FedEx: Merchandising Plan

.

DISPOSABLE YET HANDY LETS GET DANDY

D.Handy Merchandising Plan

Do Yeon Stacey Park IED Level 6 Marketing Bianka Renn

executive summary The merchandising plan was undertaken in order to analyse and develop a potential commercial product assortment collection for D.Handy.

As the need for professional delivery service was the key of the product and thus FedEx was nominated among its competitors as the best potential company to undertake this new business idea. However, FedEx is not a fashion brand or has any experience with developing a fashion product nor is the product of D.handy currently available.

It is a new commercial product to the market.

Thus, a commercial collection was developed considering the competitors and the possible consumer expectations of D.handy collection. In the end the sales forecasted showed that D.handy would generate over 1 million of revenue for one season of 6 months in 7 different cities.

Table of Contents Introduction 6 Inspiration 8 Collection planning 10 Competitors analysis - Intimissimi 12 - H&M 13 - Golden Point 14 - ASOS 15 - Results 18 Assortments 19 Trend analysis 20 Colour pallette 21 Special models 22 Moodboard 23 The collection 24 Location allocation 25 Collection structure & master orders 26 Sales Forecast 32 Justifications

34 Collection timing 36 Sales pattern 37 Collection book 38 Bibliography 40

introduction The Merchandising chapter analyses the most potential competitors of D.handy focusing on the product categories that D.handy will incorporate folowing a strict commercial objective. The assortment of models and colours of 4 competitors was undertaken. Lead by the investigation of consumer expectation of the collection of D.handy with surveys of potential consumers and in the end followed by the master orders and finally the budgeting and sales forecast. The timing of the collection was adjusted to the strategy of D.handy’s collectioned weighted upon the sales pattern.

6

Chapter 1

Collection Development

7

inspiration online booking

Europe LCC accounts for 32% of all Europe air traffic in 2013.

A 15% increase since 2005. And has the highest number of destinations and seats per day. (airlineprofiler, 2014)

luggage fast tourism

Low Cost Carriers

Restriction

professional

delivery service Last Minute booking

8

free social media Smart Devices quality

lingerie socks

Fast Fashion

87%

panties

of Travellers use the internet for the bulk of travel planning (nsight, 2014)

convenience

MOBILE

Ethical

Disposable goods

9

Chapter 1 Collection Planning

10

Zero based

The Merchandising plan was developed using a budgeting method as D.handy is a new business unit for FedEx and so there are no historic data available to elaborate on.

Traditional line plan Therefore, in order to structure the best potentially commercial collection structure, the collection structure of the competitors of D.handy was analysed followed by the consumer expectation of D.handy and furthermore finding the coherence with the FedEx’s DNA. Competitors collection structure analysis was untaken of 1. Intimissimi 2. H&M 3. Golden Point 4. ASOS

As mentioned in the marketing plan these brands were the new competitors of D.Handy. And as the majority of underpant styles come down to a categorisation of 4 standard styles: Briefs, Bikini, Thongs and Hipster. Only these styles were evaluted in the competitiors collection to find out the collection structure of the weight of each style and the associated colours. Colours are an important aspect of D.handy as the limit of 4 standard styles in underpants gives more concentration on the selection of colours for underpants.

Thus as the main 4 styles of underpants are the commercial styles that D.handy will develop in its collection. Whilst analysing these models all colours were noted in order to find the percentage distribution of the neutral and trend colours. As D.handy will only have the 4 commercial models plus one special seasonal model the dependence on providing the correct colours was important. And as most travellers usually travelled with comfortable basic style underwear purchased mostly in fast fashion stores or dependable online stores.

11

UNDERPANTS

intimissimi

Intimissimi collection was analysed via their e-commerce website. They had divided their website by the categories of women and men in which slips and basics were considered for women and briefs and boxers for men. Thus, understanding Intimissimi’s colour assortment they showed that 83.5% of their female underpants collection was in neutral colours and 16.5% in the current trend colours. Male underpants were not only provided by neutral and seasonal colours but also by a variety of prints. The prints accounted for 16.7% of the collection therefore it was seen as an important segment thus, prints were considered under the colour assortment for all male underpants.

Overall, Intimissimi had more neutral colours than trend colours and more bikini models for female underpants and more hip brief models for males. In the case of Intimissimi although for females the model of brief and more styles the bikini model had more SKU, same concept with male, hip brief had more models but trunks had more SKUs this indicated that the higher the number of models not necessarily meant the higher number of SKUs.

12

H&M

UNDERPANTS

H&M collection was analysed via their e-commerce website. They had divided their website by the categories of women and men in which brief & knickers and best basics segments were considered for women and the underpants segment for men.

Understanding H&M’s colour assortment they showed that 59.3% of their female underpants collection was in neutral colours and 40.7% in the current trend colours. which was more of a balance compared with Intimissimi. In the case of H&M their male underpants models were consisted of either neutral or prints. All trend colours were provided in different prints. Thus, the division was neutral and prints. In which neutral accounted for 55% and prints 45% showing a better balance like the female underpants.

Overall, H&M had still more neutral colours than trend colours and more brief models for female underpants and more boxer models for males. In the case of H&M the styles with more models had more SKUs however, the other models were not far behind in the number of SKUs. Thus, giving a more balance assortment % for males of 30%, 30% and 40%. Indicating that number of SKUs were balanced despite the number of models.

13

UNDERPANTS

golden point

Golden Point collection was analysed via their e-commerce website. They had divided their website by the categories of women and men in which the fall/winter collection for knickers were considered for women and the underpants segment for men.

Understanding Golden Point’s colour assortment they showed that 87% of their female underpants collection was in neutral colours and 13% in the current trend colours. which was a similar distribution with Intimissimi. In the case of Golden Point their male underpants models were consisted of neutral, trend or prints. With neutral accounting for 77.3%, trends with a mere 4.5% and prints with 18.2%.

Overall, Golden Point had a lot more neutral colours than trend colours or prints and more brief models for female underpants and more hip brief models for males. In the case of Golden Point the styles with more models had more SKUs however, the other styles were not far behind in the number of SKUs just like H&M. However, Golden Point gave a balance of the number of SKUs among the top 2 styles.

14

asos

UNDERPANTS

ASOS collection was analysed via their e-commerce website. They had divided their website by the categories of women and men in which the briefs & thongs segment was considered for women and the trunks and briefs segment for men. Understanding ASOS’s colour assortment they showed that 47,6% of their female underpants collection was in neutral colours and 52,4% in the current trend colours. which was a similar balanced distribution concept as H&M. In the case of ASOS their male underpants models were consisted of neutral, trend or prints. With neutral accounting for 68.5%, trends with a mere 22.2% and prints with 9.3%.

Overall, for the female underpants ASOS was the only brand that had more trend colours than neutral colours and the male segments were similar to the other competitors. In the case of ASOS the styles with more models had a lot more SKUs and 2 styles in the female category only had one model with one SKU.

15

SOCKS

Two competitors were analysed for the assortment of socks the major player in online H&M and the major player online ASOS. Again only 4 styles were considered in finding the assortment of the competitors as these 4 styles pop, ankle, low calf and mid calf are the most basic commercial styles. Pop socks are more targeted and popular among younger people and mid calf were considered for the business men. However, all socks will be produced as unisex with different sizes to cover both female and males. In order to reduce costs that do not directly impact the consumers of the collection as many socks in general cannot be distinguished male or female unless there are stereotypically a male or female design.

The colour assortment for each style was analysed and the total sock collection assortment by each style can be seen highlighted in orange. In the case of H&M they did not have any trend colours for pop socks whereas ASOS had neutral and trend colours for all styles.

Overall, the assortment of style of both brands were similar. H&M had all styles apart from mid calf having more neutral colours than of trend. ASOS had all styles having a lot more neutral colours than of trend.

16

SLEEPING PANTS

Sleeping pants will also be designed and manufactured unisex as the features of maximum comfort and efficiency of the nightwear pants lead to the design outcome of the kimono style (Hakama) pants in which any gender can wear comfortably by adjusting the fit with the strap on the waist. This will reduce D.handy collection costs offering one model of nightwear pants in two most commercial styles mini and short in three sizes small, medium and large. Mini style is more targeted and popular among female and younger people and short is considered for men and older woman. The cultural conceptual design will give travellers maximum convenience and comfort. However, as D.handy is a commercial fashion product the analysis of the basic nightwear pants of H&M and ASOS was analysed. In order to find the colour distribution. The colour assortment for each style was analysed and the total pants collection assortment by each style can be seen highlighted in orange. In the case of ASOS they did not have any trend colours for male mini style whereas H&M had neutral and trend colours for all styles. H&M had more neutral colours for both female and male in both styles whereas ASOS had a more balanced distribution for female however for male, was the same case as H&M.

17

Results

The competitors assortment results summed up the average percentages for all styles D.handy will consider in their collection. The averages were inserted in the assortment chart on the right to compare with the consumer expectations to eventually end with a final average that D.handy will follow by in their collection structure. The consumer’s expectation was divided in to 3 age groups as LCC contaminated travellers had a wide age group that have different fashion tastes. Thus, in order to be as accurate as possible in estimation 3 groups were evaluated.

18

Assortment chart

19

trend analysis

20

colour pallette

21

special models As mentioned briefly in the Strategic Marketing chapter, special models designed by the women manufacturing D.handy will be developed one for each gender. An example of what the female special model would look like is below:

Consumers of this design are likely to be younger and fashion conscious. And as the fashion underpants industry of these consumers is dominated by Victoria Secret, a certain style in her collection was taken in order to develop a special model of D.handy. As seen on the right the moodboards pictures are all from her e-commerce webiste.

22

moodboard

23

The Collection FEMALE FRONT

BACK

BRIEFS

BIKINI

THONGS

BRIEFS

MALE FRONT

HIP BRIEF

TRUNKS

UNISEX

BOXERS

POP

LOW CALF SHORTS

24

MINI

ANKLE

MID CALF

distribution The distribution allocation of percentages was based on the research undertaken in the ‘Place’ of the marketing strategy chapter. In place, Milan and London were identified as most potential cities for D.handy due to the upcoming international events.

Thus, for the first season of Winter 2015 London and Milan were given a higher percentage. Followed by Paris and Madrid as they were the top destination of tourists and then Barcelona and Rome and lastly Berlin.

In the next season of Summer 2016 Barcelona and Rome were given more share as they were popular summer destinations and as Berlin would be colder it was given less.

The strategy will continue in this way, researching for major events and forecasting cities in which many people would travel to for each season in order to distribute the D.handy units accordingly so that FedEx meets optimal level of sales.

After 3 seasons of selling in the 7 cities FedEx will expand D.handy into other potentials cities, the cities listed under the second wave. As it usually takes a collection 3 seasons for it to settle down

25

collection structure The assortment percentages that resulted after the weighting of the competitors and consumer expectations was placed for each category the percentages in the thrid column highlighted in orange represented those resulted percentages from the assortment chart in the previous pages.

Total unit was identified and calculated by style followed by the distribution by colour category and then by the specific colour.

Master order for the female underpants was developed knowing the location percentages form the chart in the previous page. and furthermore was distribution by sizes to show the exact amount of units that will be produced under what category, colour and size for what city. London and Milan had the same distribution percentages for all the female styles thus was put together.

They do not share the amount of units but have their own same master order. Same goes for Paris and Madrid and the other 3 cities. Thus, as London and Milan accoutn for 20% of the collection, this means 20 + 20 Paris and Madrid were 15%, this means 15 + 15 and Barcelona, Rome and Berlin were 10%, this means 10 + 10 + 10 so the addition of 20 + 20 + 15 + 15 + 10 + 10 + 10 = 100%.

26

master order

27

collection structure

The same approach was applied here for the male underpants.

Male collection had fewer colours, considering that females are more attracted to colour. However, the units manufactured was higher for men as the calculation of total units resulted that men travelled more. The details of the calculation will follow on page 36.

28

master order

29

collection structure

Socks and Sleeping pants were structed as unisex, due to the various reasons mentioned before in marketing strategy.

Like the female and male collection unisex had the same approach in dividing my colour category then my specific colour then my city and then by size. The percentages of sizes is noted after the budgeting and sales and forecast.

30

master order

31

budgeting and

32

sales forecast

33

justifications As D.handy will sell online the sell in price was excluded. Instead as those online platforms need a financial reason to sell D.handy, they will be given 10% commission on every unit sold- thus, 10% was added to the cost of D.handy in order to work out the margin.

The percentages of size division was decided by evaluating the kind of consumers that would purchase the product. For female styles size: XL was not considered instead size: XS was considered. As for male is was vice versa XS was not considered and XL was considered. And as socks and sleeping pants were designed unisex all sizes were integrated. However, in the case of the Pop socks style not alot of men wore this style thus, the XL size was not considered. Same concept for the mini sleeping pants style shorter pants are worn more by females thus XL was excluded.

The master orders in the previous pages clearly show the exact number of units that will be manufactured for each size of each style using the percentages noted in the budgeting and sales forecast chart.

The total number of units to be manufactured for sale were calculated in the way shown in the chart above in order to understand the number of total units that should be manufactured that will guarantee sale so that there is less risk in the planning of the new business unit. D.handy will target 1% of the total seats sold in the targeted destinations as they are a new product from a non fashion brand. 1% still accounted for a high number of 120,000 seats. In which resulted a total margin of over â‚Ź1 million, indicating the high potential of D.handy. 1% the possible lowest 1% they could cover in the market thus this means â‚Ź1 million of profit is the minimum that this project can make out of.

34

D.handy will be sold in packs instead in individual units as delivery will be advertised free and in order to undertake a free delivery without generating a loss a minimum of 3 underpants had to be sold for one delivery thus the packs start with 3. And for socks it starts at 4 in order to have a minimum sell out price of â‚Ź5.

Female and Male had a different arrangement of packs as men took shorter trips than of females. And the pack number of 3, 5, 7 in the case of women can be flexible in ordering for any number. For example 3 + 5 = 8 thus those who need 8 units will purchase one 3 pack and one 5 pack. Moreover the 7 pack will be given a 15% discount as a incentive to the consuemr for purchasing more units. This strategy has the potential to increase the number of 7 packs over 5 if the consumer is discount conscious.

Revenue for each cities was inserted cosidering that all manufactured items will be sold. Discounts will not be offered for D.handy as it is already an affordable product and should give the consumers the insight of the fact that it will always be avaliable online with the same price for any style within the gender excluding the special model and at any time of the year with the free delivery service. Thus, 5% was estimated to be unslod of the entire collection and this 5% will be donated to integrate a more ethical image and desire from consumers. The neutral colours will always be carry overs thus only the trend colours and special models unsold units will be donated for good cause.

35

collection timing

Milan EXPO is a highly potential event that can generate a lot of sales for D.handy as the majority of the contaminated consumer groups of the LCC trend will be traveling to Milan. The travellers for business, the travellers for food and the tourists they will all be interested to be in Milan for the EXPO that is to be operating from May until October. Thus, in order to have the D.handy product ready for it’s first launch in time for the Milan EXPO the manufacturing of D.handy began last month and will be ready to be delivered to Milan by April for the public event explained earlier in the promotion under marketing strategy. And the sales will begin in May. And considering travel seasons usually divided by Summer and Winter. D.handy will be a seasonal collection divided into Summer and Winter and is different to the calendar of the fashion industry. It will follow its own pattern according to the peak times it will have sales and due to the fact that travellers want to wear summer coloured underwear when they are travelling in summer.

36

sales patterns The sales pattern corresponds the number of travels in the year.

The more travellers and more likeliness of sales.

Travellers travel all year, there are two main peak travel seasons however as D.handy is not targeting typical summer travel destinations or typical winter destinations of travel the pattern of sales does not have a significant peak and more balanced out.

The average percentage of sales came out to be 67.5%.

The the chart above starts from August following the time dimension chart on the left.

And the chart below shows the pattern from the first month of the year January.

37

collection book The collection book of D.handy would be of internal use as D.handy will not sell to wholesalers in the first years of sales.

The internally used collection book will contain: - The concept and inspiration of the collection - The objectives of the collection - The collection structure with pictures - The description of the fabric and styles and sizes - The table for each model indicating the description and number of SKUs - The description of the targeted cities in the launch of waves - The master orders for each city An example of the collection details chart below:

38

We live in a disposable society. It’s easier to throw things out than to fix them. We even give it a name we call it recycling.

- Neil LaBute

39

bibliography About FedEx, (2015). English Archives - About FedEx. [online] Available at: http://about.van.fedex.com/newsroom/global-english/ [Accessed 26 Jan. 2015].

Asos.custhelp.com, (2015). ASOS | Shop women’s fashion & men’s clothing | Free Delivery & Returns. [online] Available at: http://asos. custhelp.com/app/answers/detail/a_id/50/~/how-does-your-uk-next-day-delivery-service-work%3F [Accessed 7 Feb. 2015].

Badkar, M. (2012). CITI: Big Changes Are Coming To The Women’s Underwear Market. [online] Business Insider. Available at: http://www. businessinsider.com/citi-womens-lingerie-market-2012-4?op=1#ixzz3Rzv2p4Ne [Accessed 7 Feb. 2015].

BEUC, (2013). 1st ed. [ebook] BEUC, p.2. Available at: http://www.beuc.org/publications/2013-00196-01-e.pdf [Accessed 7 Feb. 2015].

Ecommerce News, (2014). EU consumers want free delivery, but retailers focus on timely delivery - Ecommerce News. [online] Available at: http://ecommercenews.eu/eu-consumers-want-free-delivery-but-retailers-focus-on-timely-delivery/ [Accessed 7 Feb. 2015]. (edreams, 2013) easyJet’s Most Popular Destinations, Available at: http://blog.edreams.com/easyjet-most-popular-destinations/ (Accessed: 27th December 2014).

Falconi, D. (2013). Are All Tourists Really Seeking an “Authentic Local Experience”? - The Boutique Traveler. [online] The Boutique Traveler. Available at: http://theboutiquetraveler.com/are-all-tourists-really-seeking-a-local-experience/ [Accessed 27 Jan. 2015].

Fenwick, S. (2014). Consumers Want Faster Delivery, Personalized Service in the Aisles this Holiday Season | Manhattan Associates. [online] Manh.com. Available at: http://www.manh.com/articles/consumers-want-faster-delivery-personalized-service-aisles-holidayseason [Accessed 6 Feb. 2015].

Fibre2fashion.com, (2012). Global Lingerie Market - Lingerie Trends for Womens. [online] Available at: http://www.fibre2fashion.com/ industry-article/40/3991/womens-second-skin1.asp [Accessed 7 Feb. 2015].

Insider, B. (2013). The Mobile Tourist: How Smartphones Are Shaking Up The Travel Market. [online] Business Insider. Available at: http:// www.businessinsider.com/the-mobile-tourist-how-smartphones-are-shaking-up-the-travel-market-2013-2?IR=T [Accessed 25 Jan. 2015].

Lepore, M. (2011). Everything You Need To Know About The Red-Hot, Growing Lingerie Industry. [online] Business Insider. Available at: http://www.businessinsider.com/everything-you-need-to-know-about-the-rapidly-growing-lingerie-industry-2011-1?op=1#ixzz3Rzrz0rcx [Accessed 7 Feb. 2015].

40

Mohn, T. (2013). Travel Boom: Young Tourists Spent $217 Billion Last Year, More Growth Than Any Other Group. [online] Forbes. Available at: http://www.forbes.com/sites/tanyamohn/2013/10/07/the-new-young-traveler-boom/ [Accessed 29 Jan. 2015].

Reston, V. (2014). Study: Consumers Demand More Flexibility When Shopping Online. [online] comScore, Inc. Available at: http://www. comscore.com/Insights/Press-Releases/2014/6/Study-Consumers-Demand-More-Flexibility-When-Shopping-Online [Accessed 7 Feb. 2015].

Santos, S. (2013). 2012 & 2013 Social Media and Tourism Industry Statistics. [online] Stikky Media Inc. Available at: http://www. stikkymedia.com/blog/2012-2013-social-media-and-tourism-industry-statistics [Accessed 26 Jan. 2015]. urb-it 1hour -, (2015). urb-it - Handla lokalt online. [online] Available at: http://urb-it.com [Accessed 7 Feb. 2015].

Tripalocal, (2014). Tripalocal Wants To Connect Travellers With Local Hosts for Authentic Experiences - TechNode. [online] TechNode.

Available at: http://technode.com/2014/08/13/tripalocal-platform-travellers-wants-authentic-local-experiences/ [Accessed 28 Jan. 2015].

Tripbod, (2015). tripbod.com original travel experiences - plan, experience and host authentic local activities personally. [online] Available at: http://www.tripbod.com [Accessed 29 Feb. 2015].

Ups.com, (2013). European Consumers Want Choices and Convenience When Shopping Online. [online] Available at: http://www.ups. com/content/ru/en/about/news/press_releases/20131126_consumer.html [Accessed 7 Feb. 2015].

Uk.intimissimi.com, (2015). Intimissimi goes Green: power the Recycling - Intimissimi. [online] Available at: http://uk.intimissimi.com/ custserv/custserv.jsp?pageName=Recycling [Accessed 31 Jan. 2015].

Wintle, F. (2012). Social media and the travel industry - simple tactics to win. [online] Webbedfeet.com.au. Available at: http://webbedfeet. com.au/influence-social-media-travel/ [Accessed 27 Jan. 2015].

Withlocals, (2015). Withlocals - The marketplace local withfor tours, activities, home restaurants and private guides. [online] Available at: https://www.withlocals.com [Accessed 29 Jan. 2015].

EDITD, (2013). EDITD exposes commercial data from the lingerie industry. [online] Available at: https://editd.com/blog/2013/04/thebooming-lingerie-market/ [Accessed 6 Feb. 2015].

Prnewswire.com, (2014). Global Underwear Market 2014. [online] Available at: http://www.prnewswire.com/news-releases/globalunderwear-market-2014-272921201.html [Accessed 3 Feb. 2015].

41