FM Retail Improvement Report

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FASHION MANAGEMENT

Retail Improvement Report N0591147 + N0555489 Word count: 3294 Submission Date: 23/03/18

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Exec Summary & Other Stories (further referred as AOS) is a womenswear clothing brand that falls within the H&M Group brand portfolio.

This report addresses how AOS can increase their market share whilst maintaining their sustainable competitive advantage within the retail industry by expanding their womenswear brand into the menswear market.

Mintel(2018 forecasts that men)swear market will grow by 11% between 2018 and 2022 to reach £17.1 billion. Key findings also state that while the menswear sector still only accounts for 27% of the total clothing market, it is forecasted to outperform the womenswear market within the next three years (Mintel, 2017).

This expansion into menswear will allow AOS to gain a new audience base while maintaining their existing market share. Fashion has become a growing interest for male consumers as they are becoming more conscious of what they wear, and keep in trend (Sebra, 2016).

Many companies have noticed this dominant market and started launching menswear into their previously womens-only collections.

This can be seen through the launch of BoohooMAN, Mennace by Missguided and Stella McCartney, that debuted her first men’s ranges in the last few years(Sebra, 2016; Jahsan, 2017).

As a part of the H&M Group, AOS have a greater competitive advantage over other retailers looking to expand. Using the organic growth of the parent company, financial backing, resources, infrastructure and employees can all assist towards the launch of AOS men.

The AOS menswear collection will be launched both online and within selected physical stores for SS19. The first stores to modify their retail space to carry the menswear line will be Stockholm, Paris and LA in parallel with the launch of the digital presence.

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Contents List of Figures

7

List of Tables

10

1. Introduction

13

2. Company Analysis

15

2.1 Company Overview

15

2.2 Marketing Mix Analysis

17

2.3 Market positioning

22

2.4 Competitor Analysis

23

2.5 Financial Analysis

24

3. Situational Analysis

29

3.1 External: Porter’s Five Forces

30

3.2 Internal: SWOT and TOWS Analysis

31

4.0 Market Analysis

34

4.1 Market Overview

34

4.2 Customer Analysis

36

4.3 Menswear SS19: The collection

38

5.0 Growth Strategy

43

5.1 Growth vectors and Ansoff matrix

44

5.2 Business Improvement

44

5.3 Core competencies

44

5.4 Strategy type

44

5.5 Porter’s Generic Strategies

45

6.0 Feasibility and Implementation Plan

47

6.1 SAFe Model

47

6.2 McKinsey Growth Model- Three Horizons

48

7.0 Conclusion

50

8.0 References

52

9.0 Bibliography

56

10. Appendices

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I List of Figures

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List of Figures FIG

TITLE

REFERENCES

PAGE

1,1

& OTHER STORIES IN STOCKHOLM

(AUTHOR’S OWN, 2018)

14

2,1

& OTHER STORIES IN STOCKHOLM

(AUTHOR’S OWN, 2018)

16

2,2

H&M’S VISION AND STRATEGY

H&M. (2018). VISION AND STRATEGY. AVAILABLE: HTTP:// ABOUT.HM.COM/EN/SUSTAINABILITY/VISION-AND-STRATEGY.HTML. LAST ACCESSED 8TH MAR 2018.

17

2,3

AOS INSTORE RECYCLING

(AUTHOR’S OWN, 2018)

17

2,4

& OTHER STORIES

STORIES.COM. (2018). AVAILABLE: HTTPS://WWW.STORIES.COM/ GB/. LAST ACCESSED 2ND MAR 2018.

18

2,5

& OTHER STORIES PRODUCT CATEGORIES

EDITED.COM. (2018). & OTHER STORIES- PRODUCT ASSORTMENT 18 AND PRICING ARCHITECTURE. [ONLINE] AVAILABLE AT: HTTPS:// APP.EDITED.COM/#MARKET/DASHBOARD/113972/174524?

RETAILERS=STORIESUK&VIEW=ANALYSIS&ANALYSIS_VIEW=STRATEGY&ORDER_BY=FOUND_DES C&LIST_STYLE=IMAGE [ACCESSED 12 MAR. 2018].

2,6

AOS PRODUCT ASSORTMENT CATEGORY BY PERCENTAGE

EDITED.COM. (2018). & OTHER STORIES- PRODUCT ASSORTMENT 19 AND PRICING ARCHITECTURE. [ONLINE] AVAILABLE AT: HTTPS:// APP.EDITED.COM/#MARKET/DASHBOARD/113972/174524?

RETAILERS=STORIESUK&VIEW=ANALYSIS&ANALYSIS_VIEW=STRATEGY&ORDER_BY=FOUND_DES C&LIST_STYLE=IMAGE [ACCESSED 12 MAR. 2018].

2,7

PRICING ARCHITECTURE

EDITED.COM. (2018). & OTHER STORIES- PRODUCT ASSORTMENT 19 AND PRICING ARCHITECTURE. [ONLINE] AVAILABLE AT: HTTPS:// APP.EDITED.COM/#MARKET/DASHBOARD/113972/174524?

RETAILERS=STORIESUK&VIEW=ANALYSIS&ANALYSIS_VIEW=STRATEGY&ORDER_BY=FOUND_DES C&LIST_STYLE=IMAGE [ACCESSED 12 MAR. 2018].

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FIG 2.8 & OTHER STORIES IN THE WORLD (H&M, 2018)

HM.COM. (2018). H&M GROUP | & OTHER STORIES. [ONLINE] AVAILABLE AT: HTTPS://ABOUT.HM.COM/EN/BRANDS/STORIES.HTML [ACCESSED 17 MAR. 2018].

2,9

& OTHER STORIES.COM. (2018). STORES - & OTHER STORIES. [ONLINE] STORIES GLOBAL AVAILABLE AT: HTTPS://WWW.STORIES.COM/GB/STORES/UNITEDLOCATIONS KINGDOM [ACCESSED 7 MAR. 2018].

2,10

& OTHER STORIES INSTORE

STORIES.COM. (2018). STORES - & OTHER STORIES. [ONLINE] 21 AVAILABLE AT: HTTPS://WWW.STORIES.COM/GB/ [ACCESSED 7 MAR. 2018].

2,11

& OTHER STORIES SHOPPABLE INSTAGRAM

(AUTHOR’S OWN, 2018)

22

2,12

PERCEPTUAL MAP (AUTHOR’S OWN, 2018) WITHIN THE H&M GROUP

23

20

20

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2,13

PERCEPTUAL MAP (AUTHOR’S OWN, 2018) AGAINST COMPETITORS

24

2,14

H&M’S FINACIAL H&M GROUP (2018). H & M HENNES & MAURITZ AB FULL-YEAR REPORT 2017 REPORT. [ONLINE] STOCKHOLM: H&M GROUP, P.3. AVAILABLE AT: HTTPS://ABOUT.HM.COM/CONTENT/DAM/HMGROUP/GROUPSITE/ DOCUMENTS/EN/CISION/2018/01/2110334_EN.PDF [ACCESSED 8 FEB. 2018].

25

2,15

INDUSTRY LIFE CYCLE

ANDERSON, Z. (2016). PRODUCT LIFE CYCLE. AVAILABLE: HTTP://WWW.VALUEBASEDMANAGEMENT.NET/ METHODS_PRODUCT_LIFE_CYCLE.HTML. LAST ACCESSED 5TH MAR 2018.

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3,1

SITUATIONAL ANALYSIS

DAVIDSON, J. (2018). CHANGE MANAGEMENT SEMINAR.

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4,1

BEST- AND MINTEL. (2018). MENSWEAR MARKET GROWS BY 3.5% IN 2017.

WORST-CASE AVAILABLE: HTTP://ACADEMIC.MINTEL.COM/DISPLAY/885951/.

FORECAST OF UK LAST ACCESSED 19TH MAR 2018.

SALES OF MEN’S OUTERWEAR, 2012-22

35

4,2

AOS MENS TRANSACTIONAL WEBSITE MOCK UP

AUTHOR’S OWN. (2018). AOS MENS TRANSACTIONAL WEBSITE MOCK UP

36

4,3

MENSWEAR INFORGRAPHIC

AUTHOR’S OWN. (2018). MENSWEAR INFOGRAPHIC.

37

4,4

CUSTOMER PROFILE

AUTHOR’S OWN. (2018). CUSTOMER PROFILE

38

4,5

MENSWEAR SS19 MOODBOARD

AUTHOR’S OWN (2018). MENSWEAR MOODBOARD. AVAILABLE: HTTPS://WWW.WGSN.COM/FASHION/. LAST ACCESSED 6TH MAR 2018

39

4,6

MENSWEAR SS19 CAD BORAD

WGSN (2018). MENSWEAR SS19 CAD BOARD. AVAILABLE: HTTPS:// WWW.WGSN.COM/FASHION/. LAST ACCESSED 7TH MAR 2018

40

4,7

MENSWEAR MOODBOARD

AUTHOR’S OWN (2018). MENSWEAR MOODBOARD. AVAILABLE: HTTPS://WWW.WGSN.COM/FASHION/. LAST ACCESSED 6TH MAR 2018

41

4,8

MENSWEAR MOODBOARD

AUTHOR’S OWN (2018). MENSWEAR MOODBOARD. AVAILABLE: HTTPS://WWW.WGSN.COM/FASHION/. LAST ACCESSED 6TH MAR 2018

42

5,1

MCGOLDRICK AUTHOR’S OWN (2018). MCGOLDRICK 2002 RETAIL GROWTH VECTORS 44 2002 RETAIL GROWTH VECTORS

5,2

PORTERS GENERIC STRATEGY

7,1

INSIDE & OTHER LINEHAN, J. (2016). & OTHER STORIES: 12 THINGS YOU NEED TO 51 STORIES KNOW ABOUT THE NEW GRAFTON STREET STORE THAT HAS EVERYONE TALKING. AVAILABLE: HTTPS://LOVINDUBLIN.COM/LIFESTYLE/ FASHION/12-THINGS-YOU-NEED-TO-KNOW-ABOUT-THE-NEW-OTHERSTORIES-STORE. LAST ACCESSED 17TH MAR 2018.

TUTOR2U. (2015). PORTER'S MODEL OF GENERIC STRATEGIES FOR 46 COMPETITIVE ADVANTAGE. AVAILABLE: HTTPS://WWW.TUTOR2U.NET/ BUSINESS/REFERENCE/PORTERS-GENERIC-STRATEGIES-FORCOMPETITIVE-ADVANTAGE. LAST ACCESSED 1ST MAR 2018.

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ii List of Tables

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List of Tables TABLE

TITLE

REFERENCE

PAGE

2,5

RATIO OF H&M’S BRANDS BASED ON CURRENT MARKETS

AUTHOR’S OWN (2018). RATIO OF H&M’S BRANDS BASED ON CURRENT MARKETS. AVAILABLE AT: HTTPS://ABOUT.HM.COM/CONTENT/DAM/HMGROUP/ GROUPSITE/DOCUMENTS/EN/CISION/ 2018/01/2110334_EN.PDF [ACCESSED 8 FEB. 2018].

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2,6

SUMMARY OF H&M GROUP FINANCIALS 2012 - 2017.

AUTHOR’S OWN (2018). SUMMARY OF H&M GROUP FINANCIALS 2012 - 2017. AVAILABLE AT: HTTPS://ABOUT.HM.COM/CONTENT/DAM/HMGROUP/ GROUPSITE/DOCUMENTS/EN/CISION/ 2018/01/2110334_EN.PDF [ACCESSED 8 FEB. 2018].

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3,1

PORTERS FIVE FORCES

AUTHOR’S OWN (2018).PORTERS FIVE FORCES

31

3,2

SWOT ANALYSIS

AUTHOR’S OWN (2018).PORTERS FIVE FORCES

33

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1 Introduction

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1. Introduction

Aim The report aims to identify a feasible improvement strategy for AOS to increase their market share, whilst maintaining a sustainable competitive advantage. The report will conduct series of in depth market, financial and situational analysis, to ensure that the suitable growth strategy is incorporated for AOS and implemented over the next three to five years.

Vision “& Other Stories designs collections built around inspiring fashion stories, created from ateliers in Paris, Stockholm and Los Angeles. The & Other Stories brand has great attention to detail and quality and provides all of the elements of a wardrobe under one roof—from boots and bags, to ready to wear and BB cream, enabling them to create their personal style, or story”.

(H&M, 2018)

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2 Company Analysis

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2. Company Analysis 2.1 Company Overview

FIG 2.1 & OTHER STORIES IN STOCKHOLM (AUTHOR’S OWN, 2018)

Founded in 2013, AOS focuses on “evoking emotions rather than splashing high-end celebrities and low-end prices across billboards whereby they urge the consumers to shop a mood as opposed to a trend” (Fashionunited, 2013).

AOS prides themselves in being a ‘one-stop’ styling destination. The designs from Paris tell a story of femininity, Stockholm atelier provides Scandinavian minimalism, the LA collection captures the creative Californian vibe. They try to personalise and cater each identity to their consumer; this concept is reflective of the fact that female shoppers don't necessarily buy into every trend that comes their way anymore, or that their tastes vary on any given day (WGSN, 2013b)

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2.1.2 Corporate Social Responsibility “Our size, scale and influence mean we have both a responsibility to do the right thing and an opportunity to create real lasting change.”

-Anna Gedda, Head of Sustainability

FIG 2.2 H&M’S VISION AND STRATEGY (AUTHOR’S OWN, 2018)

The H&M Group pride themselves in sustainability and ensure their brands reflect this value. They want their consumers to “wear products with pride” and for the group to be “conscious in all their actions” (H&M sustainability, 2018).

AOS follow a code of conduct that values their suppliers and the working conditions of their employees. AOS also consider the environment, climate and recycling, and include recycling programs within their stores, and encourage collecting textiles not just from their own brand but from any retailer, where in return, give customers a voucher for 10% off AOS purchase (stories.com)

FIG 2.3 AOS IN STORE RECYCLING (AUTHOR’S OWN, 2018)

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2.2 Marketing Mix Analysis In order to review the company’s existing strategy, a Marketing Mix analysis was conducted to build its sustainable competitive advantage.

FIG 2.4 & OTHER STORIES (STORIES.COM, 2018)

2.2.1 Product AOS’s product offering targets only womenswear. The overall USP of AOS is that it provides an assortment of Fashion, basic and trend products curated in three very distinct cities to offer a mix of the three ateliers (andotherstories, 2018). They have also previously presented collaborations with names such as Rodarte, Toms, Sadie Williams, Nike, etc (WGSN, 2013).

FIG 2.5 & OTHER STORIES PRODUCT CATEGORIES

(STORIES.COM, 2018)

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FIG 2.6 AOS PRODUCT ASSORTMENT CATEGORY BY PERCENTAGE (EDITED.COM, 2018)

2.2.2 Price The AOS pricing hit a sweet spot between economy H&M and premium COS (Fashionunited, 2013). While they have garments priced as high as £345, most of their clothing fall within £19-£65 price range with the average garment price being £48.71 (See Fig 2.7) as prices are aligned with quality.

FIGURE 2.7 PRICING ARCHITECTURE (EDITED.COM, 2018)

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2.2.3 Place

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FIG 2.8 & OTHER STORIES IN THE WORLD (H&M, 2018)

AOS currently operate in 16 markets and have 60 stores. The stores are located within city centres placed amongst stores such as Ralph Lauren, COS and Mango in major cities in Europe, America and Asia. In 2017, AOS had internal store expansions in Ireland, Finland, South Korea and franchise store openings in UAE and Qatar (about.hm.com, 2018).The overall channel and market reach is still limited.

FIG 2.9 & OTHER STORIES GLOBAL LOCATIONS (GOOGLEMAPS, 2018)

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2.2.4 In store environment “Consumers are immediately struck by the unconventional juxtaposition of products; bags are displayed with shoes among body lotions, jewellery with matching nail polish” (stories.com, 2018). The retail space embodies a very modern but minimalistic feel where items are organised in colour ranges against white walls, light fixtures highlight the clothes. “Our stores are meant to inspire and be a welcoming, creative environment” (stories.com, 2018).

FIG 2.10 & OTHER STORIES IN-STORE (PINTEREST, 2018)

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2.2.5 Marketing and Promotions AOS currently use a digital platform that reflects the essence of the brand, the website features a scrapbook-like overflow of imagery, a mix of candid tableaux, colour cosmetics, prints and textures and high heelclad feet (Fashionunited, 2013). AOS also currently use email newsletters on a frequency of twice a week to its subscribed customers. AOS’s social platforms, Instagram and Facebook have 1m followers and 264k respectively. They have utilised the ‘social commerce’ technology through shoppable instagram allowing visitors to buy items on social directly (See full PESTLE Analysis, Appendix 11).

FIG 2.11 & OTHER STORIES SHOPPABLE INSTAGRAM (AUTHOR’S OWN, 2018)

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‘Positioning is the design and implementation of a retail mix to create an image of the retailer in the customer’s mind relative to its competitors’ - (Levy & Weitz, 2004:152)

2.3 Market positioning Within the H&M Group brand portfolio, AOS differentiate itself by residing in a sweet spot between high priced and timeless COS and affordable and trendy H&M.

Trend driven

Affordable

High price

Timeless FIG 2.12 PERCEPTUAL MAP WITHIN THE H&M GROUP (AUTHOR’S OWN, 2018)

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2.4 Competitor Analysis In addition to internal strategy, AOS need to analyse the performance of brands of the same calibre in the market landscape, to gain a competitive advantage. Reiss, Ted Baker and Zara have been identified as key competitors. A comprehensive competitor analysis has been conducted highlighting positioning, price points and quality (See Appendix 3).

Interview with AOS store assistant, Gill (2018) suggested that “men often come in to the store asking if we sell menswear and seem disappointed when we say no” and also suggested that Zara, Ted Baker, Reiss are all competitors due to “the overall aesthetic of the AOS brand” (see Appendix 4). The brand must establish itself to distinguish themselves against competitors as well as customers who are shopping at these competitors. A perpetual map was established to identity positioning against competitors (Fig 2.13).

High trend

Low Price

Low fashionability

High Price

FIG 2.13 PERCEPTUAL MAP AGAINST COMPETITORS (AUTHOR’S OWN, 2018)

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2.5 Financial Analysis H&M Group profit for the full-year 2016-2017 amounted to SEK 20,809 m, a decrease of SEK 3,230 from the previous financial year. Persson, CEO of H&M justified the decrease by stating that their “online sales and our newer brands performed well but the weakness was in H&M’s physical stores where the changes in customer behaviour and reduction in footfall impacted the sales negatively” (H&M Financials 2017, 2018).

FIG 2.14 H&M’S FINACIAL REPORT 2017 (H&M, 2018)

It can be seen in Fig 2.14 that the selling and admin expenses are higher, this shows that expenditure has increased due to costs, which negatively affected profit margin by 1.9%. The gross profit has increased

by SEK 1,913m since the previous year, but the gross profit margin has decreased by 1.2%, due to high expenditure on costs and low sales achieved (H&M Financials 2017, 2018).

The overall gearing for H&M is at 9.3%, low debt can be good however it can portray a lack of ambition in developing the company (H&M financial report 2017, 2018).

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AOS can use the harvesting strategy as investment for the menswear range.

As H&M is a stable cash cow, their profits can be utilised to fund the proposed improvement of AOS menswear. Organic growth provides lower risk, as the business does not need to use measures such as assortment reduction or store closures, to retrieve finance.

SALES

It is identified that AOS sits within the growth area of the Industry Life Cycle with increasing but limited brand awareness in the global market. “The H&M Group strongly advocates expansion and investments� (H&M Group, 2018). There is scope for the brand to continue their growth, using the Retail growth vectors into geographical development, new products and services and new segments to maintain their position within the Industry Life Cycle. (McGoldrick, 2002)

AOS

TIME

FIG 2.15 INDUSTRY LIFE CYCLE (FOX, 2016)

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H&M Profit for the period SEK (m) 16 184 Current Markets

Ratio

SEK (m)

H&M

69

45

3596

COS

37

25

6474

MONKI

14

9

17982

WEEKDAY

9

6

26973

& OTHER STORIES

16

11

14713

CHEAP MONDAY

2

1

161840

ARKET

4

3

53947

total

151

100

1618

TABLE 2.5 RATIO OF H&M’S BRANDS BASED ON CURRENT MARKETS. (AUTHOR’S OWN, 2018)

Under the H&M group, the brands operate in various markets. In 2017, H&M's profit for the period is 16,184 SEK (m). A ratio between the brands has been devised to visualise how much finance each brand is allocated, towards the next financial year, 2018. AOS is the third biggest brand H&M own, and can use 14,713 SEK (m) as their budget, a feasible amount in creating a menswear range.

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H&M Group Financials 2012-2017 2017

2016

2015

2014

2013

2012

Net Sales

200004

192267

180861

151419

128562

120799

Gross Profit Gross profit margin % Operating profit Operating profit margin %

108090

106177

103167

89052

76033

71871

54,0

55,2

57,0

58,8

59,1

59,5

20569

23823

26942

25583

22168

21754

10,3

12,4

14,9

16,9

17,2

18,0

240

216

300

312

358

531

20809

24039

27242

25895

22526

22285

-4625

-5403

-6344

-5919

-5374

-5418

16184

18636

20898

19976

17152

16867

SEK (m)

Net financial items Profit after financial items Tax Profit for the period

TABLE 2.6 SUMMARY OF H&M GROUP FINANCIALS 2012 - 2017. (H&M, 2018)

Gross profit margin % has decreased year on year this could be due to H&M increasing spend on costs of goods. The operating profit margin is also showing a decline year on year which again could portray high spend on their fixed costs such as admin and selling expenses and overheads. The profit for the period displays a fluctuation in earnings, showing a peak in years 2014 and 2015, however decreased in years 2016 and 2017.

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3.0 Situational Analysis

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3. Situational Analysis

FIG 3.1 SITUATIONAL ANALYSIS (DAVIDSON, 2018)

A situational analysis has been conducted in order to propose new strategic direction, whereby Macro factors have been identified to flex and adapt the Micro factors accordingly (Davidson, 2018).

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3.1 External: Porter’s Five Forces The Porter’s Five forces model is a tool used for “understanding the competitiveness of your business environments and for identifying the strategy's potential profitability”(Ding, 2017).

Bargaining power of suppliers

Bargaining Power of Buyers

Upon conducting the core competencies,

According to Mintel (2017), consumers

(see section 5.3) it has been identified

will have less money to spend on non-

that AOS will utilise the H&M Groups

essential purchases such as clothes in

suppliers, where strong relationships are

2018 (Appendix 11). AOS pricing

already established. Suppliers that

strategy as a premium brand, reflects

produce menswear ranges for H&M Men, COS

their customer employment status and

and Arket are in place. H&M Group’s aim

shopping behaviour, however the

is to maintain a sustainable

business needs to react to the

strategy as they aim to

MACRO factors and the

provide integrity and

competitive environment

transparency in the

they operate in, in Competitive Rivalry

way they operate all

order to maintain

the businesses.

their position To ensure AOS maintain a competitive

within the

advantage, they will need to conduct a

market.

thorough analysis to gain understanding of their target consumer and produce a desirable collection with the right marketing strategy.

Generating sales and profit will prove difficult initially in the first horizon however Porter’s Threat of New

growth strategy can be utilised by AOS (See

Entrants

chapter 6.2) as they have been placed within

In adopting their

differentiation leaders for being a mens

existing brand to

‘one-stop’ shop.

Threat of substitutes AOS

have

direct

competition

cater to the male

from

their competitors, as

consumer, they can

analysed in Appendix 3,

utilise their core

which

competencies (see 5.3) currently

could

difficulties

when

prove

launching

the

in place. There are threats of new

new diversification and targeting their

retailers entering the market and taking

customer. In order to lower the threat

the attention of their market share. With

of substitutes, AOS will have to ensure

the H&M Group’s varied brands this allows

their product, price and promotion are

them to target different consumer

catered to the consumer. AOS Mens will

segments. There is less risk and pressure

have to emulate the AOS vision of being

for AOS mens to bring profits in

a

immediately, with having H&M as their

more

backbone, in comparison to new entrants

consumer in store.

‘one-stop’

shop’

attractive

to

and

make keep

menswear the

male

fighting for their market presence.

TABLE 3.1 PORTERS FIVE FORCES (AUTHOR’S OWN, 2018)

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3.2 Internal: SWOT and TOWS Analysis A SWOT analysis has been conducted to assess the internal and external influences within the organisation, to provide information for matching resources and capabilities in which the organisation operates (Van assen et al, 2008). A further TOWS matrix has been conducted in order to further strategy planning, to evaluate where attention is needed and what action is required.

STRENGTHS

• AOS has a clearly defined target audience of a working female aged 25 and over.

• Provides high quality, stylish, affordable clothing curated from three ateliers based in Paris, Stockholm and LA. • Provides a ‘one-stop shop’ for the customer, from clothing to skincare, footwear and accessories, etc.

• Brand image consistent across stores in all global markets.

• Offers take-back recycling scheme in line with their sustainable values.

WEAKNESSESS • AOS don’t offer a menswear line.

• Although it aims to be a ‘one-stop shop’, it doesn’t offer the home and lifestyle element unlike retailers such as Anthropologie.

• Limited brand awareness amongst customers in the global market.

• Retail store presence in only 16 markets with 60 stores.

• Website navigation and user experience can be improved (Mir, 2018).

TABLE 3.1 AOS SWOT ANALYSIS (AUTHOR’S OWN, 2018)

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OPPORTUNITIES • Expansion into Menswear by mirroring the existing aesthetics and pricing strategy, to fit the Millennial working male, which will help increase market share.

• Opportunity to enhance the ‘storytelling’ experience through Marketing campaigns.

• Elevate the in-store customer experience, especially within the skincare and beauty area with store experts and personalisation as according to Multichannel Retail Handbook (2015) personalisation “could increase sales by 15%”.

• Store expansion opportunities to increase brand awareness in markets, and help understand potential customers for future store expansion (Fashionunited, 2013).

• Digital improvement, particularly within User experience of the website could be beneficial to online customers.

• Opportunity to create more sustainably designed and produced clothing to align with the H&M Group mission.

THREATS • Primary research indicated that brand loyalty is not a high influential factor, however 80% of male respondents stated they are willing to try a new brand (See Appendix 8).

• Increased competition and threat of rivalry from pure play retailers and already established brand names.

• As the brand falls within the H&M Group, there could be perception issues linking quality to the fast fashion retailer, H&M. • International store expansion to new markets might be risky due to competition alert and lack of brand awareness.

• AOS has already successfully created a brand curated to the female following, the expansion into menswear needs to have a clear separate identity. “BoohooMAN struggled with becoming a brand in their own right due to connotations of being a ladies brand” (Babb, 2018 See Appendix 7).

TABLE 3.2 SWOT ANALYSIS (AUTHOR’S OWN, 2018)

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4.0 Market Analysis

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4.0 Market Analysis 4.1 Market Overview “The global apparel market is valued at 3 trillion dollars, and accounts for 2 percent of the world's Gross Domestic Product (GDP)” (Fashionunited, 2016).

Mintel (2018) forecasts that menswear will grow by 11% between 2018 and 2022 to reach £17.1 billion. In 2018, we expect men’s clothing sales to grow by only 2.9% as consumers continue to see their disposable income squeezed as a result of rising inflation and interest rates and falling real incomes. However, despite the economic downturn, the menswear market is still growing at twice the rate of womenswear, rising by 2.8% in 2016 compared with 1.3% for women’s clothing (Mintel, 2017).

FIG 4.1 BEST- AND WORST-CASE FORECAST OF UK SALES OF MEN’S OUTERWEAR, 2012-22 (MINTE;, 2018)

According to Mintel (2018), the economy sees a shrinking youth population and a 3.4% increase in men aged 25-34. This will benefit the overall menswear market as these men are now equally keen fashion buyers as their younger counterparts. “There is a growing appetite for new brands and men are seeking a high/low mix of luxury and high street” (Stocker, 2018).

This demographic thinks its worth spending more on quality clothes that

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FIG 4.2 AOS MENS TRANSACTIONAL WEBSITE MOCKUP (AUTHOR’S OWN, 2018)

“75% of men aged 25-34 bought clothes online in the last 12 months” (Mintel, 2017). This stat backs up the argument that AOS will be utilising their existing digital website and social site as key platforms to sell as the initial launch will only be in selected stores.

An additional in-depth analysis of the Macro environment for the menswear market has been conducted to determine risk and threat factors as well as positive trends that can support new strategy for menswear expansion. The external influences have been analysed using a PESTLE framework and can be seen in Appendix 11.

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4.2 Customer Analysis 4.2.1 Infographic

FIG 4.3 MENSWEAR INFOGRAPHIC(AUTHOR’S OWN, 2018)

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4.2.2 Customer Profile After conducting in-depth secondary and primary research, and spotting a gap in the market for menswear, a customer profile has been created.

“34%

of 25-44 year old male shoppers would like to see clothes with more unique designs at the retailers they usually shop at” (Mintel, 2017)

Target Customer The AOS customer is a millennial male based in his mid-twenties to late thirties, with a medium to high disposable income. The AOS man will buy into quality and longevity, he is not brand loyal and is willing to look past the brand name and price tag; primary research survey shows that “83% willing to try new brands”(see Appendix 8). He is interested in looking for trend inspiration and understands the importance of buying into investment pieces.

He is digital savvy and shops online but finds physical retail environment equally as important (see Infographic 4.2.1). He works within the creative industry where he’s not required to dress formally and has an average income of 21-30k (see Infographic 4.2.1). Living in an urban city area where he is social and engages with content usually through channels such as Instagram (see Infographic 4.2.1). He is usually influenced by friends and values word of mouth to make shopping decisions(see Infographic 4.2.1).

FIG 4.4 CUSTOMER PROFILE (AUTHOR’S OWN, 2018)

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4.3 Menswear SS19: The collection Based on internal marketing mix analysis and competitor analysis, a moodboard, look-book and range board has been created for the Menswear SS19 launch. Based on these research, the AOS mens range will mirror the existing womenswear concept and allowing the targeted male consumer to shop for statement pieces as well as casual pieces.

4.3.1 Menswear SS19: Moodboard 

FIG 4.5 MENSWEAR SS19 MOODBOARD (AUTHOR’S OWN, 2018)

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4.3.2 Menswear SS19: Lookbook


FIG 4.6 MENSWEAR SS19 CAD BOARD (WGSN, 2018)

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4.3.3 Menswear SS19: Lookbook

FIG 4.7 MENSWEAR MOODBOARD (AUTHOR’S OWN, 2018)

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4.3.3 Menswear SS19: Lookbook

FIG 4.8 MENSWEAR MOODBOARD (AUTHOR’S OWN, 2018)

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5.0 Growth Strategy

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5.0 Growth Strategy Existing proposition

New products and services

New segments

pr

nt ce ts ja en Ad gm se

R od el se uc ate rv ts d ic a es nd

Grow Market share

Di f fo fe r r ma en t t

l na on o i ti ns a N pa ex

Linked channels Separate channel

na o n ti io a s rn an e p t x In e l

Mo fo di r fi m at ed s

Existing market segment, trading formats and channels

Geographical developments

t en s er nt ff me Di eg s

pr Un od re se uc lat rv ts ed ic a es nd

Maximum viable share

New formats

New channels FIG 5.1 MCGOLDRICK (2002) RETAIL GROWTH VECTORS(AUTHOR’S OWN, 2018) 

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5.1 Growth vectors and Ansoff matrix Upon extensive analysis of the MACRO retail environment, current strategy, and capabilities of the organisation, McGoldrick’s (2002) retail growth vectors have been used to identify areas for growth opportunities (See fig 5.1). The growth vectors selected highlights the touch points that AOS will be able to meet with the menswear diversification strategy. It has been used in parallel to the Ansoff Matrix (See Appendix 10) for a rounded evaluation to analyse feasible growth strategy options.

5.2 Business Improvement AOS’ business improvement is to develop a menswear range to launch for SS19. Their aim to be a ‘one-stop’ shop will be diffused through to the mens collection allowing the company to expand their existing proposition by growing their market share as highlighted in growth vectors.

5.3 Core competencies In order to hold a competitive advantage, identification and evaluation of business’s core competencies is crucial. Core competencies model is a strategic tool used to determine the internal unique assets that can be used to create and offer value to customers (Van Assen, 2008). As AOS establishes a menswear department, they are able to utilise internal core competencies within H&M Group, allowing them to use resources such as employees and strategies.

5.4 Strategy type Reconstruction strategy will be used to implement the growth (Balogun and Hope Hailey, 2007). The company will foresee rapid change realigned within core competencies and the culture immediately in line for SS19 launch of the menswear collection. This strategy will entail high expenses to begin with, but will generate market share and revenue for AOS in time (Davidson, 2018).

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5.5 Porter’s Generic Strategies

FIG 5.2 PORTER’S GENERIC STRATEGIES (TUTOR2U, 2015)

By AOS expanding market share, their focus is on differentiation leadership. Targeting the wider market and creating a range for the additional market segment - the male consumer - to give a competitive advantage. It is also a leadership method, not just developing IN one section but aiming to be a ‘one-stop’ shop for the male.

Stores will include the menswear range in the beginning however the focus will be online and targeting the male consumer through social media. To create the teams, experienced employees from H&M and COS menswear teams, can be used as to initially start up the range, over time an increased team will be in place to be responsible for all menswear categories. The range will be influenced based on the country to keep in the theme of AOS, using their three ateliers.

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6.0 Feasibility and Implementation Plan

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6.0 Feasibility and Implementation Plan 6.1 SAFe Model Suitability The key development for AOS will grasp the huge opportunity of them gaining a larger market share. AOS menswear’s will enable them to have a contingency plan for when the menswear market is expected to rise and potentially overtake the womenswear sector. They key constraints to building a new range for a new target market is to ensure the brand is known and the consumer is aware of the brand and what they have to offer.

Acceptability A proposed strategy to meet expectations of the stakeholder is positive, again by gaining a larger market share their predicted income could potentially double and increase sales, which for stakeholders that have invested in the business can gain a higher ROI. AOS’ parent company are important stakeholders, with H&M’s financial figures showing low gearing, this can be positive for the financial investment that AOS need, reducing the risk.

Feasibility Feasibility can be seen through the Financial analysis (see section 2.5) and Three horizons model (see 6.2) whereby H&M’s financial position and stability has been reviewed, to ensure they can uphold AOS and assist them in the development of their market. Displays the timeline in which the implementation of the improvement shall take place.

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2nd Horizon (3-4 years)

3rd Horizon (5+ years)

6.2 McKinsey Growth Model- Three Horizons   - Overall - Retain consumer loyalty.

- Increasing touch points in order to manage high level engagement with the consumer.

- Product Innovation - Technological advances in Tailoring and suits in

order

experience ensure

give

the

in

store,

that

fit

consumer

is

by

using

catered

a

personalised technology towards

to

each

individual.

- Overall - RevIew current strategies in place and evaluate the effectiveness through sales analysis and press coverages.

- Product - Incorporate a larger product assortment including all categories to be a true ‘one-stop’ shop.

- Place - Increase menswear range throughout flagship stores in 16 markets that they currently operate in.

1st Horizon (1-2 years)

- Product: - Conduct comprehensive research on key menswear trends and develop a range encompassing Ready to wear for SS19 launch.

- Liaise with existing suppliers to gain product samples and cost engineering - Marketing and Promotions: - Develop brand awareness for menswear using below the line marketing strategies.

- Place: - Interview with Babb (2018) suggested that BoohooMAN established own transactional website in 201, therefore a new website will be developed for menswear to cater personalised service away from female.

- Gradual integration of menswear collections within capital city stores i.e.

London Regent Street, Stockholm, Paris and LA. People:

- Merge internal employees within the H&M Group and hire new employees throughout all three offices to balance the core competencies.

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7.0 Conclusion

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7.0 Conclusion

FIG 7.1. INSIDE & OTHER STORIES (2016)

In conclusion, AOS aims to achieve their SMART targets throughout the development process of their menswear range. They have a clear specific goal to create a menswear range, which will enable them to gain market share for a new audience. The goal is measurable, AOS can plan their objectives over a planned time span and measure the success based on sales and interaction from consumers. AOS will be able to achieve the proposed improvement, with internal financial support from their parent company, H&M Group. The improvement aligns to market predictions growth within the menswear, justifying success opportunities for the strategy.

Finally, the goal will be achieved in incremental stages which can be seen implemented through the Three horizons model.

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8.0 References

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8.0 References About.hm.com. (2018). H&M group | & Other Stories. [online] Available at: http://about.hm.com/en/about-us/in-focus/the-other-stories-story.html [Accessed 8 Feb. 2018].

Babb, H (2018). Interview with Former Buying intern at BOOHOOMAN. Interviewed on: 20th Feb 2018.

Balogun, J. and Hope Hailey, V. (2007). Exploring strategic change. 3rd ed.

Harlow, United Kingdom [u.a.]: Pearson Education.

Bobila, M. (2018). Menswear Revenues Are Expected to Outpace the Womenswear Market. [online] Fashionista. Available at: https://fashionista.com/2018/02/ menswear-market-revenue-to-outpace-womenswear [Accessed 4 Feb. 2018].

Brown, H. (2018). The ascent of The Idle Man. [online] Drapers. Available at: https://www.drapersonline.com/people/the-drapers-interview/the-ascent-of-theidle-man/7028368.article [Accessed 6 Feb. 2018].

Businessoffashion. (2018). & Other Stories | Discover & Other Stories's Company Page | The Business of Fashion. [online] Available at: https:// www.businessoffashion.com/community/companies/other-stories [Accessed 21 Jan. 2018].

Chahal, M. (2017). Social commerce: How willing are consumers to buy through social media? - Marketing Week. [online] Marketing Week. Available at: https://www.marketingweek.com/2016/03/23/social-commerce-how-willing-areconsumers-to-buy-through-social-media/ [Accessed 29 Jan. 2018].

Chitrakorn, K. (2018). 5 Technologies Transforming Retail in 2018. [online] The Business of Fashion. Available at: https://www.businessoffashion.com/ articles/fashion-tech/5-technologies-transforming-retail? utm_source=Subscribers&utm_campaign=f2b860ce63-5-technologies-transformingretail-dries-van-noten&utm_medium=email&utm_term=0_d2191372b3f2b860ce63-422436377 [Accessed 29 Jan. 2018].

Davidson, J. (2018). Change Management Seminar.

Davidson, J. (2017). Retail Growth Strategies Seminar Part 1.

Digiday. (2017). Social media is driving growth in the luxury menswear market - Digiday. [online] Available at: https://digiday.com/marketing/social-mediadriving-growth-luxury-menswear-market/ [Accessed 3 Feb. 2018].

Davidson, J. (2018). Change Management Seminar.

Ding, D. (2017). Porter’s five forces analysis of ASOS. Available: https:// medium.com/msing051/porters-five-forces-analysis-of-asos-bcb9c03c759. Last accessed 6th Mar 2018.

Econsultancy. (2018). 10 of the best digital marketing stats we’ve seen this week. [online] Available at: https://econsultancy.com/blog/69751-10-of-thebest-digital-marketing-stats-we-ve-seen-this-week-7/?cmpid=ECON-DAILYPULSEUK-290118-081044&utm_medium=email&utm_source=newsletter&utm_campaign=ECONDAILYPULSE-UK-290118-081044 [Accessed 31 Jan. 2018].

Edited.com. (2018). & other stories- Product assortment and Pricing architecture. [online] Available at: https://app.edited.com/#market/ d a s h b o a r d / 1 1 3 9 7 2 / 1 7 4 5 2 4 ? r e t a i l e r s = s t o r i e s -

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H&M Group (2018). H & M Hennes & Mauritz AB Full-year report. [online] Stockholm: H&M Group, p.3. Available at: https://about.hm.com/content/dam/ hmgroup/groupsite/documents/en/cision/2018/01/2110334_en.pdf [Accessed 8 Feb. 2018].

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Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2009). Strategic management: Competitiveness and globalization, concepts and cases. Mason: Cengage SouthWestern.

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McKinsey (2009). Enduring Ideas: The three horizons of growth. [podcast] Enduring Ideas: The three horizons of growth. Available at: https:// www.mckinsey.com/business-functions/strategy-and-corporate-finance/ourinsights/enduring-ideas-the-three-horizons-of-growth [Accessed 2 Feb. 2018].

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a

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Strategic

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analyzing

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Retail Week. (2018). Retail 2018: The industry's blueprint for the year. [online] Available at: https://www.retail-week.com/analysis/retail-2018-theindustrys-blueprint-for-the-year/7028189.article?authent=1 [Accessed 29 Jan. 2018].

Sebra, M. (2016). Here’s Your First Look at Stella McCartney’s Full Menswear Collection. [online] GQ. Available at: https://www.gq.com/story/stellamccartney-menswear-collection-look-book [Accessed 4 Feb. 2018].

Stack, L. (2018). H&M Apologizes for ‘Monkey’ Image Featuring Black Child. [online] Nytimes.com. Available at: https://www.nytimes.com/2018/01/08/ business/hm-monkey.html [Accessed 17 Mar. 2018].

Stephen, R. (2018). Former marketing assistant at THE IDLE MAN interview.

Interviewed on: 5th Jan 2018.

Stocker, K. (2018). Editor's Comment: Menswear growth adds vitality to the market. Available: https://www.drapersonline.com/news/comment/editorscomment-menswear-growth-adds-vitality-to-the-market/7028608.article. Last accessed 19th Mar 2018.

Stories. (2018). About & Other Stories. [online] Available at: https:// www.stories.com/gb/About [Accessed 21 Jan. 2018].

Stories.com. (2018). Working in store - & Other Stories. [online] Available at: https://www.stories.com/gb/Careers/Working_in_store [Accessed 2 Feb. 2018]. tutor2u. (2015). Porter's Model of Generic Strategies for Competitive Advantage. Available: https://www.tutor2u.net/business/reference/portersgeneric-strategies-for-competitive-advantage. Last accessed 1st Mar 2018.

Van Assen, M., Van den Berg, G. and Pietersma, P. (2009). Key management models. 2nd ed. Harlow, England: Financial Times/Prentice Hall.

Vendhq.com. (2018). 2018 Retail Industry Trends & Predictions | Future of Retail | Vend. [online] Available at: https://www.vendhq.com/uk/2018-retailtrends-predictions [Accessed 30 Jan. 2018].

Wgsn. (2013). & Other Stories- Stylesight in Berlin. [online] Available at: https://www.wgsn.com/content/board_viewer/#/28956/page/4 [Accessed 21 Jan. 2018].

Wgsn.com. (2013b). H&M's new narrative: & Other Stories, London. [online] Available at: https://www.wgsn.com/content/board_viewer/#/135457/page/1 [Accessed 21 Jan. 2018].

Willis, E. (2018). H&M hoodie row: Family of boy who modelled 'coolest monkey in the jungle' jumper forced to move house in Sweden for 'security reasons'.

Available: https://www.standard.co.uk/news/world/hm-race-row-family-ofcoolest-monkey-in-the-jungle-model-forced-to-move-house-in-sweden-forsecurity-a3742366.html. Last accessed 15th Feb 2018.

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9.0 Bibliography

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9.0 Bibliography Online

About.hm.com. (2018). H&M group | & Other Stories. [online] Available at: http:// about.hm.com/en/about-us/in-focus/the-other-stories-story.html [Accessed 8 Feb. 2018].

Babb, H (2018). Former Buying intern at BOOHOOMAN Interview. Interviewed on: 20th Feb 2018.

Balogun, J. and Hope Hailey, V. (2007). Exploring strategic change. 3rd ed. Harlow, United Kingdom [u.a.]: Pearson Education.

Bobila, M. (2018). Menswear Revenues Are Expected to Outpace the Womenswear Market. [online] Fashionista. Available at: https://fashionista.com/2018/02/menswear-marketrevenue-to-outpace-womenswear [Accessed 4 Feb. 2018].

Brown, H. (2018). The ascent of The Idle Man. [online] Drapers. Available at: https:// www.drapersonline.com/people/the-drapers-interview/the-ascent-of-the-idle-man/ 7028368.article [Accessed 6 Feb. 2018].

Businessoffashion. (2018). & Other Stories | Discover & Other Stories's Company Page | The Business of Fashion. [online] Available at: https://www.businessoffashion.com/ community/companies/other-stories [Accessed 21 Jan. 2018].

Chahal, M. (2017). Social commerce: How willing are consumers to buy through social media? - Marketing Week. [online] Marketing Week. Available at: https:// www.marketingweek.com/2016/03/23/social-commerce-how-willing-are-consumers-to-buythrough-social-media/ [Accessed 29 Jan. 2018].

Chitrakorn, K. (2018). 5 Technologies Transforming Retail in 2018. [online] The Business of Fashion. Available at: https://www.businessoffashion.com/articles/fashiont e c h / 5 - t e c h n o l o g i e s - t r a n s f o r m i n g - r e t a i l ? utm_source=Subscribers&utm_campaign=f2b860ce63-5-technologies-transforming-retaildries-van-noten&utm_medium=email&utm_term=0_d2191372b3-f2b860ce63-422436377 [Accessed 29 Jan. 2018].

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Ding, D. (2017). Porter’s five forces analysis of ASOS. Available: https://medium.com/ msing051/porters-five-forces-analysis-of-asos-bcb9c03c759. Last accessed 6th Mar 2018.

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Hendriksz, V. (2017). LFWM: Millennial Men drive the UK menswear market. Available: https://fashionunited.uk/news/fashion/lfwm-millennial-men-drive-the-uk-menswearmarket/2017060924783. Last accessed 22nd Jan 2018.

Jahshan, E. (2017). Missguided brother label Mennace launches next month - Retail Gazette. [online] Retail Gazette. Available at: https://www.retailgazette.co.uk/blog/ 2017/08/missguided-mennace-launches-september/ [Accessed 4 Feb. 2018].

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McKinsey (2009). Enduring Ideas: The three horizons of growth. [podcast] Enduring Ideas: The three horizons of growth. Available at: https://www.mckinsey.com/businessfunctions/strategy-and-corporate-finance/our-insights/enduring-ideas-the-threehorizons-of-growth [Accessed 2 Feb. 2018].

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Stack, L. (2018). H&M Apologizes for ‘Monkey’ Image Featuring Black Child. [online] Nytimes.com. Available at: https://www.nytimes.com/2018/01/08/business/hm-monkey.html [Accessed 17 Mar. 2018].

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Available: https://www.drapersonline.com/news/comment/editors-comment-menswear-growthadds-vitality-to-the-market/7028608.article. Last accessed 19th Mar 2018.

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Available: https://www.tutor2u.net/business/reference/porters-generic-strategies-forcompetitive-advantage. Last accessed 1st Mar 2018.

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Willis, E. (2018). H&M hoodie row: Family of boy who modelled 'coolest monkey in the jungle' jumper forced to move house in Sweden for 'security reasons'. Available: https://www.standard.co.uk/news/world/hm-race-row-family-of-coolest-monkey-in-thejungle-model-forced-to-move-house-in-sweden-for-security-a3742366.html. Last accessed 15th Feb 2018.

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Grant, R. (2008). Contemporary strategy analysis. Hoboken, NJ: John Wiley & Sons.

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(2011).

Exploring

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strategy.

Van Assen, M., Van den Berg, G. and Pietersma, P. (2009). Key management models. 2nd ed.

Harlow, England: Financial Times/Prentice Hall.

Journals Porter, M. E. (1979). How competitive forces shape strategy. Harvard Business Review, 57(2), 137-145.

Porter, M. E. (1991). Towards a dynamic theory of strategy. Strategic Management Journal, 12, 95-117.

Porter, M. E. (1998). Competitive strategy: Techniques for analyzing industries and competitors. New York: Simon & Schuster, Limited.

Lectures Davidson, J. (2018). Change Management Seminar.

Davidson, J. (2017). Retail Growth Strategies Seminar Part 1.

Interviews Babb, H (2018). Interview with Former BoohooMAN Buying intern. Interviewed on: 20th Feb 2018.

Gill, E. (2018). Interview with & Other stories store assistant. Interviewed on: 27th Jan 2018.

Mir, L. (2018). Interview with & Other stories customer. Interviewed on: 25th Jan 2018.

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10.0 List of Appendices

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10. Appendices Appendix 1. Store Visit- Stockholm, Sweden

61

Appendix 2. Store Visit- Manchester, UK

62

Appendix 3. Competitor Analysis

63

Appendix 4. Interview- AOS Store Assistant

65

Appendix 5.Interview- AOS Current Customer

67

Appendix 6. Interview- Former Marketing Assistant at The Idle Man

68

Appendix 7.Interview- Former Buying Intern at BoohooMAN

69

Appendix 8. Survey- Results

70

Appendix 9. Existing Customer Profile

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Appendix 10. Ansoff Matrix

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Appendix 11. PESTLE Analysis

75

Appendix 12. TOWS Matrix

78

Appendix 13. Gantt chart

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Appendix 1. Store Visit- Stockholm, Sweden


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Appendix 2. Store Visit- Manchester, UK  

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Appendix 3. Competitor Analysis 

Ted Baker

Reiss

Zara !63

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Competitor Analysis

Profile: Womenswear ready to wear brand, one-stop styling destination filled with collections from three design ateliers in Paris, Stockholm and Los Angeles.

Product overview: Women’s only, RTW, footwear and accessories, ready to wear, swimwear and lingerie and skincare essentials.

Customer: Affluent mid-high disposable income woman that loves fashion and personal style.

Pricing: Womens Footwear: £125

formal:

£110,

Trousers:

£69,

Dresses:

£59,

Profile: Luxury British clothing company founded in 1988.

Product overview: Womenswear, menswear, kidswear affordable brand, inc: Tailoring and suits, accessories.

exclusive but footwear and

Customer: Fashion forward, brand loyal 25+ men and women. High disposable income, likes prints and bold fashion and making a statement Pricing: Tailoring and suits £250, Dresses £150, Footwear: £175

Profile: Brand with design philosophy centred on creating designled menswear, womenswear and accessories brand.

Product Overview: Menswear, footwear and accessories.

tailoring

and

suits,

womenswear,

Customer: Aimed at over 25s men and women with a higher disposable income. Working in areas such as business, trading or retail opting for quality and detail but simple and conservative style.

Pricing: Tailoring and suits £450, Dresses £185, Polo shirts £110, Footwear £160

Profile: High street fast fashion brand Customer: Womens (18-35), men and kidswear.

Predominantly aimed ay trend conscious over 18 market.

Product Overview: Womenswear, menswear, womenswear, footwear and accessories.

tailoring

and

suits,

Pricing: Womens formal: £69 , Tailoring and suits: £150, Dresses: £29, Footwear: £49.

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Appendix 4. Interview- AOS Store Assistant Emily Gill| Date: 27/01/18 1. How do you think the current & other stories customer is? Could you provide a short description on what the target consumer looks like.

The typical target consumer is a female aged between 20 – 35. She is fashion conscious and design led when shopping for clothing. She is creative and might hold a creative job or degree, and likes a minimal style aesthetic. She shops at other brands on the high street, but likes and other stories for the unique products on offer at a higher quality. The other stories store is split into the three ateliers where the clothing is designed (Stockholm, Paris and Los Angeles), and the typical customer usually fits into one of these three. Each trend offers the customer specific products and allows her to express her own personal style.

2. Purchasing habits and spending behaviour: Do customers tend to purchase one off or multiple items at a time and how much do they spend on average?

Sometimes a customer will purchase just one item, and this is usually when the item is a higher price or they have never shopped the brand before.

However, the typical customer will purchase one or two items of clothing and a couple of add on products such as a piece of jewellery or a beauty product.

These add on products makes the customer buy into the brand more, and makes them return. I would say they usually spend between £70 - £100.

3. Are the customers generally accompanied by male? Do men come in to shop for their partners?

Generally, the customer is either on her own or with another female. However, they are sometimes accompanied by a male and they enjoy shopping the brand as much as a female shopper. Males sometimes come in to shop the beauty products for themselves as well as clothing items such as knitwear. Yes, men often come in store to shop for their partners. Their partners have usually found something they like online or use a specific product all the time and their partner will purchase them as a gift.

4. What are your opinions on & other stories branching out to menswear? Who do you think their main competitors would be?

I think and other stories branching out to menswear is a great idea. Men often come in to the store asking if we sell menswear and seem disappointed when we say no, and I think that’s because they like the overall aesthetic of the brand. I think the main competitors would be Zara man, Ted Baker, Reiss and All Saints.

5. What do you think the menswear product offering will look like and do you think it will reflect aesthetics of the womenswear collection?

I think the menswear collection could reflect the same price point as the womenswear collection. I think maybe it would work better if the menswear

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! ! range was split up into trends, such as mainline, formal wear, and new in rather than in the typical and other stories ateliers which I mentioned above (Stockholm, Paris, Los Angeles). I think it would work well if the menswear collection reflected the same aesthetic as the womenswear collection. I think there is definitely a gap in the market for a menswear brand with a minimal aesthetic and really inspiring visual merchandising store layout. I think it would really appeal to fashion conscious men who are the same age as the female target consumer, and have similar interests. 

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Appendix 5.Interview- AOS Current Customer Laura Mir | Date: 25/01/18 1. What encourages you to buy with & other stories?

The design of the clothes, I find it a very cool brand, I love the quality and the Scandinavian style of the garments. Also I like the fact that not many people wear their clothes.

2. What type of product do you purchase with this retailer?

Tops, blouses, knitwear, shoes, dresses, skirts, jewellery accessories.

and

3. How much on average would you say you spend each transaction.

On average £100. More if I buy a pair of shoes and less if I just buy tops.

4. Where do you think they could improve in store or online Online needs improvement. There is no search option and delivery is expensive. Fit finder like Zara would help. Quicker delivery options.

Better filters.

5. Would you buy for your partner if & other stories had a menswear section?

Yes, 100% 6. What kind of product do you except & other stories to stock for men: Good quality knitwear, basic shirts, nice blazers and some suit trousers, shoes, accessories.

7. Who do you think is their main competitors in menswear Cos, Reiss, Zara (for some products only) 8. Do you think the launch of the collection should just be in flagship stores and online Yes, at the beginning I would trial online and main stores in key markets as a test.

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Appendix 6. Interview- Former Marketing Assistant at The Idle Man Rachel Stephen| Date: 05/01/18 1. Who is The Idle man target consumer?

He is in his early 20s to mid 30s, on his second job in creative industry. Our target consumer lives in London is moving in or lives with his partner in their own space. They have a disposable income enough to consumer and live for experience.

This is a description of The Idle Man customer from Tezcan, “Hovering between high street and luxury: “Typically, it’s an urban, roughly 25year old guy who works in a large city, in an office where you don’t wear a suit. They’re not the scene setters – but they want to look cool and need a little guidance, help and information on how to dress the way they want” “menswear is so much less saturated than womenswear.”

2. Do you have a physical store environment?

We have a guide store. Oliver CEO came up with the concept after being inspired by Bonobos, as he argues that retail space is still relevant in an online world. It is a form of advertisement in itself. He prefers tangible item to touch, feel and try on. The employee in the guide store is a personal stylist as well as customer employee. We provide services such as office next day delivery. The response to the guide store has been very positive.

3. What methods of marketing worked best for results?

Email & blog through newsletters, Organic search-through SEO boosts.

Direct sales- social media-facebook & content adverts and sponsored posts worked well to get traffic through.

4. What social media posts did they engage most with?

Branded products and content were the main driver, They engaged well with grooming such as hair/ aftershave, body wash products too.

5. Did your customers engage with competitions that was put on?

They engaged with product giveaway competitions. Prizes were alcohol, technology- i.e speakers, festivals ticket, and so on.

often

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Appendix 7.Interview- Former Buying Intern at BoohooMAN Hannah Babb | Date: 20/02/18

1. Who is the BoohooMAN customer?

• He is 16-24.

• Price conscious - heavily influenced by promotion • Trend led and mobile savvy - most of their website traffic is mobile.

• Predominantly white.

• Most still live with their parents (44%) with a partner (24%).

• 86% no kids • Income 0-30k • Large percentage still in education (school or degree) • Social • 66% watch Netflix • Would Engage with content from lad bible / uni lad • Big on fb insta and snapchat • Very influenced by their friends • Would also shop with asos and top man 2. Why did Boohoo decide to go into menswear? And how successful was this expansion Because they saw the huge market opportunity- womenswear was becoming increasingly saturated and there was a gap in the market for boohooman , the only real competition was asos and they knew they could gain competitive advantage with their price points. Although they faced challenges when starting (like any new brand would) they had existing processes, infrastructure and etc from boohoo to make it a much easier start up compared to those going in from scratch. Its been very successful, the brand has seen huge growth and they have got big plans for the future.

3. What were the primary marketing tactics were used to target this target consumer.

Tv , bill boards , collaborations and big promotions - it’s like 50% off half the time - they know the target demographic is very price sensitive and influenced by discount so to widen consumer base and encourage men to ‘try’ they focus heavily on it; they will slowly pull back from discounting as the brand becomes more established (like ladies did- still do discounts but a lot less

than when they were penetrating the market) One thing they struggled with was becoming a brand in their own right and loosing connotations of being a ladies brand - which is why they re established themselves in 2016 with their own transactional website.

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Appendix 8. Survey- Results A questionnaire was shared amongst Male aged 18-45 through social media, LinkedIn, friends and family to gain an understanding of what the target audience value and demands, what shopping channels he uses, what influences him to make a purchase and what his shopping behaviour is like. A total of 70 responses was collected where 80% of the respondents were Male aged 25-30, therefore our infographic and customer profile has been catered to reflect this result.  

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Appendix 9. Existing Customer Profile

Existing Customer Laura- 31 Senior Merchandiser Manchester, UK What encourages you to buy from & Other Stories?

“The design of the clothes, I find it a very cool brand, I love the quality and the Scandinavian style of the garments. Also I like the fact that not many people wear their clothes” (Laura, 2018: Interview) “The & Other Stories Customer is fashion conscious; she uses social media and visits blogs, trying to find something new and interesting. Overall, the & Other Stories customer loves fashion and aspires to create her very own personal style as well as long lasting wardrobe.

According to the store’s staff, the & Other Stories customer is around mid/late 20s or older; the brand’s timeless silhouettes widen the H&M appeal to a different audience, with older customers(See Appendix 4).

The brand really captures contemporary consumer attitudes towards personal style (Fashionunited, 2013) Although affordable, & Other Stories quality comes with a higher price than other retailers, making the brand more exclusive.

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Appendix 10. Ansoff Matrix The Ansoff matrix was used to identify and analyse potential growth opportunities for AOS and ultimately, diversification strategy was identified as high risk but most rewarding as it would result in increased market share.

Existing Products Existing Markets

• Grow

market

existing

New Products

shares

by

products

pushing • C o l l a b o r a t i o n s further

designers

to

with

create

through marketing methods such

exclusive products and media

as

buzz or technology such as

events

and

influencer

to

reach a wider female audience.

• Investing in training employees

Futurelab to enhance retail experience

with

Augmented

to provide personalised retail

reality

shopping and service experience

experience

within

clothing in store.

store

spending

as

money

customers on

are

experience • Create

and activities than shopping.

• Incorporating in-store

tech

retail

within

the

environment

such as Interactive mirrors and • Web

optimisation

seamless integration

to

create

digital

later in physical world. and

create

of

trying

sustainable

recycled

materials

collected

store

promote

to

range

through

a

closed

loop economy. size

range

to

and

maternity

target

the

same

audience with different body shape and through times of

• Invest more within skincare and beauty

enhanced

comprising

provide • P l u s

omni-channel to

a

for

in

store

service stations to pamper the

maternity as they currently incorporate UK size 8-20 in their product assortment.

consumer.

New Markets

• Geographical as

development

national

and

such • Expansion

international

expansion to new markets, such

cater

the

COS

&

H&M

channels

such

currently

exist.

• New

growing

to

menswear

into

incorporating

Homewarethe

Danish

Hygge movement to create a as

better

mobile experience, online, app, and

Menswear

market.

as Asia, Australia and markets • Expansion where

into

opportunities

for

fully ‘one-stop’ destination for consumers.

new

digital ways to shop.

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Appendix 11. PESTLE Analysis External Macro factors can affect the framework of the brand. An analysis of the Macro environment was conducted to determine threat factors as well as positive trends that can support new for menswear expansion. The external influences are going to be using a PEST framework.

in-depth risk and strategy analysed

Political 1. As per the McKinsey report on fashion industry, “Geopolitical instability, terrorism, Brexit, and stalled trade deals will all increase a pervasive sense of uncertainty in the global economy” (McKBOF, 2017 report) The state of the fashion industry is affected by the ongoing political shifts in US and UK. 2. International expansion has dropped down the priority list, with only 28% of retailers focused on this area. Last year, this figure was 56% (Retailweek, 2018). A drop in retailers’ willingness to expand their global horizons is perhaps a result of Brexit, or simply a case of companies gauging how recently opened territories perform with the view to more international expansion further down the line (Retailweek, 2018).

Economical 1. In 2018, men’s clothing sales is predicted to grow by only 2.9% as consumers continue to see their disposable income squeezed as a result of rising inflation and interest rates and falling real incomes (Mintel, 2018) 2. According to Mintel (2017) many retailers are forced to increase prices following the Brexit vote in 2016. As a result, rising inflation will hit essentials such as groceries and petrol meaning that consumers will have less money to spend on non-essential purchases such as clothes (Mintel, 2017).

3. The redirection of consumer spend to leisure pursuits, eating out and at-home technology has also played a part in creating a more challenging environment in retail (Retail2018, 2018).

Social 1. Mintel report (2017) shows that almost three fifths of Millennial men use social media to help them decide what to buy.

2. According to Klear (2018), the number of influencer posts on Instagram doubled in 2017, reaching more than 1.5m in total (Econsultancy, 2018) 3. According to primary research store employee Emily (2018), “although males primarily come to shop for their partner, sometimes they come in to shop the beauty products for themselves as well as clothing items such as knitwear”.(See Appendix 4)

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4. Racial discrimination allegations on H&M Group in Q4 affected sales negatively and caused footfall to reduce due to bad publicity (Stack, 2018) 5. “People will still make their way to physical stores, not because they want to “buy stuff,” but because they want to get experiences that they won’t find anywhere else.” (Vendhq, 2018) AOS will need to ensure their in-store experience is catered to the male audience.

6. Building new brand loyalty takes 6x more effort than existing customers (Davidson, 2018) 7. According to Mintel (2017), the economy sees a shrinking youth population, therefore retailers need to focus their attention on the growing male population aged 25-44. Men aged 25-34 stand out as enjoying clothes shopping most, with 56% agreeing that shopping for clothes is a leisure activity. AOS will be catering to this age group and will need to take this finding into account.

8. Influencers and bloggers have a huge impact on today’s society, it has contributed to this idealistic lifestyle many people aspire to as they are more attainable than the lives of celebrities.

Technological 1. E-commerce was cited by 60% of the business leaders as a key area for investment in 2018, followed by mobile and customer service (both 52%), and employees (48%) (Retail-week, 2017) 2. By 2020 mobile commerce is set to make up half of all online purchases, with projected global sales reaching 250bn (WGSN White paper, 2018).

3. “75% of men aged 25-34 bought clothes online in the last 12 months” (Mintel, 2017). This stat backs up the argument that AOS will be utilising their existing digital website and social site as key platforms to sell.

4. Social commerce offers a real opportunity for retailers to shorten the path to purchase for customers, by allowing visitors to buy items directly from the social site, instead of being redirected to the retailers webpage (Chahal, 2016). This could benefit AOS as it is not fully operating in many markets and has limited location. AOS could enhance core competencies to ensure maximum capitalisation of their mobile commerce.

5. Digital layer on physical space by keeping up with demands of the tech savvy millennial. Streamline the gap between technological and the physical retail world. (Ref) 6. Artificial Intelligence has the ability to help brands and retailers with predictive forecasting, capacity planning and merchandising.

Seara managing director of BCG says that “It is, by far, the most important technology that is already here, growing and will change the fashion industry,” (Chitrakorn, 2018) 7. “Experiences will actually evolve based on customer data” (Ref)

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8. Ecommerce performance report suggests that 60% of companies will experiment with conversational commerce by 2020, this includes chatbots and personal assistants (Econsultancy, 2018)

Legal 1. Infringement is a legal issue affecting the fashion industry which H&M have previously encountered in the past, and now operate a strict risk management system to avoid any other dispute (H&M, 2018).

2. Intellectual property rights (i.e., copyright and trademark law), will come under the H&M Group umbrella and therefore will be covered for AOS Men.

Ethical 1. Ethics and compliance are important focus areas for the big brands and they are working actively in this direction. Compliance and ethics should be the core of the business and not an afterthought. (Ian, 2018) 2. H&M Group mission is “to make sure that fashion continues to be enjoyed today and for generations to come. But to create a truly sustainable fashion industry that is good for people, communities and the planet, (they) need to take (their) work to the next level.� (WGSN Insider, 2017) 3. The world’s natural resources cannot sustain the increasing demand for throw-away or fast fashion fashion.

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Appendix 12. TOWS Matrix

INTERNAL FACTORS

Strengths (S)

Weakness (W)

Opportuniti es (O)

AOS sits within the H&M brand portfolio where it has a strong financial position therefore it can introduce new development within their sub brands. An opportunity to develop a menswear range is a strong move the company could take.

AOS has limited global brand awareness. An opportunity would be to enhance the ‘Storytelling’ of the brand through Marketing strategies to create awareness within national and international markets.

Threats (T)

A brand such as AOS can build a strong menswear range with the unique handwriting of the three ateliers they operate through design. This can also include using campaigns to influence the male consumer.

Overall this can lead to a reduction in competition from other established retailers with menswear ranges.

H&M finances have took a negative turn in Q4 of financial year ending 2017. In the last quarter their finances was also negatively affected, potentially from the backlash of the racial scandal, which caused an uproar in media.

EXTERNAL FACTORS

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Appendix 13. Gantt chart

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REPORT BY,

N0591147 |N0555489 BABITA PUN & DANIKA MISTRY

BA (HONS) FASHION MANAGEMENT NOTTINGHAM TRENT UNIVERSITY

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