PRETTYLITTLETHING Retail Audit Report by Aidora Tankeu

AIDORA TANKEU 1604575 INTRODUCTION TO FASHION MARKETING 1 FT4100

CW2- RETAIL AUDIT REPORT: PRETTYLITTLETHING

SUBMISSION DATE: 7 MAY 2017 WORD COUNT: 2580

EXECUTIVE SUMMARY

Executive summary In this report, I will be analyzing the British online brand, PrettyLittleThing. I will define the value of the brand, their key strategies, their financial performances and lastly their marketing environments. After defining the marketing environments of the brand, I will predict their future challenges and opportunities. PLT is a British online brand, which was found in 2012 by Umar and Adam Kamani. PLT is a new brand that targets young and sassy women to help them keep on trend with a variety range of products on their website. To stay at the top of the high street online retailers, especially in UK, PLT has established numerous marketing strategies such as collaborations with influencers, but also by sending text messages for promotions to keep the relationship with their own customers. However, the brand has to be careful of the high concurrence which is present today, especially in UK, with fashion online retailers such as Missguided and for facing that concurrence, they could think about opening a physical store.

CONTENT 1. Introduction

2a. Brand evaluation

2b. Brand values

2c. Brand key strategies

3. Financial performances

4. Product and price range

5. Current positioning

6. Critique on the companyâ&#x20AC;&#x2122;s marketing

17 Â

7. Marketing environments

8. Future challenges & opportunities

9. Conclusion

10. Bibliography

11. Appendices

1.INTRODUCTION

PrettyLittleThing (PLT) is a British fast fashion online retailer launched in 2012 by two brothers: Umar and Adam Kamani. The brand targets teenagers and young adults. It provides on-trend fashion at affordable prices offering the latest trends style to fashion forward females (PrettyLittleThing,2016). Online fashion retailers become more and more present in the fashion industry. We can see nowadays, fast fashion retailers like Missguided, ASOS, or Boohoo especially in the United Kingdom. UK online fashion sector has grown 258% in five years and his taking a huge part in fashion’s economy (Bold,2014). The aim of this retail audit report is firstly to evaluate the brand by defining his values and key strategies and also by showing his financial performances. Secondly is to define the price and product range of the brand but also the marketing environment of the brand. Then lastly, assess its future challenges and opportunities.

2a. Brand evaluation Umar and Adam Kamani , the two founders of PrettyLittleThing, are the sons of Mahmud Kamani, the founder of the online fashion retailer Boohoo.com. Last year, Boohoo bought 66% of share capital of PrettyLittleThing for an amount of £ 3 . 3 m i l l i o n s . ( F e d o r, 2 0 1 6 ) . Surprisingly, between the sons and their fathers there is no competition. Umar said “Boohoo has been an amazing success story, but I wanted to do my own thing, put my own stamp on it.” (Bourne, 2015). PLT head office is situated in Manchester and the brand employs 140 people per year (McGregor, 2016). They ship worldwide but United Kingdom represents 70% of the sales, which is the majority. It’s a Gen Z brand that creates and anticipates trends. As a high street retailer, catwalks, influencers and celebrities also inspire them. They want to make sure that all their products are available before anywhere else.

Strengths

Weaknesses

The 16-24 demographic – the choice of models are young and their communication style on their website and social media channels target students and those wanting affordable prices -  C o l l a b o r a t i o n w i t h bloggers or influencers such as Sofia Richie and Stassie (Anastasia Karonikolau). -  W i d e v a r i e t y o f o w n branded products suitable for a number of different o c c a s i o n s ( N i g h t w e a r, Sportswear, Swimwear).

Opportunities -  -

Uk and overseas growth (worldwide shiiping) The brand grows with the help of social media (Instagram: 1.5 million of followers and Twitter: 313k followers) They can start working with bloggers or influencers, which are on trend right now on social media.

Due to the fact that is a high street brand and the prices are cheap, the quality of the products is not always good.

-  The fact that is just a online retailer cause they have no stores like Missguided for example, people cannot try the clothes before buying.

Threats

-  Highly competitive market, especially within ecommerce high street UK retailers with competitors such as Boohoo.com, Missguided, Misspap, ASOS etc…

2b. Brand values PrettyLittleThing considered themselves as a young, sassy, glamorous and body confident brand (Wood, 2016). They wants people to â&#x20AC;&#x153;feel famousâ&#x20AC;? while they are wearing their products. Knowing that their prices are really cheap and disposable.

2c. Brand key strategies For the brand, the key of their success is the ability to identify emerging fashion trends for the stylish young females on affordable prices. Firstly, their objectives is to drive traffic to the website and makes the visual search clear and easy for the customers (Barber,2016). Thanks to a good technology, customers can easily search and find their products within different categories. Secondly, their main strategy is to use SMS in order to drive traffic to their website and increase their revenues knowing that teenagers and young adults (16-24) are always on their phone. So text message should allow them to target their customers. On those text messages, they send promotions, sales or even students discounts codes.

Place -  Internet/E-commerce -  Over 3 billion of people in the world are connected, whether is through a computer, a mobile phone or a tablet -  PrettyLittleThing have their own website, mobile platform and their social media platforms.

Product -  1 6 - 2 4 y e a r s o l d t a r g e t customers -  Products are shown through images and videos to show the quality and how the products are displayed on models.

Price -  Brands have to be competitive to survive on the Internet as PLT sell fashion clothing and are online only, with similar competitors, they need to make sure that the overall value proposition to the customers is compelling. -  PLT makes sure they have unmiss-able cheap prices to compete with other fashion brands and attract their young fashion customers.

Promotion

-  Main hub for digital world -  Discount and students code -  Promotions text through SMS

3 .Financial performances As a young brand, PrettyLittleThing has found a place in the fashion online retailer industry even by facing the high concurrence. In 2015, the company said that their sales tripled. It went from £5 million in 2014 to £30 milion the year following (Craven, 2015). They had no signs of slowing down during that year. Years after years, the brand evolves and improves. Thanks to Fredhopper, which is a specialist website known for helping e-commerce retailers to change their configurations and their way of merchandising, PLT increased by 8% in order value across global e-commerce (Briggs, 2017). This kind of website allows the customers to have a easier way of navigating through the brand’s website. So, they can have a better shopping experience. The brand was one of the first UK online retailers to install Fredhopper (Baldwin, 2017). Thanks to them, now they have a better visibility and are improving their visual merchandising. It attracts more the customers and permits them to shop more and more. That’s why in 2017; they increased in new customers by 483% (Threepipe, 2016). Not only their customers are increasing, but they also increased in ROI by 258% (Threepipe, 2016). The ROI (Return On Investment) is the measure that investigates the amount of additional profits produced due to a certain investment. Therefore, as a result, they earned more than they invested because they had a positive return.

4. Product and price range PrettyLittleThing has a typical high street product range. First of all, their products are focused on women. They sell clothing, lingerie, nightwear, dresses, beauty, charms, phone accessories, shoes and other accessories. Overall, their products go from £2 to £100, which is available for young women. But more precisely, this is the price range for each product: -  Clothing: £2 to £100 -  Dresses: £3 to £100 -  Shoes: £5 to £60 -  -Accessories: £1 to £89 -  Beauty: £1 to £89 On PLT’s website, we can also shop by trends like metallic, ruffles or work wear. For example, if you want to shop denim clothing, instead of searching for hours in the clothing tab, you just have to click “denim” on the trend tab. The brand sells products for every women’s shape. They have for example “PLT Petite” which is more for small women; and also “PLT Shape” for curvy women. For beauty products, PrettyLittleThing is featuring with many beauty brands to complete your look such as Sleek makeup or Crown brush. It’s clear that none of this product is higher than £100.

5. Current positioning The brand offers good quality products with low prices. To compare it with other e-tailers and analyze his current positioning I made a diagram which represents PLT’s positioning on the online retailer’s market. Thanks to this diagram, we can deduce that it’s a real high street brand with low prices product available for everyone, but also with a wide product range.

HIGH QUALITY

LOW PRICE

HIGH PRICE

LOW QUALITY

6. Critique on the company’s marketing communication practice

PrettyLittleThing redesigned their website in April 2017.They keep improving their website to allows the customers to navigate easily on it. A good visibility of a website attracts more customers by his visual merchandising. To communicate more with their customers, PLT’s main strategy is to send text messages. Those text messages contain PLT’s news about the latest fashion trends, promotions, sales and discount codes. You can receive the SMS only if you had already been registered on the website. At the bottom of those text messages, there is always a link that will drive you directly to the website (Appendix A). This is one of PLT’s key strategies because it permits customers to shop more often knowing that millennials are always on their phones. Not only they used SMS as a marketing strategy to have a better communication with the customers, but they also use social media platforms to emphasize the relationship. The brand is present on every main social media platform such as Facebook, Instagram, Snapchat, YouTube or Twitter. This presence is actually important for advertising but also to communicate with their followers. According to Social Media London, approximately 38million people are using social media in UK (SocialMedia London, 2017). Facebook is one of the most used social media with 31million users only in UK (ThinkDigitalFirst, 2016). 53% of social media users visit Facebook more than once a day (Appendix B). PLT advertise through social media thanks to their followers. 17

1.6million of followers. The brand post pictures of the latest trends and new products (Appendix C)

The company use this social media to filmed the behind the scenes of their shoots and their new products. (Appendix F) Â

316.300 followers. The brand tweets about their latest products (Appendix D)

886.000 followers. The brand post some news from their website and some pictures (Appendix E).

3.000 suscribers. The brand post videos of their campaigns for each collection or season. (Appendix G)

Since the birth of social media platforms, especially Instagram, there is a rise of bloggers and influencers. Influencers are young adults who have more than 1 million followers thanks to their pictures. To attract customers, brands usually collaborate with those influencers or bloggers. That is the reason why, this last April, PLT decided to do a collaboration with the famous young influencer Anastasia Karanikolaou also known as StassieBaby on Instagram (Rocks, 2017). The aim of this collaboration was to renew their range of products called “PLT Shape” for their new campaign starring Stassie. The range “PLT Shape” focus on curvy women, that’s why they choose a curvy girl like Stassie to promote their products. To introduce the new collection with the new face of the brand, Stassie, they organized a party which was filmed on their own Snapchat account. Almost every social media’s users thanks to celebrities such as Kylie Jenner or Travis Scott saw the party. It has permitted to attract even more customers than they had before. PrettyLittleThing last strategy for advertising is posters. In London, we can see PLT’s posters campaign on the tube or even at the corridors of some tube stations.

7. MARKETING ENVIRONMENTS

The marketing environment contains two different parts: the micro environment and the macro environment. 1.Macro environment analysis: The macro environment consists of the larger society forces that affect the microenvironment. There are 6 forces: demographic, economic, natural, technological, political and cultural. They are also called “PESTEL”. -  Political: With the latest process of Brexit, the shipping policies for European countries could maybe change in the future. -  Economic: The UK fashion online sector keeps growing more and more since this past 10 years. -  Social: Millennials, also called Generation Y are a huge and attractive market that represents 83million people in the world (Kotler, 2015). Gen Y people age’s are from 10 to 33 years old, which is approximately PLT’s target customers. -  Technological: Nowadays, technology is part of our life with gadgets such as mobile phone, tablets or computers. And as an e-commerce brand, PLT’s major forces is technological cause everything is online. We just have to shop through our own devices, then the parcel will come to us few days later. -  Legal: PLT’s customers are protected by a data protection and a privacy law (Shirley, 2014).

2. Micro environment analysis:

The micro environment consists of the actors close to the company that affect its ability to serve its customers. Those actors are: the company, the suppliers, market intermediaries, competitors and publics. -

Company: PrettyLittleThing is part of the group 21 Three Clothing which is a private limited company based in Manchester (Duedli, 2017). Marketing intermediaries: To boost their growth, PLT needs some intermediaries. This is the reason why the online retailer ASOS, is one of their suppliers. When the ASOS’s customers are navigating on the website, they can find the brand PrettyLittleThing on the menu bar. This marketing strategy allows PLT to grow their number of customers. They also appointed the agency called Epiphany in 2015 to improve their online marketing package and search visibility (Begum, 2015). Competitors: The e-commerce market keeps growing and growing so there is a huge concurrence with online retailers. As o n l i n e w o m e n ’s f a s h i o n re t a i l e r s , PrettyLittleThing’s main competitors are Missguided, Boohoo.com and ASOS. They are online retailers that offer the same range of products than PLT. Publics: The fashion brand Boohoo.com has bought £3.3 million on PLT’s shares capital (Fedor, 2016). So they owned now 66% of PLT’s stake.

8. Future challenges & opportunities:

Being an online brand can be both negative and positive. Like every brand, PrettyLittleThing will be facing some challenges on the future. In the fashion m a r k e t l e v e l p y r a m i d , P LT i s considerated as a mass market brand. Knowing that the UK’s online high street market is rising with new online retailers such as MissPap, Hotmess and Missy empire; PLT has to keep is place of one of the most famous e-commerce retailers in the UK with Boohoo and Missguided. Otherwise, to keep his positioning on the high-street market, PLT could think of opening a physical store like Missguided did this last November in Westfield shopping centre at Stratford. Even if it’s more expensive to open a physical store, it can double PLT’s sales and will be an advantage for them to stay at the top of the e-commerce retailers in UK.

9. CONCLUSION

After evaluating the brand by defining his values and key strategies, his market environment and finally analysing his financial performances, we can deduce that PrettyLittleThing is a new brand that keeps rising years after years thanks to their marketing strategies and their wide range of products. Even if in the future they are probably going to be confronted to some challenges, but, opportunities such as opening a physical store could help them to face the enormous concurrence with other brands such as Missguided or Boohoo.com.

10. BIBLIOGRAPHY Baldwin.C (2017), Essential Retail, [Online], Available at : http://www.essentialretail.com/home/article/58b5a3e1775c2prettylittlething-reaps-rewards-from-online-merchandising-tech [Accessed: 3 May 2017] Barber.H (2016), Firetext, [Online], Available at : https://www.firetext.co.uk/blog/case-study-prettylittlething-com/ [Accessed : 25 March 2017] Begum.S (2015), Manchester Evening News, [Online], Available at : http://www.manchestereveningnews.co.uk/business/media/prettylittlethingappoints-epiphany-boost-online-10298870 [Accessed: 21 March 2017] Bold.B (2014), Campaign, [Online], Available at : http://www.campaignlive.co.uk/article/fashion-emerges-best-performingsegment-ecommerce-claims-report/1231014 [Accessed: 4 April 2017] Bourne.D (2015), Manchester Evening News, [Online], Available at : http://www.manchestereveningnews.co.uk/business/umar-kamani-makingpretty-little-9150671 [Accessed : 21 March 2017] Briggs.M (2017), Retail Times, [Online], Available at : http://www.campaignlive.co.uk/article/fashion-emerges-best-performingsegment-ecommerce-claims-report/1231014 [Accessed : 3 May 2017] Craven.N (2015), This is money, [Online], Available at : http://www.thisismoney.co.uk/money/markets/article-3357478/Sales-fashionwebsite-PrettyLittleThing-set-hit-30m-end-year.html [Accessed: 25 March 2017] Duedil (2017), Duedil.com, [Online], Available at : https://www.duedil.com/company/gb/07352417/21three-clothing-companylimited [Accessed: 3 May 2017] Fedor.L (2016), Financial Times, [Online], Available at : https://www.ft.com/content/be168f3a-c1d0-11e6-81c2-f57d90f6741a [Accessed: 21March 2017] Kotler.P (2015), Principles of marketing. London : Pearsons McGregor.K (2016), Drapers, [Online], Available at : https://www.drapersonline.com/news/prettylittlething-growth-continuesapace/7009839.article [Accessed: 21 March 2017]

Rocks.J (2017), Flavour Mag, [Online], Available at : http://www.flavourmag.co.uk/anastasia-karanikolaou-aka-stassiebabyannounced-face-prettylittlething-x-shape/ [Accessed : 3 May 2017] Shirley.V (2014), PrettyLittle commuincations, [Online], Available at : http://prettylittlecommunications.weebly.com/digital-marketingenvironment.html [Accessed : 4 April 2017] SocialMedia London (2016), [Online], Available at : http://www.thinkdigitalfirst.com/2016/01/04/the-demographics-of-socialmedia-users-in-2016/ [Accessed : 3 May 2017] ThinkDigitalFirst( 2016), [Online], Available at : http://www.thinkdigitalfirst.com/2016/01/04/the-demographics-of-socialmedia-users-in-2016/ [Accessed : 3 May 2017] Threepipe (2016), Threepipe.com, [Online], Available at : http://www.threepipe.co.uk/portfolio/prettylittlething/ [Accessed : 25 March 2017] Wood.Z (2016), The Guardian, [Online], Available at : https://www.theguardian.com/business/2016/dec/17/missguided-pretty-littlething-hit-big-time-fast-fashion-generation-z [Accessed : 25 March 2017]

11.APPENDICES

Appendix B

Appendix A

Appendix C 27

Appendix D

Appendix F

Appendix E

Appendix G