JD SPORTS. AIMS & OBJECTIVES.
Despite the current crippling financial climate that the world faces the US retail market is still valued at more than $150billion (market research 2009: online). Whilst the US athletics apparel market, with brands like Nike and Adidas, is the strongest accounting for 41% of global sportswear sales. (research and markets 2009: online). This report recognises the potential for success that the US retail market still offers. Thus its purpose is to determine how JD Sports Fashion PLC can successfully conquer the competitive US retail market. The report intends to further show how the JD Sports brand will also form a collaboration linking to a creative industry. However the main objective is to ultimately strengthen the brand image and identity in order to insure that JD Sports can appeal to the right US target consumer.
METHODOLOGY. The collecting of research has been carried out by means of primary and secondary research. The primary research includes: questionnaires, interviews and focus groups. The secondary sources of research comprises of articles, journals, television and scouring for facts and opinions on blogs, social networking sites and the like. The majority of research, which demanded individual and or live feedback, were targeted at the 15-30 year olds of both genders. These were individuals that belong to similar or the same ‘social tribes’ and that also share the same or similar cultural beliefs. The research was conducted in this way to reflect the target market that JD Sports appeals to. The analysis also consists of the SWOT and PEST, a Pen-portrait of a select consumer, a consumer moodboard and perceptual mapping.
JD SPORTS. RATIONALE.
The reasoning behind choosing the JD Sports brand lies within its brand image. JD Sports is clearly a brand that prides itself on its youthful and sporty aesthetic which is something that can be easily translated into the US market. Furthermore the US athletic apparel market is predicted to be $7.20bn in 2012. (juststyle 2009: online). To further prove its popularity there is also a strong culture of ‘streetwear’ (karmaloop 2009: online) amongst teenagers and young adults. This is a term that defines the attire of a certain social tribe, that incorporates sportswear, such as jogging bottoms, trainers, jerseys et-
cetera into their everyday style, taking inspiration from hip-hop and skateboarding cultures. (ezinearticles 2009: online). The ‘streetwear’ style is also closely linked to 15-30 year olds in urban and inner-city environments where the hip-hop and skateboarding cultures thrive. Therefore the obvious place to launch the JD Sports brand would be in America’s west coast in New York city, where the hip-hop style is a more dominant trend, with the hope of expanding to the East coast area of California, where the skateboarding culture is more influential. Thus ultimately appealing to both cultures that share similar tastes in clothes and focusing on the potential longevity for the brand in the US market.
JD SPORTS. SWOT ANALYSIS. The SWOT analysis is a key tool to help determine the strengths, weaknesses, opportunities and threats of JD Sport Fashion PLC. This will also be used to compare JD Sports against one of its main rivals, Footlocker.
JD SPORT. STRENGTHS.
stock.
• Has on-street presence in the UK and Ireland. WEAKNESSES. • Only currently operates in the UK • leading UK retailer of fashionable and Ireland. sports and casual wear. •
E-commerce site.
• Caters for males, females and junior fashion. •
Large variety of brand names in
OPPURTUNITIES.
• Expanding the brand to other countries. •
More aggressive marketing.
• try.
Collaborating with a creative indus-
THREATS.
• Big name competitors such as Footlocker. •
Changing consumer tastes.
•
Tax increases.
FOOTLOCKER. STRENGTHS. • Leading retailer of athletic footwear and apparel worldwide. • Has a lot of street presence e.g. 3,800 stores in 21 countries.
• Focus group members said that it could be seen as ‘too mainstream.’
OPPURTUNITIES.
• Future expansion hoped for the Middle East.
THREATS.
• Appeals to different consumers with • Potential sportswear competitors sister brands such as: Foot Locker, Footacsuch as JD Sports tion, Lady Foot Locker, Kids Foot Locker and Champs Sports. • Strong use of media to promote the brand and brand image e.g. television, magazine, newspaper, on-line, in-store signage and exclusive VIP club membership e-mails •
E-commerce site.
WEAKNESSES.
• Not all products feature on the ecommerce site.
The information laid out in the SWOT analysis for JD Sports and its main potential competitor Footlocker has confirmed the need for expansion. JD Sports is considered the leading fashionable sportswear retailer in the UK, reporting £670,855 in revenue with a gross profit of 49.3% and a 13% increase. (jdsports 2009: online). Whilst Footlocker is considered the leading fashionable sportswear retailer in the world reporting $5,437million in sales. (footlocker 2009: online). It is believed that Footlockers success lies in its combination of heavy marketing and a proliferation of international street presence. Therefore by taping into the US market and thus increasing the amount of JD Sports stores they can directly compete with Footlocker. The Global Market Review of Active Sportswear and Athletic Footwear – Forecasts to 2014 stated that growth in the sports retail sector is very much marketing driven. (juststyle 2009: online). Therefore, JD Sports may also benefit from heavier marketing, like Footlocker; an opportunity that can be realized through a launch event.
JD SPORTS. PEST ANALYSIS. The PEST is a vital form of analysis that aims to observe various factors within the political, economical, social and technological arenas that can affect sales in regards to a brand. Therefore the use here is to explore said factors and observe what they could mean for the JD Sports Fashion PLC.
POLITICAL.
• The minority mindset of believing it is possible to spend ourselves out of the recession. •
Fair trade.
TECHNOLOGICAL. •
E-commerce.
• Possibility of changes to trade restric- • New advances in sportswear that the tions. more serious/athletic consumer would seek out.
ECONOMICAL.
• Disposable income amongst US consumers has decreased in relation to the international credit crunch.
SOCIAL.
• JD Sports can benefit from the rise of ‘streetwear’ in everyday attire amongst the 14-25 year olds.
The PEST analysis has revealed factors that JD sports can benefit from or that can hinder their success. The biggest hindrance is the global credit crunch. Many industry professionals, and much of the world including Muriel Zingraff, the Senior Advisor for retail, luxury goods and fashion at Oaktree Capital Management agree that “consumers have less cash and will probably continue to spend less as the downturn deepens” (Drapers: April 4 2009). However this view is counteracted by the mindset and beliefs of the JD Sports’ target audience. They are mainly aged between 15-30 years old who see the merging of fashion and function in sports apparel as an investment worth making. According to some focus group members, sportswear is considered a symbol that can help determine and define your status in the social hierarchy. Nike, Adidas and Puma symbolize a sense of cool, much like Asia’s relationship with luxury brands such as Louis Vuitton, Prada and Gucci. Cadha, R et al Husband, P (2006). When the focus group members were questioned why, it was found that it related to the rise of street fashion in everyday attire, which is a social impact. A 19 year old American male studying in the UK said: ‘I want to change up my look, it’s important my sneak-
ers are fresh, clean. It’s about being “I want my street but there’s a clothes to tell new pristine thing going on! I want my people that I’ve clothes to tell peo- got it.” ple that I’ve got ‘it’’. Furthermore, they tend to be people who have no mortgage or low mortgages and have fewer financial responsibilities, as expressed by the JD Sport Executive chairman, Peter Cowgill. (bnet 2009: online). Therefore, they are somewhat immune to the credit crunch, although it may slightly curve the spending habits of a select few.
JD SPORTS. CONSUMER BEHAVIOUR.
In order for JD Sports to make a successful online). This is emphasised when we comtransition from the UK to the US it is para- pare, for example, the behaviour of shop mount that the brand is translated well. floor employees in the UK and the US in the Footlocker brand, then these difference beThe success lies in the brand’s ability to come highly noticeable. In the Times Square maintain a strong brand image and identity Footlocker store, the sales people immethat is recognisable in both the UK and US but still communicates individually to both, as different things may attract or repel each. For example, in the UK there is a culture between the consumer and the seller that demands a distance to be kept. Whilst being polite is an obvious need by the sales people, in general, UK consumers appreciate their space and do not want to be ‘bombarded with sales assistants trying to help’ as stated by an interviewee. However the Genesys’ Industry Strategy Guide informed us that US diately greet you as you enter with polite consumers have greater expectations: “48% smiles. They also pay keen attention to you of US consumers said costumer service was within the store, whilst browsing they ask if the biggest factor on determining whether you need help with any purchases or if you they stay loyal to a brand”.(genesyslab 2009: wish to try anything on. The sales assistants
by the door are solely there to also tell you to ‘have a nice day’ as you leave. Therefore this is a cultural difference certainly to be considered when JD Sports enters the US. The US sports apparel market may account for 41% of turnover but the European market is responsible for 38%. (bnet 2009: online) These findings demonstrate that the sports apparel market is strong and in demand by the consumer in both the US and Europe, including the UK. However the US holds a slightly greater interest in sportswear, making a strong foundation for success. Another factor within consumer behaviour lies in the spending habits of each consumer. The current downturn in the economic climate means that consumer’s are spending less as their disposable income shrinks in size. (Mintel 2009: online). This behaviour has affected JD Sports that has a reported
“I hate it when I’m bombarded with sales assistants ‘trying’ to help me.”
market capital of £107.06m in January 2009 (Drapers: January 31 2009) in comparison to £161.8m in January 2007. (Drapers: January 20 2007) According to Mintel this is a result of the uncertainty the consumer is experiencing in the present times. However they also predict that this uncertainty has subsided in the US, following the recent presidential elections that has sparked ‘hope and optimism’ in the American people. (Mintel 2009: online). However despite this, it is still evident that the JD Sports brand needs to identify key trends in consumer behaviour that are a result of the present climate and appeal to the consumer. For example, it is predicted that consumers will be leaning towards brands that offer them a distraction or detect their consumer need to enjoy themselves and go further to appeal to their individual styles and lifestyles. (Mintel 2009: online). This is a factor that JD Sports can take advantage of by maximising the appeal, that they already have in the UK market, to consumers who mix music and sport into their image into the US market.
“What credit crunch? I’m as penniless as I’ve always been and still spending…This shirt is Ed Hardy.”
JD SPORTS. CONSUMER SEGMENTATION. The typical consumer of JD Sports Fashion is between 15-30 years old. (bnet 2009: online) As the consumer consists of a younger audience they generally have low financial responsibility, which means they may have more money to spend on their appearance and luxuries, including fashionable clothes and shoes. The target consumer is generally in the so-
cio-economic group of C1 and above. However although they may belong to households that fall within this group, the younger sector are generally dependent on parents or guardians for their disposable income. There is a key aspect of the JD Sports Fashion consumer that should not be overlooked; “They are brand savvy and they are keen to keep up with key trends.” (bnet 2009: online). This type of consumer who is looking for that bridge between function and fashion is considered a modern phenomenon. The young sector, especially may be apart of a peer system where their tastes may be influenced. However, each consumer traditionally shares a craving to be ‘cool’ and ‘on-trend’ whether it’s with music, fashion or the latest technology.
PEN-PORTRAIT. Ollie wakes at 11am for his day at college.
He rushes to get ready but carefully selects which brightly coloured hoody and brand new trainers he should put on to compliment the rest of his outfit. He leaves the high-rise apartment block in New York’s west side, still eating a slice of heavily buttered toast that his mum prepared. His journey to college includes him listening to the latest hiphop song on a lime green iPod nano as he is waiting for a new iPhone to replace the one he recently lost. The day consists of a mixture of socialising with peers, discussing the newest trends and highly stimulating class environments that merge media studies and all required curricular subjects such as English and Mathematics. When he returns home he retires to his room to check various social networking sites, play on his Sony PSP and dabbles in music production until dinner which, he eats off his lap in front of the television, before falling asleep watching HBO.
CONSUMER MOODBOARD.
JD SPORTS. PERCEPTUAL MAP.
High cost Ed Hardy Bape BBCIcecream
Nike Adidas
Function
Fashion Kiser NY Karmaloop.com Footlocker
JD Sports
Columbia Outlet Low cost
The perceptual map illustrates that more sportswear brands are focusing on the fashion element within their product and for many, that is their main and primary focus. This is in order to appeal to the more fashionconscious consumer who takes pride in their individual style. This proliferation of fashion in sportswear has created an industry where fashion is influenced by sportswear instead of sportswear being influenced by fashion. This has led to the creation of high-market brands such as Bathing Ape, Ed Hardy and Billionaire Boys Club Ice-cream. Each of these brands are mostly heavily influenced by the music industry, so much so that Billionaire Boys Club Icecream is co-owned by A-list music artist Pharell Williams. Therefore they represent and attract a youngminded and aspirational type of consumer.
JD SPORTS.
FLAGSHIP IN-STORE ENVIRONMENT. The in-store environment will not differenti- image and identity is recognisable in both which, has been considered to have adoptate much from the current UK stores. This cultures. However, the US stores will take ed a more subtle take on the ‘blingmalism’ is to enable that the JD Sport Fashion brand on the image of the most recent UK stores (Futurelab online: 2009) design trend that reflects a new era of urban glamour that would appeal to the potential JD Sport target consumer. This will be implemented through the use of high gloss surfaces and simplicity that will resonate throughout the store. For example, the exterior of the store will have a high gloss black finish with only the ‘JD’ logo in white for further simplicity and emphasis. This design influence can also be seen in stores like John Rocha in Dover Street, New York and All Capital Office store by i29 in the Netherlands, Amsterdam. (wallpaper 2009: online). The in-store environment itself will have a backdrop colour of brilliant white, reminiscent of the current UK stores, which has helped JD Sport Fashion to make the transition to a higher market level aesthetic.
tion to service levels and interaction should be high. This is the ultimate difference from UK stores and US stores. This recognises the different needs of UK and US consumers. Therefore sales assistants by the entrance will greet new consumers when they enter and bid them a good day when they leave.
ees are encouraged to wear extravagant makeup or makeup that enhances their own style, or in ED Hardy, where employees are allowed to show off their tattoos and unique aspects of their style that are solely theirs. This is a tool used to gain the respect from the consumer relating to the employees advice, as consumers are more likely to apTo further enhance the consumer experi- preciate the views of someone who already ence and emphasise the fashionable lifestyle seems fashionably aware. of JD Sports it is imperative that employees are encouraged to inject a sense of individual style that compliments their collective uniformity. This attitude towards employee uniform has been successfully adopted in In order to appeal to the music-lovers that is stores like MAC Cosmetics, where employthe JD Sports Fashion consumer LCD televisions will be fitted throughout the store displaying the latest music videos, covering a multitude of the coolest music genres. However a stronger emphasis will focus on the hip-hop genre to echo the majority of New York youth fashion. The environment should have an uplifting atmosphere from the moment of entry. The music and the high energy that emerges from heavy beats should dominate the space yet not distract from the ability for customers to feel comfortable within the retail space. To maintain this balance, atten-
JD SPORTS. COMMUNICATION STRATEGY. It is imperative to implement a relevant and engaging communication strategy to ensure a stable and productive launch into the US market. Therefore it is best felt to relate the communication strategy to aspects of the JD Sport Fashion consumer lifestyles and tastes. The music industry, for example, is a highly successful one that boasts a combined revenue of $15bn a year and includes about 2,600 companies (marketresearch 2009: online). The majority of this industry targets consumers that share a JD Sport Fashion consumer attitude and style. They are often young people who are keen and open to new genres of music, which is reflected in their dress. This necessitated a collaboration with JD Sports and new hiphop artist Asher Roth, who was proved to be ‘heavily hyped upon his arrival into the mainstream rap scene in 2008’ (mtv 2009: online) and is still a popular and new music choice amongst the youth.
The ‘See it. Hear it. Own it. Launch campaign’ focuses on the fashion, music and lifestyle conscious ‘aspirational’ consumer that UK JD Sports Fashion Executive chairman described. (bnet 2009: online). The collaboration will be apart of the launch campaign that consists of a secret gig to
raise hysteria and in turn promote the JD Sports brand. Street-wear and Asher Roth fans alike will be able to go to the US JD Sports website and give their details, particularly their cell phone number, home address and email address, to enter to get a chance to go to the gig. Fans may apply in groups no bigger than 4 members. 400 places will be given out to go to the secret gig. All chosen applicants will be told to keep the date of August 22nd 2009 free. It will be explained that on this date they will expect a text message and email detailing the location of the gig, two hours before it begins. This is to ensure the gig stays secret. Whilst the gig takes place there will be other activities happening to compliment the event. However this part will be open to the public. As the gig will take place in one of the popular basketball courts in New York’s West side, special areas will be set up for B-boy and basketball competitions with the chance to win JD Sport Fashion
merchandise. All of the guests that were lucky enough to gain entry to the court where Asher Roth performs will get a free drawstring bag containing goodies upon arrival, which will brandish the JD Sport logo. The bag will contain various memorabilia including an ‘I heart JD’ t-shirt, modelled
on the famous ‘I heart NY’ t-shirt. Therefore the ‘see it. Hear it. Own it.’ Launch campaign refers to the merging of activity, music and fashion that creates and defines a lifestyle of a certain individual. This communication strategy goes to great lengths to instil a sense of community with
the street-wear fanatics. It also has the capacity to be altered to coincide with a future launch into the East coast region of the US. Furthermore it will also promote the JD Sports brand name and strengthen its link with music and other aspects of its consumer’s lives.
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REFERENCES.
BOOKS
Cadha, R et al Husband, P. The Cult of The Luxury Brand: Inside Asia’s Love Affair with Luxury. London Boston: Nicholas Brealey International. INTERNET Bnet.com Ezinearticles Footlocker.com Futurelab.org.uk Genesyslab.com Jdsports.co.uk Juststyle.com Karmaloop.com Marketresearch.com Mintel.com Mtv.com Researchandmarkets.com Wallpaper.com ARTICLES & JOURNALS 2009. ‘Drapers’ (4 April 2009) 2009. ‘Drapers’ (31 Jan 2009) 2007 ‘Drapers’ (20 Jan 2009) ‘Wallpaper’
ILLUSTRATIONS Fig 1 Nike trainer from jdsports.co.uk Fig 2 Female model sitting down from jdsports.co.uk Fig 3 Adidas originals red hoody from jdsports.co.uk Fig 4 1st male in grey striped hoody by myself (Angel Nicholls) Fig 5 Smiling Footlocker employee from flickr.com Fig 6 Girl with yellow bag by myself (Angel Nicholls) Fig 7 2nd male with grey jacket and black graffiti t-shirt by myself (Angel Nicholls) Fig 8 Boy sat in chair with skateboard at feet (unknown) Fig 9 Comsumer Moodboard created by myself (Angel Nicholls) Fig 10 Nike logo from nike.com Fig 11 Bathing Ape logo from Bape.com Fig 12 Karmaloop logo from karmaloop.com Fig 13 JD Sports logo from jdsports.co.uk Fig 14 Footlocker logo from footlocker.com Fig 15 Pharrell Williams models for own-label BBCI from billionaire boys club ice-cream Fig 16 BBCI astronaut from BBCI Fig 17 BBCI store from bbcicecream.com Fig 18 Black and white photo of JD Sports store front by Jones, available at flickr.com Fig 19 All Capital Office in Amsterdam from mocoloco.com Fig 20 Mac cosmetics employee by Seenya Rita available at 100strangers.com Fig 21 Asher Roth album cover from threeonefour.files.wordpress. com Fig 22 Asher Roth in ‘I heart JD’ T-shirt created by myself (Angel Nicholls) Fig 23 Community basketball court in New York from noimpactman.typepad.com
BIBLIOGRAPHY.
‘Wallpaper’ (May 2009) ‘You Magazine’
BOOKS
INTERNET
Baines, P et al Fill, C et al Page, K. 2008. Marketing. New York: Oxford University Press.
Asos.com asseenfit.com Bape.com channel4.com columbia.com contactmusic.com dailymail.co.uk ezinearticles.com findarticles.com faspak.eu footlocker-inc.com footlocker.com getthelabel.com iamurban.co.uk jdsports.co.uk just-style.com just-style.com marketresearch.com margin.tv mtv.com myspace.com nyse.com ontheinside.info plunkettresearch.com presentation.jkut.com
Belk, R W. ed. 2006. Research in Consumer Behaviour, Volume 10. Elesvier ltd. Jai Press. Cadha, R et al Husband, P. The Cult of The Luxury Brand: Inside Asia’s Love Affair with Luxury. London Boston: Nicholas Brealey International. Watson, L. 2008 Vogue Fashion: 100 YearsOf Style By Decade And Designer, In Association with Vogue. China: Condé Nast Publications Limited. Jones, T et al Rushton, S. 2005. Fashion Now 2. China: Tashen. JOURNALS ‘Anglomania Magazine’ (March 2009) ‘Anglomania Magazine’ (May 2009) ‘Anglomania Magazine’ (June 2009) ‘Drapers’ ‘Fabulous Magazine’ ‘Love’ (February 2009) ‘Tar Magazine’ (Spring 2009)
reportbuyer.com snapdata.com streetwear-websites.com streetwear-websites.com streetwearunited.com thisisleicestershire.co.uk urbantailor.com
APPENDIX. SAMPLE QUESTIONNAIRE Name: Age: Gender: Do you like streetwear (and why/why not)? Describe your individual style: Does music affect your clothing choices? Do your peers affect your tastes (why/why not)? On a scale on 1-5 (1 being the least, 5 the most) how active would you say you are on a day to day basis? What activities/hoobies do you take part in if any? Are you familar with Asher Roth? Are you familar with JD Sports? How would you say is JD Sports top competitor in the sportswear apparel market? Describe JD Sports in 3 words: How often do you shop in JD Sports, if at all: Do you think JD Sports could be successful in the US (why/why not)?
SAMPLE INTERVIEWEE
HAT- Topman Cardigan- Forever 21 Shoes- Converse All Star Jeans- Forever 21 Top- Camden Market Would you ever shop in JD Sports or Footlocker? “I actually love trainers so I do shop in those stores occassionally but generally I try to spend as little as possible on clothes so like generally trainers are a bit to exspensive for me. But that’s why I buy Converse, cool and only £30!”
SAMPLE OF NOTABLE BLOGS