6 Month Buying Plan
Table of Content
Buyer’s Role
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Company Profile
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Company History
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Merchandise Analysis
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Product Offering
08
Stores
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Customer Profile
11
Competitor Analysis
13
Perceptual Map
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6 Month Buying Plan
27
Trend Report
31
Color Trend
32
Assortment Plan
33
References
34
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Buyer’s Role
As a buyer for Lane Crawford I will be focusing on shoes department. After clothing, shoes is the second big contributor in sales for Lane Crawford. Lane Crawford has a variety of brands including high-end and contemporary brands. My focus will be on high end brands. The love for luxury goods among the Chinese customers have taken a stop. The retail market has really taken a beating especially in Asia as there is a global economic downturn. Lane Crawford has been closing its stores in China hence there is an uproar of customers flowing in Hong Kong stores. The merchandise has to be perfect and according to the customer demand. Lane Crawford needs to cut down on extra inventory costs and boost up higher sales volume. By analyzing the macro market trends and competitors customer profiles it helps to understand what kind of merchandise is popular amongst Hong Kong customers and also what kind of merchandise is needed especially for Lane Crawford stores. The market segmentation and perceptual maps helps understand where Lane Crawford is positioned in the market to get better insight of the company. The six month plan focuses on merchandise according to the months and weather conditions for example as I will be buying for Spring / Summer 19, inventory would be much higher in April/May as customers are likely to buy spring collections at this time. Macro factors play a great role in customers shopping behaviors hence assortment planning is necessary as it helps the buyer understand the quantities of merchandise needed according to the demand of different product styles, color etc and also to cut down extra inventory costs. The six month buying plan had been created after considering all the macro factors, company’s primary and secondary research, customer analysis, competitor analysis and current market position. Batool Chishty
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Company Profile
Lane Crawford is a department store that offers the largest designer portfolio in Greater China in global luxury, fashion, beauty and lifestyle. It is globally renowned for its carefully created collections across international womenswear, menswear, shoes and accessories, jewelry, beauty and home & lifestyle
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Company History
Lane Crawford was started in early 1850s during the British rule. Thomas Ash Lane and Ninian Crawford opened shop on the Des Voeux road Hong Kong. The store sold everything including clothes, wines, antiques and also had a restaurant and a bakery. The store also expanded to China Shanghai, and Japan in 1860’s. In 1899 Hong Kong press reports “That the store is a place to buy anything from a pin to an anchor.” AW Brown the general manager during the 1940s, had to build everything from scratch after Japan China war as the Japanese military had taken over the property and the assets. The store started to focus on more luxury import items. After the death of AW Brown in 1958, Lane Crawford has continued to operate under different managements.
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Company History
The Lane Crawford that we see today has been modernized by Jennifer Woo in 2003. Woo moved away from the traditional department store aesthetics and focused more on bringing in international designer fashion. In 2004 Lane Crawford flagship store at IFC was launched. At 82,000 sq feet it is the largest Lane Crawford in its history. In 2007 Lane Crawford’s first Beijing store was opened with more than 600 brands out of which most of them are exclusive for Beijing market. This is also one of the reason why people from China come to shop at Hong Kong Lane Crawford stores because they are looking for variety. Lane Crawford launched e-commerce website in 2011 and became competitor to companies such as Net-A-Porter, Farfetch and Matchesfashion. Though for the buying plan I will be focus on the retail stores.
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Merchandise Analysis
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Product Offering
As a buyer I will be focusing on shoes department. Lane Crawford has variety of brands including highend and contemporary brands. My focus will be on high end brands. Merchandise price analysis Boots (450-19000) HKD Flats (300-9000) HKD Low Heels(600-10000) HKD Mid Heels (400-10000) HKD High heels (350-13000) HKD Sandals (400-13000) HKD Sneakers (200-8900) HKD
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Stores
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Stores
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Customer Profile
Lane Crawford Hong Kong has three stores where shoes are available IFC Harbour City Times Square Customer profiles vary according to the stores. IFC store has equal number of tourists and Hong Kong residents flowing in. As IFC mall is a famous mall it attracts a lot of mainland tourists.
Shoes is the biggest part of buying after clothing Most customer live outside Hong Kong and are from Mainland China Have a great interest in fashion Earning income is high Looking for latest trends and more experiential shopping experience
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Customer Profile
Lane Crawford stores in Harbour City and Times Square attract more mainland and other tourists than IFC store because they are located in shopping areas of Hong Kong where the tourists always go to shop. This reason makes the sales of these stores relatively high. However the IFC store holds the most of the shoe merchandise because it caters to both the Hong Kong residents and also tourists. Major pop up events are also held at IFC store as it has more brand value. International Finance Centre is one of the tallest buildings in Hong Kong and this makes the IFC store stand out more. The tourists are attracted by other high end designers also and in Times Square and Harbour City they are in close proximity with designers like Gucci and Chanel this also adds to the business of Lane Crawford stores in this area. Lane Crawford customers in general regardless of the different stores are more mass market customers who like variety and mainstream high end brands.
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Competitor Analysis
According to traditional retail store perspectives Lane Crawford’s competitors would be Harvey Nichols, Joyce and IT in Hong Kong. However if we look at e-commerce then the competitors would also include fashion e-commerce websites such as Matchesfashion.com, Net-A-Porter and Farfetch. Harvey Nichols is a British luxury department store that first opened in 1831 and offers the ultimate fashion experience. Exclusive, niche and established labels sit alongside accessible everyday collections. Thye have stores in the UK and seven large format stores overseas Turkey, Saudi Arabia, Dubai. Hong Kong and Kuwait. Joyce was founded in 1971 and represents designers who transcend creative boundaries. A nurturer and supporter of extraordinary talents across the world with a wide distribution portfolio of innovative designers. IT rides on a unique multi-brand, multi layer business model. A multi channel approach that caters to well defined groups of fashion lovers in targeted regions with distinct multi brand stores and single brand shops. IT is a place for young shoppers to find the best fun, edgy casual wear. Just like Joyce, IT also believes in nurturing new and unknown designers.
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Competitor Analysis
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Competitor Customer Profile
Demographic Gender- both male and female Age- 25-65 Psychographic Harvey Nichols has a more variety of niche brands in comparison to Lane Crawford so the customers of Harvey Nichols have high interest in exclusive niche expensive luxury brands. Geographic Hong Kong and tourists from Europe and various countries In general Harvey Nichols customers are from all over the world because of its international recognition therefore it has a lot of Italian, British and exclusive niche brands.
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Competitor Merchandise Analysis
Merchandise analysis Boots (2000-12000 HKD) Flatforms (900-6500 HKD) Flats (600-6500 HKD) Mules (650-6000 HKD) Pumps (3000-7000 HKD) Sandals (600-9000 HKD) Trainers (650-7000 HKD) 16
Competitor Analysis
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Competitor Customer Profile
Demographic Gender-Female Income based on the price value of merchandise and occupation of customers 20000 HKD and above Occupation-Young Professionals, students who are interested in high end exclusive brands, KOL’s and celebrities such as Korean pop stars Psychographic High interest in fashionable exclusive niche brands Geographic Hong Kong, Mainland China Behavior- Customers are interested in Japanese and European brands 18
Competitor Merchandise Analysis
Formal shoes Sneakers Boots Loafers Flat shoes Heels All range from 1000-13000 HKD
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Competitor Merchandise Analysis
Brands Acne Studios Ann Demeulemeester Carvela Coliac Comme des Garcons Play DRKSHDW Joshua Sanders McQ Alexander McQueen MM6 N21 Opening Ceremony Rick Owens Simone Rocha Tsumori Chisato Zadig Voltaire
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Competitor Analysis
Although Lane Crawford is under the company Joyce the customers for both brands are quite different. Lane Crawford customers are more mass market segmentation customers who like mass market brands such as Christian Louboutin while Joyce customers are more into exclusive products that make them stand out. Shoe merchandise is not in large quantity at Joyce in compare to Lane Crawford though the customers at Joyce shop here because they want exclusivity. Joyce customers are high profile influencers and KOL’s(Key Opinion Leaders) in Hong Kong who shop at Joyce to stand out from the rest of the crowd and get photographed by magazines. With totally different customer values both brands make equal amount of sales as the values, interests and shopping behaviors of the customers are totally different regardless of them living in the same city.
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Competitor Customer Analysis
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Competitor Customer Analysis
Demographic Gender- mostly female Highly Fashionable customers earning 20000 and above based on the merchandise price available in stores Age 25-40 Psychographic Interest in fashion and arts As Joyce does a lot collaborations with different artists, its customers have high interest in arts and fashion Geographic Hong Kong Behavior Looking for exclusive niche market products 23
Competitor Merchandise Analysis
Brands Vetements Balenciaga Sue Comma Bonnie Loewe Price range 3000-7000 HKD
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Perceptual Map Prestige Price
Niche Market
Mass Market
Affordability Price High End Brands
More Focus on Casual Shoes
More Focus on Formal
Exclusive Unknown Brands 25
Perceptual Map Older Customer
Fashion Focused
Timeless
Younger Customer
High Price
Wide Range of Shoes
Narrow Range
Low Price 26
6 Month Buying Plan Lane Crawford stores always have sales on special occasions with merchandise being mark down up to 70% off. The brands include all contemporary and also high-end brands. With new seasons and new inventory coming up it is important to get the old seasonal stock sold out to lower the cost of inventory. Hence the buying plan will focus on how to cut back extra inventory costs and increase high amount of sales because at the end of the day it is all about profit.
Lane Crawford sales happen according to the shoe sizes with 40 and 41 being the lowest in number as these sizes are not bought in high quantity by the store.
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6 Month Buying Plan
Planned Sales 2018/19 (Last Year) and 2019/20 (Plan) six month sales are estimated based on past three year Joyce Boutique Financial reports. By analyzing past three years sales trend I determined that sales have been decreasing year over year by 19%. Over the 3 year Hong Kong (HK) sales have increased as a percentage to total Joyce Group sales from 84% to 85.5% and 88.7%. This is due to a major decrease in group sales outside of HK. I have estimated that for the 2018/19 season and 2019/20 season Hong Kong sales will be 90% of total group sales. Joyce Boutique operates 24 stores in Hong Kong of which 3 are Joyce (12.5%), remaining are Joyce Beauty and specific brand stores. It is estimated that the 3 Joyce store sales represent 20% of Joyce Group HK Sales. It is assumed that Lane Crawford sales would be same as Joyce group as they are competitors and both hold equal interest of customers in market segmentation hence I decreased Lane Crawford sales by 19% year over year as well. It is further estimated that women department sales are 50% of the 3 Joyce store sales and off those 25% represent shoe sales. Women shoe department in Lane Crawford has the second highest sales after clothing hence making up to 25% of total sales. Monthly sales are distributed with a higher percentage in Apr/May (peak of spring season) compared to other months.
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6 Month Buying Plan Planned Markup % - Markup for 2017/18 year is calculated from the financial reports, assuming a 10% average reduction for the season. Planned markup is set at 54% to allow for greater discounts for Lane Crawford shoe merchandise to push sales as market outlook is not favorable. Hence Lane Crawford needs to have low inventory and higher sales volume. Gross Margin - Gross margin of 49% is calculated from the financial reports. Same gross margin is planned for the new season Average Inventory - The stock to sales ratio is determined from the financial reports, For the new season a lower stock to sales number is used to keep a tight stock based on the general economic situation and the market forecast. Based on the distributed monthly sales and stock to sales ratio, each months beginning of month inventory is determined, which can then be used to determine the average inventory for the season. Inventory Turnover - Inventory turnover is calculated from seasons sales and average inventory. A higher turnover is planned for the new season, as intention is to keep lower inventory and push sales through more reductions. Markdowns and Reductions - An average markdown is assumed for last year at 10%. For the new season with the general retail outlook not looking good a higher markdown of 12% is used. Based on the seasonal planned sales, the total markdown is determined. Markdowns are distributed with a high percentage in the first month February as the store is getting rid of winter merchandise and for the end of season June and July as it is summer sale period. BOM and EOM - Planned BOM is determined for each month based on the stock to sales ratio. EOM inventory is just the BOM of the following month. EOM of the last month July is estimated by lowering the BOM as our purchasing will be low in July. Retail Purchases - Purchases for each month are determined by monthly sales, reductions, BOM and EOM.
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6 Month Buying Plan
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Trend Report
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Color Trend
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Assortment Plan
Sales by store IFC and Harbour City store has the most shoe brands and variety while the Times Square Lane Crawford store has more contemporary brands and less high-end brands Sales by Classification Athleisure trend has taken a massive uproar since past few years and is only likely to grow hence the sales of sneakers are always high as well is their demand. Geographically Hong Kong is hilly and it is more practical for people to wear sneakers while being up to trend and fashionable at the same time. Fabrication had been chosen by looking at the macro factors including weather, where light materials are preferred in clothing as well as shoes. Most sneakers are made from high quality leather and canvas hence the percentage for these is high. For shoes other than sneakers the fabrics will vary from satin to suede. Pastel and Bright colors are major staples in Spring. This color trend is not only seen in clothes but also in shoes. Colors like Black and Nude are classics that customers will buy regardless of the season. Especially the working professional women in Hong Kong would prefer more neutral tone shoes that can be worn everyday whereas the edgy customers would want more fun colors like pastel and bright colors. Plan by size has been assorted to what the department store always buys. The size 40 and 41 is bought in the lowest amount whereas others on an average percentage. As a buyer I would purchase sizes that would be sold. Chinese people have small feet sizes hence buying bigger size would not be an advantage. For pricing the most expensive shoes are bought in the lowest quantity to give it an exclusive approach and lowest price shoes in higher quantity to boost up higher volume of sales.
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References (n.d.). Retrieved February 06, 2018, from http://www.joyce.com/ (n.d.). Retrieved February 06, 2018, from https://www.farfetch.com/hk/shopping/women/items. aspx N. (n.d.). Retrieved February 06, 2018, from https://www.net-a-porter.com/hk/en/ (n.d.). Retrieved February 06, 2018, from http://www.glossy.co/uncategorized/for-farfetch-2018is-all-about-global-growth-and-the-store-of-the-future (n.d.). Retrieved March 11, 2018, from http://www.irasia.com/listco/hk/joyce/ 8 Reasons Consumers Like To Shop Online – Cater To Them For Online Retail Success. (2015, June 30). Retrieved February 06, 2018, from http://upstreamcommerce.com/blog/2012/02/14/8reasons-consumer-likes-shop-online T. (2017, January 04). 12 reasons why online shopping is better than in-store. Retrieved February 06, 2018, from http://www.telegraph.co.uk/technology/connecting-britain/why-online-shoppingis-better-than-in-store/ 14 September 2013 By Catherine Neilan. (n.d.). Close-Up: Andrew Keith, president, Lane Crawford. Retrieved January 28, 2018, from https://www.drapersonline.com/people/the-drapers-interview/close-up-andrew-keith-president-lane-crawford/5052912.article Buyer - Home and Lifestyle at Lane Crawford | BoF Careers. (n.d.). Retrieved January 28, 2018, from https://www.businessoffashion.com/careers/jobs/buying/hong-kong/lane-crawford/buyerhome-and-lifestyle China’s addiction to luxury goods. (2014, April 29). Retrieved January 28, 2018, from https:// www.economist.com/blogs/economist-explains/2014/04/economist-explains-17 China’s Luxury Market Set for Steady Performance Amid Unfavourable Market Environment. (2017, June 21). Retrieved January 28, 2018, from https://blog.euromonitor.com/2017/03/china-luxury-market-steady-performance-amid-unfavourable-market-environment.html Eugénie Trochu, translated by Roxanne Cecil. (2018, January 04). 9 shoe trends from Fashion Week Spring/Summer 2018. Retrieved January 28, 2018, from http://en.vogue.fr/fashion/fashion-inspiration/diaporama/en-shoe-trends-fashion-week-spring-summer-2018/46529#les-tendances-chaussures-de-la-saison-printemps-ete-2018-resille_image5 Explainer: Why do millions of people shop online on November 11? (2017, November 10). Retrieved February 06, 2018, from http://www.scmp.com/tech/e-commerce/article/2119309/explainer-why-do-millions-people-choose-shop-online-november-11
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References R. (2018, January 31). Farfetch gears up for fashion store of the future. Retrieved February 06, 2018, from http://www.businessinsider.com/r-farfetch-gears-up-for-fashion-store-of-the-future-2018-1 Harvey Nichols. (n.d.). Retrieved February 06, 2018, from https://www.harveynichols.com/en-hk/ Horton, C. (2016, April 05). When It Comes to Luxury, China Still Leads. Retrieved January 28, 2018, from https://www.nytimes.com/2016/04/05/fashion/china-luxury-goods-retail.html I.T IS INSPIRATION (@ithk) • Instagram photos and videos. (n.d.). Retrieved February 06, 2018, from https://www.instagram.com/ithk/ Lane Crawford calls the shots. (2006, November 23). Retrieved January 28, 2018, from http:// www.scmp.com/node/572711 Luxury Is Now Online. Shop Your Way, Anytime, Anywhere. | Lane Crawford - Shop Designer Brands Online. (n.d.). Retrieved January 28, 2018, from http://www.lanecrawford.com.hk/ MATCHESFASHION.COM. (n.d.). Retrieved February 06, 2018, from https://www.matchesfashion.com/intl/womens Ng, D. (2017, September 06). Meet the man who once owned 13,000 pairs of shoes: Sneaker Con’s Yu-ming Wu. Retrieved January 28, 2018, from http://www.scmp.com/magazines/style/fashion-beauty/article/2110032/sneaker-con-feeds-hong-kongs-growing-hunger-luxury Paurav Shukla Professor of Luxury Brand Marketing, Glasgow Caledonian University. (2018, January 26). Consumers in Asia buy luxuries for different reasons to the West. Retrieved January 28, 2018, from http://theconversation.com/consumers-in-asia-buy-luxuries-for-different-reasonsto-the-west-45069 Selling to Harvey Nichols: Don’t assume you’ll have to play hardball. (2017, June 07). Retrieved February 06, 2018, from http://businessadvice.co.uk/supply-chain/sourcing-suppliers/selling-toharvey-nichols-dont-assume-youll-have-to-play-hardball/ Vetements. (n.d.). Retrieved February 06, 2018, from http://vetementswebsite.com/ Why mainland consumers have an big appetite for luxury goods. (2014, January 26). Retrieved January 28, 2018, from http://www.scmp.com/lifestyle/family-education/article/1412663/ why-mainland-consumers-have-big-appetite-luxury-goods
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