Funktional Wearables: YMA FSF Business Case Study 2017
Bringing new customers to Macy’s and Etsy by turning Fitness into Fashion and Fun.
Grace Rokela YMA FSF Business Case Study 2017
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Funktional Wearables: YMA FSF Business Case Study 2017 Funktional Wearables: Turning Fitness into Fashion
It’s no secret that the movement toward active lifestyles
has become a dominant force with modern consumers. While we have seen an explosion of products from sneakers to active apparel to fitness trackers meant to tap into the business opportunity presented by active lifestyles, the challenge exists to bring forward products that merge function with fashion in ways that make these products personal and fun to wear.
Introducing Funktional Wearables, a unique collection of
Figure 1. Active Lifestyle (2016)
fashion accessories designed to conceal fitness trackers and turn them into attractive pieces of fashion jewelry. Funktional Wearables empowers consumers to stay connected to their fitness tracker at all times in a way that is about both function and fashion. Funktional Wearables are currently presented as a featured artisan on Etsy, where the collection has earned a rating of 4.5 stars and has generated more than 10,000 sales since launching on Etsy in 2014 (Appendix C).
The partnership developed between Macy’s and Etsy provides unique opportunities for
both brands to expand their customer base. Funktional Wearables is a prime example of the type of successful artisan likely to leave Etsy if not provided with the access to the retail showcase and the resources available from Macy’s. Macy’s has been struggling to attract new customers in a highly competitive marketplace and will benefit greatly from the addition of Funktional Wearables, which will provide innovative and exclusive products attractive to the millennial consumers who frequent Etsy. Taking advantage of this mutual opportunity for growth is what the Macy’s Etsy partnership is all about.
Figure 2. Funktional Wearables Angelina Bracelet (2016)
Funktional Wearables: YMA FSF Business Case Study 2017
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Provides exposure to new consumers for both Macy’s and Etsy Artisans Introduces creative and exclusive products into the Macy’s assortment Provides Etsy consumers with the opportunity to experience products and buy directly from the store Takes advantage of both the digital and on ground marketing resources available for both partners Innovative Etsy shop will provide an attractive showcase for artisans while enhancing the Macy’s shopping experience Attract a new audience of millennial consumers to Macy’s Provide top Etsy artisans with brick and mortar exposure and the resources they need for expansion Successful Etsy artisans may provide the foundation for future Macy’s private label brands
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Etsy artisans may be reluctant to enter the department store environment There is currently an absence of the marketing required to raise the visibility of this unique partnership The current Etsy shop presentation is cluttered and positioned in a location with poor exposure
The Macy’s business model focuses on price discounting which is not appropriate for Etsy artisans May be difficult for Macy’s to maintain quality control for artisanal products Current customer interests in artisanal products may be a passing trend Exposure at Macy’s may subject artisans to counterfeiting
Figure 3. Macy’s x Etsy SWOT analysis (2016)
Who loves Funktional Wearables? Meet Molly & Sam
The Funktional Wearables x Macy’s shop has the potential to
reach a broad audience of modern women. The target customer may range in age from 18 to 35, is of middle to upper income and most likely lives in an urban or upscale suburban location. She is either in college or has a college degree. In addition to her engagement in fitness activities, she is interested in music and film and enjoys Asian fusion cuisine. She likes to put her personal stamp on everything she does and appreciates the opportunity fashion accessories present to develop her own sense of personal style, without breaking the budget.
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Molly is 32, and a graduate of Penn State University with a degree in marketing. She currently lives in Jacksonville, Florida and works for Coastal Communications, a medical marketing firm. Molly just celebrated her fifth wedding anniversary with her husband and has a child, three years old. Their annual household income is $150,000. Molly is devoted to health and fitness and while her lifestyle puts many demands on her time, she always finds a way to get to the gym and to complete her morning five-mile run. Molly stays connected to her health through her
Figure 4. Customer Profile Molly (2016)
Fitbit Alta, but does not like the way it often interferes with the look of her outfit.
Sam is 21 and is a undergraduate student at NYU. Her major is Environmental Engineering with a minor in Landscape Architecture. She is from Boulder, Colorado, and loves to be outdoors. Her favorite activities include hiking, mountain biking, and camping. Sam practices yoga for both her personal fitness and for her emotional well-being. She shares her devotion to yoga as an instructor at the yoga center adjacent to her campus. Sam wears her Fitbit Charge to keep track of her active minutes as well as her physical statistics and sleep patterns. Sam loves to wear stretch fabrics that compliment her physique and thinks careful- Figure 5. Customer Profile Sam (2016)
ly about her choice of accessories to complete her personal style. Funktional Wearables: The journey from the gym to Broadway
In my interview with Funktional Wearables CEO, Cynthia Blais (Appendix B), she ex-
plained to me how she often observed those in her fitness classes achieving positive results from wearing various fitness trackers. Soon after she purchased a Fitbit of her own and fell in love with everything about it, except how it looked with her favorite outfits. In addition to her work as a fitness instructor, Cynthia is also a jewelry maker and she began to create bracelets to cover
Funktional Wearables: YMA FSF Business Case Study 2017
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her Fitbit and turn it into a fashion accessory. In this way, Cynthia turned her personal commitment to fitness into a new business opportunity and an Etsy success story. The success she has experienced on Etsy can now become a powerful opportunity for Macy’s to reach new customers with the launch of an exclusive in-store shop for Funktional Wearables. Macys x Funktional Wearables in store
The Funktional Wearables shop will be featured on the main floor of Macy’s in a high
traffic location where it will be visible to a broad range of customers. The main statement of the shop will be a feature wall that will present all categories of jewelry including charms, bracelets and necklaces (Fig. 6). The shop will be presented adjacent to the display of related Fitbit products. The wall will also feature a touch screen. By using the touch screen display, the customer will be able to access product information for all styles of Funktional Wearables available instore and online. The use of a feature wall to showcase Funktional Wearables will make this shop successful and generating sales without requiring costly square footage. This presentation will also encourage impulse shopping and will motivate customers to explore the entire collection and to become Funktional Wearables collectors.
Figure 6. Funktional Wearables x Macy’s Feature Wall Mock Up(2016)
Funktional Wearables: YMA FSF Business Case Study 2017 Assortment
Funktional Wearables at Macy’s assortment consists of 16 styles of jewelry available in
a wide selection of colors (Appendix A). The assortment offers a variety of Fitbit compatible products for the Fitbit Flex, Charge, Charge HR and Alta. Funktional Wearables will launch in 100 Macy’s stores in both urban and upscale suburban locations. The following assortment plan presents the product assortment planned for A stores (40), B stores (35) and C stores (25):
Figure 7. Assortment Plan (2016)
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Launch Plan - Funktional Wearables will be launched with a special event planned for
the Macy’s Herald Square Flagship store and featuring a personal appearance by CEO Cynthia Blias. Cynthia will be sharing the story of Funktional Wearables with Macy’s customers while also providing product demonstrations with her marketing team. This event will be broadcast live over the Internet from the Macy’s Youtube channel and images from the event will be posted to Instagram and shared via Snapchat.
In addition to the launch event planned for the Macy’s Flagship store, the launch of
Funktional Wearables will be supported by participation in the annual NYC Runs 5k which is scheduled for Central Park on January 8th, 2017. Funktional Wearables will be present at the event with a pop-up shop in the form of a graphic wrapped van (Fig. 8) that will display all categories of jewelry while also providing compli-
Figure 8. Funktional Wearables x Macy’s Pop-Up Shop (2016)
mentary refreshments to the participants. Those interested in purchasing Funktional Wearables will be able to place their orders via an ipad through Macy’s e-commerce website.
Celebrity Ambassador: Funktional Wearables will partner with USA Olympic gymnast
Simone Biles, who will become the celebrity ambassador for the brand (Appendix D). Simone is 19 years old, received global recognition for her gold-metal winning performances at 2016 Summer Olympics and has a large following on social media, including Instagram (3.4 Million). Simone Biles has become a positive role model for Figure 9. Simone Biles (2016)
fitness minded women around the world and is the perfect ambassador to support the launch of the brand.
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Hashtag: The hash-tag “#FunktionalWearablesLife will be used to identify the launch
across all social media platforms. Functional Wearables will take advantage of this hash-tag to provide ongoing information about the brand and to interact with customers. Facebook: During my interview with CEO Cynthia Blias, she explained that Facebook has become their primary venue for social media marketing. The launch of Functional Wearables x Macy’s will be featured on the Facebook pages of Macy’s, Etsy, and celebrity ambassador Simone Biles. Posts to Facebook will be updated twice a week and will include the images and information that will keep visitors up to date with the brand in an entertaining way. Snapchat: Snapchat reaches 41% of all 18 to 34 year-old consumers in the U.S. daily (Perlberg, 2016). The launch of Funktional Wearables will tap into the popularity of Snapchat with millennial consumers through the release of a “sponsored lens.” This sponsored lens will be an interactive Snapchat filter. This filter will add a crown and a Funktional Wearables necklace to the image of the viewer on their smartphone. At the bottom of the “sponsored lens, will be the Etsy macy’s
Macy’s Functional Wearables logo. In addition to a “sponsored Fitbit compatible accessories using consealment technology
Sponsored Lens
macy’s
Geo-Tag
lens”, the Funktional Wearables x Macy’s shop will be identified with a permanent Geo-tag for tracking the location of customers
Figure 10. Snapchat Mock Ups (2016)
while shopping in a Macy’s store (Fig. 10).
Youtube: Youtube will strategically be
used to live-stream the launch party featuring CEO Cynthia Blias and to share video content and narrative materials depicting the brand on an ongoing basis. It has been reported that 74 percent of millennials prefer videos uploaded by brands, companies, or institutions to other forms of marketing (Heltai, 2016).
Figure 11. CEO Cynthia Blias (2016)
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Instagram: The launch of Funktional
Wearables at Macy’s will be supported with a contest on Instagram where customers will be invited to post their favorite images taken while wearing the jewelry, and to share them with others. Each month during the launch, the top three photos will be selected for entry into a contest where the win-
Figure 12. Espy Awards (2016)
ner will be selected to join brand ambassador Simone Biles as her guest for attending the 2017 Espy Awards. Funktional Wearables Financial Plan Spring 2017 My financial plan for Spring 2017 calls for an average stock of $1,384,100, which funds the investment in inventory required to support my assortment plan. I am planning to turn my inventory 2.5 times, with a sales plan of $3,500,000. My inventory markup percent is planned at 60.00%. I am planning reductions of 15.00% and am targeting a gross margin profit of 49.50%.
Figure 13. Funktional Wearables Financial Plan Spring 2016 (2016)
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Growth and Liquidation
The next step for building sales of Funktional Wearables x Macy’s will call for expanding from 100 to 250 stores across the country. In addition to expanding stores, Funktional Wearables will introduce new classifications of jewelry including earrings and rings as well as new styles of bracelets and necklaces. Funktional Wearables will also introduce products that
Figure 14. Dicks Sporting Goods (2016)
are compatible with fitness trackers other than Fitbit including Garmin and Jawbone.
If it becomes necessary to liquidate the inventories of Funktional Wearables x Macy’s,
the brand will be introduced as a new product offering at Dicks Sporting Goods, where it will be featured as a focal wall presentation adjacent to the women’s fitness department. Dicks Sporting Goods draws a large audience of female athletes and women devoted to fitness who will provide a very lucrative target audience of impulse shoppers for liquidating excess inventory that may result from the introduction of the brand to Macy’s.
x Macy’s
The Turquoise Charm ALL FITBIT COMPATIBLE Genuine Silver Turquoise charm
$20
The Kate Single The Rosie Bracelet
FITBIT ALTA/FLEX COMPATIBLE
ALL FITBIT COMPATIBLE
Brushed Metal & Vegan Leather
Braided string, Gold beads, mixed with fun colors
$30
$35
The Color-block Summer Charm The Tinley Bracelet
ALL FITBIT COMPATIBLE
FITBIT CHARGE/HR COMPATIBLE
Gold, White / Turquoise / Black charm
Faux studded snap bracelet
$20
$30
The Beverly Bangle The Avery Charm
FITBIT CHARGE/HR COMPATIBLE Aztec print, Blue, Pink, Green, Peach, Tan & Yellow
ALL FITBIT COMPATIBLE Rhinestone Studded Charm
$20
$35
The Simplicity Charm FITBIT FLEX & ALTA COMPATIBLE
The Angelina Bracelet
Metal Charm
FITBIT FLEX COMPATIBLE
$20
Textured Stretch Bracelet
$35
The Bridget Bangle
The Hannah Charm
FITBIT CHARGE/HR COMPATIBLE
FITBIT CHARGE/HR COMPATIBLE Red, and Blue Charm
Antique Hammered Silver, Gold and Rose
$20
$35
The Alana Charm FITBIT ALTA COMPATIBLE
The Ocean Bracelet
Rhinestone Charm
FITBIT CHARGE/HR COMPATIBLE
$20
Turquoise, Pearl and Gold Beaded Bracelet
$35 The Kate Wrap
The Adalyn Bangle
FITBIT ALTA/FLEX COMPATIBLE
FITBIT FLEX COMPATIBLE
Brushed Metal & Vegan Leather
Stretch Bracelet
$35
$40 The Perri Necklace & Earring set FITBIT FLEX & ALTA COMPATIBLE Antiques Hammered Silver and Leather Cord Fitbit compatible Necklace and Earrings
$40
Funktional Wearables: YMA FSF Business Case Study 2017
Appendix B
My Interview with CEO Cynthia Blais October 20th, 2016
What is the meaning and inspiration behind your logo? Cynthia: A graphic designer made our current logo for me after he told me the orange/ silver design I had originally made was too masculine. This is more feminine from a color perspective obviously. The circles are suggestive of bracelets, our primary product type. If FUNKtional Wearables were to team up with Macy’s for a permanent in-store space why would FUNKtional Wearables be the best fit? Cynthia: Fitness trackers are changing quickly, people upgrade frequently, and of course trends and tastes change also, particularly for millennials- FW is a perfect fit because of our price point and versatile designs. Although you sell accessories for multiple fitness trackers. Which fitness tracker accessories do you sell the most product of? Cynthia: Right now, we are selling by far the most accessories for the Fitbit ChargeHR. When we started in June 2014 we only had accessories for the Flex. Would you say that FUNKtional wearables products cater to the millennial consumer? If so, why? Cynthia: I definitely would- primarily because of the low price point. We also have a very user friendly website and are very active on social media particularly instagram. What differentiates these fitness tracker accessories from other fitness tracker accessories? Cynthia: We offer a wider selection of sizes, more unique looks, and a lower price point. What makes your Etsy shop/product stand out compared to other Etsy’s shops? Cynthia: We offer a bilingual customer service line and encourage calls, we offer free shipping in the US and Canada, we have free gift wrapping, and we try to have great pictures and give lots of details in our listings.
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Funktional Wearables: YMA FSF Business Case Study 2017
Appendix C
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Funktional Wearables: YMA FSF Business Case Study 2017
Appendix D
Simone Biles
The most decorated gymnast in World Championship History & 2016 Summer Olympics Star
Olympic Metal count: 4 golds and 1 silver World Championship Metal count: 14 Favorite Quote: “We can push ourselves further. We always have more to give.” Favorite pre workout song “’Into You’ by Ariana Grande,” Favorite workout snack Core Power Protein Shake or some Special K with Red Berries Gym bag essentials Smartwater, Beats (by Dre), Chapstick, and deodorant.
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