The tiered structure of UK fashion market

THE

TIERED STRUCTURE of

UK FASHION MARKET Fashion Communication & Promotion Li Xiao

N0351471 FASH10040 January 2011

Market Report

contents 1.0 Introduction 2.0 Methodology 3.0 Result & Discussion 3.1 Brand Investigation for Burberry 3.2 Brand Investigation for Topshop 4.0 New Product Extension Range 4.1 Rational for Brand Chosen 4.2 Rational for Product Range Chosen 4.3 Rational for Market Level Chosen 4.4 Competitor Analysis for the New Product Range 4.5 Consumer Profile 4.6 Marketing Mix(4 P’s) 4.6.1 Place 4.6.2 Price 4.6.3 Promotion 4.6.4 Product 5.0 Summary & Recommendations 6.0 Illustrations 7.0 Bibliography 8.0 Appendix 8.1 Questionnaire 8.2 Perceptual Map 8.3 SWOT Analysis 8.4 Mood board 8.4.1 Advertising ideas 8.4.2 Consumer Profile 8.4.3 Packing ideas

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1.0 Introduction This report is aiming to investigate two brands, Burberry and Topshop which are currently operating in different segments of the UK fashion market. The report will focus on each brand’s promotional and marketing strategies, investigate how they trade up and trade down. Afterwards, Topshop, in particular, will be selected to be fully investigated in order to introduce a new extension range in to appropriate market levels, providing rational for market level chosen, rational for product range chosen, competitor analysis, consumer profile and marketing mix analysis, help the brand successfully launching new product extension into a applicable market sector.

2.0 Methodology In order to gain a comprehensive knowledge of these two brands in the market, both primary and secondary research will be taken in use. A questionnaire, as for primary research, will be made on “SurveyMonkey” and passed on to consumers through the Internet. By receiving the suggestions and consumers’ point of view to decide which market segments is possible and appropriate for the new product extension. Moreover, in-store research will also strongly support finding out marketing strategies. For secondary research, Mintel and Verdict reports will be used as a trustworthy data resource, to discover the brand’s market positioning, competitors, marketing mix etc. Besides, the brand’s ad campaigns and related photographs could provide a clear view of the brand and how it promotes itself.

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3.0 Results & Discussion 3.1 Brand investigation for Burberry Burberry, an historical British luxury fashion house, established in 1856, is known for its highlypreserving heritage, and operating in premium price fashion market. Also, its sophisticated marketing strategies and talented team, guaranteeing a solid brand position in market, keeps Burberry sustainable and profitable on a world scale. (Burberry annual report 09/10) By conducting research，it was found that Burberry has a series of successful and efficient trade up and trade down marketing strategies to boosts its profit.

Promotional and marketing strategies: • Keeping a long-term cooperating relationship on its ad campaigns with prestigious photographer Mario Testino from 2004 until now, meanwhile one by one fashion icons has been chosen to represent the brand, for example Kate Moss in 2005, Emma Watson in 2009 and 2010. (Burberry heritage, burberry.com) • It has built sector leading expertise in digital media arena by its Creative Media and IT teams.

Burberry invited its consumers to share the full experience of its S/S 2010 show globally for the first time. Joining the social medias, Facebook, Twitter and Youtube, shortened the distance between brand and consumers.

• Created “Art of the Trench” website and promoted its rich trench heritage. It Allowed consumers around the world to share the taste of trench fashion.

• Launching new stores on a world scale, considering the market condition, Burberry added 21 mainline stores during the 09-10, including first flagship store in Asia at Singapore. Also, 28 stores and concessions were renovated over the year. (Burberry annual report 09/10) • Burberry constantly enhance customers service, keeping its industry-leading status. Its roll-out sales and service programme was fully finished in US and European market and well advanced in Asia over the period. (Burberry annual report 09/10) • Except premium product line Burberry Prorsum, Burberry London target top market, Burberry promoted its sub line Burberry Brit and Burberry Sport to lower-premium market while maintaining its good quality at a lower price point. This makes it more accessible and widens its customer portfolio.

• Burberry continued its diffusion range, specifically, target the Japan mid-high market, which is the Burberry black label for menswear and blue label for womenswear. Its much cheaper than the mainline product and collaborates with upcoming local Japanese designers which match the taste of the Japanese market to gain more profit.

• Burberry just brought its brand-new beauty products into the market, and has therefore expanded its product offering, which made it more reachable as of consumers.

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3.1 Brand investigation for Topshop

Topshop operates in the mid-segment on the UK fashion market, and was founded in 1964. It has become a fashion pioneer . It is under Arcadia Group, and is attracting a large amount of consumers, especially ageing between 16-25 (see appendix, questionnaire). Topshop opened more than 300 stores around UK, gained a loyal and solid customer group, and the brand has become a fashion phenomenon. (Topshop, arcadiagroup.co.uk)

Promotional and marketing strategies: • Topshop has over 300 stores in UK and on 100 international territories, operating in more than 30 countries which provides it a huge market scale. It Focuses on major markets and opened its flagship stores in London and New York, to its maximise profits. (Topshop.com) • Keeping it at an affordable price, providing trendy and fashionable clothing with a good quality and design details.

• Created a widely popular website, including a variety of information about the brand and products. “Update five days a week with over 300 new product, TOPSHOP.COM is the ultimate fashion fix.”(Topshop.com). Being “one of the most successful fashion websites.” (Brandrepublic.com) • Topshop is a pioneer of high street and designer collaborations. Introducing the designers collections to mid market. In 2007 it launched Kate Moss for Topshop’s range, resulting in having a large impact on the fashion industry.

• In 2002, Topshop started off as a sponsor of new designers in London fashion week, providing them with financial and promotional support (Arcadia Group, arcadiagroup.co.uk), and as a marketing strategy to promote itself.

• Topshop set up different departments,which include Collection, Mainline, Premium, Boutique, Unique and Collaborations, each department owns its unique features, target different consumers group makes brand wider acceptable.

• Launched its beauty range in spring 2010, enriched its product line, gained more consumers.

• Selected stores started its Style Advisor programme offer customers free personal fashion advisors.

• Offering students 10% off in-store or online shopping all year round, and providing promotion like “₤12 for 2 tees” all the time. (Based on primary research)

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4.0 New product extension range

4.1 Rational for brand chosen According to Jane Shepherdson who is a former brand director at Topshop, the popularity of Topshop is its appeal being less about customers’ age, but more about being appealing to “anyone interested in fashion” (Mintel report). Based on my primary research, Topshop is a highlyrecognised brand with a number of consumers, up to 75% interviewees chose Topshop as the brand where they shop the most, and 80% answered they are loyal to a brand (see Appendix, 8.1 questionnaire). Therefore Topshop is chosen to launch a new product range, which basically could attract most of the existing loyal Topshop customers who already is a formed large market.

Afterwards, the brand promotional strategies will help achieving a growing number of consumers and a wider market range.

4.2 Rational for product range chosen Topshop’s range, currently, includes womenswear, a wide range of accessories and recently launched beauty products, additionally its sister brand Topman is selling menswear. In order to make a brand fully established and obtain an extensive market, launching a new product range is necessary.

Over the last five years, consumers’ interest in interior design has increased some of them want an improvement in their homes (Mintel report). It is a good opportunity to introduce Topshop interior product to the market, not only will it boost brand benefits, but also a completed product line.

Research suggest potentially over 95% consumers show their interests in Topshop home product and inclined to purchase it, furthermore almost 80% interviewees buy interior products at least once a month(see Appendix, questionnaire), its guaranteed there is a potential market for Topshop’s interior products. Moreover, Zara is a major competitor of Topshop which already operates home products on the market. With Topshop bringing its home line to the market through its unique feature could attract and share consumers of Zara Home.

4.3 Rational for market level chosen As an appropriate market segment for Topshop’s home products to enter, keeping it in the middle price market would be the best choice. Topshop home products is a extension range based on Topshop’s brand identity, hence continue Topshop’s price strategy could endeavour to maximise market scale. A survey relates to the topic and also indicates that over 50% would spend 30-60 pounds on interior products (see Appendix, 8.1 questionnaire). A Mintel report, meanwhile, supported this result. Although there are still some consumers buying premium price products, in 2008 many consumers tend to trading down to cheaper ones, and heavy discount let them get top level products at a reasonable price (Mintel report).

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4.4 Competitor analysis for the new product range Resource from Verdict report shows the top eight homewares retailers in UK market are John Lewis, Debenhams, Argos, IKEA, ASDA, Tesco, M&S and Next (Verdict report, 2010), all of these retailers are based on middle price market, owned the major interior product market, which are potential competitors of Topshop new interior range. This result also reflect on my primary research, John Lewis appears to be the most popular home product retailer which beyond 50% consumer choose it as the shop they often shop interior products (see Appendix, 8.1 questionnaire).

However, due to the Topshop is a fashion-leading brand, its homewares range are heavily influenced by trends and design, consequently the major competitors of new interior range possibly would be H&M Home collection and Zara Home. Both brand are operating in middle market, sells good quality, fashion-oriented homewares (H&M home collection, 2009). This is also what Topshop Home need to focus and compete with.

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4.5 Consumers profile Topshop interior products will initially attract loyal Topshop customers, they may pay more attention to new product range, tend to purchase it to support the brand. Based on products which is heavily fashion-influenced designed, Fashion-lover would also become Topshop Home audience.

Younger generation group, particularly, would become Topshop interior fans. They focus on style, design, used to shopping in middle price market and willing to have a quality life. Topshop Home will provide such life experience. Sarah Nina is typical Topshop consumers, who shops the Topshop frequently and would definitely become a Topshop Home products follower. (see 8.4.2 mood board)

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4.6 Marketing Mix (4 P’s)

4.6.1 Place I would recommend launching the new product range initially in Topshop’s flagship store in London, with it’s huge space create a showroom for Home products, attract consumers at the first sight. Placing the display area as home, match different interior products, which offering customers a real experience as they are in home. In this way could stimulate consumer’s desire to buy the products. Then start offering a limited number of home products in various Topshop retail stores, makes it more accessible to audiences. After Topshop Home possess a solid consumer group and market, Topshop could establish its independent interior product stores. In addition, using Topshop advanced website sell its interior range products could also be a feasible way.

4.6.2 Price As a extension range of Topshop brand, the price setting of its interior range would not keep far away from its currently pricing. According to the questionnaire survey’s result most of people could accept ₤30-60 for interior product, about 20% will spend less than ₤30 and another 20% are able to spend ₤60-90 (see Appendix, 8.1 questionnaire). In that case, the average price of Topshop interior products would be around ₤40-50, starting price at ₤15, special editions and collaboration products price ₤60-100. This pricing strategy could give Topshop a wider space in market, consider different level of needs from consumers.

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4.6.3 Promotion At the first stage to promote Topshop’s new interior products, starting with a powerful, visualdriven, edgy and cozy ad campaign is quite significant, which give its potential consumers a strong and impressive feeling of new products, completely reveal different lifestyle that Topshop can provide them with its new products. Advertising will be spread by different media, for example magazines (especially fashion magazines and home interior magazines), Internet, billboards etc.

Besides, prepare a finely designed look book of its products for customers which is free to take would be a good way to promote.

In name of Topshop Home, sponsor or hold a big event like outdoor concert, design a showing area at the event, involve a increasing number of people participate in event and get acquire of Topshop interior, spread it widely.

Offering discount matches of its new products at first 3 days of selling, such as buy sofa get a back cushion for free. Also, window display is absolutely useful and necessary when promoting its new homewares.

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4.6.4 Product

Topshop interior products will fulfil three basic characteristics fashion-based, creativedesigned and quality-guaranteed. The product range will be separated by different rooms of home, which make s customers more convenient to choose what they want while shopping. For the sake of consumer’s different tastes, Topshop Home products will covering various style, from vintage to avantgrade, including classical black & white to fantastic colours and using different fabrics.

Verdict report indicate that in 2011 a prospect growth of curtain and furnishing fabric will up to 31.4%, bed linen placed the second which is 26.9%, bathroom and table linen following is 17.7% (fig.1 UK retail futures homewares, 2011). As a result, Topshop interior products will definitely focus on these categories, introduce them to mass market. To successfully launching this new product range, expending market share, except provide good quality, stylish and affordable products enter mid market. Nevertheless, Topshop Home can work with famous artists, promote collaborate collections and special editions, which is quite artistically painted for instance, introduce this special line to market, target mid-high market, pricing ₤60-100, not only will wider its consumers, but gain a well reputation, in prepare of future upgrading.

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fig.1

Textile & Soft Furnishings category growth Prospects 2005, 2006 & 2011

‘UK Retail Futures 2011 Homewares, annual forecasts to 2011’, Verdict (2010), http://360.datamonitor.com/Product?pid=DMVT0374

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5.0 Summary & Recommendations This report has discussed two brands Topshop and Burberry, which are currently operating in different segments of UK fashion market, explored their marketing and promotional strategies which makes theses two brands stand out in today’s market.

As one of the most successful fashion retailer in UK, Topshop was chosen to launch a new product range which is “Topshop Home” enter mid price homewares market. Topshop owned a massive number of loyal customers, mainly provide trendy, stylish and affordable price clothing, it’s retail stores opened in every major citys all over UK and is now expanding its international market.

Moving this strong heritage into it’s interior product range will help Topshop Home achieve success rapidly. Moreover, it keeps a good relationship with different designers for several years and accumulated experiences from it as well, which also could be a positive point that makes Topshop Home expand market in the future.

（word：2432）

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6.0 Illustrations

page 5. http://smartpdf.blacksunplc.com/burberry2009-10ara/ http://artofthetrench.com/ http://uk.burberry.com/store/content/experience/heritage/index.jsp

Page 7. http://static.guim.co.uk/sys-images/Guardian/Pix/pictures2010/2/2/1265129772368/ Topshop-in-Oxford-Street--008.jpg http://media.photobucket.com/image/topshop/StyleJunkee/60E05VBLK_large.jpg http://www.highsnobiety.com/news/wp-content/uploads/2008/11/gareth-pugh-topshopchristmas-tree-2-340x540.jpg

Page 9. http://blog.ispira.com/upload/d4/d41d8cd98f00b204e9800998ecf8427e/ bf0ec6cefb11e426dd9a21a1c51faaad.JPG http://3.bp.blogspot.com/_TISg1LIvCsc/THT3P3BdRhI/AAAAAAAAAjg/oahkE5x5fmo/ s1600/5.JPG

Page 10. http://fashiontribes.typepad.com/main/images/topshop_3

Page 13. http://www.nitrolicious.com/blog/wp-content/uploads/2008/11/hm_home_1.jpg http://www.nitrolicious.com/blog/wp-content/uploads/2008/11/hm_home_3.jpg http://www.nitrolicious.com/blog/2008/11/29/hm-home-collection-february-2009/

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7.0 Bibliography Website: ‘Arcadia Brand History, Topshop’, Arcadia Group, http://www.arcadiagroup.co.uk/about/ topshop.html , Accessed 15/1/2011 ‘Burberry Annual Report 2009/10’, Burberry, http://smartpdf.blacksunplc.com/ burberry2009-10ara/ , Accessed 12/1/2011 ‘Burberry Heritage’, Burberry, http://uk.burberry.com/store/content/experience/heritage/index.jsp , Accessed 12/1/2011 ‘H&M home collection’, Nitrolicious (2009), http://www.nitrolicious.com/blog/2008/11/29/hmhome-collection-february-2009/, Accessed 23/1/2011 ‘Superbrands Case Studies: Topshop’, Brand Republic (2005), http://www.brandrepublic.com/news/ 474559/superbrands-case-studies-topshop , Accessed 17/1/2011 ‘Topshop History’, Topshop, http://www.topshop.com/webapp/wcs/stores/servlet/ StaticPageDisplay?storeId=12556&catalogId=33057&identifier=ts2-aboutus&intcmpid=W_FOOTER_WK39_HP_UK_ABOUT_US , Accessed 15/1/2011 ‘Topshop Products’, Topshop, http://www.topshop.com/webapp/wcs/stores/servlet/ StaticPageDisplay?storeId=12556&catalogId=33057&identifier=ts2-aboutus&intcmpid=W_FOOTER_WK39_HP_UK_ABOUT_US , Accessed 15/1/2011 ‘Topshop Services’, Topshop, http://www.topshop.com/webapp/wcs/stores/servlet/ StaticPageDisplay?storeId=12556&catalogId=33057&identifier=ts2-aboutus&intcmpid=W_FOOTER_WK39_HP_UK_ABOUT_US , Accessed 15/1/2011 Reprot: ‘Accessorising the Home’, Mintel (2009), http://academic.mintel.com/sinatra/oxygen_academic// display/&id=395580#atom2 , Accessed 19/1/2011 ‘Furniture Retailing’, Mintel (2008), http://academic.mintel.com/sinatra/oxygen_academic/ search_results/ show&&type=RCItem&sort=relevant&access=accessible&archive=hide&source=non_snapshot&li st=search_results/display/id=280604/display/id=364887?select_section=364849 , Accessed 19/1/2011 ‘UK Retail Futures 2011 Homewares, annual forecasts to 2011’, Verdict (2010), http:// 360.datamonitor.com/Product?pid=DMVT0374 , Accessed 21/1/2011 ‘UK Homewares Retailers 2010, non-specialists win out in shrinking market’, Verdict (2010), http://360.datamonitor.com/Product?pid=DMVT0545 , Accessed 21/1/2011 17

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8.0 Appendix

8.1 Questionnaire

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8.2 Perceptual map

High Style

High Quality

Low Quality

Low Style

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8.3 SWOT analysis

Topshop interior range “Topshop Home”

Strengths • A large consumer group

Weakness • Without previous practical experience within the homewares market.

• Highly fashion-influenced products.

• Wide price range.

• Consumers are used to shop the brand wich they are familiar with.

• Owned a experienced and mature management team.

• Good relationship with upcoming designers.

• Successful website will be a positive promotional tool.

Opportunities • A growing number of needs for interior products in the market.

• Attracting different age groups.

Threats • A number of competitors.

• Quite similar product range and alike positioning in the market with its major rivals.

• Publicity • Recession.

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8.4 Mood board

8.4.1 Advertising Ideas 8.4.2 Consumer Profile 8.4.3 Packaging Ideas

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Consumer Profile Name: Sarah Nina Age: 24 Location: Nottingham, UK Job: Fashion editor Magazine: Vogue, Wonderland Music: Lily Allen Brand: Topshop, Zara, Asos Cafe: Costa, Starbucks Travel: Greece, Italy Hobbies: Shopping, Reading, Photography

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