CWK4 Retail Management Project
Jenni Liinavuori Fashion Marketing & Communication, Level 5, 2015/2016
MIED 510 Marketing Techniques and Strategy 2 Retail Management CWK4
Marta Fernรกndez Melgarejo
INDEX
1. Introduction 2. • • •
Introducing the brand Target Marketing Mix Main Competitors
3. Introducing Barcelona • Barcelona in the Retail World • Main commercial areas 4. • • • • • • • •
Store Management Plan Retail format & Location Category Management Product buying and supplying Visual merchandising In Store Communication Store management Human resources Advertising & communication
5. Financial Plan • Expenses and Incomes • P&L statement and ROI calculation 6. Conclusions and recommendations 7. Bibliography
Introduction The aim of the project is to create a successful retail management plan by opening an brick and mortar shop in Barcelona. In order to create the plan a research was conducted. The research methods include the background of the brand, recognizing its role in the fashion industry, research and data of the Barcelona’s retail environment and main commercial areas. According of the analysed data and research an efficient store management plan for the brand was set. The plan includes introducing the retail format and location, category management, product buying and supplying,
visual merchandising, in store communication, store management,
human resourses and an 12 month advertising and communication calendar and budget. Based on the store management plan the last part will indicate whether opening the store is a good idea for business or not. The performance was monitored by ROI calculation and P&L statement.
Introducing the brand Acne Studios was founded in 1996 in Stockholm Sweden and was a part of creative collective ACNE (ACNE stands for "Ambition to Create Novel Expressions) which focused on graphic design, film making, production and advertising. They first started making jeans but in 1997 they expanded into other garments. In 2006 Acne Studios became their own company separating the brand from Acne Film, Acne Advertising and Acne Digital. Since then Acne has grown to be one of the followed fashion houses and
now they have stores in 14 different countries. Acne Studios designs, markets and distributes high-end fashion. Acne Studios offers for both women's and men's ready-to-wear fashion, footwear, bags and accessories. According to the Acne Studios the company’s mission is to produce products as responsibly as possible and which are high in quality and has long life. The range of prices goes from 70 euros up to 3000 euros which also explains how the brand is so popular among both middle and upper class. Many people who haven’t really followed Acne Studios would mostly know the brand from their jeans or they would think the prices are too high for middle class earners. People who would know the brand a little bit more would in another hand say that they offer great quality garments with average price to a high price level. Acne’s identity is based on individuality, innovative style, good quality and on high fashion and they also want to communicate this to consumer. The message still though hasn’t been fully received among consumers.
Target Acne’s target is 25 to 45 year old women and men from middle/upper class who live in big cities or more upper class suburban areas. Their main target is also interested in arts and of the products sustainability. They looks for simple and high quality garments, and are not so interested in high luxury brands with big logos.
Acne has been one of the fashion brands realising that many people are now buying their clothes from different places and the style and quality means more than just the brand label.
Marketing Mix Product Women’s ready-to-wear; coats & jackets, shoes, jeans, dresses, knitwear, tops, blouses, sweatshirts, suit jackets, trousers, skirts, accessories, jewellery, miniature collection, bags, small leather goods, eyewear, underwear. Men’s ready-to-wear; outerwear, jeans, shirts, t-shirts, knitwear, sweatshirts, suit jackets, trousers, shorts, shoes, accessories, miniature collection, bags, small leather goods, eyewear, underwear. Acne Paper. Acne’s products are focused to be high quality, stylish and minimalistic. Oversized but nicely tailored garments which look at the same time luxurious as well as comfortable. Layers are also a key thing on their designs. Sizes for women goes from XXS-L and for men XXS-XL. In stores they usually offer sizes from small to large.
Marketing Mix Price Women’s wear:
Men’s wear:
Coat & Jackets
240-3000€
Trousers
200-1000€
Shoes
320-1000€ Skirts
180-1900€
Jeans
170-300€
Accessories
70-600€
Dresses
150-1100€
Jewellery
180-440€
Knitwear
240-650€
Bags
800-1400€
Tops
80-480€
Small leather goods
95-420€
Blouses
700-220€
Eyewear
260-340€
Sweatshirts
170-280€
Underwear
40€
Suit jackets
550-900€
Miniature collection
110-200€
Outerwear
240-2200€
Shorts
140-550€
Jeans
170-280€
Shoes
300-700€
Shirts
160-250€
Accessories
70-350€
T-Shirts
80-350€
Bags
800-1400€
Knitwear
200-1400€
Small leather goods
95-420€
Sweatshirts
150-350€
Eyewear
260-340€
Suit jackets
420-1400€
Underwear
40€
Trousers
190-750€
Miniature collection
Acne’s prices are set after the products exclusivity. As the price tables shows the prices scale is wide. Though some products are on the premium price level but most of the products are priced in the middle.
110-200€
Marketing Mix Place Stores in 14 countries; Australia, Belgium, China, Denmark, France, Germany, Hong Kong, Japan, Netherlands, Norway, South Korea, Sweden, United Kingdom and United States. Acne’s products are also sold through 650 retailers around the world in more than 40 countries. Acne also has its own E-shop and shipping all around the world so people who are not able to go shopping to their store can order their products from online.
Marketing Mix Promotion The philosophy of the brand differentiates from many other fashion brands. Johnny Johansson, the co-founder and creative director of acne, has said to try find different ways to run a fashion brand and not to rely on the traditional advertising methods. Acne has really minimal approach when it comes to advertising, they trust on their product and that the people are coming back to them. Acne is more than just a fashion brand they also offer consumers innovative cultural experiences and inspiration, good example is their Paper magazine where they make collaborations with different artists, designers and create collections. These collections are never announced anywhere else than in the Acne Paper Magazine.
Main Competitors Acne’s approach and way of doing things as a fashion house sets them apart of their competitors. Making aesthetic decisions and not using traditional marketing tricks they have managed to become well-known brand and also stayed relevant and true to the brand and among consumers. Also the thing that makes the brand more different from the other is their design and price mythology. Prices starting from
70â‚Ź for a t-shirt to 3000â‚Ź for a coat. This is not usually common to have such a huge price range inside one brand. This also makes it more harder to set main competitors because their brand strategy is very unique.
The positioning map on the right shows the possible main competitors of Acne Studios in Barcelona. The price and quality indicators shows that Acne is situated in the middle of the market. Brands like Helmut Lang and Stella McCartney are considered to have a higher price and better quality when again COS and & other stories a lower price and quality.
Main Competitors
The positioning map is Acne’s possible competitors in Barcelona where I am going to open the flagship store. The other map shows where the competitors are located in Barcelona. I also found out if Acne’s main competitors in Barcelona would have their own flagship store or are they sold for example in a multibrand shops. The research’s result is that only COS, & another stories and Stella McCartney had their own stores in Barcelona. Other competitors Helmut Lang, Alexander Wang, Carven and A.P.C. where sold only in multibrand shops. Also what I noticed is that most of the competitors are sold in Passeig de Gracia. This was one of the reasons I decide to open the Acne Studios in Passeig de Gracia. People who are entering and buying from the stores around there are also most likely of buying Acne’s products. Not only because of the style but also the price.
Introducing Barcelona Barcelona in the Retail World
According to a Spanish market study made by JLL the premium market segment carries 27% of Spanish market and 25% of Barcelona’s market. The sales are forecasted to grow 5% during the years 2014-2018 as also demand of new retailers. Tourism has been continued to grown after the year 2014 which will continue to have good effect on sales. Also positive changes for the populations spendngs has been predicted since the economic situation after the crisis has been started to grow and unemployment beginned to get lower. The annual rental prices are expected to have 5% increase in upcoming years. JLL predicted on their study that rental prices would stabilise to 215/m2 /month on standard retail areas between 300-600 m2.
Introducing Barcelona Main commercial areas; Portal del Ángel
Main commercial areas;Plaza Cataluña
Portal del Ángel is the most expensive street in Spain rent prices being
Plaza Cataluña is really close to Portal del Ángel, it is located
250€/ m2/ month. The number of potential clients per month is 396.670
between Plaza Cataluña and Calle Aragón. It is also one of the prime
and the cost of potential client
retail locations in Barcelona. Rental prices 90€/ m2/ month are more
0,081.
It is located in the centre on the Gothic Quarter district, the street
cheaper than compared for example to Portal del Ángel or Passeig de
starts right next from the Placa Catalynia square. The street is
Gracia. The potential clients per month is 178.869 and CPC 0,060.
pedestrianised area and offers a lot of space for shoppers to walk.
The
The commercial mix consist of apparel, accessories, beauty and
commercial mix consist of apparel, lingerie, accessories and jewellery.
restaurants. Anchor stores being El Corte Ingles department store.
Most of the mainstream brands like Zara, H&M, Mango and Pull & Bear are
Other mainstream shops like Urban Outfitters and Desigual are situated
located on this street. Zara stores being the anchor stores of the
in the area. Opening hours are from 10 am to 10 pm Monday-Saturday.
street. Opening hours are usually from 10am to 10 pm Monday-Saturday.
The location brings a lot of tourist to the stores but for example El
Transport connections are great the street has it Bicing station, the
Corte Ingles is also really popular among Barcelona’s inhabitants.
metro is close and there is various car parks around the area. Due to the centric location Portal del Ángel is mostly filled with tourist but also among people who live in the center.
Introducing Barcelona Main commercial areas; Passeig de Gracia
Passeig de Gracia is located in the central part of Eixample starting from Placa Catalynia to Carrer Gran de Gracia. Passeig de Gracia is considered to be one of the most important area for shopping and business. The area is also offering many tourist attraction which has made it one of the busiest streets of Barcelona. It is also the second most expensive street in Barcelona rental prices being 225 â‚Ź/ m2/ month. Potential clients per month are said to be 387.479 and CPC 0,069. The opening hours are from Monday-Saturday usually from 10-10. The commercial mix consist from famous luxury fashion brands but also fast fashion stores. The anchor stores in Passeig de Gracia in probably Zara and H&M due to the reason they have a larger market segment offering products for everyone. Passeig the Gracia has more international retailers than other retail streets and many brands can are only sold in this street in Barcelona. The streets are spacious and has great transport connections. Passeig de Gracia or Plaza Catalynia Metro stations, various bicing stations and car park.
Store Management Plan Retail format & Location
After conducting the research of the brand and Barcelona’s retail market I decided to open Acne Studios store in the street of Carrer del Consell de Cent 347, L’example. It is located right in the corner of Passeig de Gracia shopping street. Rental prices in the street is 100 €/sq.m/month the store is 180 sq.m so the rental price of the premise would be 18 000€ in a month and in a year 216 000€. The number of potential clients per month is 180 656 and CPC:0,09963688. The opening hours of the store would be from Monday-Saturday from 10am to 9pm.
Reason I chose this location was that the most important market segment and Acne’s competition is located in here. People who are for example buying their clothes from Cos, & Other Stories or Santa Eulalia are more likely to shop at Acne Studios. Also the street is really active which makes it is easy to attract new customers. Though the area attracts a lot of tourist it is also really popular area to live in. People who live in the area are well-educated and are wealthy. 33% of the areas population are between the age of 25-44 which is the main target and 60.5% have a upper degree from studies.
Above is the street overview of Passeig de Gracia. Like seen on the figure Cos and & Other Stories are really close to Acne Studios store. Commercial mix consist of apparel, jewellery ans restaurant.
Category Management
The Category Casual Wear includes both women and men casual were. Due to the reason it has the biggest market coverage it is considered to have category role ”Destination”. The leather goods are seen to be as a more impulse purchase, innovative and visual merchandising will try to grow the sales traffic of this category. Eyewear will be seen as ”Seasonal” and during spring and summer time the promotion and merchandice will have a high level
activity.
Product Buying & Supplying
Product Buying & Supplying
Visual Merchandising
Visual Merchandising The Visual Merchandising of the store is trying to follow the style of other Acne Studios
stores but it is also inspired of the achitecture and nature of Barcelona. Overall the store is going to be very clear, a lot of white and light with some marble and rose gold details and few designer decoration items likee chair and tables. Acne Studios stores are always unique concepts but they share similiar style. Decoration is very modern; clean lines and cuts. Some stores are more spacious than others. The store going to be opened in Barcelona is not among of the biggest ones and storage place is also quite limited, due to this reason it is necessary to make smart decision for the merchandising. Some funitures will not only work for displaying the garments but they also work as a storage. Garmets will be displayed by matching colour palette and lenghts has to be in balance. For
shoes there will be one size per model displayed and for garments there will be 1=3 units per model and no same size garments displayed at the same time. Products will be hanged, folded and displayed on shelves. In order to maintain open and spacious environment, a minimal amount of merchandise will be displayed on the floor.
The next following pages will demonstrate the store floorplan, show the circulation of the store and the hot and cold spots and where the products would be displayed inside the store.
1st Floor -Women
Fitting rooms
Cashier
Warm zone Cold zone Natural circuit Forced circuit (Men)
Stairs to 2nd floor
2nd Floor -Men
Warm zone Natural circuit Stairs
In Store Communication Acne Studios has a minimalistic aproach when it comes to marketing and communication. They are known to communicate to their costumer
internally. Acne Paper is one of the brands biggest communication tools and the best way to know more about the brand. This taken into account Acne Papers will be sold in the store. Acne Studios signature packaging and bags are also important part of Acne’s in store communication. With these bags many people will turn their head around when been seen on the street. Outside of the store the will be a sign which says Acne Studios so people who are walking in Passeig de Gracia would notice it. Windowdisplays would chande every month when new products and collections arrives to the store. Windows would also be see through so it would attact more costumers to come inside of the store.
Store Management The Store Management will be consisting of Store Manager, two department managers; one for women
Store Manager
department and one for men and two sales associates. Because the stores opening hours are from 10am to 9pm
Sales Associate
and by Spanish law a person can work max. 8 hours a day the working hours would be usually 5-7 h per day/employee. There should be always at least two people working in the store, during the busiest hours
Department Manager (Women)
Department Manager (Men)
Sales Associate
3-4 people.
Human Resources Welcome Plan & Sales Protocol The welcome plan for the employees will be consist of 6 different parts. The first is information about the company, including history and telling about the indentity of the brand. The second part will be about the products which all the employees has to study so they have the knowledge of the products to tell about to the customers. The third part will be telling the employee rights and obligations. Including payment days, absence, breaks, equality rights and resignation policy. 4th part of the Welcome Plan is telling about the customer profile how the customers look like, behave and what are they interests. This helps the employees get to know their clients even better and build a relationship and shopping experience. The fifth part is the look policy guideline, in Acne Studios the employees has to be stylish and into fashion, overall look can be edgy but always clean. Everything effensive or too extreme like mohawk hairtyle or tatoos in the face are forbitten. The last part is about the benefits for employees. The full-time employees will get 20% discount and part-time 10% discount of regular priced products.Also information about the holiday and holiday payments will be presented in this part of the plan.
The sales protocol is pretty simple, everytime a customer enters or leaves from the store they must be greeted. Employees should also offer help at least once to the customer. When customer is going to the fitting room they must be helped to put the garments in the room and the garments must be counted. When a customer is making a purchase question: �Did you found everything you were looking for?� has to be asked.
Advertising & Communication
Since part of the Acne Studios identity is to be minimalistic in advertising only 23 500â‚Ź will be spended on the first year of the stores advertising and communication budget. Street marketing will happen with posters on the walls in the center of Barcelona. The first three
months when store is opened promiding information of the stores adress and a editorial shot from newest campaign and from May to July same thing but the posters will be promoting the eyewear collection. The store will open during its Grand Opening event where people are invited. The event will have a DJ, drinks and little snacks. Invited customers will also have 10% discount from normal priced products. In December the store would also take part in the Barcelona Shopping Night where also the event will include a DJ and drinks. The store would have its own social media sites in Facebook and Instagram andthere would be hired person to post updates and pictures every week. There would be spend money on visual merchandising four times during the year. Always when the season changes the merchandise will change a little bit.
Financial Plan;Expenses
Financial Plan;Incomes
Financial Plan; P&L
ROI Return of Investment 20,30%
Conclusions and recommendations After making the research, retail management plan and financial plan it looks like opening Acne Store in Barcelona would be viable. The store should already earn profit and avoid financial losses during the first year. This would be the first Acne Studios store in Spain and demand for new brands is high. The premium market is expected tto grow during the following years which makes it the store to have good changes to succeed.
The store is likely to stand out of its competitors because of its unique store and their approach of consumers. In the future the store could expand their selection more when they know better what their consumers want. The store could also make bigger investments on their communication and store environment when the business is
set on the market.
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