ZARA RETAIL BUYING PLAN: ACTIVEWEAR, FALL 2015
OBJECTIVE At Zara, we strive to provide the latest runway trends in a timely manner at a price point that is comfortable for our customer. The objective of this book was to become buyers by building buying plans for two retail locations: the Grove in Los Angeles, California and Soho in New York City, New York. Our plan, which introduces a new product category of activewear into Zara, is based on extensive research into the company’s target markets, competitors, and finances. We utilized customer profiles and trend reports to build a plan that will safely introduce the new catergory while maximizing profit.
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TABLE OF CONTENTS
2. Objective 4. History 6. Scope and Size 8. Identity 10. Strategy 12. Our Customer 14. Competition 20. Trends 22. Corporate Buying Plan 24. The Grove Buying Plan 28. SoHo Buying Plan 32. Assortment Plan
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HISTORY
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Zara is one of the largest international fashion companies. The company was founded in 1975 by Amancio Ortega Gaona in Arteixo, Galicia, Spain. Zara belongs to Inditex, one of the world’s largest distribution groups. Zara is the oldest and biggest brand under Inditex. The company is vertically integrated through design, production, distribution, and sales. Zara is a leader in fast fashion because of the vertical integration that cuts down on the time other companies need to get new product to the consumer. The first U.S. Zara opened its doors in New York in 1989. Zara offers clothing for infants and children, Zara Mini and Zara Kids respectively, to clothing for adult men and women. Zara can be purchased in brick-and-mortar stores strategically placed in key U.S. cities, online on Zara.com, as well as through a Zara for iPhone application. Zara is active on social media as well on Facebook, Instagram, twitter, and pinterest.
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SCOPE & SIZE
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Zara is under the Inditex Group, which owns several other sister-brands of Zara. Zara stores are globally positioned in key cities. In the United States, Zara brick-and-mortar stores are strategically placed in 52 key cities. Some of these cities include Atlanta, several in New York City, Los Angeles, and Las Vegas. There are not many Zara stores in the midwest, except for Chicago.
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IDENTITY
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WHAT IS ZARA? TRENDY CONTEMPORARY AFFORDABLE FRESH CUSTOMER FOCUSED EVER CHANGING
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STRATEGY
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At Zara, we let our clothes speak for themselves. Our window displays and positive word of mouth marketing draw the customer into the store. Our customers don’t need to feel bombarded by ads. We place our stores in only the best locations to maximize success. We always have the latest fashions in stock right after they appear on the runway. Every time the customer visits our store, we will have new products for them to shop through. Our customer is very cost conscious. They want to be able to dress fashionably but do not have the expenses to spend money on clothing that will only be in style for one season. To accommodate, we offer the latest fashions at affordable prices that lead to guilt free purchases.
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OUR CUSTOMER
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Rob Age: 27 Occupation: Entry level finance job at Prudential Income: 40,000 Education: Graduated from Northeastern for Business Family Size: Single Bachelor Residence: Chicago, Illinois Likes to Shop: Zara, H&M, Topshop Why Zara? Zara is the right price point and he can shop for work and weekends at the same place.
Emily Age: 20 Occupation: Part Time at Lush Income: $9/hr Education: Student at University of Southern California studying Journalism Family Size: Single Residence: LA, CA Likes to Shop: Zara, H&M, Topshop Why Zara? Zara is the right price for a student but is still fashionable and they always have new items.
Cara Age: 29-35 Occupation: Mom/Art Dealer Income: $25,370/year Education: Studied Art History at Pratt Family Size: Husband, 2 children: infant and toddler. Residence: Upper West Side, NYC Likes to Shop: Zara [Woman, Man, Mini], GAP [men and children], ASOS, Nordstrom Why Zara? Can create trendy and stylish outfits for herself, her husband, and her children all in one store.
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COMPETITION
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As we are introducing a brand new line to Zara, our competitors all share a common trait of having their own activewear brands in-store or online. While some of these brands, such as Miss Guided, are online only, their span is broad and their activewear is trendy, meaning it is definitely competition. Some other competitors include H&M, Topshop, and Boohoo. These stores generally fall within a similar price range to Zara, albeit slightly higher or lower. Our edge as a brand is the aesthetic experience while shopping at Zara. Introducing an activewear section to the store will create a higher sense of fast fashion luxury.
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H&M Founded in Sweden, H&M is now a global source for fast fashion trends and basics for a similar age group to Zara’s. H&M focuses on trendy, ready to wear items that mirror runway trends. They also have a similar turnover rate to Zara. H&M also has an activewear section, though basic, and has partnered with Alexander Wang for a activewear based collection for a limited time in the fall of 2014.
TOPSHOP A London based retailer, Topshop is one of Zara’s biggest competitors, with most of the target customers of each shopping at the stores interchangeably. Topshop carries everything from basics to even formal now, and with a brand extension of Beyonce x Topshop, they will become an even larger competitor in Spring of 2016.
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BOOHOO Boohoo FIT will be a competitor for our Zara activewear line. Boohoo states that their FIT line has high impact pieces that’ll get their customer noticed at the gym, and put their everyday wardrobe into a spin. The brand features a sports bra with a branded band, which we saw as an emerging trend. The brand is also very affordable with its lowest price at $8.00 and its highest at $30.00. The FIT line features a variety in their assortment, such as leggings, shorts, skirts, tops, and trousers.
LULULEMON/ATHLETICA Lululemon is a competitor because of their absolute focus on activewear. The brand is more yoga focused, which will give Zara activewear an advantage. Zara can also get an advantage over this competitor with pricing. Lululemon is not the cheapest source of activewear. Tops and bottoms start at $42.00 and jackets get as high as $298.00. The brand does feature a wide assortment with tops, bottoms, and even accessories.
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GAP FIT Gap is moving into an activewear market with their Gap Fit line, separately listed from their womenswear. They provide activewear for run, yoga, and street style. Their assortment is the typical tops, sports bras, capris, shorts, pants, hoodies, jackets, and accessories. Gap’s target consumers are the typical American families. Zara targets the more stylish person and the young professionals.
VICTORIAS SECRET Known for their bras and yoga pants, Victoria’s Secret is a strong competitor for Zara’s new activewear line. Victoria’s Secret knows their customer and have consistently created products that, in the customer’s eye, warrant the higher price tag. Their sports bras come in a wide variety of sizes and styles that other stores cannot compete with. Marketing is another strong aspect for Victoria’s Secret. The Victoria’s Secret model is famous world wide. The models are in better shape then most models and are the envy of most women. This want to look like the models drive the sales of the clothing.
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MISS GUIDED Missguided is an online store that provides trendy fast fashion that is affordable. It is a direct competitor for Zara, as the prices are very similar. They offer clothing that is comparable to Zara and just recently launched their activewear line. The activewear line is trendy and plays into the idea of wearing active clothing in everyday outfits. They also offer a student discount.
NORDSTROM Nordstrom has recently rebranded their Savvy department which placed them on the same playing field as brands like Zara. Their Savvy department, which also hosts Topshop and Madewell pop up stores, carries the latest fashions at prices points slightly higher than Zara, but still appealing to young adults. Nordstrom also carries a vast athletic department. Brands such as Adidas, Fitbit, Under Armour, and Zella supply Nordstrom with everything from yoga pants, running jackets, and performance sneakers. As a result of the high number of brands, there are items in every price range.
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TRENDS
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Marketing Trend
Celebrity Endorsements
Runway Trend
Branded Bras
Technology Trend
Wearable Technology
Lifestyle Trend
Health and Fitness 21
BUYING PLAN
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THE GROVE
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One of the most popular malls in Los Angeles, the Grove is home to stores such as Topshop, H&M, MAC Cosmetics, Saks, and Zara. It’s open format allows for a social experience while shopping, and is also known for celebrity spottings, making it a desirable local to shop at. Because of its high foot traffic, the Grove Mall’s Zara store turns much faster. This fast turnover has given us the ability to set the turnover rate at 2.87, putting 1.1 million of our 15 million budget into the Grove alone.
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SOHO
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Although Zara has an abundance of stores in New York City, because of SoHo’s hip and active clientele, we felt as though this store would be an excellent starting point for the activewear line in New York. With Soul Cycle being the hot workout, having gyms all over New York and especially SoHo, Zara activewear could easily assimilate into this trendy area. The SoHo store is a hotspot because it is so close to gyms and other active areas, we feel that the turnover should be slightly higher in such a concentrated area. Our plan has a turnover of 2.63, and 900 thousand dollars of our budget will be dedicated to the SoHo store.
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ASSORTMENT PLAN
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Assortment Plans
FASM 245 Retail Buying Simulation Assortment Plans Fall 2015 Focus Product Category: Activewear Planned Purchases, Retail: Average Retail Price:
$17,240,000 $58
% Total 10% 25% 30% 25% 10%
$ Purchases $1,724,000 $4,310,000 $5,172,000 $4,310,000 $1,724,000
Unit Purchases 29724.1379 74310.3448 89172.4138 74310.3448 29724.1379
100%
$17,240,000
297241.379
Sizes XS S M L XL
Price Range $0-$30 $30-$50 $50-$70 $70-$100 < $100
Classification Tops Sports Bras Pants Shorts Outerwear Other
% Total 30% 20% 15% 15% 15% 5% 100%
$ Purchases $5,172,000 $3,448,000 $2,586,000 $2,586,000 $2,586,000 $862,000 $17,240,000
Unit Purchases 103440 114933 43100 64650 17240 57467 400830
Avg. Retail $50 $30 $60 $40 $150 $15 $58
% Total 10% 35% 30% 10% 15% 100%
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Thank You
Kristin Terrana Mi’Kiera Graham-Young Danielle McGotty
RETAIL BUYING SIMULATION, FASM 245, SECTION 2, WINTER 2015, PROFESSOR DANIEL GREEN