ORLA KIELY Harriet Exton N0733000 Word Count: 1,529
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ETHICS
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CONTENTS Orla Kiely Ethics Contents Introduction Methodology PESTLE Analysis Macro Trends Implications Market Health Competitve Environment Positioning Map Brand Audit Pen Portrait Brand Health Check Primary Research SWOT ANSOFF Matrix Key Conclusions Illustrations References Bibliography
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INTRODUCTION This report will review the brand Orla Kiely and discuss its current marketing activity, whilst identifying and critically analysing the main problems affecting Orla Kiely’s development as a business. As well as examining its overall health and the means in which macro trends affect their past and future. This will coincide with making potential recommendations and opportunities which are feasible for them. The aim is to outline the growth engines which the business has used; its successes and achievements; any potential obstacles and experiences; and finally any areas which need to be improved.
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METHODOLOGY
The research conducted was for the purpose of discovering whether the public were aware of Orla Kiely as a brand and the type of product associated with it, also to discover consumers’ favoured method of purchasing in the 21st century. This research was collected using the online survey website SurveyMonkey which was shared using a personal facebook account and twitter account in order to get a variety of responses from various age groups to identify any similarities or differences regarding age. The participants had the choice of participating in the survey as it was open to anyone, all the surveys were completed anonymously in order to maintain the participants confidentiality. There was a total of 36 questionnaires collected in total which allowed there to be a variety of data to be analysed.
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PESTLE ANALYSIS Factors Political
Macro Environment Due to the largely uncertain political environment as a result of conflicts, terrorism, BREXIT and financial crises across the globe, certain industries have become more concerned and volatile of their future. As a consequence of this, the retail and clothing industries will have to become accustomed to instability. McKinsey (2017) has stated that “Fashion purchases are often emotional ones, and if consumers are feeling uncertain or scared, they are less likely to buy�. Therefore demonstrating that if the British public are feeling uncertain about the political situation it is certain to have a knock-on effect to other industries. The Gen Z generation are more politically aware caused by the rise of social media, this means that brands have to make a concerted effort to become involved to gain the support from young adults; although taking a political stance can leave the brand in an unchartered territory. The British Election Study found that young British voters have become more active in politics, with an estimated 58% of 18- to 24-year-olds voting in the 2015 general election.
Orla Kiely This will have an impact on Orla Kiely as it means that her sales may be fluctuating frequently, meaning her profits will be affected which could lead to uncertainty for stores or staff - both internally and externally.
Ecominic The economy has a substantial impact on the fashion clothing industry, whether that be prosperous or negative. According to MINTEL’s Clothing Retail report 2017, clothing sales have increased by 3.1%. This is compared to real incomes falling, however due to the drop in value of the pound this has meant that products have become more expensive, therefore although consumers are spending more, they are in reality buying much less due to a lack of disposable income and augmented prices.
This will have a significant impact for Orla Kiely, as her prices will have been increased which means her products are likely to still be purchased but a smaller amount sold due to a drop in consumer confidence and disposable income. Also as the value of the pound continues to fall, prices will continue to grow meaning customers will be less inclined to purchase products at an unnecessarily higher price than usual and will abstain from purchasing.
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PESTLE ANALYSIS Factors Social
Technology
Legal
Environment
Macro Environment There has been an increase in the health and fitness industry with the market growing at 6.3%; as there is a growing concern of keeping fit.
Orla Kiely For Orla Kiely this is an opportunity for them to invest in creating an activewear range, as it is the second-highest growing sector this would allow her to diversify into new sectors of the retailing industry and help to generate sales in the time of a lack of consumer confidence as they will be more inclined to buying a product they need. Online shopping has become inThis demonstrates that when updating creasingly popular, with 57% peo- websites and releasing new products, they ple saying they shop online in order should update their social media pages in to find the best prices for products. order to create awareness, this therefore This came alongside internet rewill be positive for them because it should tailing increasing by 84% between help to create more sales. As consumers are 2011-16 describes Euromonitor using the internet to determine whether to International. purchase a product this could be the difference between a sales or no sale. The internet is such a valuable tool for businesses in the 21st century, particularly in the retail industry as using social media can be an advantage ahead of Kiely’s competitors. In the fashion industry, ethics are a Some of Orla Kiely’s products are made in growing concern for most retailers China, which means that when she finalises and their consumers. Consumers a manufacturer, they will have to consider want to be assured that their cloth- the legal and ethical issues associated with ing is being produced in an ethical- producing products in foreign countries, ly friendly environment, therefore otherwise if they aren’t complying with the ensuring the working conditions laws there can be considerable consequences for the manufacturers are to an ac- for the business and its image. ceptable standard and that there are fair wages and the employees have their rights states the EFF. Consumers are becoming more and Orla Kiely would highly benefit from bemore environmentally conscious, coming more sustainable with her products. therefore making it part of their Although they maintain an ‘environmental’ daily regime. They are more aware image, her clothes aren’t all made sustainaof sustainability and its impact on bly. Although she did a collaboration with the world. Therefore according to People Tree which are an ethically producer Euromonitor 4/5 consumers are of clothes. more likely to buy from a brand with a positive approach towards sustainability.
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MACRO TRENDS Health and Well-Being
Smart and Connected
Easy and Affordable 8
MACRO TRENDS The penetration rate of fitness members has reached an all-time high of 14.9% up from 14.3%. Therefore 1 in every 7 people in the UK is a member of a gym
91% of consumers have bought online with clothing being the most popular product purchased with 52%
36% of people choose to purchase time-saving products and services in order to reduce stress and simplify their lives
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IMPLICATIONS
Health and Well-Being
Due to the greater interest in health and wellbeing and the growing popularity of people having a gym membership. There is a gap available in the market for Orla Kiely to expand and develop her product range into activewear and equipment. This includes products such as: yoga mats, gym wear, water bottles, phone holders. They could consider a collaboration with an electronics company to develop earphones and combine her distinctive print with popular fitness technology such as smartwatches.
Smart and Connected The statistic depicted by Mintel’s Online Retailing Report, details that online shopping is an increasingly important aspect of retailing now, thus Orla Kiely would significantly benefit from heightening her presence on social media platforms, as it would be an effective means of exposure for the business, as social media guides the consumer towards purchases by using promotional techniques which influence consumers.
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IMPLICATIONS
Easy and Affordable This figure identified from GlobalData via the web page Verdict helps to identify that there is room for improvement with time-saving services for every business. Whether this be having regular updates on their app; hosting competitions for their followers; opening pop-up stores in popular cities to make it easy and accessible to consumers to access Orla Kiely as a brand. Although she has an app and her website, its not regularly updated with the latest information and collections.
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MARKET HEALTH The clothing retailing industry has been through a challenging 5 years, alongside the recession, the industry was hit hard. Mainly due to a lack of disposable income. Although it is continuing to recover, there are still obstacles to overcome. The Clothing Retailing UK October 2017 report (via Mintel) displays that the industry is going to increase by 3.1%, giving the market a value of ÂŁ57.7billion; whilst consumers continue to increase their spending gradually by 3.8% from 2016, although real incomes continue to fall.
Fig 1. Forecast on Consumer Spending on Clothing and Accesories (2012-22) by Mintel
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COMPETITIVE ENVIRONMENT Orla Kiely is a luxury-priced clothing store, selling womens clothing, accessories and homeware. On the market, their individual style is unique to the brand, with the distinctive print. However, within the clothing market there is a variety of brands who choose a particular style to design their clothes around. Although her clothing is unique, there are brands which have a similar thread throughout.
Some of their clothing competitors include:
BODEN
BRORA
CATH KIDSTON
DIANE VON FURSTENBERG
FAT FACE
JOULES
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COMPETITIVE ENVIRONMENT Brand
Strengths
Weaknesses
Boden
High Quality Versatile Modern
Workwear Style Alternatives on the market - cheaper/ dearer Non-Identifiable
Brora
Good Quality Bohemian Style Menswear Collection
Plain Alternatives Non-Identifiable
Cath Kidston
Identifiable Popular Cheaper
Lack of Quality Mainstream Unflattering Childish Fashion
Diane Von Furstenberg
Fat Face
Unique High Quality Variety of Patterns On Trend Seasonal ‘Wrap” is their USP
Expensive Lack of Casual Wear Limited Target Market
Identifiable High Street Popular
Plain Alternatives Similar patterns and styles Not Unique
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POSITIONING MAP
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BRAND AUDIT
BRAND MISSION
“change the basic black boring “uniform” if you will that had gripped the industry in the 1990’s by introducing color”
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BRAND AUDIT BRAND ESSENCE
Charming Cute Fresh
POSITIONING STATEMENT
Orla Kiely provides women aged 25-35 high quality apparel with distinctive spirited prints for a premium high street price point. This will be provided by developing new patterns and unique items of clothing unlike any on the market.
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PEN PORTRAIT
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BRAND HEALTH CHECK The brand Orla Kiely has seen a considerable mix in their incomes following certain economic backdrops. Their revenues dropped from a significant £8.16m in 2015 to £7.2m in 2016. Although, the general outlook is negative, it did see an increase in their revenues from the United States by £450,000 from the previous year. This signifies that it is becoming more of an established brand, by bringing in more revenue from previous years. On the other hand, due to the Brexit announcement, this had a detrimental effect on their revenues in Europe. Mintel’s “What does Brexit mean for the fashion industry?” - 2016, detailed that retailers would be under considerable pressure, whilst consumers haven’t altered their shopping habits by a large percent.
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PRIMARY RESEARCH
Fig 2. Survey Monkey. Have you heard of Orla Kiely (2018) by Harriet Exton From the primary research conducted; the results displayed that the general awareness of Orla Kiely within the UK is particularly mixed with 17/36 being aware of them and 19/36 unaware, the majority of the responses were from the 18-20 and 30-50 age groups, which encompasses Orla Kiely’s target market, therefore displaying that a large percentage of the market she is choosing to target isn’t aware of the brand. This suggests that their marketing techniques need to be improved. This could be improved by using social media platforms.
Fig 3. Survey Monkey. What is your age? (2018) by Harriet Exton
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PRIMARY RESEARCH The question which helps to give a clearer understanding of consumer’s purchasing methods, is “When purchasing clothing item which factor is most important?” the most important choice for the product type with 43.33% choosing this, displaying that no matter what, a consumer will always be more likely to purchase when they know what product they want; the next most important was price with 32.26% depending on this.
Fig 4. Survey Monkey. When purchasing clothing items which factor is most imortant. 1 is most important. (2018) by Harriet Exton Therefore, this helps to clarify for Orla Kiely, that the consumer needs to be aware of what they want and it can be dependent on prices. This can all be altered and changed using the recommendations.
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SWOT Strengths
They have a unique selling point with their distinctive print Provides the market with a diverse range of products. From clothing, to accessories, homeware, garden ware, electricals etc. Collaborations with different brands Recognisable Operating within the global market Omni-channel Lack of alternative prints on the market
Opportunities
Introduce an activewear range Develop existing ranges Use the available marketing options available (social media) Introduce more pop-up stores into the market
Weaknesses
Limited target market Lack of awareness surrounding the brand Large quantity of unfinished product ranges High price range Lack of presence on social media and lack of traditional marketing methods Consumers aren’t committed to brands (primary research) .
Threats
Competition with similar styles Economic threats due to Brexit, which can drive their prices even higher Not evolving with the growing technology Consumer confidence decreasing
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SWOT Orla Kiely’s main threats are the large range of competitors which have been previously discussed; as they offer a similar type of product range. Another threat for Orla Kiely is the current economic backdrop, Mintel 2017 predicts that consumers will begin to have a decrease in their disposable income meaning spending will soon be decreasing, along with their purchasing confidence. This can have a detrimental effect on their sales as if disposable income decreases, people will prefer to be spending money on their necessities rather than new products. Another threat they can possibly face is their lack of an online presence, particularly in the growing technology era, where a large majority of fashion brands are choosing instagram/facebook/snapchat as a means of communicating to their consumers. Both Instagram and Snapchat have features which now allow their users to make a purchase from their app and they are fast becoming an opportunity for retailers to increase customer acquisition and revenue says Mintel from their research. This threat suggests that if Kiely makes no development with their technology, this could significantly affect their sales and profits, as consumers want convenience at their fingertips rather than having to scour the internet. They have an app, however it hasn’t been advertised very well which suggests that their online advertisements and social media presence needs to be improved in order to increase their popularity.
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ANSOFF MATRIX Penetration/Core Developments
Product Development
- Alter their prices to appeal to a wider audience - Continue to open pop up shops in locations relevant to their target consumer - Competitions for customers, so they gain interest in the company to encourage them to make continued purchases - Reduce their packaging usage which will help gain ethical and environmental awareness.
Market Development
- Widen their target market by using social media platforms. - Open stores into new countries to increase their global influence.
- Expand on product range - Childcare - Garden - New style of clothing for a younger consumer or older consumer to help widen the target consumer - Develop more collaborations with brands in various product areas other than clothing etc.
Diversification
- Create a personalised range available in clothing (handbags) or homeware department and launch in a new location within the Asian market; which will increase exposure within the Asian market for Orla Kiely whilst incorporating a new trend into products. - Produce the activewear apparel as well as gym equipment/technology into the European market.
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KEY CONCLUSIONS The key insights after this detailed analysis for Orla Kiely is that there are certain aspects of the businesses activities which need altering and developing to improve its general success as a fashion retailer. In order to continue to be a successful british company, all the developments need linking together in order to work to its potential.
Firstly, due to the lack of public awareness this can easily be rectified by frequently updating their app and online services in order to keep people updated as well as introducing some online advertisements depending on demographics. The necessity for regular updates on their online services is due to the online retailing market rocketing.
Additionally, alongside the heightened popularity and growth of the health market this allows Orla Kiely the perfect opportunity to create an activewear range, which will help towards sales and reach a new target consumer.
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ILLUSTRATIONS Fig 1.Forecast on Consumer Spending on Clothing and Accesories (2012-22) by Mintel [online] Fig 2. Survey Monkey. Have you heard of Orla Kiely (2018) by Harriet Exton [online] Fig 3. Survey Monkey. What is your age? (2018) by Harriet Exton [online] Fig 4. Survey Monkey. When purchasing clothing items which factor is most imortant. 1 is most important. (2018) by Harriet Exton [online]
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REFERENCES Amed, I. and Berg, A., 2017. The State of Fashion 2017 [online]. McKinsey, Business of Fashion. Available at: https://www.businessoffashion.com/articles/ news-analysis/the-state-of-fashion-2017 [Accessed 7 January 2018]. Barr, C., 2016. Who are Generation Z? The latest data on todays teens/. [online], , 09/01/18. Available at: https://www.theguardian.com/lifeandstyle/2016/ dec/10/generation-z-latest-data-teens . [Accessed 5 January 2018] eoyireland, 2014. Orla Kiely & Dermot Rowan - Kiely Rowan (Profile). Youtube https://www.youtube.com/watch?v=F8ua6z0HWcE: [Accessed 13 January 2018] Ethical Fashion Forum, What is Ethical Fashion [online]. Ethical Fashion Forum. Available at: https://www.ethicalfashionforum.com/the-issues/ethical-fashion [Accessed 3 January 2018]. Euromonitor International, December 2016. Consumer Lifestyles in the United Kingdom. Euromonitor International. [Accessed 3 January 2018] GlobalData, 2017. People are buying time saving products to reduce stress rather than to save time [online]. Verdict. Available at: https://www.verdict. co.uk/people-buying-time-saving-products-reduce-stress-rather-save-time/ [Accessed 12 January 2018]. Halliday, S., 2016. Orla Kiely profits fall, firm is worried about Brexit. [online], Available at: http://uk.fashionnetwork.com/news/Orla-Kiely-profits-fallfirm-is-worried-about-Brexit,751726.html#.WlytGyOcbBI . [Accesssed 15 January 2018] Kemp, N., 2017. Why brands are getting political. [online], Available at: https://www.campaignlive.co.uk/article/why-brands-getting-political/1422951 [Accessed 9 January 2018] Kiely, O., 2010. Pattern. Octopus Publishing Group.[Accesssed 8 January 2018] Leisure DB, May 2017. 2017 State of the UK Fitness Industry Report. http://www. leisuredb.com/blog/2017/5/5/2017-state-of-the-uk-fitness-industry-report-outnow: Leisure DB.[Accessed 11 January 2018] Mintel, 2017. Executive Summar, Clothing Retailing UK. Mintel.[Accessed 8 January 2018] Mintel, 2016. What does Brexit mean for the fashion industry. http://academic. mintel.com/display/779288/?highlight: Mintel.[Accessed 13 January 2018]
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BIBLIOGRAPHY Allen, K., 2016. Retailers warn on weak pound and blows to consumer confidence [online]. . Available at: https:// www.theguardian.com/business/2016/oct/11/retailers-warn-weak-pound-blows-consumer-confidence-british-retail-consortium2018]. Browne, S., 2013. Made the China - The result. Kemp, N., 2017. Why brands are getting political [online]. Campaign. Available at: https://www.campaignlive.co.uk/article/why-brands-getting-political/14229512018]. Leisure DB, 2017. 2017 State of the UK Fitness Industry Report. http://www.leisuredb.com/blog/2017/5/5/2017-state-ofthe-uk-fitness-industry-report-out-now: Leisure DB. Yoneda, Y., 2011. Orla Kiely collaborated with People Tree on Ethical Fashion Collection [online]. Ecouterre. Available at: https://inhabitat.com/ecouterre/orla-kiely-collaborates-with-people-tree-on-ethical-fashion-collection/2018].
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