Visual merchandising for cos (c) Copy Right Christina Thordal Andreasen by Christina Thordal Andreasen

COURSEWORK4 DISTRIBUTION REPORT (INDIVIDUAL 30%) CHRISTINA THORDAL ANDREASEN BA FASHION MARKETING & COMMUNICATION LEVEL 5, 2017-2018 5FAMK004C MARKETING TECHNIQUES & STRATEGY 2 CWK4 VISUAL MERCHANDISING AND E-TAILING PROJECT (INDIVIDUAL) 20% QM ANA ADELL WORDS 3621

â&#x20AC;?At COS, we want to propose a style inspired by architecture, graphics, design and arts,â&#x20AC;?

ÂŠ Ethereal installation by Snarkitecture and COS at Salone del Mobile, Milan â&#x20AC;&#x201C; Italy, 2015. (Authors of cosstores.com, 2015)

TABLE OF CONTENTS INTRODUCTION & METHODOLOGY..........................................................................p.6 KEY FINDINGS......................................................................................................................p.7 1. COMPANY BACKGROUND ..........................................................................................p.8 1.1 EXTERNAL ANALYSIS...............................................................................................p.8 1.1.1 PEST ANALYSIS...........................................................................................................p.8

1.2 INTERNAL ANALYSIS.................................................................................................p.10 1.2.1 COMPANY PROFILE & KEY NUMBERS .....................................................................p.10 1.2.2 KEY INFLUENCES.......................................................................................................p.12 1.2.3 COMPETITIVE STRATEGY.........................................................................................p.14 1.2.4 SEGEMENTATION.......................................................................................................p.15 1.2.5 MARKETING MIX ........................................................................................................p.15

2. FIELD RESEARCH.........................................................................................................p.22 2.1 INTRODUCTION OF COSâ&#x20AC;&#x2122; RETAIL & PRODUCT CATEGORY.................p.22 2.2 FIELD OBSERVATION..............................................................................................p.23 2.2.1 COS OBSERVATION ..................................................................................................p.23 2.2.2 WINDOW DISPLAY & EXTERNAL STORE DESIGN................................................p.23 2.2.3 INTERNAL STORE DESIGN.......................................................................................p.24 2.2.4 PRODUCTS & PLACEMENT .....................................................................................p.24 2.2.5 EVALUATION OF IN-STORE COMMUNICATION ...................................................p.25

3. PROPOSAL........................................................................................................................p.30 3.1 SWOT.............................................................................................................................p.30 3.2 MERCHANDISING STRATEGY............................................................................p.31 3.2.1 OBJECTIVES..............................................................................................................p.31 3.2.2. PROPOSALS...............................................................................................................p.31

BIBLIOGRPHY.....................................................................................................................p.37 ANNEX......................................................................................................................................p.45

INTRODUCTION & METHODOLOGY

In an increasingly digitalised retail environment, in which

petitive market space. With outset in a thorough research and analysis of the current visual merchandising techniques of COS, a field observation is conducted directly in the point of sale, in order to identify the strengths, weaknesses and potential opportunities and threats of the present brand strategy. Additionally, the SWOT analysis allows for proposing effective and improved strategies for the visual merchandising of COS. and must for the same reason demon-strate compliance in communicating brand identity both online and offline. Research is gathered by quantitative and qualitative data to assist the broadest perspective possible as well as establishing the groundworks for a future proposal of the visual merchandising strategy. Quantitative material has primarily been obtained through statistic resources and annual reports, while the qualitative material mainly relies on online resources, case studies, trend forecasts and information obtained through in-class lectures. The AdHoc research is complimentary included in order to provide the report with first-hand data collection and observations, supporting online resources.

e-commerce retains as a growing and highly significant influence, fashion retailers are experiencing both a revolution and evolution of the existing distribution methods. While the experience-economy and direct consumer interac-tions were reserved for the brick & mortar retailers in the past, online retailers have additionally adopted these offerings and evolved towards experience and interactions related content rather than limited to purchase orientation only as it adapts to the current state of consumption (Table 1). Nevertheless, retailing is by 2018 in need of an Omni-channel distribution approach of leveraging various digital platforms to engage and entreat customers into brick & mortar spaces to push experience fulfillment (Re-Meter Website Editors, 2017). Therefore, both distribution methods are dependent on each other in today’s retail environment. Following report examines the visual merchandising structures of the Swedish founded H&M Group subsidiary, COS, and its compliance with established brand values, characteristics, trends & branding in an increasingly com-

KEY FINDINGS Throughout this report, research has established internal and external brand insights for the H&M Group subsidiary COS. With regard to the brief giving emphasis to analysing visual merchandising structures to increase retail sales, key findings include a range of opportunities for COS to elevate the brand identity in line with sociocultural trends (Table 1) and from there increase in-store and website traffic, pushing retail sales.

Brand insights generally established one overall key fin-

current technological trends and solutions of digital points ding for COS; to include its artistic roots further into its of sales in-store, augmented reality and of high importance in-store environment to improve the retail experience. m-commerce to its in-store environment. Thirdly, COS has an opportunity to further align its webPrimarily, COS has an opportunity to improve its website site with in-store environment, by re-categorising product and in-store experience at Passeig de Gracia, by including assortment in-store and dedicate an area additional to the its brand collaborations and partnerships with the art and website category “The Essential Collection”, in order to design industries into its in-store environment. Additional- elevate brand identity and guide the customer to the true ly, this will provide COS with enhanced consumer interest essence of COS lifestyle by relaxed and considered pieces, in the store, line with the sociocultural trend of increasing easy to combine into any outfit. public interest in art, and moreover help COS to establish itself as a further lifestyle-orientated brand by pushing im- These key findings exist additionally as the proposal objepulse purchases of home décor collaborations. Finally, this ctives (See p.30). will assist COS to improved exterior visibility, as the store location often suffers from reconstruction works. Secondly, a key finding exists in the opportunity for COS to implement an Omni-channel retail approach by adopting

1.COMPANY BACKGROUND

ÂŠ COS X Agnes Martin Collection,Guggenheim Museum, New York. 2016. (Morby, A., 2016)

1.1 EXTERNAL ANALYSIS 1.1.1 PEST ANALYSIS

Following analysis is based upon research (including

the fashion system is highly adopting collaborations and partnerships to offer extended portfolio, seamless Omni channel experience and to assists brand expansion into new segments or markets.

edits for this research) from a PEST analysis (Annex, exhibit 2, PEST analysis) conducted for previous CWK1, Distribution report, from the subject, Distribution systems. Additionally, the PEST analysis has been converted into Table 1 (re-used from previous CWK1, Distribution report p.7. including edits for this research.), to give emphasis to the current market circumstances within the fashion industry. Following text highlights the main takeaways from the PEST analysis. According to Table 1, the global retail industry is experiencing a revolution, as e-commerce is de-veloping new technological solutions and both serves and disrupts the existing consumption behavior. The global economy is facing a growth shift from western markets towards eastern and southern regions, elevating an increasingly competitive market space. The analyzed consumer shifts testify to the generally changing social behavior for digital preferences, as for why e-commerce is of growing significance as a distribution method and brick & mortar stores are losing traffic. Nevertheless, analysis of consumer shift and the fashion system, found a continuous con-sumer need and desire for human interaction and physical touch points throughout the shopping journey. For that reason, the current state of retail is in a state of changing distribution formats towards further Omni-channel approaches. Additionally,

Especially, collaborations and partnerships are of high importance for COS, as retailers use it in order to enrich the consumer experience for both the brand, store and art institution, so both parties benefits from the initiative. These collaborations and partnerships help to change the way artists present their works and allows retailers to bring design to the forefront for customers to experience art in a reinvented, new and modern way. For COS, these collaborations and partner-ships help the brand establish an image of craftsmanship, curation and credibility. There are also undeniable financial motivations. In many events, retailers fund major exhibitions outright, or compensate relevant artists or institutions in the same way they would a top designer, with deals often worth several millions of dollars, especially if the partnership extends beyond a single exhibition or collection. This collaborative strategy is still relatively niche and therefore it is challenging to educate the consumer on the new product value.

GLOBAL ECONOMY - Growing market optimism of fashion sales - Economic growth shift from West towards East and South

TECHNOLOGY

- Online platforms as the first point of search, while lost interest in - This online evolution within the retail sector causes immediate shopping centers/malls brand actions towards how to collaborate with large online players

- Increased adoption of innovative and disruptive technologies - Growing digitalization in both online and offline retail environment - Digitalisation across value chains with refined cost structure. - Consumer data and insight-based business models pushing distribution efficiency. - Rapid expansion of online platforms is expected to develop into the premium and luxury market

- Consumer desire for user-led design- and experience processes of - Adoption of collaborations and partnerships to offer extended - Internet of things (IoT) provides fashion personalization and mass-customization retailers with opportunities to gain new and portfolio, seamless omnichannel experience and to assist brand thorough customer insights. expansion into new segments or markets. - Increasing social media influence - Online platforms are developing own private fashion labels to give - Increased mass-market and public interest in fine arts. This shift strength to own positioning within the fashion sphere. is democratizing the art world.

TRENDS

FASHION SYSTEM

- East and Southern market domination - Changing distribution formats and channels marks the evolution - Growing significance of m-commerce and digital integration within global online retail sales, posses- of the retail sector. throughout the shopping experience sion of e-commerce unicorn’s, innovation, - Continuous need for brick-and-mortar and human interaction - Decline in Brick-and-mortar traffic global scale investments and expansion.

Economical uncertainty

TABLE 1, Current state of consumption

CONSUMER SHIFTS

- Interconnectivity and seamless move towards omnichannel shop- - Online platforms among the top three market trends of 2018 ping experience. - Direct to consumer communications - Localising in global markets - Online platforms are often the first point of search and are expect- Increasing consumer expectations of all brand offerings (conve- ed to grow in both scales and reach attracting even more fashion nience, quality, values orientation, newness, and price) brands to participate with these new distribution channels.

Emerging East- Increasing social Personalisation and Southern media influence powers

One of the top An economic growth challenges for the shift from Western fashion retail industry mature markets to is found in global emerging East- and economic volatility, Southern regions uncertainty, and shifts have become sigin power. Geopolitical nificant hotbeds for turbulence moreover, industry growth. For represents an unpre- that reason brands dictable component with mature markets to the economic at the core, are forced uncertainty. For the to pursue new soluindustry, this means tions and “pockets of that brands must growth” in emerging invest in flexible and trading markets to innovative solutions stall declining salesto easily adapt to and profit outlook. constantly changing circumstances. Nevertheless, attention will foremost be given to re-focus internal strengths.

Increasing customer expectations

m-commerce integration

Importance of online platforms

Global interconnectedness

New Business models

Adoption of disruptive technologies

10.

A trend that has highly The rapid growth of Due to increasing Growing significance Online platforms are ex- To match today’s New business models The industry is acceleraffected online distri- online trading has market competition and of m-commerce and ating its adoption of inpected to be positioned global, millenniare appearing as the bution, is the adoption evoked a consumer constant developments digital integration among the top three mar- al-driven consumer industry increasingly novative and disruptive of real integration of desire for online within product, service, throughout the shop- ket trends of 2018, as the profile, fashion experience decline in technologies such as AI social media in buying retailers to integrate and technology, ping experience. retail method increasing- brands tend to give fo- brick & mortar traffic (Artifical Intelligence), processes. It comes in personalized services consumer expectaDistribution giants are ly dominates the retail cus to global product/ and therefore calls for m-commerce, virtual line with the increasing prior to manufacture. tions have increased entering fully into mo- environment and proves brand management in digital reinventions of reality and Big data, importance of m-com- Based on existing drastically. For that allowing the fashion bile distribution with the consumer shift offline retail spaces. order become more merce and has provided technology these reason expectations online/social mediums towards online retailers These models are partly industry a comprehenuniform by standardconsumers with more user-led design- and of total fulfillment of as they provide a new as the first point of pushed by increasing sive and significant control, information complete experience all brand offerings opportunity for brand search rather and brick- izing operational social media influence, data-flow on consumand power over the processes, increasingly such as convenience, engagement and serve and-mortar. Despite the metrics. why the focus is given ers. The technologies This penetrating glomarket process. The takes place online, but quality, values orien- as lead generation for market position of given to quick-response meth- moreover help to mark great impact of social offline retailers have tation, newness, price, brick & mortar store online platform they are balization pushes an ods and supply-chain or renewing customer media interactions and additionally begun functionality, and im- traffic. The mobile expected to attract even opponent of localiza- optimization. The new touch points throughcommitments between adopting the consumer mediacy at all time has devices unravel con- more collaborations and tion and forces global online business models out the shopping brands and consumers desire. This initiative become normality. sumer opportunities for partnerships with brands retailers to strike the moreover turn to devel- experience and hereby have globally affected is represented by the discovery and conve- or events to help an right balance of seiz- oping into premium and to differentiate within purchasing decisions of model of mass-customnient engagement with omnichannel experience ing the local benefits luxury market with data the market by pushing consumers. ization and successfully product and content in and their expansion into while guarding brand and customer-insights distribution efficiency. pairs with the rise of physical locations. new segments. integrity and econo- at core. m-commerce. mies of scale.

DISRUPTIONS

- Continued moderate economic growth

1.2 INTERNAL ANALYSIS 1.2.1 COMPANY PROFILE & KEY NUMBERS

The Swedish founded fashion brand COS is a subsidia-

ry operating under the H&M Group (Editors of cosstores. com, (N/A), cosstore.com). The brand was launched by the group with a flagship store in London on Regent Street in 2007, followed by the launch of the online store in 2011 and has rapidly increased its expansion across the world (Abnett, K., 2015). COS is now available in carefully selected locations across Europe, Asia, North America, the Middle East and Australia (Editors of cosstores.com, (N/A), cosstore.com), applying an architectural design concept that preserves the original features of the chosen store buildings, while highly communicating a modern interior space. Since its launch, COS has highly celebrated a clean and minimalist approach and made the brand a rather quiet player within the trend- and experience-driven high street market (Abnett, K., 2015). Additionally, the business model of COS holds a slightly different approach. While H&Mâ&#x20AC;&#x2122;s fast-fashion model of based upon short lead times and runway-inspired product offerings, the business model of COS only creates collections biannually, each designed nineteen months before going into sale. In contrary to the majority of fast-fashion brands, COS has man-aged to bridge design, quality and affordability and the formula has proven successful (Abnett, K., 2015).

COS is by 2017 present in 37 store markets (Authors of Statista, 2017) with 231 stores and 20 online markets (Annex, Exhibit 1, Market Coverage) and is according to the H&M annual report (Authors of H&M Group, 2016, about. hm.com) of 2016 expected to continue its global expansion. According to Marie Honda, managing director of COS, in an exclusive interview with Business of Fashion at the brandâ&#x20AC;&#x2122;s London headquarters (Abnett, K., 2015), COS opened 10 to 12 stores a year the first five years. By 2012 this number has increased to 20 stores per year and the COS began to adopt eastern and southern markets such as Hong Kong, China and the Middle East. 2015 market the biggest global retail rollout, yet for COS to experience, as the brand opened 27 new stores and expanded to North America and Canada (Abnett, K., 2015).

1.2.2 KEY INFLUENCES

The seasonal collections of COS highly find inspiration

at the Whitney Museum of American Art, sponsored by H&M. In 2016 the trend had found substantial grounds for continued growth, as for why H&M partnered with one of America’s most celebrated figurative artists, Alex Katz, and extended the range of recent collaborations between fine artists and mass-market fashion retailers (Annex, Exhibit 9, p. 62) (Sherman, L., 2016).

in artistic influences including architecture, design and art, which additionally is reflected in the brand’s commitment in collaborating with these industries. The support to these influences provides COS with a unique brand identity and projects that celebrate creativity and innovation (Authors of Business Of Fashion, (N/A), busi-nessoffashion.com). Recent partnerships or collaborations include brands, companies and institutions such as COS x HAY, COS x Snarki- Additionally, COS created a capsule collection in line with techture and COS x Serpentine Galleries Park nights (See its sponsorship, to complement the Guggenheim’s Agnes Martin retrospective, highly known for its intellectual and mood board p.12). sculptural wares inspired by mid-century design. Benefits As a fast fashion retailer, COS has successfully managed of these collaborations are clear for both artists and re-taito exploit social shifts in consumer behaviour and has brid- lers as it provides both parties with the exposure offered by ged the increased public interest in contemporary art (An- COS or H&M as a mass-market retailer, not only in-store, nex, Exhibit 2, PEST Analysis) with the high-street fashion but also through social channels. Furthermore, these colby launching a range of artists collaborations (Sherman, L., laborations have undeniable financial motivations as the 2016). Such collaborative approach is typical for brands brand fund or compensate these artists or institutions in the included in the H&M Group, especially experienced th- same way they would a top designer, including deals often rough H&M, which collaborated with luxury designers worth several millions of dollars (Sherman, L., 2016). since 2004 and initiated their project with the release of For a brand like COS targeting a mass audience that favors a Karl Lagerfeld collaboration the same year (Yotka, S., a certain aesthetic, specificity is key, as for why from day 2016). The Swedish fast-fashion giant introduced a rather one both Donald Judd and Agnes Martin have been very artistic approach in 2014, commissioning the American ar- influential to the COS design team (Sherman, L., 2016). tist Jeff Koons, who designed a sell-out ladylike leather These key influences have highly assisted the rather quiet bag, which was created to coincide with his retrospective high-street rebel COS in rethinking high-street fashion.

COS x HAY (Howarth, D., 2016)

COS In conversation with Muller Van Severen (Authors of cos stores.com, 2017)

COS x Snarkitechture (Morby, A., 2017) COS x Snarkitechture (Morby, A., 2017)

COS x Oliver Van Herpt (Tucker, E., 2017) COS x Studio Swine (Frearson, A., 2017)

COS x Serpentine Galleries Park nights (Authors of cosstores.com, 2013)

COS x Phillip K. Smith III (Morby, A., 2018)

1.2.3 COMPETITIVE STRATEGY

In regard to the company profile and key inspirations that

influences COS, the market strategy is naturally based on an orientation of product differentiation. COS differentiates within the market by providing women, men and children with functional, modern and considered design of reinvented classics and essentials that are made to last beyond the season. COS operates by merging traditional methods and innovative techniques in creating timeless and understated silhouettes. As the designs, the stores and carefully selected locations seek to reflect architectural and artistic design concepts of original features in a modern and welcoming environment. Art, technology and architecture moreover saturate operational structures as COS frequently partner with recognised and emerging international artists, studios and galleries that pushes brand uniqueness alongside the seasonal fashion collections (Editors of H&M Group, (N/A), about.hm.com). This artistic and collaborative strategy is continuously relatively niche for high street labels and is as previously mentioned partly owing to the growth in public interest in art (Sherman, L., 2016). Nevertheless, this strategy allows COS to establish a significant brand identity, as for why the brand additionally maintains the same merchandise, store environment and marketing ap-

proach across its markets. This approach is furthermore globally maintained as COS truly believes in having a customer base with an international mind set and that the typical COS customer is one with a â&#x20AC;&#x153;big city sensibility and a global outlookâ&#x20AC;?, said Atul Pathak, COSâ&#x20AC;&#x2122;s head of communication, in an in an email to Strategy Online (Singh, H., 2015). With the launch of COS in 2017, the H&M Group expanded their portfolio by adding a further minimalist, health-conscious and older targeted consumer profile to the generally rather millennial orientated audience of the H&M Group (Foreman, K., 2017). This extension of the company offer-ing had moreover allowed the group for a slightly future-proof product portfolio with offerings targeted several markets and audiences.

1.2.4 SEGMENTATION

With core business in classic, timeless and high-quali-

(Abnett, K., 2015).

“more of a mindset and an awareness than a specific geographic location.”, “To have the ‘big city mindset’ you don’t have to live in a big city, to be curious and confident and really up to date about everything that’s happening around you.” (Abnett, K., 2015).

Analysis of the target psychographics and behavioural aspects, found clear behavioral differences in comparing the primary target (Generation Y) with the sencondary target (Generation X). Generation X’s (Baby Boomers) shopping habits mainly are need-orientated rather than desire-driven, as for why monetary investments are put into further luxury elements as expensive shoes, purses or travels as an expression of quality. Generation Y, finds similarity with the parent generation in size of ‘members’, yet the majority of aspects have developed quiet differently. Generation Y has lived in a time when the technological explosion is constant and highly has affected consumer expectations, and therefore, investments are relocated to experience-orientated content.

ty, mass- to mid market apparel, COS predominantly target males and females from Generation X and Generation Y, respectively born from 1966-1976, and 1977-1994. If comparing the market segmentation of COS with the H&M brand, it is clear that the COS target segment is quite specific, while the target of H&M is rather versatile, due to its low price point, trend-led and quick response model (Abnett, K., 2015), also explained by following brand statement on target audience:

The primary target age of COS focuses on 25-50 years old (Gen Y (Millennials accounts for half of the primary target)), while the secondary target age is: 16-75 years old (Gen X). As the segmentation focuses on a further mature audience, the income is set at middle- to high level with solid economically flexibility and middle- to high educations

If gathering both ends of the target audience, the COS target is socially-interested and highly invests in quality content independently of being product or service. Thorough market segmentation in (Annex, Exhibit 3, Market and target segmentation p-51-53)

1.2.5 MARKETING MIX

COS is a subsidiary of the most trusted apparel Groups,

ping experience that not necessarily correlate with the priH&M Group, which has a minimum of 2.786 merchan- ce setting. dises under its portfolio (Bhasin, H., 2017), making the group the second largest after Spanish fast-fashion retailer The brick & mortar stores are located in carefully considered areas and buildings that applies an architectural design Inditex (Abnett, K., 2015). concept in relation to brand values and preserves the origiThe marketing mix of COS offers reinvented classics and nal features of the buildings, while highly communicating wardrobe essentials and comprise ready-to-wear pieces, a highly modern, minimalistic and sleek interior space. accessories and shoes for men, women and children (see Similar merchandising direction follows to the store exteproduct portfolio for men, women, kids p.15-17). Exten- rior communicated by an often rather simplistic window dedly, the brand offers a range of home décor, furniture, display of pyramid or repetitive character elevating the books and home wear curated by external designers (see artistic brand identity (See Annex, Exhibit 4, Marketing product portfolio p.18) (Authors of Business Of Fashion, Mix p.54-56 ). Online, COS highly celebrates its cultural (N/A), businessoffashion.com). The marketing mix of COS collaborations and partnerships, which additionally reflects is highly inspired by a minimalism coming from the ar- in the online merchandising layout. In regard to promotitistic, design and architectural elements influencing the on COS holds a rather controlled approach to discounting brand. Moreover, the marketing mix clearly reflects an un- with small reductions, which often takes places outside derstated and timeless design direction creating pieces and seasonal sales. Nevertheless, discounts of 30-40% appears initiatives defy of seasonal trends. Additionally, the brand at COS occasionally (Smith, K., 2017). has become highly popular among architects and designers, This positioning of COS allows the H&M Group to upscale who perceive COS as an affordable alternative to simpli- its general market position and taps into market segments, in which several fast-fashion competitors lacks presence stic-designed luxury brands such as Céline and Prada. In regard to the price setting of COS, the brand has succes- only entered by Inditex with Massimo Dutti (Abnett, K., sfully kept clear of the mass-market images that has em- 2015). braced the group subsidiary, H&M. In contrary to H&M, Thorough analysis of the marketing mix (Annex, Exhibit 4, COS’ target audience rather focus in more nature and high- Marketing Mix p. 54-56) end customers, creating an exclusive and high-end shop- Following moodboards represent COS’ product portfolios.

(Editors of cosstores.com, (N/A), Cosstores.com)

Product depth of womens white T-shirt. (Editors of cosstores.com, (N/A), Cosstores.com)

1.2.6 COMPETITORS

As previously mentioned, COS aims to compete with

mid- to high-end fashion brands in terms of product and distribution, but with differences in the price point and promotion (Annex, Exhibit 4, Marketing Mix & related images), as for why, COS additionally have competitors in mass-market. The high-end brands are mainly considered as secondary competitors, as the competition is based upon the adoption of artistic, architectural and design collaborations and partnerships, while the direct competitors are mass-market to mid-market brands, due to similar price points.

point corresponding to just above mass-market. For that reason, the COS competitors are ranging from Prada to Céline and Acne, as well as the fast-fashion rival Inditex, who especially is key appropriator of Céline’s mini-malist products (Authors of Thefashionlaw.com, 2014). For the H&M Group, this upscale positioning of COS holds an important competitive advantage, as many of the direct competitors are ab-sent in the mid- to high-end market (Abnett, K., 2015).

COS seeks to position itself as a mid-market brand by product, distribution and communication, as an alternative to the high-end luxury brands, while maintaining a price

TABLE 2, Brand positioning map. Brand Positioning Map showing COS’ positioning amog its direct competitors. HIGH PRICE

FIXED DESIGN DIRECTION MID- TO HIGH-END

FAST-FASHION (TREND-LED) MASS-MARKET

LOW PRICE

2. FIELD RESEARCH 2.1. INTRODUCTION TO LOCAL POINT OF SALE Ibid Makreting Mix p.14.

COS is a subsidiary of the most trusted apparel Groups,

The garments are highly inspired by a minimalism coming from the artistic, design and architectural elements influencing the brand. Moreover, the products clearly reflect an understated and timeless design direction creating prices defy of seasonal trends. Additionally, the product style has become highly popular among architects and designers, who perceive COS as an affordable alternative to simplistic-designed luxury brands such as Céline and Prada.

H&M Group, which has a minimum of 2.786 merchandises under its portfolio (Bhasin, H., 2017), making the group the second largest after Inditex (Abnett, K., 2015). The product portfolio of COS offers reinvented classics and ward-robe essentials and comprise ready-to-wear pieces, accessories and shoes for men, women and children (See product portfolio p.15-17). Extendedly, the brand offers a range of Analysis on traffic, location, the consumer, pedestrian home décor, furniture, books and home wear curated by flows and rental rates (Annex, Exhibit 5 General traffic in external designers (See décor portfolio p.18). Barcelona, p. 59-60)

COS Head Quarters © COS (Editors of cosstores.com, (N/A), Cosstores.com)

2.2. FIELD OBSERVATION

Entering the COS store at Passeig de Gracia 27, Eixamp-

le in Barcelona, one is met with a feeling of exclusivity, quality and simple living in a welcoming colour scheme. The store seems like an artistic oasis from the urban and hectic life from the commercial street outside. This location is home to the cityâ&#x20AC;&#x2122;s walk of preference, due to the variated and successfully selected commercial mix of fine architecture, retail, business, transport and food and beverage.

A considered and minimalist approach to its retail management and visual merchandising, has made COS a slightly silent, yet mature player on a rather fast-changing, young, trend-led and flashy market (Abnett, K., 2015). For that reason, COS is positioned as an antidote to the ever-changing fast-fashion and aspires for longevity and simplistic design and silhouettes, use of natural textile and for a subtle colour palette to have future staying power (Budd, D., 2016).

2.2.1. COS OBSERVATION Passeig de Gracia 27, Eixample Barcelona 1. Window dressing & External design of the store.

stretching from the store window down to the back with fitting rooms. The open store window moreover allows customers to see the products features on the mannequins from the front, left side and back.

Building Building is of high and detailed architecture relating to the surrounding area and Gaudi buildings. COS is located next to the Italian fashion brand Twin-set, highly known for transmitting harmony and quality, which additionally drives the productions lines. The two brands share the building divided into two separate retail spaces, and both brands are benefitting from great scale store windows providing the store a great amount of natural lightning when entering the store. Differences of the two brands are found in the brand identity, and management of interior retail space.

Principles of Composition: Balance (Symmetric/ Asymmetric) & Harmony The store front is exclusively made of glass. The top is displaying the COS logo on a glass window, increasing the amount of natural lighting entering the store, followed by a full glass window on the left and glass door on the right. The store font additionally features architectural attributes from the building that encircles the entrance. These architectural attributes from the building are rather asymmetric in comparison to the later integrated glass entrance that is highly symmetric and minimalistic. Despite, these differences this combination creates harmony and additionally transmits a symbiosis between historic architecture and modern design, highly complimenting the brand identity of COS. The same symbiosis is transmitted by the stucco ceiling and historic looking lamps hanging on the wall in the entrance of the store, also providing COS with a highly exclusive look and brand feeling.

Types of Composition: Pyramid, Arrow, Zig-zag, Focal point, Repetition As visual merchandising in the store window, are three mannequins, placed in a pyramid/arrow composition, pointing inside the store, guiding the consumer past the entrance and into the store. The mannequins are respective-ly representing two women and one man, additionally illustrating the weight of the product categories, with main focus given to womenâ&#x20AC;&#x2122;s clothing. The women mannequins are placed to the right of the window, while the man mannequin is placed to the left. This composition moreover, related to the placement of the product categories, as menswear is located down the stair to the left and additionally womenswear is placed directly to the right when entering the store. The mannequins are made of a slightly see-through material adding an in-novative atmosphere to the store.

Colors Subtle colour palette, transmitting the minimalistic brand identity. Additionally, it generates a calmness to the store, as a quiet oasis away from Passeig de Gracia, as a highly stressed and loud commercial street. The colours are kept in a natural and organic scheme contributing to a relaxed, considered and settled in-store feeling.

Types of show windows: open, closed, semi-opened The single store window has an open back in order to give air and a deeper view to the store entrance. This composition opens up the store as the space exists as a rectangle

Communication materials

The “experience”?

Entering the store, there are few communicative elements promoting the store. While, many high-street brands (read. Mass-market and fast-fashion brand) uses promotional-, direction-, or collection signs, COS avoid this and lets the customer be guided by other tangible retail drivers such as colour organisation and floor structures.

The experience of the store gives a feeling of a calm and considered environment and functions as a breathing space from the outside urban environment. The tone of voice is settled and calm and creates a relaxed shopping experience. The music is fitting for the store as well.

3.Products & placement Logo, doors, lightning Classification and assortment As mentioned logo is placed on glass above the door, which likewise is made of glass (See above observations). Entering the store, the light is mainly natural lighting combined with subtle spotlights on the mannequins in the store window, crediting the clothing displayed. Lightning is used for directional approaches at the stairways guiding the customer up or down the stair.

The classification and product assortment is highly colour coordinated and features a high level of cross merchandising, creating a clear overview on the product assortment. The store entrance feature more light colours, while the journey to the back of the store display a gradual deepening of these colours into more bold or dark colour schemes.

The quantity of products seems to counteract the brand image that COS desires. Especially at the clothing racks, 2.Internal design of the store the collections are put closely together, and might need more air between the products to maintain the mini-maliSections, hot and cold zones, Sight-lines, walkways stic look.

and focal points along the foot-fall

When observing the consumers entering COS, it becomes clear that the hot and cold zones of the retail space, mainly relies on the garment display. While the store window displayed colours of white, black, grey and red, the majority of the store visitors went to the seasonal collection (collection closets to the entrance displayed in front right side of the store), of pink, blues, sand-coloured, reds and whites, featuring mannequins wearing addi-tional collections pieces. Consumer attention was simultaneously lost for the black, white and grey collection displayed in the following left side of the store, not featuring any mannequins, despite from the window.

Product presentation The product presentation is very neat in the front store, yet gradually fading, while entering the middle of the store, where, especially the impulse and accessories lacks the same order as in the front. The presentation is mainly given by clothing racks and hangers, while accessories and shoes are located at in-between shelves or tables (islands).

Shelves distribution

The shelves distribution is mostly used for pushing cross merchandising in between in the clothing racks. The shelves mainly feature product catego-ries such as shoes, Hot-zones were mainly located around activity locations jewellery and bags. of the store such as the entrance, cashier placed in the middle of the store, and in the very back around the fitting rooms, where furniture and a large table with folded gar- Planograms ments and accessories were located, functioning as a centre The store includes two floors with main focus dedicated to of the back space. womenswear, while the men’s and kids’ sections is given Cold-zones were primarily at the collections placed in cor- medium to little attention and is located in the basement, ners or away from the walkways. The walkways and floor while womenswear is located at the entry ground. structure were straight and clearly guided the customer the Store layout (See p. 26) certain directions. Despite the fact of the floor guiding the customers in small round abounds around the tables and islands located in between the collections hanging on the racks, the customers tended to maintain a straight walkway towards the back of the store. For that reason, the customers tended to skip the collections placed outside the straight sight-line. The walkways and sight-lines are also created by arches attached to the clothing racks guiding the consumer into the different store areas and collections.

4. Additional points of analysis

Lighting

Simplicity

The lightning is as previously mentioned well fitting for the floor especially on the entry floor, yet the basement floor lacks natural lightning, which results in a very different shopping experience from the entry floor to the basement, in which men’s and kids’ collections are located exclusively.

The store organisation is as mentioned made by colour scheme. The retail space is coherent to the brand identity, by the minimalistic approach and subtle colour scheme for store decorations. Additionally, the iron arches that guides the consumer into new collections areas, compliment the architectural influences of COS. The main floor and foun- Greatings dation of the clothing racks is moreover kept in concrete to provide the store with a clean, minimalistic and slightly Was welcomed into the store. industrial and rustic brand feel and functions likewise as a contrast to the sophisticated designs.

Brand identity Low quantity of logos, in-store signs and visual promotions, these are only featured over the cashier, fitting rooms and as guidance down the stairs to the lower floor. The brand identity is mainly told through the store look and decorative style and products.

Storytelling Throughout the COS store one is not met with campaign fixtures or in-store billboards. Nevertheless, the theme and concept is discrete, yet clear communicated by the simple and minimalistic retail management. COS do not communicate a specific brand story; however, the key brand influences are visible, yet could be pushed further to stress the importance of these for COS and the COS customer (See following proposal for COS’ merchandising strategy).

Decorative items Decorative items such as furniture are in very good conditions and appears to be new, fresh and clean. These are located in the very end of both floors close to the fitting rooms, serving as a relaxed waiting area. Additionally, the furniture is of Scandinavian design giving emphasis to the brand origin and affection for quality design. Generally, all fixtures, props and mannequins seems in good condition providing the store a clean and considered look.

WOW effect The WOW effect generated from visiting the COS store is the entrance and first view of the products and store organisation. The first impression let the consumer know that they are in the hands of a perfectionist and that noth-ing is left to a coincidence. The building and its architectural attributes both at the façade and the ceiling of the entrance, creates a feeling of exclusivity independed of the price setting.

ENTRANCE, WINDOWS AND CEILING

FIRST APPEARANCE OF CLOTHING

CASHIER & SECOND LEVEL OF CLOTHING

THIRD LEVEL OF CLOTHING

FOURTH LEVEL OF CLOTHING & FITTING ROOMS

FOURTH LEVEL OF CLOTHING, FITTING ROOMS & STAIR TO BASEMENT OF WOMEN, MEN AND KIDS

THREE LEVELS OF MENâ&#x20AC;&#x2122;S SECTION IN BASEMENT

ONE LEVEL OF WOMENS SECTIONS, CASHIER & KIDS SECTIONS

ENTRY FLOOR RACKS

RACKS

FITTING ROOMS

RACKS

FOLDINGS TABLE

RACKS SO FA

CARPET

CHAIR

MANNEQUIN

RACKS

STAIR

RACKS

SHELVES

RACKS

SHELVES

RACKS

SHELVES

RACKS

CASHIER

RACKS

CARPET

FOLDINGS TABLE

RACKS

STAIR

SHELVES

MANNEQUINS

CHAIR

MANNEQUINS

ENTRANCE & EXIT

FRONT WINDOW

BASEMENT FLOOT

RACKS

FITTING ROOMS

RACKS

RACKS RACKS

RACKS

FOLDINGS TABLE

CH AI

SHELVES

CARPET

RACKS

MANNEQUINS

RACKS

TABLE

RACKS

STAIR

CASHIER

RACKS

MANNEQUINS

RACKS

MANNEQUINS

STAIR

RACKS

TABLE RACKS

PRIVATE DOOR

3.PROPOSAL 3.1. SWOT ANALYSIS

S STRENGHTS

W WEAKNESSES

O OPPORTUNITIES

S. Aesthetically pleasing and coherent website. Features a simple navigation coherent to in-store environment.

S. COS is part of a recognized retail

group, which often functions as an important brand attribute to easily drive and convert leads.

S. The COS collections are made defy of mass-market seasons. S. COS is successfully positioned between mass-market and luxury competitors both in terms of brand identity and point of sale, which always are carefully selected for the

trend-led target, which exists as the largest generation by size and spending power.

S. Store interior and layout at the

Passeig de Gracia store is stimulating and reflects the values of the brand: modern, functional and considered design.

S. Successfully aligning existing

interior design, store windows and overall merchandising strategies with Instagram and other social media channels.

adoption and development at the Passeig de Gracia store

W. Low exterior eyesight and visibiW. Lacks strong search options/fil- lity, often due to reconstructions.

ters, such as price.

W. Little effort and attention is given W. Similar pieces are produced each to omnichannel management seasonal collection, and therefore lacks newness. Consumers might turn to other retailers for statement pieces.

Introduce large-scale communication of the collaborations and partnerships through the interior and exterior store space to give more exterior eyesight/visibility to the store (use of art installations to showcase products)

O. Push in-store experience and technological adoption such as adoption of digital point of sales in offline store environment (omnichannel) or model O2O2O, along with m-commerce and augmented reality. two store floors.

THREATS

S. Additionally, COS successfully communicates a global high-end feel despite its lower price point.

W. Gradually excludes the millennial W. Lack of in-store and online tech

O. Push for further aligning of the

brand to match the existing culture and retail environment.

O. Introduce a more user-friendly

website, adding ’Click & Collect’ pushing the omnichannel experience

T. Consumers may increasingly become further price sensitive when purchasing basic garments and turn to pure fast-fashion brands/retailers. T. Competitors have quickly adapted to industry, technology and social changes, requiring a more tailored

W. Low level of advertising, promotions and discounts.

and model O2O2O adoption.

O. Push for impulse purchases with

smaller products from collaborations and partnerships in-store, these might be products from collaborations with HAY, this can additionally be helped by adding a further living-orientated in-store decor.

O. Dedicate and re-categorise product assortment aligning with the website. Create an area additional to the website category ”The Essentials collection”(Editors of cosstores. com, (N/A), cosstore.com) in order to guide the customer to the true essence of COS lifestyle by relaxed and considered pieces, easy to combine into any outfit.

and personal shopping experience.

T. Competitors investing further in own online platforms. Additionally, the competitors are increasingly investing in designer collaborations or fundings of cultural events and initiatives.

3.2. MERCHANDISING STRATEGY 3.2.1. OBJECTIVES 1. Introduce increased in-store communication of the brand collaborations and partnerships 2. Increase in-store experience by technological adoption and improvements of website 3. Re-categories product assortment in-store aligning with the website.

3.2.2. PROPOSAL The proposed strategy suggests effective improvements of the visual merchandising of COS locat-ed on Passeig de Gracia, Barcelona, in order to increase sales results. 1. Introduce increased in-store communication of living-orientated in-store décor from similar collaborations (See product port-folio on décor p.18). the brand collaborations and partnerships

As the research found both a social shift of increasing

public interest in fine arts and industry changes of retailers adopting collaborations and partnerships to meet these consumer changes, the proposal suggests elevating the in-store communication around the brand collaborations and partnerships with the cooperating artists and institutions. The increased in-store communication of the brand collaborations and partnerships will be applied through both interior and exterior store space in order to drive store traffic along with brand- and in-store engagement (Howard, F., 2017). For interior purposes (See moodboard p. 31 - 32), the proposed communication exists in adopting the collaborative artworks and small installations into the store environment, additionally as a possibility to assist display of product assortment. COS previously introduced this initiative in collaboration with the French duo Remy Clémenta and Morgan Maccari, together operating under the name Bonsoir Paris, at a pop-up concept store in Milan. With emphasis given to COS’ values, the focus for the installation was given to rational simplicity and functionality and resulted in a refreshing low-key contrast to a rather colorful and flashy take on the 2013 Milan Design Week (Authors of cosstores.com, 2015, Cosstores.com). Additionally, smaller products from collaborations such as the partnership with the Danish furni-ture design company, HAY1 , might be introduced into the in-store product portfolio. This inclusion serves the possibility for COS to strategically push for smaller impulse purchases and create a further lifestyle orientation to the brand. Last mentioned can moreover be helped by adding more areas dedicated to

For exterior purposes (See moodboard p. 33), the communication seeks to give more eyesight and visibility to the store windows and outer store appearance. The exterior proposal, therefore, suggests a use of art installations to showcase the products in the window display. This type of window content will assumingly increase the likeliness of consumers photographing or posting the window display on social media, driving improved engagement for both COS and the collaborator. In 2015 COS collaborated with Brooklyn studio Snarkitechture to create a pop-up store with cut-out garment silhouettes for consumers to stand in a take a photo (Morby, A., 2015). A similar approach might be adopted into the window display to additionally drives traffic to the store by engaging content for an increasingly mobile-driven consumer shopping journey. This initiative of combining the artworks and installations with the store environment, bridges the COS identity with current and popular social structures, while democratizing the art world by further aligning the overall merchandising strategies with Instagram. According to WGSN Insights, visual merchandising is experiencing changes in this era of Instagram, as for why window displays have gained an increasing significance as the ultimate tool for brand and retailers to promote and communicate their identity and message globally, as for why several stores become a must-visit destination (Authors of WGSN Insider, 2016). This improvement will serve the retail sales by driv-ing traffic along with brand and in-store engagement, and additionally, offer an extended product portfolio and possibly assist brand expansion into further millennials driven segments.

1 HAY, founded in 2002, highly shares similar values and design direction to COS. They create contem-

porary furniture with focus given to modern living and sophisticated industrial manufacturing. Through the brand’s commitment to the design and production of furniture and accessories with an international appeal they strive to make good design accessible to the largest possible audience. Additionally they are inspired by the stable structures of fashion and architecture. (Authors of HAY, (N/A), About HAY, hay.dk.)

INTERIOR PROPOSAL

EXTERIOR PROPOSAL

© Daniel Emma, three-part installation, COS Martin Pla- © Mun Design Studio, Four Brothers, Seoul, Korea, COS ce, Westfield ondi unction and Strand elbourne stores., 34 store, 2012. (Editors of Mun Design Studio, 2012) 2016. (Tucker, E., 2016)

2. Increase in-store experience by technological Additionally, COS would benefit from adopting digital point of sales in the in-store environment, as it drives the adoption and improvements of website.

The proposal furthermore suggests a digital integrati-

on throughout the in-store shopping experience, pushing the COS distribution towards an omni-channel or model O2O2O retail approach. As research found (Table 1), the industry is experiencing a revolution in distribution methods by a growing significance of combining e-commerce, m-commerce and technological solutions with brick & mortar stores. For that reason, it has become a strategic objective for this proposal to introduce a more user-friendly website of improved filter options such as ‘price’ and a ‘Click & Collect’ feature pushing the consumer to enter different point of sales, by ordering and purchasing online, while receiving the purchase by pick-up points in-store.

customer to the store and provides a fulfillment of both online and offline experiences. As wearable technology holds a growing domination for current and future retail management, an adoption of m-commerce in-store, will assist COS in creating the essential Instagram-friendly store environment. Another tech solution that might be initiated, exist in augmented reality in line with the introduc-tion of the in-store m-commerce. As the AdHoc research found, COS holds a large product as-sortment that is closely hung together on the racks in the store located at Passeig de Gracia (See observation images). This results in the store losing its desired simplistic style and product overview, despite is clear colour organization. Augmented reality will help to guide consumers towards the products or artworks in-store and additionally suggest a complementary item. PRICE

3. Re-categories product assortment in-store alig- assortment, as the majority of the prices from “The Essential Collection” are basics that are located around the ning with the website

Additional to the previous proposal, this proposal sug-

gests improvements in the interior retail space helped by creating an area additional to the website category, ”The Essentials collection”(Editors of cosstores.com, (N/A), cosstore.com) in order to guide the customer to the true essence of COS lifestyle by relaxed and considered pieces that are easy to combine into any outfit. This proposal requires a re-organization of the existing in-store product

in-store islands pushing impulse purchases. The adoption of augmented reality will additionally assist the consumer guidance to this product area. Adding an area specifically dedicated to “The Essential Collection”, helps COS establish and clearly promote the brand identity, values and brand influences. The proposal highly suggests that this product category in hung, folded and placed interac-tively in or at an art installation, as proposed through the first objective.

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Editors of mytheresa.com, (N/A), PRADA Cropped wool trousers, mytheresa.com. [Online]. Available at: https://www.mytheresa.com/euro_en/prada-cropped-wool-trousers-919264.html?catref=category [Accessed 15th May 2018]. Foiret, C., 2015, COS x Nendo Installation at Salone del Mobile, Trendland.com. © COS x Nendo Installation at Salone del Mobile 2015. [Online]. Available at: https://trendland.com/cos-x-nendo-installation-at-salone-del-mobile-milan/ [Accessed 15th May 2018]. Foreman, K., 2017, Despite slowing sales growth, H&M announces plans for new higher-end brand Arket, Los Angeles Times, latimes.com. [Online]. Available at: http://www.latimes.com/fashion/la-ig-h-and-m-arket-new-brand-20170330-story.html [Accessed 15th May 2018]. Frearson, A., 2017, Studio Swine and COS create sculptural tree that blossoms with mist-filled bubbles, dezeen.com. © Studio Swine x COS Milan design week, 2017. [Online]. Available at: https://www.dezeen.com/2017/04/03/studio-swine-cos-new-spring-sculptural-tree-blossoms-mist-filledbubbles-milan-2017/ [Accessed 15th May 2018]. Furlow, N.E. (2011), “Find us on Facebook: how cause marketing has embraced social media”, Journal of Marketing Development and Competitiveness, Vol. 5 No. 6, pp. 61-64. [Online] Available at: https://search. proquest.com/openview/f6cbac1b7f5a9740ca6a6905d916d966/1?pq-origsite=gscholar&cbl=536309 [Accessed 15th May 2018]. Hanzaee, K., & Aghasibeig, S., 2010, Iranian generation Y female market segmentation, Journal of Islamic Marketing, Vol. 1 Issue: 2, pp.165-176, Emerald Group Publishing Limited. [Journal] & [Online] emeraldinsight.com Available at: https://www.emeraldinsight.com/doi/abs/10.1108/17590831011055897 [Accessed 15th May 2018]. Howard, F., 2017, Spanish retail: These innovative store concepts should be on your radar, WGSN Insider, wgsn.com. [Online]. Available at: https://www.wgsn.com/blogs/spanish-retail-innovative-store-concepts-radar/ [Accessed 10th May 2018]. Howarth, D., 2015, Competition: win tickets to Serpentine Pavilion Retrospective talk with COS and Dezeen. dezeen.com. © Serpentine Gallery Pavilion 2002 by Toyo Ito. [Online]. Available at: https://www.dezeen.com/2015/09/28/competition-tickets-serpentine-pavilion-retrospective-talk-julia-peyton-jones-hans-ulrich-obrist-cos/ [Accessed 15th May 2018]. Howarth, D., 2016, De Allegri and Fogale create COS window installations with recycled-fabric objects, dezeen.com. © COS window installation at 222 Regents Street, London, by de Allegri and Fogale. [Online]. Available at: https://www.dezeen.com/2016/03/04/cos-window-installations-de-allegri-and-fogale-recycled-fabric-objects-london-paris-milan-new-york/ [Accessed 15th May 2018]. Howarth, D., 2014, ”Design and architecture has been a key influence” says COS managing director. Dezeen.com. [Online]. Available at: https://www.dezeen.com/2014/11/05/cos-marie-honda-interview-fashion-design-architecture-branding-nendo-serpentine-numen-for-use/ [Accessed 15th May 2018].

Howarth, D., 2016, COS and Hay update curated homeware collection for Spring 2016, dezeen.com. © COS x HAY, Spring collaboration 2016. [Online]. Available at: https://www.dezeen.com/2016/03/25/cos-hay-homeware-spring-collection-2016/ [Accessed 15th May 2018]. Howarth, D., 2017, Studio Swine brings New Springs installation for COS to Miami, dezeen.com. © Studio Swine x COS Design Miami, 2017. [Online]. Available at: https://www.dezeen.com/2017/12/06/studio-swine-new-springs-installation-cos-design-miami-us/ [Accessed 15th May 2018]. Kansara, V. A., 2017. Inside Farfetch’s Store of the Future. Business Of Fashion, businessoffashion.com, [Online] Available at: https://www.businessoffashion.com/articles/bof-exclusive/inside-farfetchs-store-of-the-future [Accessed 7th March 2018]. Kestenbaum, R., 2017. This Is How Millennials Shop. Forbes. [Online] Available at: https://www.forbes. com/sites/richardkestenbaum/2017/06/14/this-is-how-millennials-shop/ [Accessed 19th April 2018]. Martin, H., 2015, COS Opens Its Second Store in New York City, architectualdigest.com. [Online]. Available at: https://www.architecturaldigest.com/story/cos-store-fifth-avenue-new-york-city [Accessed 15th May 2018]. Martija, p. 2018. Los ’millennials’ cambian el modelo clásico de consume. El Periódico. [Online]. Available at: https://www.elperiodico.com/es/mas-innovacion/20180123/los-millennials-cambian-el-modelo-clasico-de-consumo-6572039 [Accessed 15th May 2018]. Morby, A., 2017, COS and Snarkitecture reveal snaking marble run for Seoul gallery, dezeen.com. © COS x Snarkitechture Art installation, ”LOOP”, Gana Art Gallery, Seoul, South Korea, 2017. [Online]. Available at: https://www.dezeen.com/2017/11/07/cos-snarkitecture-reveal-snaking-marble-run-installation-gana-art-gallery-seoul-design/ [Accessed 15th May 2018]. Morby, A., 2016, COS unveils collection inspired by minimalist artist Agnes Martin, dezeen.com. © COS X Agnes Martin Collection,Guggenheim Museum, New York. 2016. [Online]. Available at: https://www.dezeen.com/2016/10/11/cos-agnes-martin-fashion-design-minimalist-collection-guggenheim-museum/#/ [Accessed 15th May 2018]. Morby, A., 2018, Phillip K Smith III and COS create wall of mirrors in historic Italian palazzo, dezeen.com. © Phillip K Smith III x COS Milan design Week, 2018. [Online]. Available at: https://www.dezeen.com/2018/04/16/phillip-k-smith-iii-cos-open-sky-installation-milan-design-week/ [Accessed 15th May 2018]. Morby, A., 2015, Snarkitecture uses steel sheets with garment-shaped cutaways for COS pop-up shop in LA, dezeen.com. © Snarkitecture & COS pop-up shop in LA, 2015. [Online]. Available at: https://www.dezeen.com/2015/11/09/snarkitecture-uses-steel-sheets-with-garment-shaped-cutaways-for-cospop-up-shop-in-la/ [Accessed 15th May 2018].

Morby, A., 2016, Sou Fujimoto unveils ”forest of light” installation for COS, dezeen.com. © COS x Sou Fujimoto “forest of light”Milan Design week 2016. [Online]. Available at: https://www.dezeen.com/2016/04/12/video-sou-fujimoto-forest-of-light-for-cos-milan-design-week-2016movie/ [Accessed 15th May 2018]. Ng, E. S., Schweitzer, L., & Lyons, S. T. 2010. New generation, great expectations: A field study of the millennial generation. Journal of Business and Psychology, 25(2), 281-292. [Online].Available at:https://www. researchgate.net/publication/225617101_New_Generation_Great_Expectations_A_Field_Study_of_the_ Millennial_Generation [Accessed 18th April 2018]. Prieto, D., 2017, COS Celebrates Store Opening in the Miami Design District, Worldredeye.com. © COS store opening, Miami Design District, 2017. [Online]. Available at: http://worldredeye.com/2017/02/cos-celebrates-store-opening-in-the-miami-design-district/ [Accessed 15th May 2018]. Re-Meter Website Editors, 2017. 4 Biggest Challenges Facing Retailers in 2017-18 | Re-Meter. [Online] Available at: http://www.re-meter.com/4-biggest-challenges-facing-retailers-in-2017-18/ [Accessed 8th February 2018]. Rodda, M., 2016, Capital Views – High Street Renaissance in Europe. Cushman & Wakefield. [Online pdf] Available at: http://www.cushmanwakefield.es/en-gb/research-and-insight/2016/capital-views-high-street-renaissance-in-europe [Accessed 19th April 2018]. Rodda, M., 2016, European Cities Experiencing High Street Renaissance. Cushman & Wakefield. Cushmanwakefield.com [Online]. Available at: http://www.cushmanwakefield.es/en-gb/news/2016/02/european-cities-experience-high-street-renaissance [Accessed 19th April 2018]. Sherman, L., 2016, When High Art Meets the High Street., Business Of Fashion, businessoffashion.com. [Online]. Available at: https://www.businessoffashion.com/articles/intelligence/fast-fashion-artist-collaborations [Accessed 15th May 2018]. Sides, R. & Ament, L., 2018. 2018 retail, wholesale and distribution outlook. An industry in transition. [Online] deloitte.com. Available at: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-cb-retail-wholesale-distribution-outlook-2018.pdf [Accessed 16th February 2018]. Singh, H., 2015, COS comes to Canada, strategyonline.ca. [Online]. Available at: http://strategyonline.ca/2015/04/27/cos-comes-to-canada-2/ [Accessed 15th May 2018]. Smith, K., 2017, Is H&M’s strategy shifting to future-proof its brand portfolio?. Edited.com. [Online]. Available at: https://edited.com/blog/2017/02/hms-future-proof-brand-portfolio/ [Accessed 15th May 2018]. Smith, K., 2017, Pushing into premium: the pursuit of a higher price. Edited.com. [Online]. Available at: https://edited.com/blog/2017/04/premium-pricing/ [Accessed 15th May 2018].

Stanton, T., 2017, Asos wins the hearts and wallets of millennials online, Slice Intelligence. The Brief Blog. [On- line pdf]. Available at: http://intelligence.slice.com/blog/2017/asos-wins-hearts-wallets-millennials-online [Accessed 19th April 2018]. Steiner, R., 2017. Year of the Disruptors: Bitcoin, Tesla and the slow demise of cash. [Online] Available at: https://www.theguardian.com/business/2017/dec/31/the-year-of-the-disruptors-bitcoin-tesla-and-the-slowdemise-of-cash [Accessed 9th March 2018]. The Business of Fashion Team, 2018. The State of Fashion 2018: Unpacking the Report. [Online] Available at: https://www.businessoffashion.com/articles/professional/the-state-of-fashion-2018-unpackingthe-report [Accessed 13th March 2018]. Tucker, E., 2016, COS and Daniel Emma celebrate the classic white shirt with set of installations, dezeen. com. ÂŠ Daniel Emma, three-part installation, COS Martin Place, Westfield Bondi Junction and Strand Melbourne stores., 2016. [Online]. Available at: https://www.dezeen.com/2016/08/26/cos-x-daniel-emma-installation-fashion-furniture-white-shirt/ [Accessed 15th May 2018]. Tucker, E., 2017, Olivier van Herpt designs 3D-printed clay vases based on latest COS fashion collection, dezeen.com. ÂŠ COS x Oliver van Herpt for COS Spring summer collection 2017. [Online]. Available at: https://www.dezeen.com/2017/05/06/cos-x-olivier-van-herpt-3d-printed-clay-vases-homeware-design/ [Accessed 15th May 2018]. Valentine, A., (N/A), 5 Important Ecommerce Merchandising Strategies To Drive Online Retail Conversions, Bigcommerce.com. [Online]. Available at: https://www.bigcommerce.com/blog/5-important-merchandising-strategies-drive-online-retail-conversions/ [Accessed 15th May 2018]. Vinge, N., Persson, K., Tervonen, J., 2017, H&M Hennes & Mauritz AB Full-Year Report, Press Release, about.hm.com. [Online]. Available at: https://about.hm.com/en/media/news/financial-reports/2017/1/2441626.html [Accessed 15th May 2018]. Walker, H., 2012. COS: Thoroughly Modern Minimalism, Independent.co.uk, [Online]. Available at: https://www.independent.co.uk/life-style/fashion/features/cos-thoroughly-modern-minimalism-7834566. html [Accessed 15th May 2018]. Wingfield, N., 2017. Amid Brick-and-Mortar Travails, a Tipping Point for Amazon in Apparel. The New York Times. Nytimes.com [Online] Available at: https://www.nytimes.com/2017/04/30/technology/tippingpoint-for-amazon-in-apparel.html [Accessed 4th February 2018]. Yotka, S., 2016, Every H&M Fashion Collaboration, Ranked, Vogue.com. [Online]. Available at: https://www.vogue.com/article/hm-designer-collaborations-ranked [Accessed 10th May 2018].

ANNEX Exhibit 1: Market coverage in 2017 (Authors of Statista, 2017)

Exhibit 2: PEST analysis

olitical factors Not of relevance.

ociocultural factors Increased public interest in the art world. - Increased mass-market interest in fine arts. This shift is democratizing the art world. o In a study of art institutions from the trade publication The Art Newspaper from , it was found that of these institutions and museums that expanded, increased their footfall on average by 4 from 4. Those who didn t still experienced an increase by (Sherman, ., 201 ). ocial media, has additionally played a ma or role in democratizing the art world, making it a growing pillar of popular culture and a more approachable area for retailers. - This strategy of retailers adopting artistic collaborations and partnerships, is a relatively new approach for fast-fashion retailers initiated around 4 by collaboration with arl agerfeld. Yet the strategy has been existing for a long time for luxury retailers. etailers that exemplifies the adoption of this strategy o niqlo s partnership with ( o A) I New York ( offee, S., 201 ). o Target s partnership with issoni in (Dishman, ., 2011). o s collaborations and partnerships with luxury designers such as the recent Erdem (Authors of H M Maga ine, 201 , hm.com) collaboration and upcoming oschino collaboration (Authors of H M Maga ine, 2018, Hm.com.). o ouis uitton s collaboration with the apanese artist usama (Ale ander, ., 2012) - Consumers are connected and in control (Amed, I., Andersson, J., Berg, A.,Drageset,

M., Hedrich, S., Kappelmark, S., Young, R., 2018). â&#x20AC;¨ Consumer behaviour seamlessly move towards omnichannel shopping ouney (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). â&#x20AC;¨ No tolerance regarding friction haring peer-to-peer information, reviews and opinions (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). igh expectations of total fulfillment of all brand offerings such as convenience, quality, values orientation, newness and price (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). Internet of things (IoT) is provides fashion retailers with opportunities to gain new and thorough customer insights. Both online and offline retailers or brands are able to track the exact shopper ourney and how they interact with the products. If this data is combined with real-time analytics retailers or brands has clear possibilities to improve the entire customer path to purchase with enhanced services and experience (Detego e site ditors, 2018). â&#x20AC;¨ Increasing environmental and ethical conscious consumer behavior Continuous need for brick-and-mortar and human interaction In line with increasing consumer spending the different formats and channels are additionally changing and marks the evolution of the retail sector. Consumers tend to seek out both common and differentiated experiences throughout their path to purchase (Sides, R. Ament, ., 2018). ikewise, consumers have lost interest in shopping centers malls as there is a growing interest towards buying online along with brands experimenting with direct-toconsumer communication (Steiner, R., 201 ).

rowing middle class in emerging countries (The Business of Fashion Team, 2018) For fashion brands this online evolution within the retail sector causes immediate brand actions towards how to collaborate with large online players as they provide the brands with convenience and relevance due to the digitalised consumer shift. Whether it is mass, specialist or premium platforms these are often the first point of search and are expected to grow in both scale and reach attracting even more fashion brands to participate with these new distribution channels (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). of consumers begin their online product search on Amozon (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). rowing significance of m-commerce and digital integration throughout the shopping experience. End-to-end transactions will moreover seek towards mobile solutions and further push the consumer expectations for fashion companies to provide increasingly convenient mobile transactions (The Business of Fashion Team, 2018) nline platforms are expected to be positioned among the top three market trends of , as the retail method increasingly dominates the retail environment and proves the consumer shift towards online retailers as first point of search rather and brick-and-mortar. This online dominance shows as Amazon is expected to become the largest retailer ( ingfield, ., 201 ), while Tmall and D.com collectively dominate more than of the Chinese online apparel market and furthermore supported by the world s largest online shopping day ingle s Day by the Chinese multinational e-commerce platform, Alibaba (Amed, I., Andersson, J., Berg,

Economic factors rowing economic market optimism, forecasts predicts a , -4, of global fashion sales in (figure annex), (The Business of Fashion Team, 2018). owever, this growth is not evenly distributed across the world. ature developed markets are growing by - , while emerging markets are experiencing growth from - , (figure

A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). - To match today s global, millennial-driven consumer profile, fashion brands tend to give focus to global product brand management in order become more uniform by standardising operational metrics. This penetrating globalization pushes an opponent of localization and forces global retailers to striking the right balance of seizing the local benefits, while guarding brand integrity and economies of scale (figure , Annex), (Kansara, . A, 201 ) - The rapid growth of online trading has evoked a consumer desire for online retailers to integrate personalised services prior to manufacture. Based on existing technology these user-led design- and complete experience processes, increasingly takes place online, but offline retailers have additionally begun adopting the consumer desire. This initiative is represented by the model of mass-customization and successfully pairs with the rise of mcommerce. (figure , annex) - A trend that has highly affected online distribution, is the adoption of real integration of social media in buying processes. It comes in line with the increasing importance of m-commerce and has provided consumers with more control, information and power over the market process. The great impact of social media interactions and commitments between brands and consumers have globally affected purchasing decisions of consumers. Technological factors - Disruptive technologies such as advanced robotics, mobile internet, advanced analytics, virtual- and augmented reality and artificial intelligence is moderately being adopted by the fashion industry, additionally they carry the potential to disrupt it. For the same reason local heroes with average value proposition is challenged in competing with market

annex), (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). Economic growth shift from West towards East and outh (figure annex) ore than of the industry revenues in came from emerging markets (figure , annex), (The Business of Fashion Team, 2018). The economy is expected to continue to grow at a sufficient . - . percent rate in (Sides, R. Ament, ., 2018) Consumers are in possession of greater monetary disposals, as the unemployment and inflation is low. ouseholds are experiencing growing wealth due to rising prices on real estate and a strengthened stock market (Sides, R., R., 2018). rowing domination of the emerging Asian markets as they are in possession of more than of the world ecommerce unicorn s (pri ate companies alued at 1 illion or more) and of global online retail sales, while pioneering digital and technological innovations. For the same reasons, the Asian market outperforms the Western companies and are expected to further solidify their position by greater innovations, global scale investments and expansion (The Business of Fashion Team, 2018).

unicorn s (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). rowing digitalization in both online and offline  retail environment. nline platforms have increasingly penetrated the industry retail space and is expected during to further strengthen its position.   rowing demand of digital retail experience will assist an increasingly important two-fold in-store and online role (Sides, R., R., 2018).   The increasing importance of omni-channel distribution allows digital methods potential, not only to effect, but also to gain market share. These retail trends cause brands to consider reshaping main business approaches such as customer behavior, value proposition and design of operational model (Sides, R., R., 2018). Adoption of unconventional technologies allows retailers new opportunities to innovate and digitalise across their value chains with refined cost structure (Amed, I.,  Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). New advanced technologies such as augmented, virtual, and mixed reality may assist retailers further develop consumer- and experience centric options for direct-toconsumer engagement in- store or at home (Sides, R., R., 2018).   Accelerated industry pace industry leader push limits of time from design to shelf. Due to transformative shifts such as consumer adoption of digital approaches, new innovative business models are adopted by industry leaders (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). The new business models are therefore based upon highly detailed customer data and insights in order to mark or renew customer touch points and hereby differentiate within the market by pushing distribution efficiency.

Decline in Brick-and-mortar traffic requests reinventions of offline retail spaces often with emphasis given to digitalization. Artificial intelligence (AI) is expected to be implemented across all parts of the fashion value chain and industry leaders are therefore entitled to explore new ways of seamlessly generating value in customer- and interactive processes (Business of Fashion Team, 2018). In line with the growth of online platforms many of these, begins developing own private fashion labels to give strength to own positioning within the fashion sfere. This expansion of portfolio is expected in two ways. Either by construction of own fashion talent pool or by acquisitions to gain similar capabilities (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018) Acquisitions may also be used for online platforms to developing own customer base or gaining access to new segments (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018) The rapid expansion of online platforms is expected to develop into the premium and luxury market with focus given to offer an attractive value proposition, service and user experiences (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). Collaborations and partnerships has also been adopted by online platforms to bring external brands into their portfolio. An example might exist in the partnership between Tmall and New York Fashion Week that allowed Tmall access to premium customers (figure 4 annex) (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). These partnerships might also be developed in- house through different levels of vertical intergration (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). For fashion brands, the partnerships or collaborations with online platforms can be a highly beneficial component in terms of offering a seamless omnichannel brand experience, while assisting the brand in expanding into new segments or market.

Exhibit 3: Segmentation Market segmentation

ith core business in classic, timeless and high- uality mass-mid market apparel.

Target analysis

If comparing the market segmentation of COS with the &M brand, it is clear that the COS target segment is uite specific, while the target of &M is rather versatile, due to its low price point, trendled and uick response model n tt, , rand statement on target audience “ o o a in t an an awa n t an a ii o a i lo ation ”, “ o a t i it in t o on t a to li in a i it , to io an on i nt an all to at a o t t in t at a nin a o n o ” n tt, , COS predominantly target males and females from eneration and eneration , respectively born from 1 66-1 76, and 1 77-1 . - Primary target age 25-50 years old ( en (Millennials accounts for half of the primary target)) - Secondary target age 16-75 years old ( en ) - The income of given target audience is set at middle- to high level with solid economically flexibility and middle- to high educations n tt, , - Is likely to live in a large city or in surrounding suburbs ork and family orientated, adds a need of shopping convenience to the target profile. - Interested in art and travel, as for why classical silhouettes attracts this customer more than current trends al , , - Shopping habits are mainly need-orientated rather than want, this is moreover reason to why monetary investments are put into shoes or purses as an expression of uality. - This target highly appreciates experience-based shopping - This target age of men and women often make a highly loyal customer base, which chooses specific point of sale and brand based upon experiences with both product and store n tt, , . iving emphasis to the primary target of COS focusing on eneration , behavioral differences are easily established comparing the generation to previous eneration ( aby boomers). en only finds similarity with the parent generation in size of members’, while the majority of aspects have developed uiet differently. eneration is trustful, tolerant and better traveled and globally educated consumers, that the previous generation.

1. Demographics

2. Psychographics

ehavioral

dditionally, they highly support sociocultural causes and initiatives as well as socially responsible companies ( urlow, 2011). ccording to an article by Cone inc. from 2006, published by merald Insight, eneration members are more likely to purchase and stay loyal to a brand or a product from CRS oriented companies (Cone, Inc., 2006). These consumers have moreover been identified as individualistic, well-educated, technologically experienced, mature and structured. dditionally, identity and selfexpression becomes highly important factors for eneration . This identity expression often serves through shopping of distinctive brands that matches individual traits or values, and adds a highly materialistic character to this consumer cohort ( anzaee, k. & ghasibeig, S., 2010)

ollowin a on t ill nnial ta t i ta n o , i t i tion o t in i i al , tail ana nt

io -

or the younger part (millennials) of the primary target - Inward-focused (happiness, passion, diversity, sharing, discovery) values plays an increasingly important role of millennial consumers rather than collective-focused preferences (justice, integrity, family, practicality, duty) that highly influenced the aby oomers generation. ni ue sense of self, often calls for customization and brand/ product personalization. ntraditional approach to life - Optimistic worldview/outlook despite of the global economic challenges the future carries. - Millennials are in general more likely to make purchase in a physical store if the point of search has taken place both online and offline (Kestenbaum, R., 2017). - Discounts are often of higher values to this target audience than other values such as authenticity, local sourcing, ethical production and shopping experience (Kestenbaum, R., 2017). o this moreover causes a high disloyalty-rate according to orbes % of millennials will switch brand if they are offered a discount of 0% or more. - Their behavior and the changes that have occurred in society over the past 0 years and force companies to rethink the relationship with these consumers. The communication must additionally change accordingly.

Online target behavior

Offline target behavior

This transformation is due to several factors. The two most important ones have been that millennials have lived in a time when the technological explosion is constant, and the global financial crisis, which highly has affected and increased consumer expectations. Millennials is the group in which this has influenced the most (Martija, p. 2018.) Price sensitive - 80% are influenced by price (Kestenbaum, R., 2017) - The majority of millennials follow brands on more than one social media platform, and often follows the brands in order to gain discounts (Kestenbaum, R., 2017). Millennials is the segment that accounts for the highest share of online apparel revenue (Stanton, T., 2017) Makes most purchases online (Kestenbaum, R., 2017). - Learning to buy through the mobile â&#x20AC;&#x153;want it all, want it nowâ&#x20AC;?- concept - low price points and excellent benefits, rapid development and expansion, work/life balance, alternative careers, while contributing to society (Ng, Schweitzer, & Lyons, 2010). Price sensitive - 80% are influenced by price (Kestenbaum, R., 2017). Invests in experiences such as travels, music festivals, eating events more than material goods. - Desire to be part of first-hand experiences. The millennials part of COSâ&#x20AC;&#x2122; gathered target (both primary and secondary) is more likely to purchase in a physical store than the gathered target (16-75) as a whole.

Exhibit 4: Marketing mix & related images Pro

COS is a subsidiary of the most trusted apparel roups, H&M roup, which has a minimum of . merchandises under its portfolio ( hasin, H., 2017), making the group the second largest after nditex (Abnett, K., 2015). The product portfolio of COS offers reinvented classics and wardrobe essentials and comprise ready-to-wear pieces, accessories and shoes for men, women and children (see product portfolio for men, women, kids p. - ). xtendedly, the brand offers a range of home d cor, furniture, books and home wear curated by external designers (see product portfolio p. ) (Authors of usiness Of ashion, (N/A), businessoffashion.com). The garments are highly inspired by a minimalism coming from the artistic, design and architectural elements influencing the brand. Moreover, the products clearly reflect an understated and timeless design direction creating prices defy of seasonal trends. Additionally, the product style has become highly popular among architects and designers, who perceive COS as an affordable alternative to simplistic-designed luxury brands such as C line and Prada. This positioning of COS allows the H&M roup to upscale its general market position and taps into market segments, in which several fast-fashion competitors lacks presence only entered by nditex with Massimo utti (Abnett, K., 2015). The business model is as previously stated in the company profile differently focused, by biannual collections than most other high street retailers. Naturally, the product selections follow the model, as for why the product portfolio of COS is rather narrow and deep, while most competitors hold a wide and shallow product selections to extend market coverage. To specify, COS offers versions of a white womenâ&#x20AC;&#x2122;s shirt (See product overview of white t-shirts p. 0), as it seeks to offer investment pieces, for customers to wear independed of seasons. This deepened product offering comes alongside an immense range of plain architectural separates, drape-jersey t-shirts, skirts with asymmetric and cleancut hems and chinos (Abnett, K., 2015). f comparing the two biggest categories of each brand within the womenswear offering across the subsidiaries operating under the H&M roup, it is easily understood by the point of differences, how the specific target is approached and reflected in content and store layout (See H&M roup brand overview following this table) hile & Other Stories weight accessories at % and tops %, H&M gives % weight to tops and 4% to bottoms. Additionally, at Monki and Cheap Manday, tops are the greatest focus by respectively % and 30%, yet while Monki gives % to accessories, Cheap Monday gives % to bottoms and predominantly denim. ncluding COS in the e uation, 3 % is focused on tops, while only % weight is given to dresses, which gives emphasis to the fact of a slightly older or more mature target (Smith, K., 2017).

Pri

n regard to the price setting of COS, the brand has successfully kept clear of the mass-market images that has embraced the group subsidiary, H&M. n contrary to H&M, COSâ&#x20AC;&#x2122; target audience rather focus in more nature and high-end customers, creating an exclusive and high-end shopping experience that not necessarily correlate with the price setting. hile a shirt dress at COS costs between and , it is prices at 33, at H&M, which is additionally testifies to the different market and target approaches (Abnett, K., 2015). f comparing the COS price setting to an in-direct competitor (See following analysis of competitors), such as Prada or C line, where a pair of wool trousers is priced at 0, while the price is for a similar product at COS it becomes clear that COS seeks to position the brand as an affordable and accessible alternative to the luxury sector (See Marketing Mix images following this table). According to a recent study from 0 on the H&M roup by atie Smith from dited.com (Smith, K., 2017)., the average price setting for the H&M roup subsidiaries, is highest at COS ( , ), followed be & Other Stores ( 4 , ), Cheap Monday ( 4 , ), Monki ( , ) and H&M with ( ,44) (Annex, Exhibit , ar eting ix related images). Supplementary the group launched a new brand, Arket, which price setting by 0 became the highest in the H&M group at (roughly 0). eneral distribution overview: As mentioned in the company profile, COS is present in 3 store markets (Authors of Statista, 2017) with 3 stores and 0 online markets via cosstores.com (Editors of cosstores.com, (N/A), Cosstores.com) and is in the H&M annual report (Authors of H roup, 201 , about.hm.com) of 0 expected to continue its global expansion. ric mortar: (for in depth point of sale analysis see chapter 2: ield research) The brick & mortar stores are often located in carefully considered areas and buildings that applies an architectural design concept in relation to brand values and preserves the original features of the buildings, while highly communicating a highly modern, minimalistic and sleek interior space. The store interior of COS permanently features an intensively geometric style with linear steel-andconcrete racks, shelves and tables from which clothing are neatly placed in clear structural patterns. Additionally, the store decoration and furniture adds a discreet sophistication to the store environment and pays tribute to the Scandinavian roots, as for why most of the interior is anish design ( artin, H., 2015). The Nordic style is supplemented by e uivalent Asian influences and a subdued colour palette. Similar merchandising direction follows to the store exterior communicated by an often rather simplistic window display of pyramid or repetitive character elevating the artistic brand identity (See Marketing Mix images following this table).

Promotion

E-commerce: The website of COS (Editors of cosstores.com, (N/A), Cosstores.com) highly correlates with the values and influences established throughout this research. Online, COS highly celebrates its cultural collaborations and partnerships, which moreover is one of the first elements shown on their website front-page. This online communication of brand collaborations and partnerships additionally reflects in the merchandising layout, product campaigns and styling of models and creates an element of exploration to the website, and more specifically an exploration of the COS lifestyle (See Marketing Mix images following this table). Compared to the majority of the H&M subsidiaries, COS holds a rather controlled approach to discounting with small reductions, which often takes places outside seasonal sales. Nevertheless, discounts of 30-40% appears at COS occasionally (Smith, K., 2017). As COS do not invest in direct advertising, a brand magazine has been published alongside various online social channels, as primary sources in communicating with the COS followers and customers (Singh, H., 2015) (See Marketing Mix images following this table). Additionally, Atul Pathak, COS’s head of communication, states that, “We love to share a snapshot of what inspires us and also incorporate topics that interest us outside the world of fashion. This often results in us including features that have no direct relationship with COS, yet we find ourselves associating with them and hope that our customers can appreciate them as an organic extension of the brand.” (Singh, H., 2015). This moreover testifies to the fact of COS being inspired by external influences such as art, design and architecture and that these are implemented within the design and communicative process.

Study from 2017 on the H&M Group by Katie Smith from Edited.com, the average price setting for the H&M Group subsidiaries (Smith, K., 2017).

(Editors of H&M Group, (N/A), about.hm.com)

COS Window displays

COS Website layout.

COS price setting and product compared to luxury and in-direct competitor Prada.

COS presence on social channels

Exhibit 5: Analysis on traffic, location, the consumer, pedestrian flows and rental rates General traffic in Barcelona

General notes on the commercial areas

1. Location, influence area & proximity:

Passeig de Gracia

Inter-annual percentage variation of the daily average of pedestrian traffic in commercial streets and shopping centers, compared to the same month previous year tracking by February 2018 of Barcelona by The Traffic Index. Tracked by TCstreet sensors, Barcelona faces a 3.67% decrease since last year (Authors of TC Group Solutions, 2017, Tc-street.com). (Annex, Exhibit 6,The traffic Index (ITPC)) Studies in profitability of main commercial streets has shown an importance of the visitor for the commercial axes of Barcelona as some of the most valuable in Europe. These areas or streets are closely linked to shopping and tourism and especially shopping streets such as Portal de lâ&#x20AC;&#x2122;Angel and Paseo de Gracia are undeniably among the most influential areas for retailers, yet the majority of brands and retailers is separated from the actual candidates when considering rental rates (Authors of OI Realtor, 2017, Oirealtor.com). The tourist flows are an undeniable important factor to the economy of retail sales in Barcelona. These supposes between 60% and 80% of the sales in the commercial areas in Barcelona and has highly compensated for the slow recover in domestic consumption (Authors of OI Realtor, 2017, Oirealtor.com). Mass market, High End, Luxury, High Tourism Activity. According to the latest market report of Cushman & Wakefield (Rodda, M., 2016), Passeig de Gracia is among the top three most expensive shopping streets in Spain and the first in the premium sector. The street is moreover one of the important drivers in any tourist route through Barcelona, as the street combines architecture, business and shopping. The street stretches from north of Barcelona, Gracia, to the center at Placa Catalunya and directs a complete walking route for both locals and tourists. passing everything from fast-fashion flagship stores to high end luxury retailers, Apple and the two Gaudi buildings (La Pedrera & Casa BatllĂł) of high architectural and cultural importance. Despite the fact of Passeig de Gracia increasingly attract mass market, the street is currently the only established location for premium/luxury retailers. Major retailers present: - Apple, Prada, Puma, Mango, Stella McCartney, Bottega Veneta, Zadig & Voltaire, Guess, Michael Kors, Liu Jo Zara, H&M, Desigual, Adidas, Nike, Camper, Nespresso,

eplay, Emporio Armani, Chanel, Gucci, Louis Vuitton, Burberry, Ferrari, Bvlgari, Montblanc, Dolce & Gabbana, Dior, Versace, Macson, olex, La Perla, Maje, Wolford, C S

2. Consumer/shopper

New entrants: - Sue os Negros, Adolfo Dom ngue , Sandro, Kiabi, IKKS, Ken o, Seat (Annex, Exhibit 7, shops at Passeig de Gracia) The consumer visiting this area mainly consists of a mix of tourists and locals. The division is generally in favor of the tourist-target passing by the store, yet, C S might exist as a specific destination for locals to get the exact products, while tourists tend to visit C S impulsively. In 2016 overnight tourists in Barcelona reached over million people. Spending of international overnight visitors to Barcelona reached in 2016, a total of approximately 8. billion .S. dollars and makes Barcelona one of the leading European cities in terms of international visitor expenditure (Authors of Statista, 2017. Statista.com.). (Annex, Exhibit , International isitor spending in arcelona from 2012 to 2017 (in billion .S. dollars)

3. Pedestrian flow for this area :

numbers as of 2012 . ental rates for this area : Average Prices in 2017 (in euros per s uare meter per year) according to Statista (Authors of Statista, 2017,Statista.com).(Annex, Exhibit , Rental prices in 2017)

According to the Ajuntament Barcelona, Barcelona had 3 .00 . 3 over-night tourists in 2017. f the 6.801. 08,6 (20%) where in the millennial age (Authors of A untament de arcelona. 2017. A untament de arcelona). 26. 00 persons/day in average (Authors of TC-Group Solutions, 2012). Passeig de Gracia places itself as the second most expensive location/areas for rental rates by 3.060/m2/year, only surpassed by the adjacent commercial street Portal de lâ&#x20AC;&#x2122;Angel by 3.360 m2/year.

Exhibit 6: Traffic Index (ITPC) (Authors of TC Group Solutions, 2017, Tc-street.com).

Exhibit 7: The commercial street, Passeig de Gracia. 18 retailers) + (22 services) + (3 points of transport)

Exhibit 8: International visitor spending in Barcelona from 2012 to 2017 (in billion U.S. dollars) (Authors of Statista, 2017. Statista.com.)

Exhibit 9: Alex Katz x H&M (Sherman, L., 2016)