edtn business plan A propoed re-brad of Topshop Boutique for market-repositioning
Amelia Snape
Contents List of figures(4-5) List of tables (7) Executive summary (8-9) Objectives (12) Mission statement (13) Introduction (15-16) Business Background(18-21) Introducing EDTN (23) Motivation (26-28) Boutique drivers (30-41) Retail spaces are changing (42-43) Consumer drivers (46-49) Market drivers (50-65) In a position to re-position? (67) Consumer tribes (68-71) Concept overview (72) The name (74-75) Products (77-84) Non-clothing (85) Sourcing (86) Pricing Strategy (89)
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Re-defining touch-points (90-101) Visual Merchandising (104-107) Branding (108) Customer experience (111) Location (112-115) Funding (118) Operations (120-121) Recruitment (122) Distribution (124) Returns (125) Transition period (126) Launch Plan (127) Pre-launch (128) Specific consumer marketing (129) On-the-day marketing (130) Post-launch marketing (132) Instagram strategy (133) Measuring success (136-143) Financial justification (144-159) References (164-166) Appendicies (168-173)
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LIST OF figures Topshop history (21,20,19) source:topshop.com Boutique (39,37,34) source:topshop.com Retail design (42) source:retaildesignblog.com Campaign (63,45) source:cos.com Campaign (51) source:allsaints.com Campaign (54) source:whistles.com Campaign (57) source:weworewhat.com Campaign (58) source:mango.com Campaign (59) source:handm.com Drawing (61) source:wgsn.com Retail space (62) source:retaildesignblog.com Campaign (64-65) source:finerylondon.com Consumer profile (69-71) source:wgsn.com Campaign (73) source: rassberry-rouge.com Branding (75) Design detail (76) source:vogue.com
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Product ranges (79-84) UK map (87) Personal shoppers (93) source:insideout.com Technical detailing (98) Receipt design (101) Store designs (106,105,97,94) Branding (109) St Christophers Place source:stchristophersplace.com St Christophers Place (116-117,114) source:visitlondon.com Staff daily rota (121) World Distribution (124) Fashion week (127) source:vogue.com Street Style (135,131,123,48,47,17) source:wgsn.com Return on investment (137) Imagery (143,140,139,119,110,102-103,88,29,2425,10-11) source:tresmonikh.com Breakeven analysis (145) 5 year growth forecast (153) 5 year net profit and gross profit (154)
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list of tables Boutique sales performance (31) Boutique performance (33) Boutique positioning (40) Service market leader (41) Year 1 sales forecast (146-149) Year 1 cost of sales (150) Year 1 profit and loss (151) Year 1 cashflow forecast(152) 5 year profit and loss (156) 5 year cashflow (157)
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executive summary This business plan proposesthe re-branding of Topshop boutique brand to become EDTN, a brand that chooses style over fashion and produces pieces that are perfect for building a capsule wardrobe. One of the brands main unique selling points are its transparent supply chain, which sources the finest quality fabrics.
through continuous innovation, and this business plan recognises the opportunity for EDTN to redefine an industry and the way it interacts with its customers. It must also be noted that Topshop’s numerous collections, and consequential diverse customer profile, has overtaken a need for an improved and personalised customerservice.Satisfying the needs of many consumer groups within bricks and mortar store, and online platforms is starting to blur Topshop’s image and its core values.
The motivations for this re-brand are driven by changes in the competitive market and consumer tastes. Currently there is an emerging middle ground that is presenting an opportunity for a brand to sit between the high street and midmarket brand. This market contains consumers who do not want to compromise on quality, but are currently unable to trade up fashion items because of the large price gap between the two aforementioned existing markets.
With this said, EDTN will exploit boutiques current consumer base, whilst also adding two new consumers tribes. Therefore to allow for a diverse range of consumers to be apart of this new brand, EDTN will offer a non-clothing range of makeup and accessories, as well as a premium essential range of basic t-shirts and vests. EDTN’S design-led, high quality but affordable product strategy puts the new label in competition with brands such as & Other Stories, Cos, Whistles and All Saints. The premium essential range will start at £25, while more complex seasonal design pieces stretch up to £80.
Consumers are also beginning to demand more from their purchase experiences, and although fashion trends and styleschange,theexperience given to retail customers has barely evolved. To become the worlds leading fashion authority, it is in the interest of Topshop’s and Arcadia’s to diversify its successful offerings
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The brand will open a flagship store in the trendy St Christopher’s place in London where the store will be an artful and sophisticated destination to shop within. This will arise from a methodical redesign of the retail the space that compliment products and provides inspiration to customers. Moreover, EDTN will also have an e-commerce platform so customers around the rest of the UK and the world can purchase products. Logistics will be in partnership with Topshop’s existing operations thus allowing the brand to quickly experience international growth.
so that they can learn everything about EDTN’s products. This will create an educated and informed workforce who are confident when advising customers. Forecasted sales for this venture identify that the premium essential range will be a consistent cash driver for the brand, as they offer a lower price point that will be add-on purchases for the customer. By building an online shopping platform EDTN will have a revenue stream that is 3.1x more than its projected in store revenues. It is estimated that with an investment of £1,000,000, EDTN will break even at 9383 units (Sold at £26.83), experiencing a 100% return on investment during years 3-4. It is intended that in year 5, EDTN will have two further stores in the UK with additional plans for international expansion and franchising following the fifth year of trading.
The re-launch of Boutique to EDTN will also see the re-invention of three customer touch points, in order to break down the traditional norms of retail: 1. With more dedicated space, the fitting room environment will become more relaxed and customers will feel like they are in their own dressing room.
Fashion has experienced a democratisation through the proliferation of mobile devices and this means fashion is accessible to anyone. The fashion industry currently lacks a real differentiator or market disruptor; the EDTN brand will therefore be at the forefront of a change in the way consumers experience retail environments and istantaneously become a market leader. EDTN will form the benchmark by which other firms will compare themselves, but first the brand will need to follow this business plan and its associatedbrandguidelines.
2. The classical image of a receipt has redesigned so that it can become a key piece of brand communication; this is a great opportunity to increase brand engagement, wordofmouthrecommendations and ultimately the drive to becoming brand loyal. 3. Service will be focused on style over sales; staff will put emphasis on making sure that the customer is happy before willing them to buy. A style file will be produced for staff
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objectives Corporate Innovate in a new market to maintain being the worlds fashion authority Financial 3 stores by year 5 of trading International growth Return on investment by year 4 Marketing 3 loyal consumer groups customer loyalty
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Mission statement Favouring style over fashion, we like timeless design that takes our customer across seasons. Using key silhouettes we work hard to create fashion pieces that look and feel at once classic and modern. We pride ourselves with the transparency to our designs and products so each item has a story. Taking inspiration from modern city life, our collections are ultimately British with a chic style edge.
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“People are always going to go shopping. How do we make the retail experience a great one?� Sir Phillip green
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introduction This business plan is presented to the board of directors of Topshop/ Topman. This document proposes a re-branding and naming of the current Topshop collection “Boutique” to “EDTN”, this relaunch aims to commercialise an opportunity for the brand to become a stand alone retail space and e-commerce site. The motivations behind this proposed plan are to question and redefine the current retail norms, through the provision of value added services that create industry-changing experiences. Current user touch-points have been overlooked in previous attempts at customer experience innovation; this plan therefore provides a justification as to why these touch-points are so
imperative in paced fashion
the fast industry.
Whilst fashions,trends and consumer taste change, the experience provided to the consumer has seen little development. This new innovative concept therefore redefines the experiences expected within a retail environment, and positions Topshop at the forefront of this evolution. To innovate beyond physical products, EDTN is proud to be the first brand to challenge traditional norms of retail. EDTN will exclusively utilise and launch a revolutionary receipt redesign that will bring a more engaging experience to the customer, while preserving its functional properties.
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The strategic plan detailing all aspects of the business and the transition will be published for area managers at retail and head office to achieve general company awareness once approved. It is intended that the official relaunch will be at the 2015 annual brand conference where employees will be briefed on the project, to start the official countdown to launch in March 2016. The 2015 annual conference will also
signify the beginning of all consumer related marketing efforts. The process of rebranding and repositioning boutique (current name) to become “EDTN� (Proposed name) will require the clarification of two new customer profiles, whilst simultaneously maintaining its current core consumer base. Consequently, the brand will have three key consumer tribes rather than being reliant on just its current core consumers.
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BUSINESS BACKGROUND Topshop established in 1964 name Peter Robinsons’s Topshop,a fashion brand that was within the Sheffield branch of the Peter Robinson Ltd chain. In 1969 the business name changed to The Burton Group and a year later, Topman was launched as a counterpart to Topshop, catering to a young male demographic. The group added Evans to it’s portfolio 12 months later as well as establishing Topshop as a standalone store, and in 1994 it settled into its permanent home, 214 Oxford Street.
Dorothy Perkins was acquired in 1979 and the group experienced and extended period of growth throughout the 1980’s and 1990’s. Which resulted in The Burton Group de-merged in 1997 to shift from department store operations to focus on fashion multiples. The Arcadia group was established after the acquisition of Wallis, Miss Selfridge and Outfit the Group had a portfolio of staple dynamic fashion brands.
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kate moss
In 2002 Arcadia group became apart of Taveta Investments which was owned By Sir Phillip Green, making the group the UK’s largest privatelyownedretailgroup. Topshop currently specializes in up-tothe-minute affordable style, Topshop’s brave and irreverent approach has endeared the band to fashion-conscious shoppers and industry insiders alike, all of whom delight in the store’s cult status whilst enjoying its accessibility and buzzy atmosphere. The e-commerce site topshop. com attracts 1.9 million users per week driven from online social content that is up-to-date such as the award winning inside out blog and personal shopper style edits.
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Topshop has a wide nonclothing range that includes Topshop Makeup, Freedom Jewellery, bags and shoes, while offering a comprehensive range of products including Tall, Petite, basic jersey, boutique and the mainline collection. The brand was also the first high street label to showcase at London Fashion week, presenting the in-house designed Unique range. Mainline: Combining inspired design and affordability. Topshop’s mainline range caters for the seasonal wardrobe. It is a trend driven range visualised with trends that rotate and move on at a fast pace. Key commercial items include denim.
Unique: Launched in 2001 the unique collectionis showcases Topshop’s own design talents to an audience of the fashion innovators and opinion leaders. Designer collaborations: Have created FAD periods of brand excitement as well as making Topshop a destination for good design. Previous collections include: Marques’Almeida J.W. Anderson Mary Katrantzou Christopher Kane The successful Kate moss collection was concluded in the summer of 2014 and later in the year of 2015 Topshop will be collaborating with Beyoncé to release and active wear collection that will be operated as a joint venture company.
Boutique: Largely made up of cashmere blends and silk-based fabrics, the boutique collection is designed to build into the customers wardrobe. Although fashion forward, the neutral colour palette and attention to style rather than trend ensures that timeless garments cross seasons and last for years. The brand has over 300 stores across the UK, with flagships regionally. The Oxford street store has been long established and welcomes over 250,000 shoppers a week. International expansion sees Topshop with 140 stores globally making its mark as the world leading fashion authority.
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source: www.topshop.com/aboutus
JW Anderson
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“There is an opportunity for brands to re-energise with premium goods. After years of austerity, luxury is no longer a guilty pleasure: it can be conspicuously courted and consumed� marketing week 2014
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INTRODUCING EDTN EDTN is the proposed new name of Boutique and will operate as an independent retailer. As a resultant, the current brand boutique will be withdrawn from all Topshop locations and its accompanying e-commerce platform, thus creating more space in store for
Topshop’s other garments. The venture will develop an exclusive flagship store in London and the create a new online and mobile platform that will function to the same capabilities of the current Topshop website; for example next day delivery and collect from store.
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motivation This business proposal classifies and discusses relevant drivers that have identified Topshop Boutique asbeinginastrongcondition to expand and reposition itself within the market. A study by Unity Marketing (2014) indicates that the Millennial consumer group are set to take over the largest generational
segment in the luxury consumer market by 20182020. This shift is responsible for generating a sizable gap in the market for brands that can appeal to a more sophisticated, aspirational youth; this presents Toshop with a fantasticopportunityforthe brand to expand and further its appeal to this audience.
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“Mass and commercial and retailers need to more sophisticated elevated approach to wgsn 2015
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brands adopt a and design�
Not providing customers with more than just shopping destination has driven them to purchase and shop online. Moreover, online social platforms have created exciting discovery shopping processes whilst exposing Millennials to new brands. Yet such universal exposure has resulted in brands losing customer loyalty because of a lack of online differentiation. The evolution of social media platforms including Instagram, Pinterest and polyvore present a nascent field of visual social commerce, defined as “the use of social networks and usergenerated content to assist in the acquisition of products and services” (Amblee, 2012) The use of visual socialcommerce has driv en a change of trend adoption with 45% of Millennials claiming that Instagram is their primary source of fashion inspiration (Snape,2015). This figure is largely influenced by fashion bloggers, many
of whom are constantly uploading pictures featuring different brands; overtime this has resulted in a consumer product focus over brand advocacy. What’s more, emerging affiliate platforms such as “like to know it” are facilitatig the ability to purchase straight from Instagram;this has ultimately driven consumers to purchase impulsively when viewing an item that has a lot of social popularity. The desire for acceptance on social media has resulted in consumers becoming disengaged in a pursuit of their own personal style, instead driving trends of universally popular products on social feeds. Furthermore, the “democratizationoffashion” (Snape, 2015) (Evans, 1989) is being driven by opinion leaders who introduce new products, thus becoming key to the diffusion and adoption of fashion.
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key drivers
“Boutique”
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performance The Boutique brand currently has products on Topshop’s e-commerce site and is located in various stores across the UK. Product ranges will vary depending on sales hence frequent discussions between store and merchandise allocators occur to decide what products will be the most commercial for that particular store. With this said, after analysing sales figures of the boutique range it is apparent that the range is not meeting expectations of the company.
In terms of sales, Boutique is not selling as many units as forecast, and when comparing like-for-like (LFL) sales from last year (2013), the collection is missing out considerately on revenue opportunities. As you can see, the cumulative revenue for 2014 (Up to week 24) is down by 6% in comparison with 2013.
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source: Boutique sales figures
Analysing 1 weeks sales for the Selfridges (Birmingham) store highlights that when compared with the previous year, in store sales are currently down 45.5%. Furthermore cumulative sales up to week 24 demonstrate that Boutique is 41% down on planned sales throughout all company channels (retail and online)
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One cause for the decline in sales can be related to the product range. Boutique is currently described as “richest fabrics and exclusive prints” (Topshop,2013). However when observing available products online and in store there is no clear differentiation from the mainline stock. Likewise, there is no clear direction and promotion of Boutique on the home page and therefore products lie within mainline collection categories; for example “trousers”.
The Birmingham (Selfridges store manager highlighted that it is the premium basic products that sell the best. (Cannon, 2015) Whilst this is store specific, it illustrates that customers are willing to pay more for quality, and therefore without communicating and emphasising aspects that add value to the stock, the company will be losing potential sales.
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Branding This brings the business plan on to another aspect that is contributing to Boutiques disappointing performance. As consumers end to have a high subjective valuation, markets such as premium fashion are usually equipped with ‘judgement devices’, such as labels and brands, which provide consumers with sets of knowledge’s with which to make consumption judgements (Arvidsson,2006, Karpik, 2010) Yet current labelling on Boutique products contains only a small indication of brand name and it’s associated meanings. It is signified by a small rectangular piece of black card which is attached in addition to the mainline black and white square swing tag. These tags are attached with black plastic Kimble; the same as the mainline collection. The tags have a very inexpensive aesthetic and again do not add value to a product that holds a higher price point. Boutique will also be challenged by other high street brands if changes are not made. There has been a period of change in which retailers are adding value to their products with premium tags and labels, which are enhancing a customers 360 experience
withproducts.Consequently, customers will have heightened expectations. However inside Boutique garments a small rectangular inner label replaces the Topshop sizing labels and this is seemingly differentiating the two productlines.Nevertheless, not many customers look at these labels when shopping and therefore they are not effective until post-purchase. Furthermore Topshop has some items titled “premium” which are labelled using a large card swing tag attached with a ribbon. This aesthetic can create genuine confusion amongst customers as these items appear to have better quality because of this tag and because these products are described as “limited edition pieces in exclusive fabrics”. However these products do not demand a significant increase in price nor are labelled Boutique. This can be frustrating for the customer as without clear communication and consistent branding they are not seeing value for money with Boutique products as items with the same quality and lower cost are easily attainable beyond Topshop.
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boutique swing tag
boutique inner label
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boutique
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merchandising
Visual
merchandising
Currently, Boutique lacks head office guidance regarding the visual merchandising of products that are featured in-store. Model store guidelines simply state that stock is to be “Merchandised to colour, outfit builds and best sellers”(Topshop, 2014). This has resulted in stock being crammed together with little consideration to the space consumers have to shop in. When looking at the retail space as a whole, Boutique does not stand out and there is only a small sign indicating that these items are different to main stock at the Birmingham Selfridges store. Clothes hangers used on boutique are no different to the rest of the store, and this is also adding to the customer’s confusion.
However it is important to note that Boutique previously worked with architect students to create a more conceptual space for product. This demonstrates that given the care and attention it deserves, the brand can look fantastic on its own. Aspects of this previous conceptual space will be taken forward in the consideration of the design of the new EDTN store. Topshop’s diverse range of products and collections are conflicting with each other in regards to their target consumer. By attempting to engage and interact with various groups in one space, the brand is overlooking the valuable expectations consumers have and is instead mixing these with fast fashion products that are not as commercially viable.
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User
experience
Analysing Topshop’s Boutique market positioning in terms of service, shopping and fitting room experience leaves the brand in a vulnerable position. Through mystery shopping in numerous Boutique stocked stores, the writer of this business plan found there to be no differentiatioN of experience when engaging with the products. Additionally, staff members are not knowledgeable about the stock and are leaving customers to find out key information such as design detail, fabric content and how to style the garment for themselves. Whereas when compared to competition
on the high street such as Karen Millen, staff were able to deliver excellent service through extensive product knowledge; a “style file� that documents details about garments and the best styling tips is also passed on to customers. Furthermore when trying items on, the fitting room conditions were cramped and did not provide the customer with adequate time to think about or develop their purchasing decisions. On the other hand, all stores included in this analysis scored above Boutique for their fitting room service.
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Consumers who expect a better service with premium product brands can easily shop elsewhere and benefit from improved fundamental touch points including fitting rooms, service and the shopping space. In Birmingham and in the case of many UK stores, Boutique does stand out as a destination for shoppers. This problem arises because brands who specialise in premium/mid-market products are able to communicate solely this USP. The
problem for boutique is that operating through Topshop does not allow the brand to work to its potential capability and capacity. Therefore the new EDTN would have to go above all the satisfaction scores of other leading retailers in order for the store to become a viable consumer destination. This could be achieved through more conceptual spaces that emphasize the quality and story of each and every product.
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retail spaces are changing
a concept store
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The proliferation of retail and product choice has resulted in a retail culture where acts of shopping have taken on new entertainment and/or experiential dimensions (Lehtonen and Maenpaa, 1997) As a result, Art and Culture are now key footfall drivers for bricks and mortar stores (WGSN).
To innovate in this field, EDTN will be a retail space that is a curated universe of fashion, art, interiors and design. Brands who offer engagement with a strong identity offer exciting brand experiences that consumers would not expect; this creates social fuel and will lead to the creation of a group of loyal customers (brand advocates) who return for repeat purchases.
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“By aligning with contemporary art, fashion affords itself a criticality that it lacks. This criticality can then be acquired, literally, by the buyer, in a knowing gesture of cultural and economic mastery, turning a shopper into a collector� Oakley Smith and Kubler, 2013
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cos shirt installation
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key drivers
“Consumer� Consumer behaviour and changes of taste provide further justification for this proposal. Social streams have allowed luxury designer brands to have exposure to the masses, which have contributed to a growing consumer desire to indulge in such purchases. Furthermore consumers have more money for the first time since prerecession and therefore luxury/premium items seen on social channels are no longer a guilty pleasure; these luxury items are being conspicuously courted and consumed. Younger adult consumers (Millennials) are craving a more refined and elegant product assortment resulting in a shift away from fast fashion to a concentration on quality rather than quantity. An
ethical movement over the past few years has resulted in a demand for supply chain transparency after issues were highlighted regarding working conditions and a product’s provenance. Exposure to social streams is paralysing consumer decision-making and the ability to commit to a brand. Many people lose their social and familial connections, in favour of a self-actualization ideal (Hamburger and Artzi, 2003). As 95% of Millennials have an Instagram account, it has put pressure on this group to appear fashionable (Snape,2015) Many are measuring their self-worth with the amount of likes they receive which in turn is putting pressure on them to purchase items that are deemed desirable and associated with popularity.
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What’s more, 50% of Millennials believe they are aware of other brands because Instagram (Snape, 2015), which has made the product discovery process a lot easier. Brands have concentrated heavily on communicating through these channels and has resulted in a loss of identity as many brands struggle to differentiate themselves online. This clouding has created consumers who are not brand loyal as they can easily move from brand to brand on mobile devices; they are not connecting with the brand on a deep enough emotional or symbolic level. However consumers are developing a strong sense of place and time and while they enjoy technology, there is a desire not to be
overwhelmed. Millennials for example admit that their social media behaviour is actually making many of them anti-social. Shopping continues to be a desirable social activity and thus it is important that brand story experiences are humanized and not over complicated by the introduction of new technologies and platforms. In summary, there is a significant need to allow consumers to reconnect with brands in a physical space in real time, with more focused experiences. The onlinediscoveryplatformhas refined consumers personal tastes (Seibert, 2014) driving consumers to value their clothing decisions more by trading up their purchases to buy mature, aspirational products
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key drivers “Competitive shop analysis and current retailer positioning�
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The consumer change has had a domino affect on the retail market. Competitor re-positioning is causing the gap between fastfashion and high-end fashion to decrease. It is evident that consumer spend on fashion products has risen yet the number of items being purchased is lower; this highlights that
some retailers are already transitioningtoaccommodate refined tastes. For instance, designer/ luxury brands are creating “downward brand extensions” and high street labels are creating “upward brand extensions” in order to target the emerging middle market.
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All
Saints
All Saints have recently re-branded through a logo change that is now much more contemporary; this is a high contrast to the brand previous raw and edgy persona. The symbolic rusty stained paper has been dropped, and all bags, labels and promotional material are more refined looking with a monochrome colour pallet. Speaking to All Saints as to why they have changed, a spokesperson said that “The company has recognised that there is a change in consumer tastes. We have refined our original logo to something that is much more modern. We have done this to get younger consumer in-store
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as the previous aesthetic of the brand created the wrong perceptions. Now the brand looks fresh, new and we’ve definitely noticed a difference“(appendix) However speaking to customers, it was identified that All Saints maybe at risk of loosing their core customer with the change. “I remember the brand being so cool and edgy and it really suited my style. Now I’ve just been in and the clothes just look like any other store and I think it has lost it’s own identity and personality with the new bags. They don’t stand out like All Saints used to” (customer aged 33)
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all saints campaign
whistles campaign
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Whistles Since appointing former Topshop creative director Jane Sheperdon in 2008, Whistles has undergone a huge transformation that has seen their products and personality fit into the emerging middle market at the right time. The products are described as:“A tightly edited wardrobeof classic pieces, the collection focuses on longevity and quality rather than flash-in-the-pan trends.�(Sheperdon, 2013)
However price points of whistles products are too high for many consumers; for example a simple jersey skater dress can cost ÂŁ95. The stores are extremely refined and clean looking, the EDTN team found that was because visual merchandising teams only put sizes 6, 8 and 10 out on the shop floor. This way, merchandising looks very tidy allowing shoppers to browse products easily.
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Topshop
”freedom”
Topshop’s in house jewellery brand has recently had a refined aesthetic. The black plastic cases have made way for premium, grey marbled card and metallic lettering. Furthermore the product selection has transformed to items that provide greater value for money. After a reputation of jewellery that broke easily, consumers began shopping
elsewhere for fast and inexpensive items. Now the product ranges have semi precious stones, sleek geometry metal work and many silver plated chains. The tranistion of the change was very effective, they final phase of exiting the old braning co-insided with Boxing Day sales, in order to protect revenue.
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freedom x weworewhat collection
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mango premium
Mango
premium
Mango offers their customers an upward extension of premium items made with rich fabrics. The reasonable pricing strategy means that Mango’s products are very appealing and attainable for the customer; this is a threat to Topshop Boutique in terms of e-commerce sales. On the other hand, the brand is not from the UK and therefore consumers can lack a connection with
the company as their style can be different to the British consumers’ tastes. As Mango Premium products are not stocked in stores, their complicated logisticoperations can cause problems. Orders can take up to 11 days to arrive and this does not satisfy a group of consumers who require instant gratification.
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H&M Designer collaborations are an example of an upward brand extension and demonstrate that there are middle market-consumers who indulge in designer items. “High-fashion doesn’t have matter of
design to be a price”(H&M)
isabel marant
However these collections are exclusively limited and therefore sell out very quickly which can be very disappointing to many customers. What’s more H&M is not innovating with their own products and is still operating fast, trend driven products and their stores can appear quite messy and un-shoppable.
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retail spaces As aforementioned, retail spaces are changing to create experiences that go above and beyond for customers as they start to expect a two-way, reciprocal relationship.
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warehouse flagship
Warehouse Designing the store around the company core roots of utility clothing, the warehouse flagship evokes an urban industrial aesthetic. Merchandise is tidy and spacious for an enjoyable shopping experience. The company has also recently invested in their social communication and has utilized young
fashion bloggers in order to increase their customer base and influence brand perceptions with their styling influence. However while products and retail spaces have become more refined and contemporary, the company has not echoed this in their branding and therefore looks ‘behind the times’.
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cos retail space
cos COS is a premium “upward brand extension� of H&M that operatesindependently.It’s image is somewhat parallel to that of its parent company but COS attracts a different customer. The store has a Scandinavian, contemporary look and the modern gallery aesthetic allows the products to stand out. Each of these changes to branding and in
store spaces have allowed the companies to channel focus on their identity. However it has been identified that for absolute success retailers need to develop an equilibrium between identity and customer engagement.
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Finery
London
finery campaign
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A start up company that has only recently launched in the UK, with a core value to deliver “design to reinspire”, the brand is solely e-commerce and has had only one pop up shop to date. It’s entry to market has not been very effective, with little marketing or communication the brand has relied on word-ofmouth communication (WOM) As this company grows it would become a direct competitor as their key consumer group is similar to that of EDTN’S. Furthermore their ethos of products to last across seasons would be a similar notion to what EDTN is offering.
However EDTN is in a strong position prior to launch as it will have Topshop style credentials and their stamp on products. Moreover, Finery as a brand will need to create loyal customers however this will require a lot of encouragement and promotion in order for trial purchases to be made. Finally, Finery’s brand identity seems confused as being described as a London brand, the logo has foreign letters and looks a lot more Scandinavian. Without a clear identity to penetrate the market, Finery will struggle to build market share.
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Boutique position to re position
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Overall, Boutique has well-established values yet as the collection continues to grow it cannot simply compete alongside mainline merchandise and similar retailer competition. Without the right branding,retail space or consistent visual merchandising there is no added vale or justification from the customers point of view to pay a higher price point and visit the retail space. Due to significant shifts in both consumer interests and the fashion retail market it is suggested that Topshop should adopt a more sophisticated and elevated approach to design. Undertaking a re-brand of boutique into EDTN will allowTopshop to develop a successful brand which concentrates on refined silhouettes and neutral colour pallets, while
allowing Topshop to move forward producing faster, trend driven products There is sound confidence that this proposal is in line with Topshop’s overall corporate objective to be the worlds fashion authority. Operating EDTN as part of Topshop will increase market share as the brand extension will attract two additional consumers groups to the collection. Topshop’sjourneytobecoming the worlds leading fashion authority will be pushed in the right direction if Boutique is re-branded and re-positioned as there is evidence that there is a large gap in the market. Due to increased competitor activity it is crucial for EDTN to extend in such a manner to appeal to the growing consumer appetite for mass sophistication.
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new consumer tribes EDTN’s repositioning in the market will attract two new customer tribes while maintaining Boutique’s original core customer.
Fashion has experienced democratization whereby simply segmenting customer profiles by age is time-worn and therefore irrelevant. EDTN’s customers are segmented based on their physiographic rather than age, looking at their attitudes towards fashion and style and what they would expect from a retailer in their 360 experience.
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customer 1
The
new
young
This consumer is a Topshop loyalist with an interest in trading up her purchases for the right product. This tribe has a fully integrated digital life and shares her own style online whilst following fashion influencers. Sophistication is the key design priority for this consumer, who is maturing quicker due to their digital connectivity and exposure to premium brands and mature styling. Increased disposable income is allowing this consumer to make investment purchases and is trading up their normal wardrobe pieces. Taste of an aspirational lifestyle through social streams means she now expects retailers to go above and beyond in what they can offer to customers. Being highly influenced by models and high profile bloggers, the
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contemporary
new young contemporary want to indulge in experiences to simulate importance. From EDTN, this consumer will buy lower price items and invest in one off seasonal pieces such as premium trouser bottoms or a leather jacket. This is because this consumer is still conscious about affordability but is willing to spend a high percentage of their income on clothing items whilst trading down other expenses like food: the popularity of discount supermarkets are facilitating this shift. Still interested in fast fashion they will return to Topshop for trend driven piecesas45%saythatlooking fashionable is extremely important to them. Some may conform to the digital dictatorship of items that are socially significant and high in peer approval.
customer 2
The
contexualists
This consumer values quality but still wants stylish clothing. She currently shops at Whistles, Reiss and Cos yet is wanting a retailer than can offer new experiences and spacious merchandising. A business professional, this customer is a highly valued, cash-rich spender and will have the largest average spend out of the three consumer profiles. Her quest for a holistic approach to retail, detached from technology means she appreciates an artful and spaciousretailenvironment. Not fully integrated in digital, this consumer is
reached through a mixture of traditional media with the most popular being print and mail marketing. This customer is not heavily influenced by opinion leaders but wants a five star service in store. 80% of this consumer tribe prefer sales assistance and 41% are willing to pay for a personal shopper(WGSN). Sophisticated product ranges and refined colour palettes will attract an older consumer who’s matured tastes in products and experiences were not being satisfied in the current market.
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customer 3
The
re-masters
This tribe are Topshop Boutiques original customer base and therefore will now be EDTN’s core consumer. They understand boutiques values and love the style of the brand as it currently exists. They will welcome a wider range of products and will fully utilize the opportunity to browse these products in a new space. The re-Masters are confident in their own personal style and their mature tastes have developed well refined wardrobes. They typically live a modern London, busy but chic city lifestyle and require a wardrobe comprising of a mixture of key silhouettes and premium essentials; to create outfits that can take them from day to night with simple yet stylish outfit options. Progressing in their career, luxury is no longer defined by price for the re-masters who expect
an exceptional, grown up shopping experience online and in-store. However as this tribe are digital natives, mobiles phones are engrained within their lives and therefore there is an expectation for brands to create a consistent omnichannel experience. The tribe want their city life of culture echoed in-store and want clean gallery like spaces to allow them to fully concentrate on the products and feel connected to the brands story. This tribe are the new mass market for the masssophistication movement and after identifying how competition are repositioning themselves it is vital for boutique to hold on to their own original customer base before competitors can offer something better in both product and brand experience. The re-masters will become EDTN advocates.
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concept overview EDTN will be a brand that focus’s on innovative yet classic pieces, powerful silhouettes refined with quality textures and fabrics. Garments are designed to be timeless and kept affordable for the modern woman. Colour pallets will be kept minimal with injections of seasonal colour and print, and the customer will know that they are buying quality through strategic branding and labelling.
The brands USP will be its design and supply chain transparency. All items will be sourced and manufactured in the UK and the provenance of garments will be communicated to the customer. Furthermore retail operation and interaction with the consumer will be re-defined; EDTN’S in-store investments will provide spaces that offer added valueto service. Ultimately creating an artful space that is grown up and reflective of the customers’ sophisticated taste.
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the name The name EDTN was developed after breaking down what the brand stands for. Boutique is a word associated with a small space and does not communicate much about the product. The success of Topshop’s edit demonstrates that consumers want to see a refined selection of choice. It also has associations that these selections of products are the elite, and essential for the season.
Boutique’s core roots are similar to this association and edition represents a small but perfectly formed collection. The word is refined down by the removal of vowels to create a word that is simple but to the point. There has been consideration to the use of the name in long-term operations of the brand. EDTN can be diverse in relation to products; EDTN is seen as a term to use in the launch of new collections and ranges.
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An example of this usage is to promote and market the casual ranges:
Leather Jacket EDTN Premium essential EDTN Beauty EDTN The use of the name in this manner allows the products
to feel exclusive and “this collection is our design team’s interpretation of a style and we’ve realised it for you, our customers” Overall, it emphasises the brands tone of voice and versatility in delivering a sleek and consistent image to consumers.
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THE PRODUCTS
EDTN will adopt a refined and minimal colour palette and combine these with fabrics and trimmings of high quality. Upon market research and an analysis of sales figures, it was discovered that premium basics such as vests and t-shirts are the best sellers in store,
indicating that customers are willing to trade-up purchases for high quality fabric and design and invest in wardrobe staples. This collection can be summarised as key items for consumers with a smaller average in store spend: The New Young Contemporary (Consumer Group 1).
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PREMIUM ESSENTIAL Therefore EDTN will have a ‘Premium Essential’ line which will be the core collection of the brand and will be the most consistent cash driver throughout the year. It will feature:
T-shirts and vests in cashmere blends and 100% cotton. High quality 100% cotton pocket button up shirt
These products will be available in core colours(white/black/grey/ navy blue) plus key accent colour from that season. The Spring/summer collections will also have the addition of a classic Breton stripe t-shirt, an item considered as a timeless summer piece. EDTN looks to make their version the must have.
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LEATHER JACKET EDTN aims to establish one key classic leather biker jacket that will me marketed to all consumers as a “must have� item. In addition there will be a summer leather and winter leather that will change aesthetically season-by-season in terms of trimming and detailing.
This will be an investment piece for the customer so great care and attention will be taken when marketing the high quality attributes of this product. This is discussed within the Marketing section of this business plan.
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Further product ranges will include the seasonal collection. These clothes will be designed for cross seasons, using key silhouettes that are refined to produce timeless pieces that build in the customer’s wardrobe.
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EDNT’s clothing line will be available in sizes 6-16 to be consistent with Topshop. Size 4’s will be available online in order to accommodate the emerging Asian consumer who’s sizes are much smaller than standard UK
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NON CLOTHING In addition EDTN will have a non-clothing collection. Accessories will include leather clutch bags and leather tote bags, classic items with lasting quality. The jewellery EDTN will be a refined collection of pieces made with silver-plated metals and semi-precious stones. Jewellery will be supplied by Freedom who currently supply Topshop. Designs will have to be signed off by EDTN design team before production to ensure that they flatter current seasonal products. There will also be a beauty range consisting of face foundations, nail paint and lipsticks. Face foundation will be long-wearing to suit the busy city core consumer whilst maintaining the corporate values of design
transparency.Theseproducts will have the same design and quality principals as the clothing, however will be more trends driven by delivering key colours and shades that compliment a consumers wardrobe whilst helping to build outfits across seasons. These products will be key cash drivers from all consumer tribes as lower price points will appeal to the younger consumer who will want to be socially associated with this exciting brand and offer tempting add on purchases for the consumer group 2 and 3. These items can also act as a brand gateway for new consumer trials, thus emphasising the importance of continuous and extensive quality maintenance
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SOURCING Following the success of Topshop’s “made in Britain” range, all of EDTN’S clothing products will be sourced and manufacturedin the UK. It is crucial for this to be consistent so it can marketed all year round to highlight the brands USP. It will benefit the brand to have locally sourced materials, as this design transparency will add value
to the associated of the product and its quality. EDTN will source jersey fabrics from Leicestershire and woven fabrics including silk from London. This sourcing allows EDTN to tell a story for the consumers about where their products have come from; these soft techniques allows EDTN to have an honest and passionate product tone of voice.
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PRICING STRATEGY The pricing strategy adopted is not too dissimilar from Boutiques current pricing strategy. Thispricepointismaintained as it would have a negative impace on the core consumer group if even more changes were presented to them. EDTN aims to position itself between Topshop’s pricing and competitors such as whistles and COS in order to have a competitive advantage.
Therefore the average price per product range for the first season of trading (spring summer 2016) will be: Leather: £226.70 Denim: £46.70 Premium Essential: £26.83 Seasonal clothing: £66.70 Accessories: £63.35 Non-clothing (beauty): £13.75 These price points are attainable for the younger consumer but elevated enough in order to obtain an association with higher quality.
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Redefining retail norms and traditions
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TOUCHPOINT “A point of interaction involving a specific human need in a specific time and place”
Topshop needs to continually innovate in order to maintain market share in this incredibly fast paced market. There is an opportunity for the company to redefine the basic touch points that are currently overlooked by retailers. EDTN will focus on adding value through key touchpoints as well as “judgement devices” that are crucial indicators of a products worth to a consumer. The brands business model will focus on creating loyal customers; by making
investments in touch points that are usually taken for granted, EDTN will be able to penetrate the mid-market and become a benchmark for customers expectations. This new store will redfine traditional retail norms, which will positively impact it’s entrance to market by suprising customers. By taking a step back from technology, EDTN will ensure that it does not overcomplicate the shopping process. It will instead focus on enhancement and innovation which humanises brand interaction.
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Unlike other market competition, EDTN will give its customers a valuable in store experience by re-inventing three core touch points that focus on enhancement.
edtn’s target Touch points should be appropriate: context and culture Relevant: meeting needs/ functional Meaningful: importance/ purpose Endearing: subtle, playful, delight Connected: available, seamless
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service Personal style assistants will replace sales assistants. These assistants are not interested in pushing sales and will assist customers on any level they need. EDTN understands that their customers have different levels of confidence in their style and therefore interaction with style assistants is personalised for every user. Staff will be knowledgeable about products and their provenance, which gives customers more confidence in their purchases away from social influence.
When the customer is happy with their potential purchases, style assistants continue with their one-toone service and will take them to a pay station. The key to this idea is to ensure that customers do not have to queue, suggesting that their customisreallyappreciated. Till points will have seats to allow the customer to take their time and purchases are packaged into thick card bags to safeguard them. Currently, Topshop is missing out with this vital touch point as many other premium brands invest time and care in packaging which adds value.
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edtn fittingroom design
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fitting rooms This touch point is crucial as this is where the customer has their own time with the product, whilst finally making a decision about purchase. It requires the brand to do everything possible to make this time worthy; soft persuasion is vital in influecing a customersdesiretopurchase. Currently, fitting rooms in Topshop take up little space in the store. They are small confined spaces
which leave many customers feeling so overwhelmed that they want to leave the store as quickly as possible. The fitting rooms at EDTN will be on a mezzanine floor, allowing the area to be light and airy. Fitting rooms are therefore much bigger than normal and will bring a relaxing experience to the customer; any companions can utilis a lounge area, again adding alue through comfort.
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IN STORE SPACE Similary to the fitting room area, EDTN will be an artful environment with a gallery appearance. This will allow the customer (especially the new young contemporary) to find their ideal self that is not influenced through digital dictatorship. To make EDTN’s flagship a desireable destination, the brand will employ renound retail design company “studiotoogood” Under the creative direction of london-based designer
Faye, “toogood” will design an installation that incorporates two floors to showcase products. Mannequins will not be used as they don’t represent customers or inspire them by showing just one outfit option. Instead, products will be suspended, carefully placed to inspire outfit builds, showcase key silhouettes and represent the versatility premium essential range to build a capsule wardrobe.
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elevates store design
EXCLUSIVELY DESIGNED BY STUDIO TOOGOOD
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our leather
we scour the uk for the f inest skins. our classic biker is crafted from natural grain lambskin, dyed with a chrome tanning process for a unique supple feel. it is given a hot drum and wash to achieve the worn aesthetic
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TECHNICAL DETAILING EDTN’s customer is investing their time in the store to make purchases and therefore in turn, the brand will invest its time in enusring transparent design processes which demonstrate to consumers
what they are buying. This will be communicated through technical detailing which highlights key features of the items, whether it be fasteners, trimmings or the special provenance of the fabric.
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receipt Currently, receipts are printed onto very thin paper and lack any branding or engagement. The information is very clinical and only useful to the customer for financial organisation. There is however a call to action for the customer to give feedback online. Moreover, the Topshop receipt is the same as all other Arcadia brands, it is extremely functional and informative. However EDTN will launch a revolutionary new receipt design. The aim of this redesign is to bring the best online, tailored content to the consumer post purchase. Engagement with a brand should not stop after
purchase and giving new functionality to a receipt aims to address this issue. Therefore, EDTN has understood that customer interaction is key to customer retention and loyalty, and a receipt that gives more than just a record of what they have purchased will encourage consumer engagement with fun and functional content. Taking inspiration from adding value from uberluxury designers, the EDTN receipt will be a key piece of communication for the brand and will become a real-time artefact of the customer’s shopping experience
The receipt becomes personalised for the customer, telling them more about what they have bought and how they paid. The receipts will vary and include:
•
Designer drawings of the items they have bought
•
Styling suggestions that include other EDTN products.
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A snapshot of EDTN’S instagram feed, which will add personality to the brand.
•
Fabric information
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visual merchandising Studio Toogood have designed a space for EDTN that includeds spacious fitting rooms, comfortzone seating and generously spaced merchandise. To create an artful experience, there will be an installation in the main atrium of the store that showcases products. •
The premium essential range will be on the ground floor of the store. commercially blocked in colour and style, placed on industrial pipe fixtures. • The back wall of the store will have the main seasonal collection. These will be put into outfit
builds and only have minimum size ranges; items will be hung on copper hangers. • The left side of the store will house nonclothing and beauty; these items will placed on shelved units that are cut into the wall, being hung off pipes in the same style as the premium essential range. • Polaroid’s will be used throughout the store to highlight key products and give the impression that these are must haves items. A more refined detailed plan of the visual merchandising guidelines will be produced close to launch date (see insert for mock up imagery)
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EXCLUSIVELY DESIGNED BY STUDIO TOOGOOD
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EXCLUSIVELY DESIGNED BY STUDIO TOOGOOD
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moodwall Tobringthebrandpersonality to life there will be a mood wall on the ascent to the fitting room level. This will become a real life, physical Instagram feed for brand, assembled using metal grids.
The
mood wall will have: In s p i r a t i o n a l l i f e s t y l e i m a g e r y Muses for the brand Inspiration for the collection Fashion influential’s latest social stream Cuttings of fabrics Promotional material Collate images of the customers who are looking stylish and who will inspire outfit choices.
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branding The logo has been designed to be dynamic and sophisticated. The strong shape allows the logo to be used with out lettering so it is instantly recognisable. The brand is an advocate of quality, refinement a clean cut shape reflects that.
A branded tone of voice will accompany the logo on swing tags, shopping bags to ensure that EDTN has a strong personality. A brand identity guideline will be produced to ensure that there is a consistent image communicated.
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ma e fro Mad hable t on brea cott s 100% hi ey, t jers ized s over cree shap a re ates boxy d laxe uette. o slim silh with r Pair m fo k deni ac . id-b a la me look i dayt
ED
TN p e sr e m se i n tu m ia l s
8 e iz
t h s e t b r r ip e e t t o e n e
labelling
shopping bags
EDTN
st Christophers pl
st Christophers place
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experience As EDTN’s customers will be entering an entirely separate store , this will immediately alter their perceptions currently associated with Topshop. This extension will redefine topshop and to focus on what the company does best, good design. Style assistants, who replace sales assistants, will focus their attention on added service and not pushy sales. They will have a genuine interest in ensuring the customer leaves the store happy. Guidelines will be produced and distributed to new staff before they start, in order for them to understand the brand and most importantly what it stands for and
why it is different to its sister brand Topshop. Furthermore style files will be produced detailing everything the customer will want to know about the products:
What they are made from Fabric sourcing What to wear it with A description Special design features. Inaddition,EDTNunderstands that every customer need is different and will therefore allow customers to shop and browse independently if they wish to do so whilst reassuring them that assistants are on hand to offer expert advice and guidance if required.
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location The first flagship store will be situated at St Christophers place. It is described as “a hidden gem�(Visit London) that is situated just off Londons shoppinghavenOxfordStreet. St is has
Christophers place pedestrianized and a large footfall
from many entrances, including a tube station. Surrounded by trendy bars, it is a unique shopping destination with a mix of retail and eateries. The urban setting has cobbled streets and three-storey town house architecture that is very symbolic of London.
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proposed location of store
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entrance of oxford street
proposed store unit
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The proximate location of competitors is ideal for EDTN and will contribute to football. For instance, opposite is a flagship Whistles store and Kooples is slightly adjacent. Furthermore, from the location diagram it is clear that there are also several luxury retailers in close proximity; which will have a positive affect on consumer perceptions of EDTN and its associations with premium and luxury.
The entrance to St Christopher’s place is a small alley way off Oxford street, signified with a unique purple clock. As it is not in a main shopping area the process of discovering the store will be exciting for the customer and presents great opportunities for marketing and PR strategies. The unit itself has the potential for the inclusion of the desired mezzanine floor.
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st christophers place
FUNDING Arcadia is in a positive cash situation with a current capital expenditure of ÂŁ105.0m, enabling the company to drive new business development. Leasing the property in St Christophers place, and the cost of fitting
out the store will require an initial investment of ÂŁ1,000,000 from Arcadia. EDTN will obtain revenue through sales, online and in store. Financial evaluation and analysis including sales forecasts will be included in the financial section.
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OPERATIONS For day to day running of the store, EDTN will employ:
1 general store manager 3X brand managers 3x full time team leaders 2x visual merchandisers 3x style assistant (16 hour contracts) 6X style assistants (4 hour contract)
For the first year of trading, EDTN will employ 10 people to work at the London head office with the intention to recruit more as the brand grows.
1 creative director 3X buyer and merchandiser 2x designers 1x non clothing buyer
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A typical day rota
There will need to be at least 2 style assistant on the floor to interact with customers and at minimum 1 member of staff to manage payments. Finally to fill the pledge to re-define touch points there should be at least 1 person on fitting room floor to be available to give advice, pick up sizes and manage the appearance of the rooms. Know your stuff (KYS)
Connect with the customer (CWC) and Fashion role model (FRM) Are company incentives run by topshop and will be adopted by EDTN in order for staff to be continually motivated to deliver 100% service. The motivations of these incentives will be written up in a staff training book that will be issued to each new staff member.
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recruitment In order for EDTN to deliver a five star service to the customer, recruitment will initially be internal. This will ensure that staff are already knowledgeable about the company and are passionate about style . EDTN will recruit current employees who are working as personal shoppers in the London area. This is because their approach to customers is more holistic and they are more passionate about styling over sales.
EDTN will also only recruit Topshop employees that are well experienced with at least 400 modules signed of in their development book so that they are well on their way to becoming team leaders. For all levels of staffing, the opportunity of working at EDTN will be something that is aspirational for Topshop employees and is something they can work towards in terms of their development.
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distribution Tight stock management is a priority for Topshop and Arcadia Group, and the supply chain is well audited. EDTN as part of it’s USP will be manufactured in Britain and distributed using Arcadia’s well established logistic process. Once products are manufactured they would be transported to one of the four distribution centres in the UK, where a team of 1500 employees rapidly process stock to send products to the re evant store. This will be simplified as in year 1 EDTN will be operating the flagship
store in London, allowing all stock to be transported through the southern distribution centre, then immediately allocated to St Christopher’s place store. E-commerce orders are critical for international growth and to reach the rest of the UK. Therefore stock will be stored at the same warehouse and processing plant as Topshop. This will allow EDTN, when items are purchased, to-immediately deliver a first class service. Distributing products to the customer next day and to over 100 countries.
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returns Returns will only be permitted by post, there could be an opportunity to allow store returns to Topshop stores however this would a very complicated logistical process. It will be commercially viable to invest in free postage labels and this
will be sufficient for customers satisfaction. However if there are any direct problems with products such as them being faulty then customers can go to their local Topshop for the store to process faulty items as they would for concession items.
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transition period There is a tightrope to be walked between adjusting to this new wave of consumer optimism and not diluting the original brand integrity and risking alienating the existing core customer base. Therefore close management of the transition from Boutique to EDTN is fundamental at all aspects of the organisational structure. It is vital that the collection is not to just suddenly disappear with out any communication as this may cause speculation and confusion amongst customers. To fit in with the proposed marketing
plan, EDTN will utilise Topshop’s existing social media operations to inform and communication that Boutique will be leaving the stores and online.
1.1 Million twitter followers 3.8 million Instagram 4 million Facebook likes There will be a countdown in store situated around the merchandise of boutique to indicate that something is changing in store. Creating a sense of excitement. Once the retail space has opened marketing material will indicate where to find the new exciting collection.
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launch plan EDTN will open it’s store and launch online in March 2016, stocking the SS16 Product ranges. THis launch will be a few weeks after London fashion week, which will create a great opportunity to build up momentum and customer interest during the preceding weeks.
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pre-launch marketing EDTN’s 3 customer profiles all receive information communication through differentmediums,therefore a carefully created strategy is needed so that content is consistent but gets to the customer through different channels. The specific targeting plan outlines how EDTN will reach its customers using Mixed Media. General: Topshop will insert flyers/small posters into bags of shopping for two weeks before launch and two weeks post launch.
Using Topshopsocial media to inform customers that something exciting is going to happen, customers will be advised to follow @EDTN on Instagram. The account will be already loaded with design inspiration, aspirational imagery and teaser pictures. To utilise London Fashion week, a teaser video will be launched on screens around events and published on social media pages. #EDTN Small sharp teaser phrases:
“something is happening at St Christophers place“ “#EDTN landing March 14th
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Specific consumer target marketing Customer 1: EDTN will invite key influential bloggers and opinion leaders to find out about the brand, so they are able to communicate that there is an exciting concept coming. A few days before the launch these opinion leaders will publish their favourite pieces with their own personal style influence and inform their readers about Topshop’s new adventure. Customer 2: Using a similar back stage strategy, EDTN will invite magazine and fashion editors to come and see the new store coming being built. They will also get an exclusive look at the products. The content they create from this will be an advertorial, not directly selling the brand but creating interesting content that the customer will want to follow up to see the complete story.
A week before the launch date EDTN will get coverage in these key publications, with full-page campaign imagery and a follow up story about the editor’s favourite pieces and the overall journey it has taken. Vogue ELLE Look Grazia Customer 3: Topshop’s data collection of original Boutique customers will be used to create personalised mail marketing. These messages will invite customers to the launch and to shop the collection online. Keeping them up to date with follow up emails, the pre-launch marketing will be much more personalised for this consumer group to ensure that they understand the justificatios for a transition to EDTN.
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on the day customer targeting In order to maintain the loyal customer base that Boutique has it is important to market the launch to them. If all three consumer groups visit on opening day it could impact their
perceptions of the brand if they see another group there. Consumer group 2 should be the focus for the launch date , allowing consumer group 1&3 to naturally follow.
LOCATION MARKETING EDTN will Utilize St Christopher’s place entrance from Oxford Street as a marketing tool. This will be done by printing a large logo on the floor with an arrow pointing down the narrow corridor directing customers. Promotional staff will be
used around this entrance to find customers and direct them to the store while talking to them about the store and how exciting all the products are. In store there will be style finders to run a style spotted campaign that will coincide with the launch and beginning of the mood wall.
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POST LAUNCH MARKETING Traditional systems have made way for mobile devices and they are now fundamental in marketing and commerce strategies. Social media has gone past the point of just sharing content and is now being used as a reference tool to informpurchasingdecisions. Brands have utilized social media to successfully dictate consumer responses from marketing using carefully curated narratives. Visual communicators have also
extended to bloggers who are tasked with communicating a more genuine brand message. Conversely, such techniques can sometimes only drive traffic, if a brand advocate is not acquired, then there is no depth of conviction in communication and this results in negative conversion of sales. Bloggers that are the most cohesive become “integrated across all media, traditional and digital, especially for visually driven industries like fashion and beauty� (Wexler, 2012)
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instagram strategy A study by (Goor, 2010) found that retailers use various strategies to communicate different messages in order to generate different calls of action including: SELF EFFICACY SALES RESPONSE RELATIONSHIP STRATEGY EMOTIONS STRATEGY SYMBOLISM STRATEGY Symbolism strategies are applied when it is necessary for a brand to convey a certain identity emphasis towards a brand image rather than a product. For luxury brands it provides space to broadcast the craftsmanship behind their products. For middle/ mass-market brands it presents opportunities to show their consumers their own sense of style A relationship strategy concerns products and is directed at the consumers
morals, values, and personal identity. By portraying a brand personality the consumer can reach their own personal goals, related to their ideal selves. Brands that use a relationship strategy enable a deeper connection to their customers by demonstrating a complex understanding. For Millennials, these brands are perceived to be more personal and friendly, consequently their products feel apart of everyday life and purchase decisions feel more leisurely to make. Inexpensive mass-market brands engage with their consumers on a personal level by using relationship strategies, self-efficacy and sales response to create a hype of activity around the brand, and sales response to produce and impulsive purchasing reaction.
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EDTN will run an instagram page with the aim to target consumer 1 (the new young contemporary) as 95% of this group have an instagram account making it a vital source of information for them (Snape, 20145) EDTN will not use sales responsestrategiesinsocial streams, as it is not in line with the overallstrategy to push sales. Social streams will be used as a tool to communicate and build relationships with the customer allowing them to see the brands personality, insights into the design of products, muses’s style tips, aspirational life style. The aim is to intrigue the customer who will naturally click through to the e-commerce site or visit the store in London. While EDTN knows that many customers now use social media it is aware that there are many users that are taking a “digital detox”. Brand messages can become too much for some of the users and therefore EDTN will have a mixed media approach to marketing to make sure the brand stays real life and approachable.
Furthermore EDTN will run an affiliate programme where operators will receive a small percentage of sales when a customer clicks on one of their links (Bloggers and Publications) and makes a purchase online.
EDTN: Commission Structure All publisher types excluding bloggers: New Customer Sales: 6% Existing Customer Sales: 4% 30 day cookie period Blogger commission structure: New Customer Sales: 8% Existing Customer Sales: 6% 30 day cookie period Building an affiliate programme online will enable EDTN to target consumer 2 who will look at publications online. EDTN will maintain an effective PR relationship with such companies so EDTN can regularly feature in fashion edits. Furthermore 68% of consumer group 2 have purchased online(WGSN, 2014), this means it is important to create a strategy that channels traffic online to the store.
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Developing a Search Engine Optimisation (SEO) strategy will enable EDTN to appear higher up in search engine results when the consumer searches for items. For Example when a consumer searches for “white shirt� the EDTN page will appear as the number one search. Embedding the necessary coding for this strategy will be developed during the site building by the marketing team. As Consumer 3 is becoming increasingly connected, EDTN needs to ensure that the brand is part of online conversations in a positive manner. Word-of-mouth communication from this consumer group will build
them into brand advocates. Consumers pay 2x more attentiontorecommendations from friends than other sources (Mckinsey, 2010) and this is because they value their opinion over communicationfromacompany. Therefore EDTN will run a referral reward scheme for thefirst6monthsoftrading. If customers refer 5 of their friends emails for EDTN’s to then mail and invite them to sign up to EDTN updates, they will receive a gift such as a free lipstick with their next purchase. EDTN will also encourage customer to tag and hashtag# their purchases online with the chance of being reposted and put on the mood wall in store.
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measuring success It is incredibly important to measure success of capital that has been invested in EDTN’s launch and set up. To do this EDTN will use a set of KPI’s (key performance indicators) to measure all aspects
that the brand has set out to achieve, including all marketing activities. These will be analysed daily, weekly, monthly and annually to constantly develop EDTNs strategy and performance.
“The CRM strategy needs to optimise all of the assisted and unassisted processes and ensure all channels are using the optimised processes consistently.” EDTN understands that building lasting relationships with the consumers is vital for success. After identifying three consumers it is apparent that EDTN’s target consumer’s will shop with the company for 20+ years. It is therefore critical to understand how to communicate and continually
evaluate marketing efforts to grow with the consumer as they naturally pass through the three consumer tribes. CRM will contribute to data driven recommendations to assist the planning of EDTN strategy and continual improvements for the short and long term operation of EDTN.
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Sales
per
square
Working out the sales per square foot will guide EDTN on the best place to merchandise stock. The visual merchandising team who will work out and
Return on
foot
analyse figures on a daily basis to commercialise stock positioning, will utilise this sales per square foot data.
investment
Return on investment is important for the board of directors to see how profitable the brand will be. Arcadia will have invested ÂŁ1,000,000 and
(ROI)
EDTN will make a return on investment during 3 and 4; achieving a 100% ROI at the end of year 5.These figures can be seen in the graph above.
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Conversion Conversion rates are an effective analytical tool for analysing how many consumers are converted into customer sales. This can be done both online (using bounce rates) and in store. By working out Footfall
Average
Units
(site visits) vs Number of Transactions it will produce an accurate indication of how many sales could be missed out on. It will also allow EDTN to understand whether consumers need more content online, or in store.
spend
Average customer spend will indicate how much consumers are investing in their visits online and in-store, and how much is still being spent on competitors. EDTN will target this spend
per
rates
per
customer
to be around £60 per head, and if this number drops below £45 the brand can then re-evaluate to find out whether the drop is due to consumer experience or product availability.
transaction
Comparing how many units are being bought compared to average spend will indicate if it is lower price items that are being bought, such as the beauty range, or whether customers are coming to EDTN for investment pieces like
leather jackets. Although it may seem that larger UPT is better for the business, the large range of price points available means that the revenue from sales could be the same if the customer had bought just one pair of premium bottoms.
Sales Sales are fundamental to measure the success of the company and for the first year of trading, to justify the move and investment EDTN will need to excel previous “boutique” sales. After day 1 of the launch EDTN will be able to build a database of sales figures that allow plans and targets to be set. It will enable
EDTN to identify peaks and troughs throughout the year. This will provide an understanding about the consumers lifestyle and allow more cash to be invested in marketing with declining periods. Furthermore,thiswillensure that there is sufficient stock and staff available for when sales peak.
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service EDTN is adding value to every interaction and touch point with the customer to drive revenue from service. However,
mystery For more qualitative evaluation, mystery shoppers will be used to shop in-store at different times throughout the year (busy and quiet) and create situations to analyse how staff react. Their aim is to see how
measuring the success of this investment is less quantifiable and therefore requires different evaluation.
shopper much time is spent with the customer and the level of service they deliver. In busy times, it can be analysed whether targets set for customer service is not achievable with the number of staffed rotared.
productivity Analysing the number of hours worked in relation to sales will indicate how to manage payroll.
As EDTN has flexible hour staff, identifying when they are most needed will allow rota management to be more profitable.
customer The proliferation of mobiles devices has allowed customers to interact and contact a brand easier than ever anticipated. One in four customers expect a reply from social media (WGSN) within one hour, therefore a dedicated team will respond to any EDTN
target
care
customers’ queries at the Leeds customercare centre. Targets will be set to keep negative comments to an absolute minimum. Overall analysing feedback will indicate the success of redefining the basic retail touch points.
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customer This would include working out the early repeat rate(number of customers who return) during the first 6 months of trading. However, due to data collection this will only be able to be done for online sales. On the other hand, as a large percentage of customers can only shop online it will be a good
retention indicator whether the online experience is satisfying enough for the consumer. For in-store, a feature on the receipt can be utilised as a tool to invite the customer back. This can be done by adding promotions than can be cut of the receipt can be counted when redeemed by the customer.
quality To ensure that only the best products are available to the customer, data will be collected to record the amount of items that are
returned due to quality. This can then be reported back to buyers and design team to improve the supply chain.
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FINANCIALS
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Basing break even on the average price of the premium essential range, EDTN will break even at 9,383 t-shirts. Thus generating a profit at 9384 units
BREAKEVEN
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In
store
year 1 sales forecast
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online
year 1 sales forecast
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The company will expect a dip in sales in the months that follow Christmas (January, February, March) as it is forecasted that consumers will not have much cash to spend. This means that EDTN will require
EDTN’s sales will peak over the winter periods (November and December), down to the Christmas celebrations which generally sees customer spending a lot more.
Over year 1 of trading it is forecasted that EDTN’s in store sales will total £857,951.00. Online sales are expected to be 3.1x more in store at £2,725,870.00. Overall, EDTN year 1 forecast is a total gross sales of £3,585,501.00.
investment in marketing around this period to push the new ss17 collection that will be making it’s way in store and online.
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EDTN is operating a typical average mark up of 60% on products. In the first year of trading, the total cost of sales will be ÂŁ1,530,171.10
year 1 cost of sales
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The last month of the trading year (February) has forecasted a loss of -ÂŁ19,880.16, however this is down to the forecasting technique of the profit and loss. Marketing and advertising has been calculated as a fixed cost, however it
is expected that spend on external advertising in the month will not be a fixed cost. In the months following Christmas, EDTN will be running internal marketing through mailing and social media, which will be an internal cost of wages to the staff at head office.
year 1profit and loss
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Furthermoreaftercalculatingthecash-flowforthefirstyear of trading, EDTN is in a very strong position of ÂŁ351,350.30 after maintaining a positive cash sum throughout the year.
year 1cash flow forecast
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5 year growth
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5 year net profit and gross profit
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EDTN will experience a steady growth with net profit percentage while maintaining a gross profit margin of 60% that is typical for the retail industry.
However as EDTN grows to be in a position to increase stock purchases the company will be able to benefit from economies of scales. If cost per item decreases EDTN will realize a gross profit margin of up to 75%.
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5 year profit and loss
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5 year cashflow
Analysis of forecasted sales figures indicate that the brand will be in a strong and independent cash position in year 3. Projected working capital at the end of years 3,4 and 5 present the company in a very strong cash position. As at the end of year 5, EDTN will have a cash sum of £3,600,000. This postulates that the company will have sufficient working capital to operate and invest independently without liabilities to parent company Topshop/ Topman and the Arcadia Group. This will allow for EDTN to invest in the start up of a new store in Manchester at the end of year 3 and a Birmingham store at the end of year 4. Taking the planned growth into account and investing £1,000,000 per store at the end of year 3 and 4 would still
keep EDTN in a strong cash position with forecasted sales and expenditure. For instance the closing balance for the end of year 4 would instead be £1,436,241.48 and with a further £1,000,000 investment through year 5 would result in a closing cash balance of £1,5697,70.14. Furthermore if Arcadia wishes to recoup the initial investment of £1,000,00 at the point of ROI, planned growth for 2 new stores will be able to happen at the end of year 4 and 5 in its place. It is however strongly advised that his does not happen as to allow EDTN to continue growing during the early years of trading. As a result, EDTN will be able to continue its investment and targeting of the two new consumer profiles during this period of consumer behaviour change.
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looking ahead By year 5 EDTN will have 3 stores in the UK.In years 6-10 it is projected that EDTN will have 7 more stores, bringing the total to 10. These will not be similar in size and smaller stores will mainly stock the premium essential collection and proportion of the seasonal stock. EDTN will also trial a new innovative retail process, by using physical spaces that function as showrooms. Products on show will have links to online stocks and would deliver better productivity as the process is streamlined;
minimizing stock per square foot, enabling stores to operate in smaller units. EDTN will have developed a strong product range and can begin to introduce designer collaborations that bring unique prints to the store. In the best-case cash position, EDTN will expand using Arcadia’s franchise system to have a store in Paris and New York. EDTN will host several PR events in Paris, New York, Milan to aid International awareness and build brand advocates on a global scale.
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references SOURCES OF INFORMATION
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Mendola, E. (2014) Blogging in the Fashion Industry:A Descriptive Study of the Use of the Two-Step Flow Communications Theory By Professional and Citizen Bloggers to Become Opinion Leaders. Bos. Polytechnic State University, Faculty of the Journalism Department California Oakley Smith, M. & Kubler, A. 2013, Art/fashion in the 21st century, Thames & Hudson, London. Snape,A.(2015)digitaldictatorship:towhatextentis millennial’s purchasing decisions, fashion adoption and brand perceptions influenced by social media channels.BachelorThesis.BirminghamCityUniversity, Department of Fashion, Textiles and 3 Design. Soneya, F. (2014) Comment: Instagram is the innovator for social retail, Retail Week, [Online] Statisa (2014) Statistics and facts on Internet Usage among Generation X (http:// www.statista.com/topics/2014/generationx-internet-usage/) [accessed 01/03/15] Wexler, J. (2012) How to Engage the Right Fashion Bloggers for your Brand (and Amplify your Content Marketing). Eight Eighteen Strategies . http://jedwexler.tumblr.com/ post/44564865669/how-to-engage-the-right-fashionbloggers-foryour-brand [accessed 08/01/14] WGSN. 10
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Appendicies ARCADIA 2014 FINANCIAL RESULTS
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TOPSHOP BOUTIQUE SELFRIDGES MANAGER INTERVIEW
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PROPOSED UNIT COMMERCIAL LET
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ALL SAINTS MANAGER INTERVIEW
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ALL SAINTS CUSTOMER INTERVIEW
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topshop boutique current store guidelines
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