Retail Management Pop-Up Shop Sarena Foster Shani Tsfoni Charlotte Von Miester Daniela Gonsalves
TABLE OF CONTENTS Executive Summary 2 History
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Company Summary
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SWOT Analysis 6 Brand Identity 7 Current Distribution 10 Market Position 11 Communication & Promotion 12 PESTLE Analysis 13 Apparel Industry 15 Direct Competition 16 Indirect Competition 18 Demographics & Psychographics 19 Customer Profiles 20 Store Location 22 Store Design 24 Merchandising Plan 26 Communication Plan 28 Financial Plan 30 Bibliography 32 Appendix 33
EXECUTIVE SUMMARY
Levi’s has a rich history as the inventor of the blue jean. They are a global leader in the denim market and their access reach all corners of the world. While their presence is strong their women’s lines don’t have the same impact as their menswear. Levi’s has the opportunity to grow their women’s market and become more of a lifestyle brand by offering more fashion driven pieces to get the attention of their target customers. The perfect place to test the waters for trendier pieces is a fashion week. Levi’s will be focusing on Sao Paulo Fashion Week in Brazil to gather information on the type of styles that would work best to offer their customers in the future. Because the food truck trend has recently hit Brazil, the pop up shop will be in the form of a truck.
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HERITAGE Levi Strauss and Co has a long history of quality, innovation and authenticity. They have experienced and inspired change in the workplace, the marketplace and around the world. Levi’s denim is an American classic and will continue to thrive as a global staple.
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1853
1853 The Company is Founded
Levi Strauss opens a wholesale business in San Fransisco.
1873 The Blue Jean is Born
1928 Levi Strauss & Co register
Levi Strauss and Jacob Davis receive a patent on the riveting process
The Levi’s name as a trademark
1934 Ladies Levi’s Jeans
1936 The iconic Red Tab
are Introduced, the first jean for women
1960 The First Integrated Factory
is introduced The red tab distinguished Levi’s from other brands
1980
in the American south Levi’s operated a desegregated factory before it was mandated
Levi’s creates clothes for athletes in the 1980 & 1984 olympics
1965 The International Division is created
1991 The Terms of Engagement
2013 Water<Less Collection
Established labor rights, health, safety and environmental standards for vendors
TODAY 4
COMPANY SUMMARY
The mission of Levi Strauss & Co is to be a global icon recognized for continued innovation and progress. Levi’s must continue to strive for excellence to remain the head of denim leadership. By paying attention to creative detail and core values like environmental protection and worker’s rights, Levi’s will inspire loyalty for generations to come. Levi Strauss & Co. is a privately held by the decedents of the original Strauss family. The business model is horizontally integrated with main headquarters in San Fransisco, California. Chip Bergh is the President & Chief Executive Officer of Levi’s with 11 other worldwide executives. (Appendix A) As of November 30th, 2014 Levi’s claimed $4.7 billion in revenues. Between 2013 and 2014 lead a growth of 2% and continued to work toward that growth rate in 2016. For future plans, Levi’s will continue to make investments in the woman’s market, ecommerce and expand into underserved markets like Brazil, China, Russia and India.
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SWOT ANALYSIS S
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-Strong Brand Identity and Brand History -Experts in Denim -Global Recognition -Material Innovations -Strong Energetic Advertisements
-Small Product Assortment -Not Trend Driven -Weaker Womenâ&#x20AC;&#x2122;s market
O P P O R T U N I T I E S
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-Expand into Emerging and Under Penetrated Markets -Invest stronger in E-commerce & Omni Channel Capabilities -Expand Lifestyle Product Offering
-Large Portion of Revenue depends on Key Wholesale Customers -Outsource many functions means relying on third parties -Counterfeits and Trademark Infringement -Changing international markets -Highly Competitive Market
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BRAND IDENTITY PRISM
“The culture of Levi Strauss & Co. is fueled by strong values, creativity and hard work. Using innovative, sustainable and progressive practices isn’t just how we make our jeans and other products, it’s a principle we value in all of our work.” Levi Strauss & Co. is a pioneer of the blue jeans industry. The chosen closet essential for everyone from railroad workers and cowboys to greasers and hippies. Levi’s denim represents authenticity, rebellion and patriotic Americana.
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CURRENT DISTRIBUTION
Globally, Levi’s operates in approximately 50,000 retail location. Approximately 2,700 of those location are retail stores which are both company operated and franchised as well as “shop-in-shop” style. Levi Strauss operates in 3 regions the Americas, Europe and Asia, Middle East & Africa also known as AMA. They are also organized under 3 pillars which include Brands, Commercial Operations and Global Retail. Levi’s has full line stores, outlet stores and also sells at a number of retail partners that feature Levi’s® Made & Crafted™ premium denim and Levi’s® Vintage Clothing. Through a wide variety of retail formats: department stores, specialty retailers, online sites, Levi also licensees products like accessories.
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MARKET POSITION
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COMMUNICATION & PROMOTION
Levi’s is supported by a mix of marketing initiatives both traditional and digital that encourage consumer demand. In 2014 Levi’s spent $272.8 (millions) on their advertising and promotional activities. Levi’s marketing includes sponsorships, product placement in fashion magazines with celebrities, television and radio ads, personal sponsorships and endorsements as well as social media and mobile outlets. Online Levi.com offers sales incentives and in store, they offer the Levi’s Loop Program to promote customer loyalty.
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PESTLE ANALYSIS P
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For the most part, Brazil is politically stable. In 1985 Brazil became a democratic government after many years of conflict between democrats and the armed forces. The system is set up into three branches, executive, judiciary and legislative. The federal government also is responsible for fiscal, defense and legal policies. The government encourages private sector participation and that has fostered economic growth and helped created stronger bonds with other countries. However, the country faces big issues when it comes to corruption. The President Dilma Rousseffâ&#x20AC;&#x2122;s popularity has declined significantly and that only leads to a weak enforcement of laws and regulations. Freedom of Speech is another major concern and violence crime is a significant future risk due to gang activities in major cities like Sao Paulo and Rio de Janeiro.
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Brazil has the 7th largest economy the world. In 2014 the countryâ&#x20AC;&#x2122;s economy stagnated, with GDP registering no significant real growth, 0.1% compared to 2.7% in 2013. Brazil reached a significant inflation rate of 6.3% in 2014. That, combined with the high interest rates, 14.25% in 2016, forced Brazilian families to cut back on their discretionary spending. However, Brazil still has extremely high potential for growth. The middle class is growing and the gap between rich and poor is shrinking which means more people have spending power. For duties they have a system that decreases the tariff based on successful importing years. The labor rates are higher than many emerging countries like the Philippines and Taiwan. This is mainly due to federal minimum wage, and each state can set wages that are higher than the federal.
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While the wealth gap in Brazil is shrinking there is a stark difference between developed and underdeveloped regions. Less affluent areas lack healthcare services and proper elementary education however Brazil has taken great strides to eradicate hunger and poverty through programs like Zero Hunger Campaign that operates under the Family Grant. Brazil faces other risks like informal employment, corruption and child labor. However, the rate of secondary education has risen dramatically which will help dissolve the issue of unskilled laborers. For the 83% of Brazilians that are under 55 they find futbol and pre-Lenten carnival important social gatherings. The also consider the street a site of social encounters and public activities.
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Brazilâ&#x20AC;&#x2122;s government highly encourages research and development with programs like National IT Policy. The Program promotes indigenous knowledge rather than imported technology and creates links between academic institutions and industry standards. They also have a large aerospace and defense industry. However, while the government encourages R&D they do not offer much funding for it, which adversely affects the number of skilled staff in science and technology. These traits negatively impact the innovation rate and collaboration possibilities with international communities. 53.4% of the Brazilian population uses the internet. Facebook and Whatsapp are the top apps used in Brazil and the expected advertisement growth will be number 4th in the world by 2018.
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Brazilâ&#x20AC;&#x2122;s legal structure is classic to a democratic layout. Laws are issues by federal and state entities and decisions are tried by the court. Some issues Brazil deals with are Intellectual Property Rights, a complicated tax system which increases litigation costs for businesses. Another major concern is that the policies that concern industry and trade are not regulated to focus on productivity growth. Things like High tariff protection stifles international competition. Employment wise Brazil enforces the Consumer Defense code which covers life and health protection, Education for consumption, freedom of choice, information, protection against misleading advertising, contractual protection, indemnity, access to justice, facilitation of defense rights, quality of public services.
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Brazil is well known for having rich natural resources, especially in the Amazonian region. Brazil also has great use of renewable energies that reduce their carbon footprint like hydropower. Unfortunately businesses and agriculture segments have pushed for change in the forest code which has led to deforestation. The change in forest biodiversity brings Brazil to a higher risk of natural disasters.
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BRAZILIAN APPAREL INDUSTRY Women’s Jeans Sales: 9,252.8 mil (2014) Forecast Sales: 1.1% CARG 5.8% Total (2014-2019) Standard - Economy 61% Premium - Super Premium 38%
Women’s Tops Sales: 6,911.6 mil (2014) Forecast Sales: -1.4% CARG -6.7% Total (2014-2019)
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DIRECT COMPETITORS Lee Mercantile Company was founded by Henry David Lee in 1889, when Lee opened his first garment factory in Salina, Kansas, producing dungarees and jackets. In 1913, the Union-All work jumpsuit was created, followed by the first-ever “Overall” and zipperfly in the 1920. Lee expanded its presence throughout the ‘60s, spreading to 51 countries and consolidating with VF Corporation in 1969. Lee Jeans’ parent company, the VF Corporation, is the largest publicly held apparel company in the world. Lee sells Women’s, Men’s and children’s merchandise. Lee is sold online through their own website and through department stores, they also are sold in brick and mortar stores throughout the world. In Sao Paulo Lee operates 21 store locations.
The first pair of Wrangler Jeans were created in 1947 and have grown just as America has grown. The brand is inspired by their western history, and represents hard working and perseverance through obstacles and challenges. Currently Wrangler resides under the VF corporation, they can be found in many department stores like Sears and Walmart throughout the united states as well as wholesale locations throughout Latin America, Asia and Europe. In Brazil Wrangler operates multiple stores, 21 specifically in Sao Paulo.
The Zoomp brand was created in 1974, with the goal of making jeans in fashion item for young hipsters by Renato Kherlakian. Influenced the trajectory of Brazilian contemporary fashion. Zoomp currently has a small network of 10 stores, and its products (more than 600 items from jeans, clothes - male and female - as well as accessories and shoes) are sold in over 1,500 retail outlets in the country. This brand is only sold in Brazil. 16
Founded in 1978, Diesel has evolved from a denim leader into a true lifestyle brand offering premium casual wear as well as accessories. Since its creation by Renzo Rosso, Diesel has represented individuality and self-expression and is always on trend delivering new products every season. Their mantra is â&#x20AC;&#x153;We see differently and align with those who see it too.â&#x20AC;? Diesel can be found online and around the globe from South Africa to Thailand. Currently Diesel has 3 stores in Sao Paulo.
True Religion is a designer denim brand offering American-made jeans and denim sportswear for women, men and children. Founded in 2002 by Jeffrey Lubell and headquartered in Vernon, California, the brand was launched with a mission to redefine premium denim through an emphasis on fit, quality and style. Sold in more than 900 branded boutiques and specialty stores in the U.S. and internationally, as well as high-end department stores.
Gap was founded in 1969 by Dori and Don Fisher in San Francisco California. The brand is rooted in confident casual styles and wardrobe essentials, with a main goal of making it easier to find a great pair of jeans. The Gap has expanded into Banana Republic, Old Navy and Athleta and currently operates online and 90 countries worldwide through 3,300 company-operated stores, almost 400 franchise stores.
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INDIRECT COMPETITORS
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The park that SPFW is held in is a large area with a lot of opportunities for people to spend their money. Mr. Cheney is a very popular cookie shop in the area. Shopping Villa Lobos is a large mall located adjacent to the park and includes cinemas, restaurants and other retail shops. The Fasano Hotel is very high end and offers spa treatments and a French restaurant. Also during SPFW there will be food trucks in the same lot as the Leviâ&#x20AC;&#x2122;s Pop up shop.
DEMOGRAPHICS & PSYCHOGRAPHICS The audience of Sao Paulo Fashion Week include models, international and national celebrities, bloggers and fashion moguls from around the world. Tickets to fashion week are expensive, so most of the attendees are upper class with a strong social status. Although both men and women attend fashion week, most of them are women, this fact is based off of other fashion weeks (for example London Fashion Week). According to The Guardian 232,000 is the approximate number of people attending fashion week per year (116,000 each fashion week) and Sao Paulo being the fourth largest fashion week, it attracts many people. Sao Paulo is also a growing luxury market sector and it shows it shows in the consumer behavior of the wealthy women living there. In a Business Of Fashion article the women are described as â&#x20AC;&#x153;...completely fashion-oriented. She knows everything about fashionâ&#x20AC;? and likes to follow American fashion and buy international and national designer brands. Sao Paulo Fashion Week involved more than 11 thousand professionals involved with the event, more than 2 thousand journalists generating coverage and the event itself generated more than 2,500 pages in magazines and newspapers attracting over 100 thousand guests for its 29 fashion shows where more than 300 models walked on its catwalks.
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CAMILLA GARCIA Age: 25 Job: Lifestyle blogger Income: $90,000 annually Education: BA in Communication and Arts from São Paulo University Living: with her boyfriend of two years in an apartment in the Vila Nova Conceição neighborhood Likes: going to the gym, buying fresh produce at the street fairs over the weekend, shopping with her mother, taking road trips with friends, traveling to various countries for inspiration Shows: Grey’s Anatomy, Chaves, Jornal da Record Publications: Vogue Brazil, Veja
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NICOLE BROWN Age: 35 Job: Wife/Mother Income: $500,000 (husband) Education: Bachelors in Art History from Pomona College Living: with her husband of 8 years and their two children â&#x20AC;&#x201C; James and Isabella â&#x20AC;&#x201C; in a house in the Jardim Paulistano neighborhood Likes: taking her children to the local parks, visiting the various outdoor markets every week, traveling on the weekends to various parts of Brazil with her family, taking cooking classes with her husband to learn about local culture and meet new people Shows: Live with Jimmy Kimmel, Game of Thrones, Last Week Tonight with John Oliver Publications: The Week, US Weekly
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STORE LOCATION
Sao Paulo is Brazil’s second largest city but number one for fashion. We’ve decided to host our pop up shop in Candido Portinari Park where Sao Paulo Fashion week is held. We’ll be utilizing Brazil’s cultural love for activities centered around the communal nature of the street by using a fashion truck. This truck style business strategy also coincides with the trend of food trucks in Brazil. Levi’s goal is to become more of a lifestyle brand especially in women’s wear so opening during fashion week is a great opportunity to showcase a new line of more fashion driven garments. Levi’s will be collaborating with popular Brazilian designer, who has shown in Sao Paulo as well, Osklen Metsavaht.
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STORE DESIGN
Levi’s pop up shop will be a fashion truck located in Candid Portinari Park during Sao Paulo Fashion week in April of 2016. We’re going to stay true to the style of the brand’s existing store aesthetic, authentic and raw.. The truck will have an industrial vibe with exposed beams and elements of reclaimed wood. It will be open concept with one side that opens completely with stairs along the side that lead into the truck. The truck will include space for the product, browsing, and dressing room. The space will be very indoor/outdoor and some of the visual merchandising like mannequins will be outside of the truck. To save room in the truck sales associates will be provided with ipads that include a card payment system. Associates may also use the iPad to assists shoppers in purchasing additional sizes and styles online. This truck will be used to highlight Levi’s new line of t-shirts and blouses for women in collaboration with Osklen Metsavaht.
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MERCHANDISING PLAN The merchandise available for purchase in the pop up shop will be a combination of existing styles and custom pieces. There will be 3 existing styles of denim jeans including the classic 501 style, and 1 existing top. There rest of the pieces will be designed in collaboration with local Brazilian designer Osklen Metsavaht. These pieces will include 1 t-shirt, 3 blouses, a denim jacket, a one piece jumpsuit and a SPFW tote bag. We plan to have the most units for the tote bag because it is a great souvenir item and even shoppers that may not be the target customer will be interested. Customers will also have access to purchase more styles and sizes with the sales associates who can assist them on iPads.
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COMMUNICATION PLAN For Leviâ&#x20AC;&#x2122;s to promote its fashion pop-up truck at Sao Paulo Fashion Week, we will begin to do so with the popup truck shop itself. We will have someone drive around the Sao Paulo area where fashion week will take place for a month to get the public attention and gain interest. To continue on with the promotion we will rely heavily on social media. On Facebook, Instagram and Twitter for the pre-promotion we will post sneak peaks and advertise the location of the event. We will also send out an email to those who are signed up to the mailing list through the Leviâ&#x20AC;&#x2122;s website. On the website itself there will be an ad for the pop-up shop with the location and dates. There will also be a release of a short fashion film prior. During the six days of the pop-up shop, there will be a continuation of Facebook, Instagram and Twitter featuring the days of the event. We will also bring in a well-known fashion blogger from Brazil, Camila Coutinho, to blog about the launch party, the day Osklen comes to the shop and the goodbye party. After the pop-up shop is done, we will continue to feature feed on Facebook, Instagram and Twitter reflecting what went on for the six days. (Appendix D)
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During the event we will also have promotional events. These events include Osklen himself coming to the shop and promoting the collaboration. We will also promote people to go to his show, those who go to his show will get an exclusive giveaway of an exclusive tote bag only available at the pop-up shop, If they come back to the shop and buy something. Also, Each day we will have a special event at the shop. The first day will be a launch party, the second day we will feature Osklen, The third day we will be giving out the exclusive tote bag, on the fourth day we will have happy hour, on the fifth day we will have a live model presentation of the clothes and on the last day, sixth, we will have a goodbye party. 29
FINANCIAL PLAN
This financial plan reflects the projected cost of goods and potential revenue produced during Leviâ&#x20AC;&#x2122;s 6 day pop up shop at the Sao Paulo Fashion Week. We expect our foot traffic to increase throughout the week as a result of our promotion strategies as well as word of mouth. Based on the footfall conversion, executed by the sales associates, and the average basket of each customer, the Leviâ&#x20AC;&#x2122;s SPFW pop up shop is expected to earn $219,632 in revenue.
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Gas/Maintenance/Parking
In terms of the building of the pop up shop we considered are fixtures and renovations as a packaged price included with the purchase of the truck. We also had to consider driving and parking of the truck during pre promotion and after the event. We plan to have 4 employees to assist customers. One manager and 1 assistant manager will be pulled from a local Leviâ&#x20AC;&#x2122;s store and we will hire 2 more associates through external sources. We will also use the logistic systems that are already in place in Sao Paulo to restock the truck, but included the cost of courier services. In the end we expect to make a profit of $11,871 (USD). 31
BIBLIOGRAPHY http://www.levi.com/US/en_US/ http://ffw.com.br/spfw/inverno-2016-rtw/ http://osklen.com/site_en.php http://www.nationsencyclopedia.com/economies/Americas/Brazil-POLITICS-GOVERNMENT-AND-TAXATION.html) http://thebrazilbusiness.com/article/dismissing-in-brazil http://www.oecdbetterlifeindex.org/countries/brazil/) http://www.everyculture.com/Bo-Co/Brazil.html#ixzz3zRkARIh2 http://thebrazilbusiness.com/article/consumer-rights-in-brazil http://www.entrepreneur.com/article/243412 http://www.businessinsider.com/fashion-trucks-across-america-2014-9 http://www.fashiontimes.com/articles/10647/20140811/diesel-open-pop-up-shop-williamsburg.htm http://sydneyeventblogger.dreamhosters.com/2014/05/14/true-religion-brand-jeans-store-launch-in-westfield-sydney/ http://shopkeepersnation.typepad.com/my_weblog/2009/08/7-for-all-mankind-opens-the-wash-house-on-newbury-street.html http://www.bustle.com/articles/85958-gap-launches-digital-pop-up-shop-with-spring-for-the-first-time-ever-featuring-remixed-logo-tees http://www.bustle.com/articles/85237-gap-recreates-signature-logo-with-11-artists-from-around-the-world-for-super-cool-line-of http://www.selectism.com/2009/09/04/wrangler-blue-bell-pop-up-shop-in-london/#slide-1 http://digiday.com/brands/diesel-talks-mobile-customers-400-programmatic-ads/ http://www.businessinsider.com/gaps-new-ad-campaign-2015-7 https://thisisnotadvertising.wordpress.com/2012/10/22/wranglerwe-are-animals-campaign-the-story-behind-the-animals/ http://www.profitsonwheels.com/how-much-should-you-charge-for-courier-services/ http://www.theguardian.com/fashion/fashion-blog/2011/sep/16/new-york-fashion-week-numbers http://www.wgsn.com/news/?p=600723&h=true http://www.businessoffashion.com/articles/global-currents/the-fashion-trail-unravelling-brazils-luxury-market http://fashionbi.com/newspaper/sao-paulo-fashion-week-the-most-important-fashion-event-in-latin-america http://www.stadiumguide.com/arenacorinthians/ http://www.shoppingitaquera.com.br/ http://www.economist.com/news/americas/21595011-youngsters-gathering-shopping-malls-want-attention-not-political-change-kids-are-all http://www.nytimes.com/2014/01/16/opinion/barbara-whose-mall-is-it.html?_r=0 http://globalbb.onesource.com/web/Reports/ReportMain.aspx?KeyID=17395&Process=CP&CIK=94845&Report=STRENGTHWEAKNESS#0 Euromonitor International Womenwear in Brazil July 2015 Euromonitor International from national statistics/Eurostat/UN/OECD Levi Strauss & Co Icons & Innovation 2014 Annual Report
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APPENDIX A: MANAGMENT
Chip Bergh
Elizabeth Wood
Harmit Singh
James Curleigh
David Love
Kelly McGinnis
Lisa Collier
Marc Rosen
Roy Bagatinni
Seth Ellison
Seth Jaffe
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APPENDIX B: COMPETITION
LEE Commercial ads on TV and magazines No pop up shops
TRUE RELIGION Russell Westbrook NBA player and creative director Product placement on TV Popup shop in Australia April-September 2014 34
APPENDIX B: COMPETITION DIESEL 400+ mobile friendly ads Pop up shop in Williamsburgh August-December 2014
WRGANGLER “We are Animals” Campaign Pop up shop London October 2009
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APPENDIX B: COMPETITION ZOOMP No formal advertising No pop up shops
GAP Featuring supermodels in campaigns Online pop up shop “The Remix Project”
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APPENDIX C: STRATEGIC PLANNING PROCESS Goal Help Levi’s to become a leading lifestyle brand in the women’s market.
Strategy In products other than jeans i.e. t-shirts/sweaters/blouses offer more fashion driven options. -Introduce new silhouettes to T-shirts & Sweaters -Collaborate with local designer to create custom pieces
Objectives -Total foot traffic and conversion rate -Total # of units sold -Amount of Press outside of in house promotion
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APPENDIX D: PROMOTION
APPENDIX D: PROMOTION