J. Crew China Marketing Plan
Capstone Project Winter 2016 Christina Tai
2
Table of Contents
About J.Crew
4-5
Understand the Market Understand the Competitors Target Customer
6 - 11 12 - 14
15 - 17
Marketing Plan / Place
18 - 19
Marketing Plan / Price
20 - 21
Marketing Plan / Product Marketing Plan / Promotion
22 - 27 28 - 33
3
“About the Brand”
4
About J. Crew
J.Crew is an American multi-brand, multi-channel, specialty retailer. The company offers merchandise from women's wear, men's wear, children's apparel and accessories, including bags, jewelry, and shoes. J. Crew is known for its fine quality apparel and various choices in color and prints. They provide both formal attire like suiting and cocktail dresses and also smart casual items that is stylish. In greater China area, J. Crew just launched its first retail store in Hong Kong and is preparing to expand to mainland China.Thus, this marketing plan is made for J. Crew's first China flagship store. 5
“Understnad the Market”
6
Chinese Millennials
China has been an important apparel market for international brands around the world for years. However, it is a difficult market to success due to the culture differences and all the changes happened quickly in recent years. Base on my research, I found Chinese Millennial as one potential emerging consumer group for J. Crew. Chinese Millenial are the ones that born between 1980 to 1990, and they have quite different aesthectics and need from the conventional Chinese consumer. And in order to success in the China market, the marketing plan I made for J. Crew will adapt to their special needs. 7
Urban Aesthetics
8
Chinese Millennials embrace the urban aesthetics and appreciate the modern life style in big city. “As an iconic symbol for innovation and opportunity, their relationship with the city serves an important inspiration. Notable Destinations such as Shanghai, Beijing, Chengdu all represent creative hubs for Millennial.� (2015, WGSN) Therefore, J. Crew's urban aesthetics can appeal to them.
Tech Savvy
Chinese Millennials are tech savvy. Digital experience is important for them that they rely heavily on social media, online shopping, and most importantly the mobile apps. Therefore, it is important for J. Crew to understand this trend and adapt to their need. Adopting local social media to communicate with their customers is one important step. Providing not only e-commerce but also mobile shopping can give the consumers that have busy lifestyle more convenience to spend their money in J. Crew.
9
The Lonely Generation
10
“Having grown up with a six-to-one family structure – four grandparents and two adults – these highly stressed, selfobsessed individuals are giving rise to a growing solitary urban consumer group” (WGSN, 2015) Chinese Millennials are the lonely generation that are looking for retail experience that can provide interaction. Thus, J. Crew's stylist service is definitely one unique selling point. Also as they are the child that growing alone, they are self-conscious of personal identity and are not afraid to show off themselves, which means bright colors and items that have unique details and prints will meet their needs.
The Rise of Feminism
�female-focused socials have been growing among Chinese Millennial women to challenge traditional gender notions� (WGSN, 2015) There are data shows the spending power of the female Millennial not only surpass their male counterparts but also have potential to keep growing. There are also research shows female are the ones to decide what to buy in a family. Therefore, the female Millennial is surely the focus consumer group for J. Crew China.
11
“Understnad the Competitors�
12
Tommy Hilfiger
Tommy is also an American brand that provide similar merchandise as J. Crew in similar price range. However, Tommy is less fashionable and the style is more mature compared to J. Crew. Also, J. Crew have provide more choices on staple pieces which I believe can attract younger customers. However, Tommy is higly aware of the difference between China market and Western market, their China website and the social media page shows their ambition to connect with the Chinese consumer. Therefore, this will be a good example for J. Crew to learn from and improve on. 13
Gap
14
Gap is also a brand that provide wide range of colors and choices in staple pieces, they also have affordable items in wool or cashmere which make them a competitor of J. Crew. However, since Gap's price range is lot lower than J. Crew, their quality is not as good as J. Crew too. Thus, Gap's consumer are the ones are younger while J. Crew can target on elder consumers that care more about the quality. Gap has been in Asia market for quite a while and they are good at connecting the market by using famous celebrity in their advertisement.
“Target Customer”
15
Urban 80s Fashionista Age: 28 Occupation: PR Place: Shanghai Lifestyle: Fascinated by the urban aesthetics. Their lifestyles is busy, however, they also takes time to have fun and go to parties. They are looking for loud colors and fun prints to show their personal style, and is willing to spend more on their working attire and party dresses.
16
Power Women Age: 34 Occupation: Founder of start up company Place: Shanghai Lifestyle: They are busy both with work and their families, and are trying to balance between working and quality time. They are looking for professional outfit with fine details, and also high quality staple pieces which they can pair up with blazer for work or pair up with jeans for leisure.
17
“Marketing Plan / Place”
18
Shanghai Flagship Store
I chose Shanghai as the location for the flagship store since it is one of the most prosperous cities in China. Also, compared to Beijing, I found the street style in Shanghai is more colorful when the people in Beijing tend to dress black and safer colors more. Thus, I believe Shanghai will be a better choice for J. Crew. After research on the major shopping area in Shanghai, I found Huaihai Middle Road the perfect place for J. Crew’s first flagship store. Huaihai Middle Road is along with metro line and is close to a lot of high-end department stores and famous area like the bond, Xintiandi. Thus, the flagship store can be exposed to more people and attract its target customers when they are shopping around this area. 19
“Marketing Plan / Price”
20
Pricing Strategy
For the pricing strategy in China, I’ve researched in the competitors’ pricing and also other international brand’s pricing. I found out the markup between the same merchandise in China will be 16% higher than the ones in Hong Kong. Thus, I decided to follow this markup for most merchandise; however, for the basic items like T-shirts and tank tops, I want to lower the markup to 10% to make them more affordable to the younger consumer group. And the affordable basic items can also attract more potential customers and increase traffic to the store. 21
“Marketing Plan / Product”
22
TCX 13-4103 Iced Aqua
China Limited Color TCX 13-0117 Mint Sorbet
TCX 809C Bioluminescent Yellow
TCX 18-2143 Power Pink
As one of the promotion, I’ve chosen six colors that are going to be the colors only sold in China in a limited period of time. I chose these color based on extensive research on color trend report of China, and at the same time considering the target market and the season. Iced aqua, orchid tint and mint sorbet are the colors targeting on the feminine customers; these colors are refreshing and calm. As for bioluminescent yellow, power pink and salmon rose, these saturated colors are targeting on the younger consumer who are bold and fun.
TCX 15-1626 Salmon Rose
TCX 13-3802 Orchid Tint
23
Assortment by Color I’ve made three assortment plan for the women’s wear department, including color, fabrication and style. The color assortment plan I have divided the categories into six different hues, black, white, stripes/plaid and prints. White and stripes/plaid have the highest percentage, as they are the key items in spring summer. Prints is one of J. Crew’s signature, also since prints has always been a favorable choice for Chinese market, I allocate 11% to the prints category. For the colors, the red and the blue got the highest percentage, as they are widely accepted by Chinese women in different age. The red hue can show the energy of Chinese millennial women and the color also suits their skin tones well. As for the blue, it is the perfect color for summer and there are quite a lot trend report spot on blue to be one of the most popular color on China’s street in the following summer.
24
Assortment by Department In J. Crew’s flagship store, there are four department including women’s, men’s, children’s apparel and accessories. Based on the in-store research in J. Crew time square and the result of my market research, I decided to allocate 45% to women’s wear and following men’s wear of 30%. Since children’s wear is still a new department in China, I allocate 15% first and can be adjust later based on consumer’s reaction.
25
Assortment by Fabrication In fabrication assortment, the top category is Cotton / Linen Woven and Cotton Linen Jersey since these two are the category the basic items falls in, including T-Shirt, casual shirts, skirt, casual bottom and casual dresses. Though Cashmere items are one of the popular category in J. Crew, considering the summer weather in China, I decided to allocate 10% for jersey (for pieces like sleeveless top and light weight cardigan), and 7% for woven (for items like suiting blazer and bottom); on the other hand, I higher the percentage of silk to 14% since the cool hand of silk is more ideal for the weather in China. As for other fabric like leather, lace and sequins fabric, I didn’t allocate much since those are in higher price point for J. Crew collection; however, I’ve seen trend report alerting the emerging trend of lace in China, thus I gave lace a higher percentage. 26
Assortment by Price For price assortment, the highest category will be RMB250 -RMB980, this is the price range most of the basic items falls at, and they are the merchandise that most of the consumer will interest in. And the following category RMB 980 - $1580 will have 23% since the stylish items like silk top, casual dresses and denim jackets all fall at this category, they are items that are attractive to our target customer and at the same time affordable for them. Also, RMB2180 - RMB3180 have higher percentage than RMB1580 - $2180 because the silk cocktail dresses and formal suiting items are in this price point, and I believe J. Crew’s target customer will be willing to invest more in this sort of merchandise. As for the category of more than RMB3180, most of the J. Crew collection will be in this price category and it will have lower percentage since it is less affordable. Currency: RMB 27
“Marketing Plan / Promotion”
28
Advertisement
The advertisement for J. Crew China will remain the same aesthetics of the J. Crew ad. And the advertisement for the new opening of the flagship store will focus on J. Crew’s signature quality including slogan like “Undefeated Quality”, “Sophisticated Details”, “Colorful Choices” and “Easy Elegance”. The ad will be seen on the internet and also the outdoor billboard around the major shopping area.
29
Social Media
30
Based on my research on the Chinese Millennial, they are tech savvy and heavily relied on social media since they are known as the lonely generation that grew up alone under single child policy. However, the social media in China is quite different from else where since the major social media in the west, including facebook and instagram are all banned. Therefore, it is important for J. Crew to cater to this difference and use Weibo, Wechat and other local social media app as their way to connect to their customer closer.
J. Crew App
Mobile phone is one of the most important devices among all the others for Chinese Millennial. Thus, I created this mockup “J. Crew App� to reflect the need of having a more convenient channel for J. Crew’s customer to reach out the brand. In this app, it will require the user to register membership in order to start, the registration will be free and the data can be used further for big data analysis or CRM. This app will include online shopping, access for look book and the new campaign, and the stylist booking service.
31
Pop up Store
32
To promote the opening of the flagship store, I planned to have pop up stores on the plaza of department store on Huaihai Middle road. The pop up store will have 6 little wooden houses; each house will have its own color chosen from the China limited color. Before walking into the house, the visitor will be asked to scan the QR code in order to join the J. Crew app. The pop up store won’t sell any products but will be the place for potential customers to interact with the brand and know more about the brand. Each house will have several tablets ready for customer to play with, staff to greet the visitors and introduce J. Crew to them, and also one ice pop stand to give out free ice pops after the visitors finish the game.
Interactive Game
The visitors will be invited to play the styling app that designed by J. Crew. The app will have all the items that are going to sell in stores, and by choosing different items and dragging them onto the model, the visitors can create their own ideal look. After finish they can choose to share the look with their friends on social media, and they will get free ice pop as rewards. Each ice pop will have a number on the stick and different number refers to different prizes. The prize will include different coupons form 10%off to 30% off, or even chance to win every item from the look they just styled and shared. 33
34