and they can organize the logistics of the warehouse sending more stock to that store, or transferring stock from another store if the stock is needed urgently; i.e, if there is a too much demand, and not enough stock in the warehouse, but that same product is not selling well in another store nearby because of its location. The merchandisers will also need to know about stock levels, so they can have an idea of what items to put on a mannequin; if there isn’t enough stock of a dress than they can’t advertise it in their display windows. The VM team in head office will have to create visual merchandiser guide books to send to each store, so they know how to display the items in each department; this makes it easier for customers to find the clothes they want in different stores, depending of where they go to shop.
PHOTOSHOP EXPERIMENT
This was the first time that I have experimented with Photoshop. This Unit I was taught how to use it, and now I use it for everything including CAD, prints, colour fills, and mood boards. I find it really useful, and now my work has improved since the first Unit.
MINI PROJECT PROPOSAL
What is the brand you have chosen? Why did you choose this brand? What type/style of range are you going to build for this brand? How will you make the range fit with the brand? What season will the range be for? I have decided to build my range around ZARA, and build a party range for them. ZARA is a cutting edge brand whose critical path is very quick; they can take what is on the catwalk and recreate it for their customer in a short amount of time. I will follow the identity of this brand, but the range will be atypical of their usual style. It will consist of 12 pieces with 6 accessory pieces and 4 pairs of shoes. I will create the first plus size range for ZARA. I will use well known fashion blogger Nadia Aboulhosn to front the campaign. She is well known for her sleek style, and confident attitude that reflects that of the ZARA customer. She is well known in America, and will help boost brand awareness in the United States online. I have chosen to bring together a party range for the first plus size clothing range for ZARA. What methods or tasks will you use in your mini project?
First I will research the history of the brand, and complete a directional shop; I will research the brands pricing, marketing tactics, and strategy over the Christmas Period. I will need to understand when they have their sales, so I can gauge the lifecycle of the ‘New’ lines. This will help me calculate cost, and profit loss. Using the data I have gathered, I will create an in depth customer profile for ZARA, and a customer profile for my own range. I will write a PESTLE. Using the information from the PESTLE I will conduct further research on the sourcing of their fabrics, their factory production, and global logistics. I will conduct a competitive shop, and find out the direct competition to ZARA, and how their pricing differs, and what styles are similar. I will also compare and contrast this competitive shop with ZARA, and with my own range that I am planning. I will include photographs of both the competitive shop and directional shop. Trend forecasting will be important; I will use this to find out the trends for the season over a range of different categories. It will be in-depth and thorough, to help me when I start planning my range with CAD images, and Photoshop. After I have built my range, I will start a business plan for the range, and the financing for the range. Evaluation and Progression- How will you continuously evaluate your progress throughout this project? I will create an action plan. I will delegate my time, and make sure I am up to date with everything before I proceed to the next day of action. I will start a log book, and write all the constructive criticisms I receive from my one to one tutorials with Amy. I will also continuously evaluate my progress throughout the unit, and then will conclude this in a final evaluation of the entire project of Unit 10. I will also create my own fashion blog, that will include my primary photographs and ideas surrounding my range.
ACTION PLAN: MINI PROJECT
12/11 Introduction to the brand, concept board.
13/11 Comp shop; product analysis, pricing, (do a table on PP)
18/11 Business planning with Amy
19/11 . Business planning with Amy
26/11 London Trip
27/11 Advertising; logo, promotions, vouchers, lookbook, primary research.
Research history of ZARA. Customer Profile PESTLE analysis; evaluate
Direct Shop; current lines, pricing, styling, theme, (do a table on PP) Material; fabric, sourcing, ethics, factories used abroad, cost
SWOT analysis; evaluate Conclusion of analysis Global Context of ZARA; where would the range fit in with the global brand, in different markets?
Organisational Chart
Conclusion of analysis
Analyse the significance of the buying environments-HO and SF, why are they important and significant Critically evaluate a range of different buying environments found in fashion retail companies. Look at phone pictures for rest of the questions
20/11 Business planning with Amy
25/11 Trend forecasting; primary research of street style, concept images, mood board images. Hair, Make-Up, shapes, textures, colours, prints, patterns. Mood board, developmental CAD board, fabric tactile board. Conclusion of analysis, how does this affect my range?
2/12 Analyse the range, evaluate it in the brand context. How will it fit in with the brand, and how is it different? The pros and cons
3/12 Create a blog, showcasing the primary research, your analysis, and research
4/12 Conclusion of range Evaluation of unit
Distribution, allocation of stock, global context of logistics. Critical path; design to shop floor Conclusion of analysis, pros and cons?
Zara is always striving to meet the needs of its customers at the same time as helping to inform their ideas, trends and tastes. The idea is to share responsible passion for fashion across a broad spectrum of people, cultures and ages.
An excerpt from Jess CartnerMorley’s article in 2013 about the quick growth of ZARA: ‘Zara’s secret weapon is the way in which information harvested on the shop floor is put to use. If a deep V-neck sweater is selling better than a scooped one, the design team will set to work on producing variations on the Vneck…’
Zara was founded in 1974, Arteixo, Galicia, Spain. It is owned by Inditex group, who also own other brands like ‘Pull and Bear’.
It has over 2,000 stores, and it’s main focus is clothing. They have a revenue of above 221,594 billion euros.
ZARA has an aesthetic that is about similarity, but different. They’ll have the same design, with a different collar, or a variation of a zip or a button. It’s about evolving the brand, but keeping the customer loyalty.
ZARA was targeted in 2011 by Greenpeace about how they use toxic dyes in the factories situated in poor areas, and this spreads carcinogenic material into the local community. After the publication of the report in 2012 by Greenpeace, ZARA stopped all toxic chemicals in their production line.
ZARA is renowned for its quick release of catwalk style clothes, for reasonable prices. They have many celebrity fans.
Cartner-Morley, J. (2013). How Zara took over the high street. [online] the Guardian. Available at: http://www.theguardian.com/fashion/2013/feb/16/how-zara-took-over-high-street [Accessed 12 Nov. 2015].
ZARA PESTLE: Political May 2015, Zara’s parent company Inditex was accused by the Brazilian government of going against their agreement with the Brazilian government regarding their employees in their production factories in Sao Paolo, Brazil. The agreement they had in 2011 stated that they improve the conditions their labourers work in. However, the ministry found evidence that over 7,000 employees in Zara’s manufacturing factory were being treated abysmally since 2012. Sao Paulo based pressure group ‘Reporter Brasil’ found Zara’s Brazilian factories included 84 accidents, cases of illness at work. They also found that workers for working excessively; over 16 hours a day, with hardly any days off work in the week.
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The Brazilian government claimed to save 15 workers from a factory associated with Zara. AHA is responsible for 90% of Zara’s Brazilian clothes production. The factory were the workers were rescued from, were from a AHA subcontracted factory. 14 workers were Bolivian, 1 was from Peru, and one was only 14 years of age. From my research I read interviews that talked about Zara’s quickness to emulate current trends and get it on the shop floor weeks before their competitors. I understood that they achieved this because they had the majority of their production factories in Europe; Spain, Portugal, and Morocco. I thought this was a positive exception to what we currently see in the fast fashion market. However, reading these articles about their large factories in South America has disturbed me. I think the pressure of producing clothes at a fast rate has caused Zara to lose their way. Since the investigation on their illegal employee environments, Inditex pulled all their contracts from those subcontractors, causing 31 companies to close.
Butler, S. (2015). Zara owner Inditex faces fines in Brazil over poor working conditions claim. [online] the Guardian. Available at: (1) http://www.theguardian.com/fashion/2015/may/12/zara-owner-inditex-fines-brazil-working-conditions-claim [Accessed 12 Nov. 2015].
Vogue UK, (2015). Zara Accused Of Using Sweatshops. [online] Available at:
(2) http://www.vogue.co.uk/news/2013/04/04/zara-faces-sweatshop-allegations-in-argentina [Accessed 12 Nov. 2015].
ZARA PESTLE: Economical (1)
China loves the style aesthetic of Zara. The women love the European slim suits, and tailoring. They also appreciate the colour palette that Zara’s clothes have; neutrals that compliment their skin tone. However, Zara has a lot of issues with their supply chain; because the majority of their clothes are produced in Europe, the shipping costs are forcing them to widen their profit margins in the Asia market. This isn’t helping the consumer, because there are a lot of similar brands in China that sell the same quality of clothes that Zara produces, but cheaper. Therefore, the company has to appear to make itself more luxurious, than it is in other countries. It’s moving itself up to the high end market in Asia. China’s consumer watchdog attacked Zara in 2011; they focus on the foreign businesses more so than the Asian businesses. They claimed Zara was selling poor quality clothing; this is bad PR for a company that is trying to be renowned as a luxury brand in the Asia market. Soon, the company will have to move the majority of its production to China. It is inevitable because of the rising importing costs. The logistical problems they face will continue to hinder the growth expansion across the globe. This will affect quality more so than ever before, and this could seep into their lucrative market in Europe.
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Clancy, R. (2013). Zara-owner Inditex's profits boosted by global expansion. [online] Telegraph.co.uk. Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10115483/Zara-owner-Inditexs-profits-boosted-by-globalexpansion.html [Accessed 12 Nov. 2015].
ZARA PESTLE: Social (1)
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The Glassdoor, a website that invites employee of companies from every level to submit their salary; hourly and monthly, allows me to see how Zara compares to their competitors. Their sales assistants on average earn a decent wage compared to UK businesses like Marks and Spencer, and Primark. However, employee satisfaction is low. This is due to disorganisation during peak times of the year; like Christmas. Zara has also been in hot water, for selling a pyjama top with a star of David attached. This was found again this past October in 2015 as it was found in a charity shop in America. Zara apologised for this design in 2014 when it was first produced. However, it is being found now and again in donations to charity clothes shops. It continues to follow them.
(2015). Zara Salaries. [online] Available at: https://www.glassdoor.co.uk/Salary/Zara-Salaries-E17544.htm?&countryRedirect=true (1) Glassdoor, [Accessed 12 Nov. 2015].
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http://ejpress.org/index.php?option=com_content&view=article&id=54529&catid=17
ZARA PESTLE: Technology
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The Business of Fashion, (2013). Inditex E-Commerce Sales Soar. [online] Available at: http://www.businessoffashion.com/articles/fashion-tech/inditex-onlinesales-soar [Accessed 12 Nov. 2015].
Zara opened it’s first e-commerce store in 2011. They were ahead of their competitors, and it soon opened their market trajectory to people who may have never shopped in Zara before. Unlike it’s fast fashion rivals H&M, Zara’s production is mainly based in Europe, close to the lucrative markets of the UK, France, and Germany. The closeness of their production factories and warehouse makes it easier for fashion fans to get the latest trend from each season the week after it is shown in fashion week. This burst in technology advancement is also seen in their app, making it easier for people to buy Zara clothes on the go, without needing a desktop computer. If they see an outfit they like in store, but their size isn’t available, they can just purchase it as they leave the store, online. The customer is the main focus of this brand, and their development of customer service is paramount to their staying power.
ZARA PESTLE: Legal (1) Over the years, Zara has been at the forefront of the ‘fast fashion’ tirade that has swept the retail industry. With the factory productions being shared overseas and in mainland Europe, close to their headquarters in Spain, it is easier for them to see a Celine show, a Balmain show, and like a magpie find the trends within the trends that their customers will want to buy. This, however, is a copyright issue. They have managed to survive the legal battles with designers houses like Marc Jacobs, because they alter it just that little bit more than the original; but the aesthetic stays the same, for example; striped trousers, a tailored boucle jacket, etc. They grace the boundaries of counterfeit clothing, because it’s woven into the fabric of their company manifesto. Produce fashion fast, and before their rivals.
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Vogue UK, (2015). Why Balmain’s Designer Loves Zara’s Copies. [online] Available at: http://www.vogue.co.uk/news/2014/07/28/olivier-rousteing-on-zara-copies-and-rihanna-the-new-naomi [Accessed 12 Nov. 2015].
ZARA PESTLE: Environmental (1) (2) In 2012, Zara committed to go toxic-free with the help of Greenpeace. They had previously been bombarded with protests at their stores in the UK. They have now committed to reducing the toxic bi-products in their supply chain by 2020. They are committed to being more transparent. There is an increase of interest by the public for fashion chains to become more aware, and take more responsibility for the destruction of the environment. Zara’s website states that they are introducing an ‘ecofriendly management model’, in order to reduce their energy consumption by 20%. They also hold in-company awareness campaigns and training online to educate all their staff.
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Greenpeace.org.uk, (2015). Zara commits to go toxic-free | Greenpeace UK. [online] Available at: http://www.greenpeace.org.uk/blog/toxics/zara-commits-go-toxic-free-20121129 [Accessed 12 Nov. 2015].
Zara.com, (2015). Our Mission Statement-Company | ZARA United Kingdom. [online] Available at: http://www.zara.com/uk/en/company/our-mission-statement-c18001.html [Accessed 12 Nov. 2015].
ZARA: S W O T Strengths (internal)
Weaknesses (internal)
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Renowned for it’s designer influenced ranges, whilst keeping the style contemporary.
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Poor quality fabrics, juxtaposition to the way it presents itself as a high end brand.
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Great VM in-store; minimalist, looks luxurious, highlights the clothes in a good way.
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No advertisements.
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International brand; isn’t affected by British or American retail layouts, or retail behaviour i.e, promotions, adverts, changing brand style for specific trends (like 70’s, or Gothic trend) etc.
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Fast fashion clothing brand; keeps the style the same every season, very rarely composes a whole range on a seasonal trend.
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All the ranges compliment each other; neutral colours at the forefront, and the odd pop of colour and prints.
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Isn’t designed for every type of person; usually slim and tall women.
Opportunities (external) • Advertise in fashion magazines. • Adapt to the modern retail method of utilising big trends to bring in more money, but not lose their identity. • Include a wider range of their target audience; plus size women.
Threats (external) • It’s subdued outward brand identity is in stark comparison to the brash campaigns that are found with their competitors like Topshop and River Island. • Doesn’t bring in new customers; their style doesn’t change, and therefore isn’t enticing new people to shop in their store. Their lack of intent to focus on singular trends is their downfall.
• Political and socially motivated protests about their supply chain; fast fashion, quick production in poor countries, the subcontractors don’t follow the legal requirements for their respective companies.
ZARA: S W O T analysis C r i t i c a l l y a n a l y s i n g m y S W O T, a n d a n a l y s i n g t h e s e c r o s s - s e c t i o n s , I h a v e f o u n d t h a t t h e s t r e n g t h o f Z a r a ’ s a b i l i t y to include new trends every season, in quick succession, straight after they are shown at fashion weeks around t h e w o r l d , i s o n e o f t h e i r m a i n q u a l i t i e s o f t h e i r b r a n d . H o w e v e r, t h i s i s a l s o a w e a k n e s s b e c a u s e t h e y s a c r i f i c e quality for the sake of being the first brand to show a new trend. This could be detrimental to their profit margins, because they do not advertise on television, or online. So, their efforts can become unfounded. T h e i r v i s u a l m e r c h a n d i s i n g t e a m i s o n e o f t h e b e s t o n t h e h i g h s t r e e t ; e v e r y s t o r e o o z e s l u x u r y, a n d m o d e r n i t y. They do not just group their ranges on rails, but they showcase them the same way that designer stores do; minimal stock, paired with an accessory above or below the clothing product. They even have an area dedicated t o a c c e s s o r i e s , t h at i s b i g g e r t h a n m o s t o f t h e i r c o m p e t i t o rs , a n d h a s s o fa ’s a n d s t a n d s fo r t h e i r b a g s , l i ke i n Chanel concession stores in Selfridges etc. In contrast a threat could be that competitors have more stock on s h o w, a n d e n t i c e c u s t o m e r s w i t h c o h e s i v e r a n g e s t h a t a r e o n t r e n d , i n l a r g e v o l u m e . Z a r a t e n d s t o n o t s h o w c a s e t h e t r e n d s t h e w a y To p s h o p o r R i v e r I s l a n d d o ; t h e y p u s h t h e i r m a i n l i n e s t h e m o s t . Z a r a i s o l a t e s k e y demographics; plus size women, which other competitors have started to build ranges around with inclusion of s i z e 1 6 i n To p s h o p , a n d S i z e 1 6 i n R i v e r I s l a n d . Z a r a ’s b i g g e s t s i z e i s a s m a l l S i z e 1 4 .T h e b u s i n e s s s t r a t e g y I w o u l d u s e w o u l d t o c r e a t e a p l u s s i z e c l o t h i n g r a n g e . T h e t h r e a t t o Z a r a i s p l u s s i z e b r a n d s l i k e ‘ B e Yo u ’, a n d ‘ E v a n s ’, s t a r t i n g t o f o c u s m o r e o n t h e i r t r e n d f o r e c a s t i n g a n d c o l l a b o r a t i o n s w i t h w e l l k n o w n c e l e b r i t i e s t o g e t the new key demographic that wants to spend money to look fashionable. Zara boasts about their small supply chain, having the majority of their manufacturers in mainland Europe, but it is starting to become apparent through external investigations that they are deceiving their customers. Analysing the SWOT under the section o p p o r t u n i t i e s , i t i s e v i d e n t Z a r a n o w h a s m o r e m a n u f a c t u r i n g f a c t o r i e s i n S o u t h A m e r i c a t h a n e v e r, t h e r e f o r e t h i s c a n r e a c h m o r e c u s t o m e r s . H o w e v e r, m o s t o f t h e s e f a c t o r i e s a r e s u b c o n t r a c t e d b y Z a r a ’s p a r e n t c o m p a n y A H A . A r g u a b l y t h i s m a ke s i t h a r d e r f o r t h e m t o a u d i t a s a c o m p a n y, t o p r e v e n t a c c i d e n t s o c c u r r i n g . T h i s l a c k o f transparency is unusual in this modern age where more and more retailers are accepting responsibility for their sweat shops in the past, and their focus on preventing that happening in the future. In terms of a business strategy being used to enhance this business, Zara needs to be more open, and accessible to the general public about their supply chain. Zara has struggled to break the American market because of their European cuts and style, they are unable to connect with middle America.In conclusion I will use Nadia Aboulhosn as an ambassador for the Plus Size A/W Party Wear range, could bring Zara into the epicentre of middle America and they could finally make a connection, and if it is successful, it could lead to further expansion of the plus size brand.
ZARA Customer Profile modern
cool
tailoring
european
ZARA Customer Profile Zara is the antithesis of high street fashion; they don’t deal in l o g o s , a n d t h e i r c u s t o m e r a p p r e c i a t e s t h i s . Yo u n g w o m e n w a n t t o build their identity with feminine shapes, androgynous tailoring, and similar designs that evolve with the trends with every new s e a s o n . T h e Z A R A w o m a n w a n t s c l o t h i n g t h a t i s n ’ t f l a s h y, o r o v e r the top, and evokes a contemporary adult style aesthetic that makes the eye look at the women in the clothes, not necessarily the clothes themselves. She is 18-35, works at the bottom of the c a r e e r l a d d e r, a n d c l i m b i n g u p a t a n a c c e l e r a t e d r a t e . S h e l i k e s t o g o o u t t o r e s t a u r a n t s , s h o p i n M & S o n p a y d a y, a n d s p e n d h e r money on key pieces in ever y season. Vogue is always on her bedside table, ready to read before an early night. Her interests i n c l u d e O s c a r n o m i n a t e d f i l m s , h o u s e m u s i c , a n d 9 0 ’s R & B . R a d i o 2 is the station she listens to on her drive to work, and she reads the ‘I’ newspaper on her breaks in work. Her make -up collection is vast, but she rarely has time to put on anything but m a s c a r a a n d N i v e a l i p b a l m d u r i n g t h e d a y. W h e n s h e g o e s o u t o n t h e r a r e o c c a s i o n t o a c l u b o r b a r, h e r m a k e - u p i s d a r k a n d g o t h i c ; h e r c l o t h e s b l a c k , n a v y, e i t h e r s i l k o r l a c e , w i t h embellishment. She prefers city breaks over beach holidays, and loves to visit museums and architecture hotspots; Basilica in Spain, Coliseum in Rome, and the Louvre in Paris.
F I N D Y O U R C I T Y, A N D PA R T Y T H E N I G H T A W AY. O U R D E B U T ZARA+ RANGE WILL BRING THE SCREEN SIRENS OUT THIS WINTER.
BUSINESS PLAN: ZARA+ Business Summary The ZARA+ range will be marketed towards the fashion forward woman who wears size 16 -20. The business name ZARA+ is minimalistic like the main ZARA brand. Inditex who owns ZARA is a Public Limited Company. Zara as a singular business has a Zara investment (Holding) Co. Ltd. This allows investment from the public, and purchases of shares. The tagline would be ‘Midnight in…’ and the range will consist of two cities; Madrid, and Milan, with the winter sky as well. These three topics will be the basis for the debut ZARA+ party season range; the colour and prints reflected by the three headings. At the same times, ZARA will introduce a personal shopping range for new shoppers who will be brought in with the launce of the ZARA+ party range, to reduce their anxiety, and make it a more welcoming environment over the busy Christmas season. The ZARA+ range will include what other plus size diffusion lines do not have in other stores; on trend shapes, prints, fabrics, and colour. Through competitive shopping I have discovered a lack of colour, shape, and style, in many plus size ranges. ZARA+ will change that horizon, and be a more inclusive high street brand. ZARA+ will offer more choice, in line with the pricing of the main line.
References Bloomberg.com, (2015). ITX:Soc.Bol SIBE Stock Quote - Industria de Diseno Textil SA. [online] Available at: http://www.bloomberg.com/quote/ITX:SM [Accessed 18 Nov. 2015].
BUSINESS PLAN: ZARA+
Sole Trader A sole trader is a person who owns a business themselves, they don’t share it with anyone else. They can keep all the profits after tax, but they are solely liable if the business goes under. For example, if a sole trader business is consumed by debt, the owner of the company has the responsibility to pay it off, or succumb to administration.
Limited Company A business structure found in Europe and Canada where the responsibility for any debt the company has is limited to the amount of shares an investor has in the company. They can own assets in their company, and sue the company. For example, if the company goes into administration the amount a shareholder is capable of losing is the maximum amount they have invested in the company in shares.
Public Limited Company A large well known business, for example Marks and Spencer. They could have a chain of stores in one country, and their shares trade on the stock exchange.
BUSINESS PLAN: ZARA+
Business Name ZARA+ is the name of the range I am intending to build, for the Autumn/Winter 2016 season. The design was created on Photoshop, and I believe I portrays a sophisticated outlook for the ZARA+ brand. It fits in with the current style of the ZARA main line; which is contemporary, fashion forward, and simplistic in design. As a new customer will approach the store, they may want to know that the line is a serious aspect of the ZARA main brand. I want it to bring in a certain type of customer; one who does not want a brand that is too childish and is not affiliated with catwalk fashion. ZARA is very much a brand that takes trends from the catwalk, and produces them at a high quality, in a quick space of time. The business materials will include this brand name separate to the main ZARA business materials. Hopefully, it will become a stand alone line in the next five years that unlike in other brands where it consists of 12 pieces per season that do not reflect the main line, the ZARA+ line will grow and be equally as important as the main line. Mango has ‘Violeta’ and HM have ‘HM Plussize’. Both of these tag lines are isolating. ‘Violeta’ isolates the main brand from the plus size range; if I conducted a market survey, and asked whether Violeta was a company or a diffusion line, I estimate not a lot of women would think it was associated with the brand Mango. As I mentioned before, this isolation of plus size range does not give the customer any confidence, in fact it could well lower their self-asteem as a plus size woman because they are not deemed equal to the customers who shop the Mango main line.
H&M have H&M Plussize. For a modern brand that likes to affiliate itself with the high fashion labels such as Balmain, Alexander Wang, and Lanvin, they make little attempt to create a plus size brand that is at the forefront of the fashion sphere like their main brand is portrayed to be. This lack of connection, and equality, is not inclusive for the majority of women in their global markets who are not the typical size 12 consumer. Another factor is the fact this line is not available in their flagship stores, it is only available online. If they are not including it in their flagship stores, it gives the impression that they are not confident in their line, and their lack of promotion also isolates the consumer because it becomes harder for them to try on the clothes first hand. There is no attempt to improve profits. In conclusion, the ZARA+ brand and its inclusivity in flagship stores, online, and the fact that a popular fashion blogger will be in the advertising campaign, will show that ZARA is inclusive of all shapes and sizes, and of all women across the globe. There will be no isolation, there will be confidence in this diffusion line. That confidence will be rewarded with increase traffic to the website, and increase footfall in the flagship stores.
BUSINESS PLAN: ZARA+ STRAP LINE FOR PARTY RANGE, ZARA+ A/W 2016:
‘Midnight in….’ The strap line for the debut range will be ‘Midnight in…’, because there will be two cities to choose from and six distinct products for each city. Out of the six products, three will be reflective of the winter midnight sky. This allows for a customer who may want a dark navy, or black, outfit. These are the bestselling colours in ZARA’s main line, and will bring it a constant flow of sales revenue. Having a strap line has its benefits, as it presents a familiarity to the customer, especially since this is an entire new line to ZARA. This range will have a huge amount of marketing involved; billboards, press releases in magazines, look books that will be available in store, etc. ZARA does not have any television adverts, and I don’t believe that having a television advert would affect the amount of visits to the online store or to the flagship stores around the world. It would be a waste of money to compete with the retail giants that monopolise the Christmas period with their expensive adverts. ZARA is a simple, contemporary, brand, and I do not want to take the company
off brand as a whole by conducting outlandish campaigns. This is what I have to consider when designing the advertising campaign for ZARA+.
Nadia Aboulhlson
BUSINESS PLAN: ZARA+ Financial Summary The financial goals for the ZARA+ range in its first year will be in line with the turnover projected for ZARA’s financial year. In 2014, the yearly growth was 4.47% with a sales revenue of 83.26million. Cost of goods sold was 76.15million. The forecast for 2016 would be a turnover of +2%, that would be my personal estimation, and the debut ZARA+ brand would help with that growth.
References Marketwatch.com, (2015). Zara Investment (Holding) Co. Ltd.. [online] Available at: http://www.marketwatch.com/investing/stock/zara/financials [Accessed 18 Nov. 2015].
BUSINESS PLAN: ZARA+ Business Aims The five aims for the ZARA+ brand will be:
1. Maximise the profits of ZARA. 2. Expand the ZARA brand, with the help of the ZARA+ brand, into the North American market. 3. Bring in a new custom er, plus size wom en.
The short term aims would be to increase profits during the golden quarter of the f inancial year, and therefore increase budgets for the next seasonal release of the ZARA+ range. The mid term goal would be to have the plus size range be successful and for the company to have the confidence in the market to continue with another range for the next season. The long term aim would be to finally break in to the North American market, and reach a specific customer that has been left out of the ZARA business strategy for quite some time whilst other competitors have been targeting them.
BUSINESS PLAN: ZARA+ Market Strategy
Direct Marketing; talking to customers in the store, getting the word out.
I intend to conduct field research, and conduct a survey in Williamson Square, Liverpool, and ask customers of every age and profile what they think of the plus size market, and if they believe there is a need for more retail companies on the high street to be more inclusive of women who wear a size 16-20+. This will constitute my primary research, and I will use this data to analyse the market and to prove that the range that I intend to build for ZARA is a necessity. I will use Twitter and Facebook to test the global market, and to see whether globally there is a necessity for high street brands to be more inclusive of plus size customers. Any information I gather from this global survey will help solidify my argument about producing a plus size range for ZARA, which is a globally recognised and respected brand. I will conduct desk research, and find from online sources, for example, articles, financial reports on Bloomberg, and the like. I will be able to gather concrete data about the plus size market, the online market, and the high street market. This will help me come to a decision about which platform I could launch the plus size range on first, and using the research I collate I will be able to find out customer behaviour which will allow me to make a decision as to which platform will be best suited for my range. It could be both shop floor launches, and an online launch could be equally successful beginnings for the range. I intend to find out the best sellers for the ZARA main line, this includes colours, patterns and shapes, and then I will use a questionnaire to find out what customers prefer to see in the new range. From the information I gather during my competitive shop, market surveys, and online surveys, I can query the question as to whether I could launch any service alongside the range launch. A personal shopping experience is an idea I will look into for my brand. This could provide a greater customer service within the store, and through word of mouth the range and the service could be promoted through friendship groups and work colleagues who could frequently shop together before a special occasion or just for fun, and who would appreciate the idea of a personal shopping experience after pay day etc. A marketing strategy that ZARA do not use as much as other competitors are promotional days, discount days, or vouchers. I believe that this adds to the luxury appearance of the ZARA brand, even though it can compete with a middle to low end price range of other high street stores. Therefore, I might ask in my customer surveys whether a promotional day would be beneficial for the launch of the range, or if it could hinder it. It could hinder it as it may turn away loyal customers and new customers as it may appear to be no different to other high street stores that ZARA competes with, like Topshop or River Island. I may ask whether instead of introducing a promotional day, maybe include a ‘Student Discount’ event of the day of the launch. This could entice the student population in numerous cities to visit the store, and try on the collection and get their 20% student discount. They age range of 20-37 is the target consumer for this range, and NUS cards can be held for up to three years post graduation day, so this student discount marketing strategy could fit within the customer profile. In climate weather, especially in the global market, can have an adverse affect on sales over the winter months. Since ZARA+ is intending to be launched at the beginning of October and continue to be sold in stores until the end of December, and then in the January sales, it is important to be mindful of weather reports in the key demographic areas around the globe. It could affect deliveries of new and replenished stock, and also deliveries to customers at home from the website. This is another reason why it is important to have a successful online launch, and to control which territories can be delivered to without customer grievances. Checking the weather in Russia, for example, may bring up snow storms throughout the winter months, making the logistics of delivery stock to consumers and stores an improbable task. Therefore, the solution would be high volume of stock delivered for the launch, and small deliveries thereafter.
Social Media; create an advert for sponsored posts on Facebook, Instagram and Twitter.
Marketing
A Lookbook; showing all the designs, modelled by Nadia Aboulhosn. It will be creative, powerful, colourful, and reflect the brand. It will be issued in stores and seen online in PDF format.
Business Cards; to send to fashion magazine editors, and plus size bloggers who have the demographic ZARA+ needs.
BUSINESS PLAN: ZARA+ Market Strategy The plan would be to introduce the collection to managers with a meeting at head office. The presentation used at the head buyer, merchandiser, and chief executive meetings will be used for this meeting also. It will allow the store managers to understand why ZARA is bringing in ZARA+ and how it should be marketed to customers. The managers will be given dates for stock release, and also POS to place within the store to start the process of building a buzz around the new range. The managers can also talk to their sales teams in store, and have them spread the word at the cash desk with every customer. Local newspapers will also be utilised; they will be promoting specific stores in each city, getting current loyal customers, and new customers, to visit on the launch date and attend the student event.
For the advertisement campaign, I intend to design landscape billboards for outdoor use, and vertical posters for the store window and inside the store, above the area where the range will be placed. The theme coincides with the strap line ‘Midnight in…’ and then it will either be Milan or Madrid. The two cities are distinctively different, even at night. The colour palette of each capsule collection for each city will be used in the advertisement campaign, so there is a distinct border between each capsule collection within the range. I also intend to curate a look book; styling the outfits, and using plus size models and bloggers as the advocates for the range, placing them in the frame with backdrops that will give the impression of Milan, and Madrid. Be bypassing the traditional television advert, the company will save money on advertising. Instead, the company will focus on raising awareness online through social media. Posting adverts on targeted websites that are related to students; guild of students, email chains, Facebook pages etc. The size of the adverts will vary in each city; bigger cities like London, Manchester, Birmingham and Liverpool will have billboards placed in the city centre, on buses that run through the city etc. These campaigns will run for the first three weeks from launch date. The look books will be given away with every purchase in store from launch date, and displayed at the front of each store. They will stay for the duration of the range being sold in store, and will be removed in time for January sales, as will all the POS and in store advertisement. The majority of the advertisement will be free, and conducted by managers and sales teams in each city. The money that could be saved will be put back into cost of keeping the billboards on screens, buses, and newspapers.
Billboard Idea
Business cards will be sent out along with promotional gift packages with samples from the range to plus size Vloggers on YouTube, and bloggers online. They will also be sent out to magazine editors, and stylists, to try and promote the range across a broad spectrum of media. The cost of this will be little, we will not be paying for the advertisement. Hopefully the intrigue surrounding the debut ZARA+ collection will be enough to get magazine editors and television shows to use our products in their media. Lookbook’s that are given out in store will also be sent out alongside the business cards also. E-Mails will be sent out to customers who sign up to the ZARA email chain, where they will receive a preview of the range. These e-mails will be sent out a month before, but only discussing the introduction of the range, then two weeks before the launch date there will be a ZARA+ specific email detailing the launch date, student event for ZARA+ in store, along with a testimonial by Nadia Aboulhosn with a link to her blog. The marketing surveys will also notify which websites are frequented often by the ZARA customer, and by regular high street shoppers. Some may use Instagram more than Facebook, and so there may need to be a greater push on Instagram. ZARA’s Facebook page could be ‘taken over’ by ZARA+. Their profile picture could change, with head office approval, to promote the brand for seven days after the launch date. The idea behind this is to direct customers to the new autumn/winter party season range. A competitive shop will be conducted, to find out how early Christmas related POS is being placed in store, and advertised. Since ZARA is not advertising on television, it is integral to the ZARA+ range that POS and lookbook’s are placed in store at the correct time.
Business Card
Zara Corporate Office Headquarters Zara USA: 500 Fifth Avenue, Suite 400 10110 New York, NY USA Corporate Phone Number: 1-212-355-1415 Fax 1-212-754-1128 Zara Stores Customer Service: 1-212-355-1415 Zara.com Online Customer Service: 1-855-635-9272
Global marketing strategy: USA marketing The global marketing strategy will differ slightly from the European marketing. There will be billboards, and adverts in local newspapers across North America. However, there will be a more intense message given across with the help of style blogger Nadia Aboulhosn. Using her rise to fame, the ZARA+ brand will have her involved in press junkets on local news in her area, and also in New York City. A billboard of her will be placed in Times Square, and she will be there for the release of the line in New York City. The aim of this is the bring in a fashion orientated audience in metropolitan cities, as well as entice middle America to join the party. There will be a red carpet for the launch in Los Angeles a few days before its official release date in North America. B list celebrities will be invited, well known faces from television and music will be styled by the ZARA+ styling team, they will be briefed on what to say about the garments, and how to wear them appropriately that fits the ZARA brand. Like in Europe, there will be a student event taking place on the release day across North America, and online for North America only. A special code will be delivered to registered students at community colleges and university campuses across North America. This will be lower than the 20% offered in Europe, so the profit margin does not suffer as a consequence due to the vast amount of people that could come to the store on that day. Companies like ‘Dove’ have found success with their ‘body confident’ branding in North America, and so we will try and add this to our North American release. This could cause controversy, and bring in negative publicity. ZARA+ intends to counter any negative arguments that may arise with a newly created page on the ‘About Us’ section on the ZARA website, that will be thoroughly vetted before going live, with help from body positive leaders, and highly respected feminist writers and activists. Magazines like US Weekly, and ELLE magazine will be asked to write a profile on the range, and a mini review with members of the public. ZARA+ is a huge event, and gifting any media publication a free range of samples and one-on-one interviews with the in-house design team and styling team about the range will hopefully put ZARA+ in a positive light. Using a vast variety of media to get the word out can only be positive for the growth of the range, and it shows that ZARA believes in the longevity of the ZARA+ line. The best city to focus on is Los Angeles, because it has a warmer temperature, and the weather is predictable during the month of October when the line will launch, so having a red carpet in Los Angeles will be great for photographs, interviews, and a general happy atmosphere. There will be goodie bags including ‘spa treatments’, and a VIP shopping card to be used online and in-store at any ZARA store across North America for those invited to the preview party in both New York and in Los Angeles. The New York launch preview night will take place indoors, and any interviews must be conducted indoors. This means a limited amount of press can be invited, and they must be respected publications that will mingle successfully with the different types of guests invited. E! news can conduct a profile on their daily news programme, and this can be broadcast in hundreds of countries during the course of the week. We want to bring in every woman to see the collection, feel the clothes, and see what ZARA is about without feeling apprehensive.
BUSINESS PLAN: ZARA+ What are you going to sell? ZARA+ will sell a debut range of party season clothes such as, dresses, skirts, and jackets. Accessories like clutch bags, and shoes, will also be incuded. The clothes will be centred around the party season to begin with, because it will provide on-trend colours, shapes, and prints, for the plus size woman. In conjunction with the release of the party season range, ZARA will launch a personal shopping experience to coincide with the new customers we hope to gain from the release of the ZARA+ line. The personal shopping service will be a welcoming for customers who may have never shopped in ZARA before, and are intimidated by the layout and aesthetic that the stores have. This service will be announced as part of the ZARA+ line launch.
The products at first will mainly consist of dresses, skirts, and tops, suitable for a night out. They will be primarily designed with being wearable for women from sizes 16-20, but that are not bland, they will be sexy and sophisticated to reflect the customer profile of the ZARA+ line. The dresses will be in the design of a fluted skirt, long sleeves, or a short skirt and short sleeves. Materials that will be used will be of a high quality, like lace, chiffon, silk, and cotton. There will be stretch in the waist, arm, and chest areas. The dark colours that sell well for the general customer will be bought at a higher volume, whereas the jewel tone colours and quirky prints will be bought at smaller volume. The closeness of the factories to mainland Europe will help for any excess stock that may need to be produced if there is an unusual amount of requests for any product that sells out quickly. That is the main positive of the ZARA brand, as it has production factories in Europe as well as further afield. The aim of this range is to break into the North American market, so factories in Brazil, and India, will be utilised to provide a quick production, with high quality, and safety of the workers paramount.
A contemporary casual line, similar to that of the main ZARA line of clothing, will be introduced if the party collection is successful. It will be introduced in the Autumn/Winter 2017 season, and every season after that. This will allow Buyers to forecast trends and materials, and reduce panic buying for the Spring
Summer 2017 season which is directly after the Autumn/Winter 2016 season.
Any profit created by the ZARA+ party season range will be injected back into the production of the next ZARA+ Autumn/Winter 2017 range. This money will allow a greater expansion of the line, including essential jersey basics, and winter coats, and winter boots.
The ZARA personal shopping experience will continue from its introduction, and will hopefully be a stand point for stores to improve their customer service evaluations, and audits. If a store does not perform in their customer service, this can be an issue for the brand as a whole and can be detrimental to any further introductions of new lines or products. Therefore, the personal shopping service will not only be a great asset for the loyal customer and the new customer, but also for head office to monitor the performance of their stores across the globe and to hopefully reduce the amount of customer complaints.
BUSINESS PLAN: ZARA+ (3)
Elevator Pitch The ZARA+ range will be at the forefront of the plus size fashion industry. A lot of ZARA’s competitors like ‘Mango’, already have a slot in the market. They produce high quality, products that are thriving. However, they are being criticised by the public on social media about how their range is ‘bland’, and ‘beige’. The British market has turned their backs on the range because of the lack of trendy colours, prints, and shapes. H&M’s plus size range is exclusively online, and not available in store. The ZARA+ range would be online, and in store. This makes it available to every woman, in every market.
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‘The average U.S. woman is about 25lbs heavier than she was in 1960. Yet plus-size clothing still makes up only about 9per cent of the $190billion spent annually on clothes’, Associated Press, October 2013.The first attempt to break into the North American market wasn’t successful, because the main line isolated the majority of women who are of a bigger size and who need a brand that provides fashionable clothing all year round, but especially for special occasions like Christmas. ZARA+ can be the new brand for plus size clothing, for women who want on trend and sophisticated, and sexy clothing. That is what makes ZARA+ different to the other competitors; ZARA+ will debut with a winter party season range that will have jewel tones, lace, and flattering shapes. Jewel embellishment will adorn the tops and dresses. High quality materials will be the focus, and providing a collection above average for the plus size woman in North America, and around the world. The brand name ZARA+ doesn’t differentiate from the normal line too much, the only difference is the ‘+’. It entices the customer, but doesn’t isolate. It doesn’t make it seem different from the usual line. There will be a personal shopping experience launching at the same time, to help bring in customers who are coming to the ZARA brand for the first time, who could feel intimidated. The aim is to make ZARA and ZARA+ a more welcoming brand. In case there is a high demand for the products in the ZARA+ line, there should be an above average order volume for the best selling colours; navy, and black etc, so that over the Christmas period customer will not be turned away, looking for a dress to wear on a night out or for a work party.
References (1)BLOG STANDARD, (2011). H&M plus size range. [online] Available at: https://charlottelilyprior.wordpress.com/2011/01/27/hm-plus-size-range/ [Accessed 18 Nov. 2015]. (2)Mail Online, (2013). Why are fashion brands STILL failing plus-size women?. [online] Available at: http://www.dailymail.co.uk/femail/article-2470139/The-plussize-fashion-market-neglected-sectors-retail.html [Accessed 18 Nov. 2015]. (3)Mail Online, (2014). Mango plus-size Violeta line irks shoppers, saying above 10 is 'big'. [online] Available at: http://www.dailymail.co.uk/femail/article2540461/Mango-plus-size-Violeta-collection-criticised-Spain-UK-Twitter-implication-size-12-large.html [Accessed 18 Nov. 2015].
BUSINESS PLAN: ZARA+
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Controversy that could affect the brand Embarking on a plus size range brings its negatives as well as positives. It is good to look over both sides, and
make an informed decision moving forward with the range. Recently in 2015, Jamelia who is a host on popular daytime chat show ‘Loose Women’ made a comment stating (1)
that ‘plus size clothes shouldn’t be available on the high street because it promotes an unhealthy lifestyle’. Her point is valid, as any form of condoning of an unhealthy lifestyle can be detrimental to a society. However, plus size clothing is not the cause of obesity, nor is it a reason not to lose weight. ZARA+ is about building confidence in women of all shapes and sizes. Plus size clothing is not exclusive to women of a larger size, it is inclusive of every woman of every height and size who wants to look fashionable, and have more options available to them on the high street. Fashion blog Slink spoke competently about the holes in Jamelia’s argument, ‘the truth is body image and body size is a hugely complicated issue and flippant but impact full, uninformed opinions like Jamelia’s are definitely harmful…’
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This is correct, as there is no proof that plus size clothing has any correlation with the global epidemic of obesity continuing to rise. If anything, having a plus size range could encourage socially isolated women to go shopping and find a dress they could wear for their work night out, and join in with the colleagues as opposed to feeling inadequate and alone in the world at home. A peer review was conducted about this range, and the same points Jamelia spoke out about came strongly from numerous people. The answers to their queries will be answered with the following statement: ‘ZARA+ does not condone promoting an unhealthy lifestyle, rather it condones gifting confidence to a percentage of women around the world who currently feel separated from the fashion industry, and their equally fashion conscious friends in their community. ZARA+ will not attempt to disguise any woman’s bodies, or force a choice onto any woman who shops with us. In fact, the debut ZARA+ range will consist of bright colours, powerful prints, and form fitting shapes that can both flatter the customer’s body, and build confidence to wear more daring clothes. Any indication that we favour unhealthy lifestyles will not be seen in any marketing
literature, or campaign. We accept everyone into our store, and see everyone as equals. We hope the world will do as well.’
Having this as an ethical statement on the ZARA website should deflect any backlash that could occur with the general public. Any problem that arises in relation to the range as a negative cause of a global unhealthy lifestyle is in no relation to the brand but sadly more so in relation to the person arguing that problem.
References (1) Nianias, Helen. 'Plus-Size Bloggers Respond To Jamelia's 'Body Shaming' Call To Ban Big Clothes'. The Independent. N.p., 2015. Web. 19 Nov. 2015.
BUSINESS PLAN: ZARA+
Who is your customer? According to the Buzzfeed article, written by Sapna Maheshwari, it indicates that the sales of plus size clothing ‘came in at a robust $17.5 billion for the year ended April 2014’ according to a report by NPD group. NBD group is a market research firm, and they also found that this was a ‘5% increase’ from the previous year, and ‘up just over a billion dollars from the $16.4 billion recorded three years ago. Revenue from plus-size apparel, typically defined as size 18 and up, grew 9%...;. In the Buzzfeed article it states that the majority of the growth is coming from the web, which has more options available. ‘ModCloth’ is a plus size online retailer, it is noted in the article that they conducted a survey of over 1,500 women who wear plus-size clothing, and those who do not. They’re independent survey found that 55% of U.S women wear at least a size 16 or above. They also (1)
found that the women they surveyed felt disenfranchised by the retail market.
I will conduct my own market survey, that will include a mix of women of all sizes, to ask them similar questions. I will ask people in the area that is local to me, and then I will conduct an online survey to see what the global market thinks. The information I will gather will help me understand what the range should consist of, what the style should look like, and how ZARA as a whole can be more inclusive of its customers.
I have already created a customer profile for my range. This includes interests, hobbies, favourite food and favourite drinks, what they like to listen to on their iPods and the women they find inspiration from etc. I used friends to create this customer profile, as many of them wear plus size clothing. They all differ in height, and size. It is good to know that there are differences in women, and that plus size is not one size fits all. So consideration about height, and size, is important.
ZARA is targeted towards young women, who want to follow the fashion trends, but not look like everyone else. ZARA has a
contemporary aesthetic that is about design of the clothes as opposed to the colour pallet. The ZARA+ range will have a similar direction, but because of the theme there will be more colour choices and pattern options available. Having a wide variety will bring in new customers.
The UK market is quite similar to the US market. The business strategy for this range is to finally make a dent in the North American market, which has been difficult for ZARA to break into due to the wide range of sizes women are in America. UK women on average can be a size 14-16. It is important that we consider them as fashionable people, and human beings who want to be as stylish or more stylish as their slimmer friends. ZARA+ will not assume that they will not wear a certain style, or shape, because confidence is the reason behind their outfits. A confident woman can wear a crop top, mini skirt, or anything sheer, regardless of their size. That is the foundation of this line.
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Who is your customer? The customer the ZARA+ brand is targeting are customers that would want to shop at ZARA, but can not because of the non-existence of sizes 16-20. They would usually shop online, where they can have to pay extra for delivery from websites that specialise in plus size clothing, who have a higher mark up on their recommended retail prices because they may be abusing the market for profit. To find out what I can design and produce the most of, I will research the staple pieces ZARA produced for the
Autumn/Winter 2015 party collection, and analyse why it has sold well; it could be because of profit, materials used, style, or colour and print. Therefore, I might add a few key pieces that are more versatile for the average consumer, alongside designs that are more fashion orientated for the customer who follows catwalks and fashion magazines like Vogue and ELLE.
The typical customer of the ZARA+ line will be aged 18-37. They are single, but date regularly and use it as an opportunity to wear all the dresses they buy online, and high
heels that they are addicted to buying. This will be launched in North America first, online at the beginning of October and will have soft opens in flagship stores across North America at the beginning of November before fully launching at the end of November.
What will attract the customer to the new ZARA+ range will be the fact it is a structured range, using the romantic cities of Madrid and Milan, adding to the excitement of the outfits which will be European orientated but designed for western bodies. There will be a lot of choice; colour and print, as well as flattering shapes, for example skater skirts, bodycon skirts, and skater dresses. Similar to the main line at ZARA, the quality will be high, and the aesthetic will scream luxury. They want to feel special, which is why the launch of the personal shopping experience will add to the luxury feel of the brand, for an average price. It will be the first stop on a Christmas shopping outing, and they have the ability to try on the clothes and match it with other prodcuts from the main ZARA line; e.g, bags, and heels etc. Using billboards, and look books in store, and online, will bring people in and help them visualise the range and what we are providing them.
The customers we hope to have queuing up to buy the range are fashion bloggers, plus size etc, and every kind of woman who might be more comfortable in a bigger size, especially if the dress is designed impeccably and is something that looks like its from the main ZARA line etc. The pricing will be mid range to high, depending on the design, e.g coats would cost more because of the intricate designs for example. The pricing will be the same as the main ZARA line.
ZARA + Customer Profile
The customer is strong minded, confident, and knows her body more than anyone else. She indulges in bubble baths, red wine on a Friday night, and loves to go out w i t h h e r f r i e n d s o n a w e e k e n d . S h e i s n ’ t s h y, a n d d o e s n ’ t w a n t t o h i d e a w a y. S h e w i l l w e a r a n y s h a p e o f c l o t h e s ; she loves loud prints, and simple colours. She works in a full time job, and has dreams of becoming the top of her profession within ten years. She loves accessories, and trench coats. Her idol’s are modern feminists; Serena W illiams, Jennif er Lawrence, and Kerry Washingt on. She likes to go on dates after work, but hasn’t settled down, and doesn’t want to settle down yet. She goes on city b r e a k s a f e w t i m e s a y e a r, a n d l o v e s t o s o a k u p t h e culture. Her favourite city is Milan, and she loves Italian men. Her favourite lipstick is Ruby Woo, and copies style staunch Alexa Chung’s hairstyle, a sleek long bob.
ZARA + Range Customer Profile confident
stylish
brave
modern muse
ZARA Directional Shop A/W 2015
£79.99 100% cotton
£39.99 100% polyamide
£19.99 56% cotton, 23% viscose, 21% nylon
£22.99 MAIN FABRIC: 95% polyester, 5% elastane SECONDARY FABRIC: 100% polyester DETAILS: 100% polyester
Doing this directional shop in Zara, I have found that their style is very European, and they use classic silhouettes again and again in their designs. The fabric quality is better than other brands, but the prices are not high. In conclusion, I have found that I will have the ability to include premium materials in my range, without sacrificing the quality or reducing the price margin for each product. The Zara+ range will have more colour, but will not be brash, it will fit the romantic contemporary aesthetic of their original line.
£39.99 BASE FABRIC: 100% polyester COATING: 100% polyurethane
£39.99 100% wool
£29.99
ZARA Competitive Shop A/W Party Wear 2015
ZARA
H&M (Plus Size)
£19.99
£25.99
£29.99
£59.99
MANGO (Plus Size)
£24.99
£24.99
£29.99
£14.99
TOPSHOP (Size 16)
£89.99
£34.99
£79.99
£44.99
£75
£40
£36
£32
This competitive shop of Zara’s competitors, and comparing it to Zara’s current party wear collection, I have found that they will need to develop a plus size range like their competitors have. However, they have the opportunity to create a diverse, more current, and more fashionable range than their competitors. I have analysed the plus size rangers of H&M, Mango, and Topshop, and have come to the conclusion that they do not offer a substantial range in regards to quantity of products, also they are not as focused on trends and styling like their normal line of clothing. This is a problem that can be addressed with my plus size range for Zara in this mini brand project.
Zara autumn/winter 2015 colour pallet. The colours used are near enough the same colours that will be used in the autumn/winter 2015 Zara+ party range.
Street Style Ideas
Catwalk Ideas
Mark Fast
Plus Size One British Plus Size Fashion Show
Jean Paul Gaultier
Three pieces from the range will be inspired by the Spanish capital; the colours will be vibrant and loud with an edge.
MADRID CITY NIGHTSCAPE
Two pieces will be ‘Midnight in…’ Madrid, or Milan. The colours will be darker, more wearable for a night out, whereas the city inspired products will be for a late evening outing, or date night.
MILAN Three pieces from the range will be inspired by the Italian mecca for fashion, Milan. The style will be simple, lots of lace, and neutral colours.
C
COLOURFUL
O CONTEMPORARY
L EUROPEAN
O U CLASSIC BEAUTY
R
S PA N I S H S I R E N S
S AT I N
‘ L a D o l c e V i ta’
V E LV E T
Federico Fellini’s ‘La Dolce Vita’ inspired the debut Zara+ collection. T he European f lair, and party lifestyle is fitting for the range I am building. Despite the black clothes, dark atmosphere of the black and white film, the light and exuberance of the women shine through. That is what the backdrop of the range will be, the gloomy winter nights that women are trapped in, until they go out on a Saturday night and transform the streets and restaurants with their jewel tone outfits. Fit for a Christmas p a r t y, o r n i g h t - o u t .
LACE
P L E AT I N G
The Zara+ Party range will be filled with flared dresses, boatneck and v-neck dresses, and trapeze tops to pair with fluted skirts, and mini bodycon skirts.
TA I L O R I N G FIT AND FLARE SKIRT
V-NECK
WGSN COLOUR FORECAST A/W
2016// golden moss
canyon rose
espresso
emerald blue
Retro shapes, highlighting the waist and neckline. Colours that are cool for winter, but shimmer in silk and velvet fabrics. The Zara+ Party Collection is about classic women from the movies, and television. They stand out in bright jewel tones; midnight blue, and Christmas greens.
l a p i s
l a z u l i
embroidery
detail
velvet f i l i g r e e
ZARA + Mood Board: A/W ‘16-’17 FABRIC/TEXTILES
t h r e a d
Chanel a/w 2015
Chartreuse top, cross back straps, black stone embellishment against the black elastic straps. The flowing tunic style top is made of a viscose material.
ZARA + Trend Forecasting: A/W ‘16-’17 SHAPES
Prada a/w 2015
Giambattista Valli a/w 2007
Peplum top, organza overlay on the peplum. Spot print, soft dark rose colour. Velvet midnight blue trapeze top. Hip skimming, dips at the back. Flattering A-Line shape.
Street Style 2015
ZARA + Trend Forecasting: A/W ‘16-’17 SHAPES
Delpozo a/w 2015
Thomas Dik a/w 2015
The Row a/w 2015
ZARA + Trend Forecasting: A/W ‘16-’17 SHAPES
Dries Van Noten a/w 2015
Margaret Howell a/w 2014
ZARA +: Field Research: Questionnaire 1. Yes or No, do you feel there are a variety of options for women who wear a size 16-20, on the high street?
2. In one word, describe what the current plus size clothing ranges of your favourite high street stores look like.
3. Would you pay more for a high quality product?
4. Does ethical matters regarding production of clothes matter to you, and why?
5. Would you like to see more high street stores offering plus size clothing ranges?
6. How would you describe your style during the Christmas Party season?
7. Do you follow trends? If so, do you pick a key piece from a trend during the season?
8. If there was a personal shopping service available to you in a high street store, would you use it? If you would not use it, why?
9. Do you have any anxiety asking for bigger sizes in store? Do you have any anxiety about shopping for clothes?
10. If you owned your own plus size clothing range, what would you consider a high priority to think about out of these five options: Style, Customer Service, The ‘Look’ and theme, Size availability, Being ‘On Trend’.
Thank you for taking part in this survey.
ZARA +: Field Research: Conclusion and Evaluation I conducted my field research at Williamson Square, on the 3rd of December. I talked to twenty women, between the ages of 18-30, and they answered the questionnaire. From the data I gathered, I found that many women do not think that there are any ranges available to plus size women, and that many women come into the Matalan store where they work and ask for bigger sizes but they have none available to them. A lot of the women I asked in Williamson Square were disappointed with the styles available to them, and there was a general feeling of discontent with the high street because they cannot find clothes to wear for a night out with friends, or a work night out. This feeling of inadequacy is constant, and the key word they used was ‘isolation’. Many of the women that I asked agreed that they would pay more for a higher quality item, if it suited the occasion they were buying the item for. A few of the women spoken to talked about the Primark ‘fiasco’ in Renza Plaza, and how
this affected how they thought about clothes. However, they agreed that it was more important to them that the clothes were made available to them, and were more concerned with high street stores having plus size ranges so they have more to choose from, and that they did not have to go onto the internet and pay ‘extortionate’ prices for one item in their size. A few of the women said that their style is more ‘outrageous’ during the party season, and that they feel they can be a bit more ‘outgoing’ with their style as opposed to the other night outs that they go on during the year. However, they said that trends do not bother them, and that ‘as long as the clothes look good, we don’t care’. The idea of introducing a personal shopping service was well received, and many of the women said that they would love that idea as it would make them feel ‘special’, many women were concerned about that they were rushed through shops in the high street, and were not treated well by general sales assistants. This also lead them to say that they felt many general sales assistants make them feel uncomfortable asking for bigger sizes; some of the women I asked work as sales assistants and explained that they feel bad that they cannot offer bigger sizes in their store, as they asked a lot. The general mood from the twenty women that I spoke to was, they felt it was important to make the customer feel ‘special’ as well to have more ‘variety’ on the high street for plus size women.
This research has helped me as a buyer to build a suitable range for the Zara+ line. The women were looking for bright, and bold outfits that would not cover them up or make them feel invisible. As the Zara+ buyer I will aim to bring more prints, and colour, to the plus size clothing market. Add more variety in different styles and shapes made available in the range, and to include trends but not focus solely on one trend overall. The clothes must be sexy, and comfortable. I have to imagine the Zara+ customer is an outgoing, charming, and flirtatious women, going on dates and having fun with her friends every weekend; and therefore needs more than one outfit to wear over the winter Christmas season. The price range can be a little higher, as the customer is willing to pay for a high quality product. The personal shopping service will help with the growth of the brand, as it will encourage those women who have anxiety about going into a high street store, and will give them confidence to wear clothes they would not usually pick out for themselves. Extra training will be provided to those sales assistants who become personal shoppers in the Zara stores, and they will learn more social skills to approach women and help them pick an outfit out that suits their bodies, and their style.
MIDNIGHT MILAN • • • •
MILAN
£25.99 £49.99
Velvet Leopard print pattern Embellishment Lace
£29.99
• • •
Printed silk Jersey/Knit Cotton
£19.99
£39.99 MIDNIGHT MADRID • •
£39.99
MADRID • • •
Jersey/Knit Peplum Print Silk
£19.99
£19.99 £29.99
£59.99
Jersey/knit Cotton
Midnight Milan
Milan
£49.99
£39.99
£49.99
£59.99
Midnight Madrid
£39.99
£29.99
£29.99 Midnight Milan
£49.99 £29.99
£29.99 £39.99
£79.99
Madrid
£29.99
Midnight Madrid
ZARA+ FINANCIAL SPREADSHEET A/W 2016
ZARA+ FINANCIAL SPREADSHEET A/W 2016
ZARA+ FINANCIAL SPREADSHEET A/W 2016
BUSINESS PLAN: ZARA+
Analysis of Financial Spreadsheet The significance of a financial spreadsheet is integral to the growth of a retail business. The merchandisers will find out through the data transmitted from each store what product is selling, and what product is not. The merchandiser will then have every thing they need to make an informed decision about which product will need replenishing, how much money could be gained and could be lost with the equations for cost price, recommended retail price, profit margin, and total cost price, total recommended retail price, and total gross profit. They can then decipher whether they should alter the quantity of stock replenishment based on up to date figures as opposed to estimates. In the case of ZARA+ the equations were used to project an estimated amount, based on a estimate of what could be the best sellers and what may not sell so well. This range will be released in October, and will be on sale for 16 weeks. This is a party range for the plus size woman, and therefore the products that may become the best sellers would most likely be dresses, shoes, and coats. This has been taken into consideration when estimating how many units of each product will be sold within 16 weeks, and how much of each product will need to be replenished. The total gross profit expected is ÂŁ169,939.60. This includes all the replenishment allocation for each product out of the 23 deep range. The RRP total profit is ÂŁ233,480.48, and the total cost profit is ÂŁ71,214.90. Using the financial spreadsheet to estimate the total profits is useful, because as a buyer I can decide whether the merchandiser needs to increase the replenishment for a product if it sells well, or decrease the allocation replenishment if it does not sell well. If a financial spreadsheet was not created, then it would be harder to gauge the start point for the range, and how much it has cost, and how much profit it could create. If there is a chance to increase and decrease the amount of products that need to be replenished then the financial spreadsheet is useful in doing so. ZARA+ is a new line in the Zara brand, and if there is any chance that the buyer could be given another budget to create another seasonal range it would be useful to show in a group meeting that this line is worth believing in because it is proven successful. The significance of a financial report is concrete evidence to apply to an argument whether a line is successful or unsuccessful. It is objective, not subjective.
15% of the overall sales would give me my replenishment number, and I would average it out over the space of the time the range is on sale. However, if I was in a professional position in a head office environment I would use this information to decrease, and increase numbers of stock as required depending on what the bestsellers of the range are.
LOOKBOOK A/W 2016 ZARA+
Composition
Composition
Composition
Stripe Jumpsuit: 60% Viscose, 45% Polyester, 5%
Skirt: 70% cotton, 25% Polyamide, 5% Elastane.
Maxi Dress: 80% Polyester, 20% Elastane.
Elastane.
Top: 30% Polyamide, 65% Cotton, 5% Elastane.
Skater Dress: 75% Polyamide, 25% Cotton.
Block Heel Leather Ankle Boots:
Dress: 70% Poleyester, 20% Cotton, 10% Elastane.
Velvet Heels:
Upper: 85% Cow Leather, 15% Polyurethane.
Bag: 100% Leather.
Upper: 65% Polyester, 35% Polyerethane.
Lining: 70% Polyerethane, 30% Polyester.
Pointed Shoes:
Lining: 70% Polyerethane, 30% Polyester.
Sole: 100% Polyerethane Thermoplastic.
Upper: 70% Leather, 30% Polyerethane.
Sole: 100% Polyerethane thermoplastic.
Lining: 70% Polyerethane, 30% Polyester. Sole: 100% Polyerethane.
LOOKBOOK A/W 2016 ZARA+
Composition Jacquard Coat: 86% acrylic, 11% Polyamide, 3% Wool. Heel: Upper: 85% polyester, 15% polyurethane Lining: 70% polyurethane, 30% polyester Sole: 100% polyurethane thermoplastic Bowling Bag: 100% leather
Composition
Composition
Wool Coat: 100% Wool.
Kimono Coat: 60% Acrylic, 40% Wool.
Pointed Shoes:
Mini Skirt: 80% cotton, 20% Elastane.
Upper: 70% Leather, 30% Polyerethane.
Velvet Heels:
Lining: 70% Polyerethane, 30% Polyester.
Upper: 65% Polyester, 35% Polyerethane.
Sole: 100% Polyerethane.
Lining: 70% Polyerethane, 30% Polyester.
Clutch: 100% Polyerethane.
Sole: 100% Polyerethane thermoplastic.
LOOKBOOK A/W 2016 ZARA+
Composition Velvet Jacket: Main Fabric: 100% Polyester. Embroidery: 100% Polyester. Quilted Skirt: 40% Cotton, 40% Polyester, 20% Elastane. Heel: Upper: 85% polyester, 15% polyurethane Lining: 70% polyurethane, 30% polyester Sole: 100% polyurethane thermoplastic Bag: 100% Leather
Composition Sleeveless Velvet Jacket: 80% Polyester, 20% Viscose. Blouse: 75% Polyester, 5% Elastane. Mini Skirt: 80% Cotton, 20% Elastane. Velvet Heels: Upper: 65% Polyester, 35% Polyerethane. Lining: 70% Polyerethane, 30% Polyester. Sole: 100% Polyerethane thermoplastic.
Composition Wrap Dress: 70% Viscose, 20% Polyamide, 10% Elastane.
Heel: Upper: 85% polyester, 15% polyurethane Lining: 70% polyurethane, 30% polyester Sole: 100% polyurethane thermoplastic Bag: 100% Leather
Composition Stripe Jumpsuit: 60% Viscose, 45% Polyester, 5% Elastane. Block Heel Leather Ankle Boots: Upper: 85% Cow Leather, 15% Polyurethane. Lining: 70% Polyerethane, 30% Polyester.
Sole: 100% Polyerethane Thermoplastic. Kimono Blazer: 75% Polyester, 20% Cotton, 5% Elastane. Bag: 100% Leather.
MAKE-UP AND HAIR STYLING FOR ADVERTS M E TA L L I C
S U LT R Y
WINTER FLOWER
S PA N I S H WAV E S
ZARA+ BILLBOARD IDEAS
Womenswear Billboard Idea: Milan
Footwear and Accessories Billboard Idea
The billboard ideas were created on Photoshop. The meaning behind the ideas is to create a winter scape that is romantic, and conveys the different styles in the two cities that the range is based on. Using Nadia Aboulhosn alongside other plus size models, will bring customers into the store so they can see how the clothes fit on their bodies which are similar to the models. The glamorous imagery is fitting for the Autumn/Winter Christmas party range for Zara+.
Womenswear Billboard Idea: Madrid
ZARA +: Marketing Strategies
Student Event Invitation! 20% off with NUS card Look Book ZARA+
Voucher Student Event Invitation
GLOBAL TRADE SHOWS
Pitti Immagine. A collection of fashion industry events in Italy.
Held in Florence, at the beginning of January.
Yarn
It is a great stage to see men’s and women’s clothing and accessories.
Pure London is a fashion and footwear showcase, over 700 brands and new designers market their brands for big retailers; hoping to get a concession in their stores.
Premiere Vision: textile fashion industry event in Paris, Moscow, New York, Sao Paulo, Shanghai.
It includes a lot of research and innovation for the Yarn industry.
Specialist Leather tanners showcase their products, plus advancements in technology
Textile
Subcontractors promote their businesses, and worldwide garment manufacturers.
Meetings, and negotiations take place over the two day event.
Buyers are recognised with awards, and recognition among the retail industry.
Branded
Menswear and Womenswear, and accessories, are showcased with fashion catwalk.
New designers are showcased in a flattering light, promoted online with the Pure London look book.
ZARA+: Trade Shows Zara+ is a womenswear, plus size, brand. However, as of today and through my primary research I have not found any plus size womenswear trade shows. Therefore, the Yarn and Textile trade shows would be more beneficial.
Yarn is a trade show that showcases knitwear materials. As the buyer for Zara+ I would attend this trade show, and try and negotiate a good deal for the wool fabric which will be used for the maxi coat in the Zara+ A/W party season range. Also, this would be a good trade show to find out any evolution in techniques from suppliers and manufacturers that good bring down the cost of the manufacturing process. Pitti Imagine in Florence will be useful since it is based in Europe, and will reflect the Zara brand more so than if it was in North America etc. The textile tradeshows Premiere Vision includes all the leather specialists, and this could be a great opportunity to negotiate a good deal with a high quality leather company, with a vast amount of leather companies taking part in the Premiere Vision trade show from all over the world. Sub contractors from different countries, promoting their business, will also have a showcase in the Premiere Vision trade show, which takes place in Paris, Moscow, New York, Sao Paulo, and Shanghai. Being able to see and speak to the
representatives of the sub contractors all under one roof will make it easier to conduct meetings, and start face to face negotiations at a quick rate, ensuring a good deal for the company.
Buying Cycle: Fast Fashion New Look, Miss Selfridge, and Primark, are just a few of the high street brands that are part of the fast fashion cycle. Trend forecasting, and keeping up to date with what styles are favoured by their customers, are integral to their company. They will review their seasonal performance regularly, keeping up to date with the best sellers so they can make swift decisions on what products to replenish
before the life cycle of that trend is near death. They must be able to complete their buying cycle within six weeks, to keep on top of customer need and availability. Every week, best seller reports are produced by the merchandiser, and not only sent to the buyer so they can increase or decrease their replenishment numbers for each product, but are also sent to the store managers who then pass specific information to the department managers so they know what products are selling well in their department, and therefore can put more stock out, or include it in their visual merchandising displays. Vice versa the department manager will see the products that are not selling well, and take them off visual merchandising displays, and move them to a less focal part of the shop. Buyers at fast fashion retailers will make frequent trips abroad, to communicate directly with the director of their supplier. This may require a translator, if the supplier is based in a country like India, Turkey or China. It is important for the buyer to keep a watchful eye on the suppliers they negotiate with, to make sure there are no ethical concerns that could jeopardise the company as a whole in regards to PR. A PESTLE analysis will help the buying team distinguish if any political, social, or economical problems will effect their auditing visits and negotiations. The buyer in a fast fashion retailer must be able to spread the budget they receive over a whole season, whilst still adding new and fresh ranges to the brand. The customer will expect to see new ranges online, and in store, at least once a week. If a fast fashion brand can achieve more than one new range a week they have a more competitive edge over the other fast fashion retailers. Short trends must be analysed, as well as long term trends. For example, if Kimono’s are a surprise trend during May and June of the Spring/Summer season, but as a buyer you did not anticipate this trend, so rush the order of over 100,000 for your stores in the UK, there is a high probability that you will miss the trend, and be left will a lot of stock, and a decrease in your replenishment fund for the other ranges in your store. It is all about being ahead of the curve, because not only will the buying team be down in their budget, the stores will have space taken up on the shop floor
and in the stock room of a product that is not selling and is preventing replenishment of best selling items because there is not enough of room to keep it in store, or place it on the shop floor. The fast fashion buyer has to have excellent hindsight, to look back at past problems that they have created through lack of field research, and trend forecasting, and not to make that mistake again in the future. As a fast fashion buyer, there has to be a higher level of confidence and assertiveness that branded buyers, and designer buyers don’t have. You must understand
Buying Cycle
the customer, the price range, and the aesthetic of the brand. If you start a negotiation with a supplier earlier than your competitors, then you can order a greater volume of products, for a cheaper price. Also, communication and socialising with directors of suppliers will put the company in good stead when negotiating deals. As a buyer you could give the team more time to make decisions, if you know the supplier knows you well enough to give you ‘first refusal’ over any other retailer. The low the cost price, the higher the mark up, and therefore if the buyer agrees for 200,000 skirts at a cost price of £3.61, the retailer can sell that skirt at a
cheaper price, and entice more customers and sell more of that skirt. Once the buyer has the confirmation of the order, it is important for the buyer to keep track of the order from wherever in the world it is being delivered from. Any complications that may arise will push the deadline for store release back and result in the financial profit forecast to change. This can affect the release dates of other ranges, and therefore alter the total profit for that season. Deliveries times will vary to different stores across the globe. The weather, political unrest, and economical issues can affect the time it takes for delivery vans to reach each store. This logistical nightmare can cause a huge amount of profit loss; with customers losing confidence in the retailer, as well as shareholders. For example, Matalan is a fast fashion retailer, and in December 2014 they moved their head offices from Skelmsdale to Knowsley. This affected the logistics for online deliveries, store deliveries, and therefore every store barely reached their target profit number for the Christmas period. As a result, the company’s credit
Fast Fashion
(1)
rating was downgraded from ‘Weak’ to Vulnerable’ by credit rating agency Standard & Poor’s.
For a fast fashion brand, the retail selling period can be up to 8-12 weeks. In some retail companies, a product must be on sale for up to 8 weeks before it can be reduced further. Therefore, the ranges will be available for up to four months, including the sale periods in the summer, winter, and any special sales that take place in between. It is important to monitor the sales figures, so that the buying team will have financial figures to look back on so they know what products sold well in 2015, and therefore will most likely sell well in 2016. Monitoring customer behaviour, and trends, is what keeps fast fashion retailers on their toes.
References (1) Gleeson, B. (2015). Major problems at Matalan's new Knowsley distribution centre blamed for retailer's financial woes. [online] liverpoolecho. Available at: http://www.liverpoolecho.co.uk/news/business/major-problems-matalans-new-knowsley-10463218 [Accessed 2 Dec. 2015].
Buying Cycle: Designer Season performance reviews are normally at the end of each season, comparing to the season before. The positive of having seasonal performance reviews is that there is no need to rush orders, and sacrifice quality. Also, the customer would be willing to pay, regardless of whether deliveries are late to the store. However, the negative of this buying cycle is designers do not follow trends, but their customer does. Speaking to Giles Deacon during his talk with us in London, he mentioned that trends are ‘the worst thing’ as a designer. For him, it is purely coincidence when more than one designer has the same colour, style, or fabric in a collection. It is the editors around the world for magazines like Numero, Elle, and Vogue, that collate the catwalks together and create the seasonal trends. As a buyer for a designer, it is more about the quality, and the designers vision, than any trend that may be seen as ‘important’ for the new season. A loyal customer would buy the brand, regardless. The budget for the designer is split between categories; accessories, footwear, ready to wear, and jewellery. Replenishment is simpler than if it were a high street brand. Demand is not as rabid as fast fashion, but designer brands have loyal customers and will be in close contact with their
Designer
most valuable customers providing them with custom clothes out of high quality materials. The designer buyer will be looking to the future, and deep into the past, when deciding on what they should design or their next season. It is not necessarily as trend focused as the high street. Any left over money from the budget is used to replenish out of stock items that are constantly on sale, for example sunglasses, accessories etc. The designer brand makes their money from these lines as opposed to the ready to wear collection which is sold once and never sold again. It is important for the buyer to respond to customer demand, and also notice when celebrities make a particular item popular; sunglasses in summer, handbags all year round, etc. The products are usually on sale seasonally, and are never released or replenished as much as fast fashion retail stores do. The designer takes part in fashion week twice a year, once in February for the Autumn/Winter season, and again in September for the Spring/Summer season. They attend tradeshows, like Yarn, and other textiles trade shows to find the highest quality fabric, and a unique fabric that will elevate the brand further from the high end brands, and high street brands. The buyer will have to be aware of time differences when contacting suppliers from all over the world, especially if they are smaller supplier; it will take longer to manufacture items of a small quantity let alone large quantities. Currency exchange, and price variants are a huge issue for designer brands. Chanel has frozen the prices of their accessories across the globe so they are all the same price, because of individual country inflation, it is cheaper abroad than in China, and more expensive in Australia than in Europe. It has caused a lot of issues with customers using loopholes like going to airports to buy Chanel bags that are duty free.
(1)
References (1) Financial Times, (2015). Chanel cuts prices in Asia to combat grey market - FT.com. [online] Available at: http://www.ft.com/cms/s/0/3938fa96-cf01-11e4-893d-00144feab7de.html#axzz3tARd9XX1 [Accessed 2 Dec. 2015].
Buying Cycle: Branded Seasonal performance is estimated, and evaluated, using past sales. Celebrity involvement in a brand can affect a brands performance; department stores could bring in a brand as a concession for a short amount of time when they have a collaboration with a celebrity; Fleur East for Lipsy, and H! Henry Holland etc.
The budget is split, and allocated to each brand that the department store holds; buyers will be given a brand to buy for; for example French Connection at Debenhams. They will have to make sure that the products from the full line at French Connection which they choose from will be profitable for Debenhams. Some buyers may negotiate exclusivity with suppliers of the brands, so they can have the upper hand over their competitors. Branded buyers will attend fashion weeks, for designer brands they may bring in for their retailer, or go to designer orientated trade shows where they can negotiate a good deal for designer products, and negotiate what profits they would take. The buyer will visit the factories, and check on the quality and the time it will take to land in their department stores. If a product is not selling well, is there a clause in the contract that states whether a branded buyer can swap the product for another product from the designers range. A branded buyer must go through every scenario, and evaluate risks of bringing in new designers, or concessions. It could create a buzz for the department store, or it could leave them with excess stock, no room in the stores for bestselling items from other brands etc. The products could be on sale for up to 6 weeks, and must keep in line with the brands RRP and shelf life in their own store. Some products could be exclusive to the branded department store, this can be considered during the negotiation with the supplier. The target customer will vary for each brand that is brought into the store, but the main customer profile that the department store can be seen in each brand that is brought in, one way or another. For example, if the customer profile
states the customer is a woman, with a full time job, enjoys high fashion accessories, but also buys more high end and high street clothes, then they can bring in designer accessory concessions, and high street concessions. Giving the customer options, and a wide price range, will encourage them to shop in the department store whenever they need a new outfit, a new bag, or a key piece. There are no contracts with the designers about supplying their products to the store, this is configured with the suppliers that hold the mass amount of stock of each product for multiple designers. It is the branded buyers role to communicate and set up a critical path for the brands to arrive in each department store at the same time.
Branded
Buying Cycle: Critical Analysis of different buying environments There are many differences that separate the significance of buying for fast fashion, designer, and branded fashion. Fast fashion requires more in depth research of trends around the world, and there is a requirement for an in depth customer profile, this is marginally different to the designer buyer, who has to appease the customers that are loyal to their brand by restocking classic branded items; they may have the logo, and are made of a cheaper material like canvas. The branded buyer would be more concerned with trends, but on a more socially wide scale as opposed to the fast fashion buyer who has to sometimes forgo the trends of the moment and focus on what the customer bought last year, and then adding a different colour that is on trend for that season. The buyer for a fast fashion retailer has to be aware of the budget, and may only have a limited amount to spend on the ranges they have designed for that season. The designer buyer will have a budget that could be triple that of the fast fashion buyer and branded buyer combined, but they will have smaller quantities of products that are of a higher quality. The branded buyer will have an open to buy budget, allowing them to increase or decrease their stock allocation from the supplier of the branded products; this allows them to be more specific with their replenishment, as opposed to a fast fashion buyer who may only make one order of a range before they plan to order another delivery; this is low risk, and prevents any stock being left on the shop floor that isn’t selling, and therefore losing profit. The designer buyer has less freedom than the fast fashion buyer, because they have to stick to a certain criteria for their store, they cannot introduce something that is not known to sell well, because of the high quality of the materials it would be overwhelmingly risky to design a product that costs a few hundred pound, that customers do not want. The fast fashion buyer has a little more breathing room than the branded buyer and designer, because they can replenish their stock quicker, because they focus more on the bestsellers, and will introduce a new range that has one less button, or is made of a different fabric. It looks new, but in reality it is not. The branded buyer cannot control what they bring in, they do not design the range or have any contact with the brand they buy from for their concessional stands. To conclude, it is apparent the differences between the three roles of a buyer within three different buying environments. The fast fashion side of retail, and the branded buying side of retail, are equally as important to the mass market; they need to entice the public, and they must have a foresight into their spending behaviour. However, they can not take on every trend, and they can not focus on one type of customer who spends money in their store. This leaves them with low quality products, that could lack catwalk influence. It may be cheaper, and there may be more available products than in the designer store, but they will not have the innovation of a designer brand that is desirable, high quality, but can have a higher mark up because of their name on the packaging. There is room for the designer brand to do what the branded buyer, and the fast fashion brand cannot do, and that is sell their name as a lifestyle and have ample opportunity to increase prices, and mark ups, but keep the cost price the same.
ZARA+: Buying Cycle Critical Analysis Zara+ A/W 2016 party range consists of 23 pieces, some of which are of a higher price than others. Using the Zara buying cycle as a guide, the Zara+ products that are more expensive like the 79.99 maxi coat. This maxi coat is of a higher quality than the 19.99 blouse, so it will be produced in Spain. Zara is a fast fashion brand, and so the manufacturing process has to take up to 6 weeks maximum. Therefore, any delays would be disastrous for the company, especially since Zara+ is launching as a brand new line. The benefit of having a manufacturing centre, and a distribution centre, practically next door to one another will make it easier to
check the stock passes quality control, and also make it easier to communicate any problems that may arise. Also, the store managers who will be ordering the products direct from the distribution centre will not have to worry about waiting a long time for their replenishment orders to arrive.
The budget needs to be higher than usual because it will be launched in the autumn/winter range, and the budget will be split so any amendments to replenishment orders can be conducted without fear of over spending. The merchandisers at head office, and the buying team, will keep a close eye on the progress of the range. To make sure that customers will buy into the new range, competitive shops, market research on a global scale, and a thorough understanding of catwalk trends to keep in line with the contemporary designs of Zara will be important.
Scheduled trips to Asia where the cheaper products are being manufactured will be important throughout the buying cycle, to monitor the supply chain so that the subcontractors are following the Zara ethos, and ethical trading standards. Any last minute changes to the order, and any design changes, could hinder the release of the range. This could lose the company profit, therefore keeping in close communication with the subcontractors using a translator if necessary, is important so that mistakes are not continually created through lack of communication and understanding.
The range will be built after conducting direct shops, and competitive shops, and using past bestseller lists for Autumn/Winter 2015. Designs must not stray far from the Zara brand, but also must not look similar to the Zara brand as Zara+ is focused more on body confident women, and a glamourous aesthetic. The customer pen profile, and market research, will help the range to be formed by the buying team and lead to a confident elevator pitch to the executive board. Mood boards for billboard ideas, and creative marketing campaigns will be vital to secure the budget and push that the new line will desperately need.
Negotiations with the subcontractors will be conducted face to face in the factories abroad, in India, and China. The factories that are closer to the head office in Spain are Zara owned so that is a benefit of the Zara brand; the company, and the Zara+ line, will save money this way in the long run. Using the direct shop, it will be significant in understanding the price range for the A/W 2015 range, and this will inform the buying team on how they should set the prices for the Zara+ line. Also, the prices must be competitive, which is where the competitive shop analysis will be useful so that Zara+ is not overpriced so much so that the company loses customers and money, or under-priced where our margins are significantly lower making replenishment harder, and customer satisfaction low over the busiest period of the year.
As the distribution centre for the products that are influenced by the catwalk and are of a higher quality and price, it will make more sense to order these at a low quantity at first to test the waters of the European market. If there is a need to replenish the stock, it will be quicker to send the orders to mainland Europe, and the UK, in order to quickly satisfy the sales team and the customer. However, with the basic items that are being manufactured abroad, they will be ordered at a larger quantity and as they are suited for a broader market, the profit created could be quicker and more stable.
Over the Christmas period, it is important that the customer is the main concern, and any enquiries and extra orders made in store by the store manager are not taken lightly, and the products are transported with immediate effect. The logistical side of the company will need to be efficient and fast so that there is no opportunity for the company to lose profit during the ‘Golden Quarter’ of the retailer’s financial year. Any weather issues across the globe that could affect the shipment of the deliveries from India, and China, they must be taken into account when confirming the delivery dates. There should be room for error, so there is no domino affect where customers lose out, and stores lose out on reaching their sales targets for the financial quarter because of a head office complication with the buying team. The Zara+ range will be on sale from the beginning of October, all the way through until January (16 weeks in total). It will be placed in the sale, but the goal is to not have a huge quantity of excess stock in all of the Zara stores. They will be reduced by 20%30% in the sale to sell any of the extra stock that is left over in each of the stores globally. This will be consistent in each store, and there will be no option for this range to be reduced through faulty reasons before the 16 week sales period is up. Any faulty products will be written off in store, and sent to the quality control in head office for evaluation.
The sales figures will be closely monitored, and a decision will be made at the end of the 16 week selling period whether it is a line that can be profitable, and as successful as the Zara brand. If it is successful, the buying team will focus on Spring/Summer, and Autumn/Winter seasonal ranges.
ZARA+: Manufacturing & Suppliers Zara is the leader in fast fashion. In a small fishing village on the Spanish coast, there is a town called Arteixo. This is where the head office of Zara is situated. Zara delivers new clothes to its stores in small batches, in line with customer demand, twice a week. Each delivery is on schedule. The store manager orders the clothes for their store, to replenish the stock as needed, and the delivery of replenishment stock arrives on time twice a week. Unlike other retailers, Zara controls most of its manufacturing; half its clothes are made in Spain or neighbouring countries. The Financial times article calls this supply chain their ‘competitive advantage’. Zara’s swiftness to replenish stock, and be quick to replicate catwalk designs, is more important than the cost; they sell themselves higher than every other retailer, and it works.
Zara has more stores in China (142) according to The Financial Times, than France. Because of this overwhelming growth in China, Zara has no localised their head offices. Now, they have their main one in Spain, and one in China. This will affect the supply chain; now they must sub-contract their manufacturing to Chinese companies, to keep up with the demand in China. Zara’s distribution centre is currently still next to their head office in Spain. According to The Financial Times, the company produces ‘about
450 million items a year for its 1770 stores in 86 countries. They have manufacturers in Portugal, Morocco, China, and Bangladesh, but the clothes still arrive in Spain at the distribution centre before going to any stores. Zara has 11 factories abroad that they solely own, allowing them more control over the hierarchy in the factories, and quicker audits of the factories for ethical reasons. Zara Distribution
Centre, Spain
The clothes that are seen as ‘trendier’, are produced in Europe. This allows for quick distribution and replenishment across the continent during the peak times of the Spring/Summer and Autumn/Winter seasons. The Financial Times adds that the basic products in their brand are produced overseas, with cheap labour, and then shipped to the Spanish head quarters. According to an article written in 2002 by The Guardian, it notes that if a style doesn’t sell within a week, it is removed from the shop floor, further orders cancelled and ‘new designs are pursued’.
It is typical for a retailer to order 80% of the garments that they will offer in store, but Zara only orders 50%. They are not afraid of changing orders, reducing or increasing replenishment orders. The retail lifespan of Zara’s products usually is up to 4 weeks; this encourages repeat visits by customers, which is more than the average high street store in Spain where they were founded. The positives of this is that they are
quick to adapt to their customer behaviour if it changes, and are not afraid to make decisions that are high risk, for the greater good of the company.
For the Zara+ brand, we will follow the same supply chain and critical path. The items that are the most expensive and on trend will be produced in Spain, and the cheaper basic products like the skirt and basic tops will be produced further afield. This all depends on the budget that is made available to the buying team for Zara+.
References Roux, C. (2002). Profile of Zara, the high-fashion chain. [online] the Guardian. Available at: http://www.theguardian.com/lifeandstyle/2002/oct/28/fashion.shopping [Accessed 3 Dec. 2015]. References Berfield, S. and Baigorri, M. (2013). Zara's Fast-Fashion Edge. [online] Businessweek.com. Available at: http://www.bloomberg.com/bw/articles/2013-11-14/2014-outlook-zaras-fashion-supply-chain-edge [Accessed 2 Dec. 2015].
Unit 10:Mini Branding Project Evaluation In this Mini Branding project, I took on the role of a buyer of a new range for Zara called Zara+. I researched before I made the decision to start a new line for Zara, based on articles I had read, and field research about the plus size market on the high street. There was a gap in the market for a contemporary line that conveyed a stylish aesthetic that plus size women were looking for on the high street. The target market was women, aged 18-37. They are sexy, and confident, and need outfits to wear that aren’t ‘shabby’ or ‘uncool’.
I conducted a SWOT and a PESTLE analysis, and found that the strengths of the Zara brand was that they have their head office and distribution centre in Spain and mainland Europe; this makes it easier for replenishment deliveries to arrive to stores in the UK. However, they have their basic range and items manufactured abroad using cheap labour, which is more in line with their fast fashion branding. The weaknesses of Zara, is that they do not have a plus size fashion line. The Zara+ will fill a niche in the market, and also help Zara globally expand their brand to North America where they have struggled to break in to because of their lack of larger sizes. As a buyer for the Zara+ range, I conducted a comp shop, and found that brands like H&M and Mango have plus size ranges but their style and availability was poor. They are European brands that are in direct competition with Zara, and therefore if Zara+ can be successful, it will hopefully lead to an increase in profits and demand for the Zara brand across the globe. As a buyer for Zara+ I conducted a direct shop, so I could see what designs were on sale during the Autumn/Winter 2015 season, so as a buyer I could forecast the future trends for the Zara brand. Also, the direct shop helped me with the price points for the Zara+ range. The more expensive items; dresses, shoes, and coats, would be manufactured in Europe to a higher quality, whereas the blouses and skirts
which have a lower price point would be manufactured abroad in China and further afield so that the cost price would be lower, and more volume could be ordered and replenished to keep up with the demand of the customer from all around the globe. The range was curated using research from the film ‘La Dolce Vita’, and the European cities of Madrid and Milan. The colours were picked from the photographs of the city, and the colour palette was brought together using the artists of the Renaissance and famous paintings from that era. As a buyer I felt that using this method to pick the colours for the range was helpful, as it helped me as a buyer stick to the brief of the brand and their neutral colour pallet, but also help me as a buyer to slightly change the aesthetic so the Zara+ brand looked more luxurious in line with the theme of ‘Party Wear’.
During a discussion with other people, they opened my eyes as a buyer when they highlighted that this range could be controversial. As a buyer, it is important to avoid controversy as it could be detrimental to profit and growth of a brand or range. To counter
this affecting the brand on a global scale, it was decided to write a letter for the Zara website, under their ‘Ethics’ banner. It would used to help people understand the viewpoint of the range, as not to promote unhealthy lifestyles, but to promote confidence in women of every size; since plus size does not mean ‘large’ or ‘unhealthy’ it could be for a woman who is taller and may not fit in the ‘average’ size 14 etc. Nadia Aboulhosn will be used to promote the range in North America, as she is a famous blogger in North America and globally. Using a social media personality will promote the brand online, and get women who were not interested in Zara before hand to check out the online store and then go into the store to try on the clothes when they are released. Nadia Aboulhosn is good at putting looks together, and choosing great locations to take her pictures. Using her to add more pictures to the marketing campaign will be cheaper, and add more to the range identity.
As a buyer for the Zara+ range, it is important to visit trade shows across the world; most notably Yarn and Premiere Vision, to find high quality materials and good contractors and negotiate a good deal for them. Being able to speak to people face to face at a trade show will lead to a good price for the brand, and will help keep the margins low, and hopefully give the Zara+ range a future. The financial spreadsheet can then be created, and as a buyer I have chosen to not replenish so much of the brand over the 16 week sale period, as this could lead to too much stock in the new year, and not a high demand for the clothes. As the plus size market is big but has not bought with the Zara brand before, it would be hard to predict their spending habits in the new year. Zara, unlike other fast fashion retailers, does not buy their ranges in large quantities; they can afford to hold off on this since the majority of their manufacturing is in mainland Europe. Therefore, there will be little replenishment, and more of a push to sell out the range before January sales. As a buyer, I believe this range will be successful, as there is a gap in the market and Zara is a respected brand by women who want high fashion clothes on a cheap budget. If this range can break into the North American market, it can only push the brand as a whole upwards like the likes of Topshop.
Unit 10: Critical Analysis and Evaluation The tasks that I completed in Unit 10 have helped me understand the different buying environments that I may encounter as a professional buyer in the future. The first task that I had to undertake was a group task; we had to conduct a PESTLE on a brand, we chose Matalan. I had never used a PESTLE to analyse a brand before, and it helped me understand the method of breaking down the key things that make a brand what it is. For example, the political atmosphere of a country (taxes, governments) etc, can effect a brand and it’s profits and growth. With Matalan the PESTLE was useful in finding out the target market of the company, and how the bedroom tax coming into affect lowered their disposable income, therefore causing the brand to introduce more value products and sales throughout the financial year. As a group we researched part of the PESTLE ourselves, and this was critically evaluated. Then as a group, we went out onto the high street to conduct primary research; we had to create a PESTLE for Primark and Marks and Spencer. We visited Primark and found that the staff was not helpful in talking to us about the political, economic, social, technology, legal, and environmental issues that the company faces. We were directed to talk to head office over the phone. This was disheartening, but we took photographs of the labels in their clothing which helped us build our own ideas as to how the company manufactures their products at a fast rate. Some of the products, mainly in menswear, were made in Britain. This was surprising to us, as it was assumed by the group that Primark would make their clothes abroad for cheap labour. The group visited Marks and Spencer, and we spoke to a manager called Lynn Matthew. She was helpful in discussing a wide range of topic with us. We asked her questions regarding how long she had worked there, if they have ever had a pay rise or if the company was considering raising their wage to match the living wage in line with inflation. Lyn told us that the company used to pay them the living wage years ago, but has since fallen short of the living wage as of 2015. They do, however, try and match the wages of their competitor John Lewis. As I mentioned before with the Matalan PESTLE, we discovered that younger people were being hired over older people due to the gap in the minimum wage. However, we discovered at Marks and Spencer that the majority of people who worked at the Church Street store were over 21. Also, as with Primark, we took pictures of the labels inside the clothes. We found that they were made all over the globe; from Indonesia to Madagascar, from India, to Pakistan. This was eye opening as it showed us that the company had factories all over the globe and in my opinion it seemed like a lot organisation and logistics had to be technically perfect in order to keep the buying cycle moving effectively. Talking to Lynn Matthew was extremely helpful for me, as it helped me understand the important of the PESTLE when discovering in depth information about a brand. Knowing the strengths and weaknesses help me as a buyer find out what I can do next to bring in more customers, and expand the brand across the world.
After researching the fast fashion environments of Primark, Matalan and Marks and Spencer, individually we had to write a report about the different buying environments in the retail sector; Fast fashion, designer buying, and branded buying. There are remarkable differences in each of these environments; I have already discussed fast fashion and so I will talk about the latter. Designer buying is more focused on key pieces, and replenishing ‘iconic’ items. The problem with designer buying is that the stock is bought at a low amount, to keep the margins low as the quality of the products are a lot higher. Therefore, once they are sold out, they are nearly never replenished. The currency exchange globally can affect which markets buy the designer brand more than others; for instance the GBP is higher than the YEN, therefore a lot of Chinese women were travelling to the UK just to buy a Chanel bag because of the price difference. To prevent this, Chanel made all their RRP’s the same worldwide. This is a clever way of preventing dips in profits in the global market, and improve the markets elsewhere. As a branded buyer, you never affiliate with the brand itself, only the supplier who you buy the products from. This can mean that you can only sell the items at the price they are in the original store, so you can not take their customers away from them; however you can negotiate exclusive products giving you the upper edge over your competitors; for example, having a dress that Selfridges can sell that Net-A-Porter cannot sell. It can add to their profit if the dress sells out in the original brands store first etc.
Regardless of the buying environment, every retailer has a head office, and some have a shop floor. The organisational chart helped me distinguish the hierarchy of the head office, leading downwards to the shop floor. As a buyer, it is important to know who you liaise with; for example the buyer liaises with the merchandiser, and they both report to the head buyer and the chief executive. As well as fast fashion, designer, and branded buying, there is wholesale, online and department stores; wholesale products are bought by independent retailers, people who work on a clothes stall in a market, and they provide cheap clothes that aren’t branded. Online stores do not have to pay for sales assistant, or unit space, so they can charge considerably less for their clothes or considerably higher, it all depends on the quality and if they are bought at wholesale, or if they are manufactured by the owner themselves. Over this unit, I have developed my writing style more so than in the last unit, when critically evaluating topics. For example, I am more confident in writing about the buying environments as I understand the logic behind them more. The knowledge I have attained is more in depth, and I now have the ability to build a range for my own brand, and build a range for a brand that already exists. This will help me in my future career in fashion buying. I can now use photoshop with ease, and I am comfortable creating financial spreadsheets, and PESTLE and SWOT’s, whilst analysing them successfully.
The business plan I created as a buyer for the Zara+ brand included the business aims, short term, mid term, and long term goals; as well as the strap line and global business strategies and financial plan. Building the business plan helped me think of numerous business strategies that could help the new range. For example, the main aim was to break into the North American market, as Zara has already successfully built a loyal customer base in Europe and Asia, but has yet to conquer one of the biggest retail markets in the world; North America. So, the plan was to use an online social media celebrity to launch the brand in New York and Los Angeles, with billboards in Times Square, a party event in New York, and Los Angeles as well as a student event in every store across the world that would give students 20% on the launch date. This would be used to create a social media buzz, and get magazines like Grazia, US Weekly, and ELLE to write reviews on the range, as well as freelance fashion bloggers around the USA, and talk about the party events. Television shows like Good Morning America and This Morning could talk to Nadia Aboulhosn or use the clothes in any fashion segments they might have to introduce the party season collection. Also, taking a leaf out of the books of many fast fashion retailers, Zara+ would create a look book that would be available online and in stores to customers. They would be handed out at the cash desk by sales assistants who, with the help of their store managers’ training at head office in promoting the new range, be able to talk to the customers a week before launch date about the Zara+ brand and create a buzz. The personal shopping experience will also be introduced for everyone, but will be launched alongside the Zara+ launch to bring in more customers. Using a social media celebrity to promote the brand will not be as expensive as using a big name celebrity, so that could help the Zara+ brand save more and therefore free up extra spending for the marketing in North America and Europe with the adverts and launch events. However, celebrities invited to the party for free will also be given clothes from the Zara+ range to wear at the party for free also adding to the cross promotion of the range. As a buyer, and from reading the financial spreadsheet that was created by the merchandisers of the Zara+ brand, it could become a successful range with a future within the Zara company. If I could change anything as a buyer for the Zara+ brand, it would be the amount of clothes I would replenish during the 16 week selling period. As of now, there is an equal number of 46 replenishment across the range, with no discrimination as to whether certain products sold more than others. If as a buyer I were to do this again, I would be critical with what sold well, and what did not, and base my replenishment numbers on those figures.
Unit 10: Critical Analysis and Evaluation During this Unit I have had to analyse the difference between a buyer and a merchandiser, and analyse their significance within a head office environment. The difference is that the merchandiser is in control of the budget and will use comparative data from the previous season to distinguish how much the buyer has to spend, and what justifies that amount of money. For example, if a particular style of dress sold well, and the buyer used that design again but with a slit on the side or a different colour, than the merchandiser will approve more spending on that design since it is known to sell well. The buyer has to negotiate with the suppliers so that they can save money on the budget that they divide between each products, and therefore get the best deals. During this unit, I had to create a financial spreadsheet for the Zara+ range. This spreadsheet is what a merchandiser would typically do, and what a buyer would use to understand the best sellers and where products are made and their cost price. Creating this financial spreadsheet helped me further understand the importance of figures, and the significance of the cost price. As a buyer it is important to keep profit margins high, and cost margins low. Logistics as to where products are manufactured are integral during this part of the buying cycle. The financial spreadsheet helped me find out how I would replenish an item, and how much I would add to the replenishment and how much I would decrease. However, in this unit I did not change the replenishment numbers; if I would do this again, I would be more confident in understanding the best sellers and adding to that replenishment number, and decreasing the number of items I would replenish for products that would not sell well.
When I become a professional buyer, I will be more confident in my understand of the buying cycle, and be more aware of the significance of each step in the buying cycle. That is why this project has been important to my growth as a buyer. I understand how it all connects, and in the case of this project I was able to understand why some products in the Zara brand were more expensive than others, because they were manufactured in Europe by high quality technicians as opposed to illegal sweat shops, or low quality factories abroad. If I were to walk into a buying meeting now at Zara, I believe I would be able to follow the steps they take and understand why they make those decisions. It is important to know where the materials come from, where they are made and where they are distributed, because any delay like increases in import tax or bad weather, can delay a launch, reduce the amount of profit the range could make, and ultimately end the life of the line.
The business strategies that I used could work well in a professional environment, however as Zara is a fast fashion brand I do believe it may not be feasible or productive to complete all of them in such a short space of time. However, the idea is of sound mind, but the execution would need to be perfect in order to gain the rewards that I set out in the business aims. Breaking into the North American market could be difficult, which is why as a buyer I felt that more emphasis should be put towards the marketing of the range. I think I had so many ideas to push the brand, I lost sight of the cost of the marketing campaign. As a buyer, any extra costs could affect whether the director of the brand would want to continue with a range that costs them so much money. Although, I do believe that I considered the global market when deducing what marketing campaigns would work and I believe that I was going in the right direction. I just need to be aware of how long it would take to complete all of the marketing strategies and the overall cost, as it could eat into the profits that the range takes in the 16 weeks it is on sale.
As I look at the finished range, as a buyer for the Zara+ line, I like how it is cohesive with the theme of ‘A midnight in…’ with the cities of Milan and Madrid having been adapted successfully into the range. The pieces in my opinion resemble the Zara brand, and its aesthetic. There are more than enough ways to create an outfit using the range, and it can be bought as separate pieces by a customer without it looking odd matched next to their own clothes, and their own style. The plus size market is craving for a more stylish approach by a high street brand, and I think this range accomplishes that request. As a buyer for the Zara+ range, I could change the colour pallet, and maybe add a few more monochrome pieces that could become bestsellers. However, as this is the first launch of the range and the line, it had to be distinguishable amongst the rest of the Zara range and not fade into the background like the Zara competitors, which was a weakness that the Zara+ could build from and become more successful with. When the range was brought together, a lot of care and attention was put into what would suit a ‘plus size’ figure; but through research as a buyer for the range, I learned that I did not want to put ‘plus size’ women into the same box, as women are all unique and all want to be different than the woman next to them. So as a buyer, I chose bold prints, colour, and shapes that came from the trend forecasting I conducted on WGSN. From my field research I found a route that as a buyer for the range I had to take, to separate the Zara brand and let women everywhere know that women of all shapes and sizes can be fashionable in the modern world, and don’t have to look the same. Zara+ has the same feel of Zara, but is more Avant Garde; but as this is a party range for Autumn/Winter I felt it was justified to make the range so extrovert. The target market is 18-37, and so as the buyer I had to look to the catwalk to influence my range, and look towards modern celebrity icons that women of that target range would look towards for inspiration. A lot of women of that age range are celebrity influenced, and want to be as glamourous as Kim Kardashian, and Marilyn Monroe; they have the curves and the sex appeal. I wanted to bring that to the range.
Unit 10: Critical Analysis and Evaluation The role of a buyer task involved putting myself as a buyer in Topshop, and analysing how the company would introduce a new range into the market. I found out that it is important to understand the location of the stores, since different stores in different countries have different climates and different women, who may go out a lot for example in Liverpool, or stay in more for example in London. It is important that a buyer understand what sold well last season, and what the upcoming trends for next season are. The style of a dress may be the same, as it sold well last season, but the colour will be more on trend for this season etc. Also, it is important that as a buyer I communicate with the merchandiser department and the head buyer, to understand how much budget I have for the upcoming season, and therefore what products I should buy more of as a result to make up the difference and give the range more money to spend on replenishment. I looked at the Kendall and Kylie range, and how that was not in keeping with the style of the Topshop brand, but it had two huge celebrity name that would make the company money over a short period of time. This is useful to understand as a buyer, because using a celebrity name to promote a brand can end up promoting the brand worldwide and also increase profits throughout the whole line of the brand, not just the range that the celebrity is promoting. It is important for the buyer to understand the customer demand for the brand they are working with, so that they can create the right range with the right trends that are popular with the mass market. There may be a trend that cannot transfer to the mass market; like feather dresses, but the colour of the feathers and shape of the dress can be easily recreated by a fast fashion brand like Topshop, and they can sell it for a competitive price.
As a buyer I will manage the buying cycle by communicating with the merchandisers, transport logistics at the distribution centre and the regional managers. I will have to communicate with the merchandisers so I understand what the best sellers were by reading their past sales report, and then I will have to know what my budget would be for the range. Furthermore, I will have to go to tradeshows and meet with suppliers and manufacturers face to face to negotiate a deal for the materials, the delivery of the materials, and the quantity. They must be able to follow the brand ethos regard ethical materials and ethical manufacturing. With transport logistics, as a buyer, I must be able to chase deadlines, and predict if any complications may arise due to hurricanes and bad weather regarding shipment of goods or air delivery of goods to the different distribution centres around the globe. I also will have to take into account any taxes that could add to the cost of the clothes, and any political unrest in the country where they are being manufactured in case there are riots, dangerous events that could occur close to the factories etc. The regional managers will communicate with the store managers about how the range should be set up in store, when it can be released, and when the sales assistants can talk about it with customers. There are a lot of legal factors that could come into affect if this process is not followed correctly.