Heritage by John Lewis Illustrated Report

ILLUSTRATED REPORT Johanna Collins | 1102241 1

C o ntents Executive Summary Introduction

Page 6 Page 7

1. The Proposal 1.1 Company Overview Pages 10 - 12 1.2 New Product Page 14 1.3 USP Page 16 1.4 Ansoff Matrix Page 18 2. The Marketing Mix 2.1 People (Target Market) Page 22 2.1.1 Demographics Page 24 2.1.2 Spending Power Page 24 2.1.3 Marketing Typologies Pages 26 - 37 2.2 Product 2.2.1 Product Overview Pages 40 - 45 2.2.2 CAD Range Plan Pages 46 - 55 2.2.3 Sourcing Strategy Pages 56 - 57 2.2.4 Sustainability/Ethical Manufacture Page 58 2.3 Price 2.3.1 Pricing Policy and Architecture 2.3.2 Price Band Matrix

Pages 62 - 63 Pages 64 - 65

2.4 Place 2.4.1 Distribution Strategy 2.4.2 Omni-Channel Retailing

Pages 68 - 69 Pages 70 - 71

2.5 Position 2.5.1 Price/Style Matrix 2.5.2 Competitor Evaluation

Pages 74 - 75 Pages 76 - 91

2.6 Promotion 2.6.1 Branding 2.6.2 Experiential Retailing 2.6.3 Integrated Marketing Strategy

Pages 94 - 98 Pages 99 - 103 Pages 104 - 109

2.7 Persuasion

Pages 112 - 113

3. Business Planning 3.1 Sales Revenue Page 116 3.2 Expenditure Page 116 3.3 Capital Funding Page 117 4. SWOT Pages 120 - 121 5. Conclusions Pages 124 - 125 Bibliography Pages 128 - 140 Appendices Pages 143 - 168 2

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Introduction Executive Summar y

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Executive Summary This report has been commissioned with the intention of further developing a proposal to launch a womenswear collection for John Lewis that has been manufactured in Britain.

After recent success in the launch of a designer collaboration with British designer Alice Temperley, John Lewis are looking to increase sales of their own-label fashion lines, and obtain a larger portion of market share by expanding the product offering and targeting a variety of different consumers.

It has also been established through a recent research and analysis report that John Lewis are looking to increase their British made product offering and raise sales of these products by 15% in 2015.

Further research has identified that one of John Lewis’ main competitors Marks and Spencer are already competing in the ‘Made in Britain’ fashion market with a new collection entitled Best of British.

For John Lewis to remain ahead of the competition, it is important for them to begin offering a similar range.

When looking at consumers, the typical John Lewis customer falls within the affluent AB demographic, and range from a younger consumer (around 25-35) as well as an older one from 40 upwards. In a 2013 report by John Lewis entitled ‘How we Shop, Live Look’ they were able to identify that 39% of their overall shoppers are younger than 34, while 28% are over 55.

Primary and secondary research has identified that the John Lewis consumer tends to be in a ‘highspenders’ category – identified by Mintel as shoppers who spend upwards of £300 on clothing every year, with a typical John Lewis customer spending around £150 in one transaction.

Mintel goes on to suggest that these high spending customers are more likely to be looking for clothing that has been Made in Britain, and would spend a premium on this type of range as they associate it with high quality.

The association with quality is further validation for placing a collection of this type into John Lewis; who pride themselves on their high quality of product, their incomparable customer service and their ‘Never Knowingly Undersold’ price promise.

In addition to this, May 2014 marks the 150 year anniversary of the first John Lewis department store opening, providing an opportunity to celebrate the John Lewis brand and remind the customer of why they choose to shop there. This gives an opportunity to not only advertise the collection to the existing John Lewis customer, but also bring in a new type of conscious, ethical consumer and teach them about the John Lewis Heritage.

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I ntr o du ctio n The aim of this report is to provide further justification as to why John Lewis should introduce a new own-brand label into their women’s fashion department that has been manufactured in Britain.

Essential areas of research have been highlighted throughout the report with qualitative and quantitative evidence coming predominantly from primary research interviews, surveys and focus groups, to support information found through secondary research sources such as Mintel, LSN: Global and a John Lewis research report released in 2013.

This research has led to increased accuracy when looking at the target market and how best to advertise the range to them, as well as giving insight into how John Lewis currently run and how to ensure the range would work as an own-label brand for them.

Due to limitations with research, particularly when looking at UK manufacture and realistic cost prices for a range of this size, while every effort was made to gain as much information in this area as possible, some data is less informed although still based on realistic figures found through competitor research.

Further secondary research has come from established resources such as John Lewis Partnership and John Lewis Press Centre websites, as well as Drapers, Business of Fashion and Retail Week among other publications.

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1. The Proposal

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1 . 1 C o m pa n y O v e r v i e w The John Lewis Partnership is a unique, respected and highly successful UK retail business which is co-owned by its 85,500 employees- known as partners. The partnership pride themselves on their fair and trustworthy approach to business, where both the partner and customer are at the heart of trade.

In 2013, the department store announced plans to repatriate textile manufacturing by producing more of their products in Britain. “Sales of UK-sourced products at John Lewis totalled £480m in 2012, which is an increase of 9% on the retailer’s 2011 baseline.” John Lewis wish to further increase sales of UK made products “by setting a two-year 15% growth target for all sales of goods in its shops that are made in the UK.” (John Lewis, 2013a) John Lewis as a department store allow their exceptional standard of customer service and ‘Never Knowingly Undersold’ promise to be at the forefront of their retailing, and apply their unique set of values to every aspect of the brand.

In May 2014, the company are celebrating their 150th anniversary of the first John Lewis department store opening on London’s Oxford Street.

“The John Lewis name aims to be a guarantee of the quality, value and style of a product and also as something that differentiates our assortment from the competition.”

(John Lewis, 2014a) 10

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Current Performance John Lewis’ strong and unique business plan is a major contributor to their consistent year on year success.

• Most recently reporting that in the last year, their gross sales exceeded £10bn for the Partnership, of which John Lewis contributed £4bn. (Rigby, 2014) • The company have gained market share in Fashion, Home and Technology, with John Lewis own label fashion accounting for 30% of all fashion sales.

• John Lewis reported in 2013 that they’re looking to increase the sales of British made goods in store by at least 15% in 2015.

P r o du cts / S erv ices • The John Lewis fashion offering ranges from own brand labels; Collection, Woman and Kin, to high street brands such as Whistles, Warehouse and Mango.

• The department store caters to every customer and their fashion ranges reflect that, with a variety of brands catering to a broad range of demographics.

• John Lewis currently sell a small own-label ‘Made in England’ footwear range for Women with leather brogues and loafers as key styles, as well as an own-label range for men, John Lewis & Co, which looks at British heritage and uses high quality materials that have been sourced locally.

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1 . 2 T he N ew P r o du ct Heritage by John Lewis is a brand new fashion range with easy-to-wear trend led designs which are designed to be worn by anyone. Each product will be designed and manufactured in Britain using local factories, and will be traceable via a serial code to allow complete transparency to the collection.

The collection will be released in celebration of John Lewis’ 150th Anniversary in 2014, giving the collection an additional story behind it and providing the perfect setting for the product launch.

To celebrate the launch of the collection and the 150th Anniversary, most of the range will feature prints that have been specially picked for the brand from the John Lewis Textile Archives.

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1.3 Unique Selling Point A trend led clothing collection for the fashion, ethically and socially conscious woman, celebrating the heritage of one of the most well known and loved department stores on the British high street.

Heritage by John Lewis supports local craftsmanship and allows all processes of manufacture to be transparent to the consumer, while celebrating the story of John Lewis and the people who make the brand what it is today.

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1 . 4 A n s o f f M at r i x The Heritage Collection sits on the line between Diversification and Product Development as it is a new line being introduced into an existing brand.

New

John Lewis have already catered to a similar market, using their strong heritage to create the John Lewis & Co brand for men, and the Made in England shoe range for men and women, giving the Heritage Collection a strong launch point and existing consumer base.

MARKET PENETRATION

PRODUCT DEVELOPMENT

Existing

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MARKET DEVELOPMENT

DIVERSIFICATION

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2. Mar keting Mix

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PEOPLE 2.1 Target Market • John Lewis define their core female consumer as being 45+ (John Lewis, 2013b) but the variation of ‘younger’ brands within their fashion departments such as Warehouse, Oasis and French Connection, suggest a desire to appeal to a younger market.

• Heritage will bring in a younger customer, and introduce a new type of conscious consumer who is looking for high street clothing that has been made in Britain.

• Mintel identify this type of customer as being a higher spender - “this group who spend the most on their clothes are interested in clothes Made in Britain.” (Mintel, 2013) • “Customers who are store or brand loyal are most interested in the durability of clothing, with over nine out of ten of these consumers describing it as important” (Mintel, 2013) existing John Lewis customers will be attracted to the range because of the high quality.

• Heritage takes the existing broad consumer base at John Lewis into consideration, as well as the consumer with a desire to shop British, and as a result, aims to target the 25-50+ fashion, socially and ethically conscious woman, with a strong focus on the transparency ethos of the collection.

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2.1.1 Demographics • Heritage will have more appeal to AB consumers, along with some C1 and C2s due to affluence and higher levels of income among these consumers. The current John Lewis consumer generally falls within the affluent AB demographic.

• John Lewis identify 39% of their overall shoppers as being younger than 34, and 28% over 55. (John Lewis, 2013b) It is important for John Lewis to retain the interest of their existing consumers, as well as bring in a new type of conscious consumer, as these are the ones who will buy Heritage.

• Emotional and rational patronage, as well as a focus on ethics will be key buying motives for the Heritage consumer as they’ll already have an association with the John Lewis brand, and a desire to buy fashion that has been made in Britain.

2.1.2 Spending Power • Mintel identifies 1 in 6 Britons as being high spenders; consumers between 25-34, and affluent ABs with a household income of over £50,000. They can spend upwards of £300 on new clothing in a year.

• Half of Britons are mid-spenders who can spend £100-£299 per year. Both high and mid spenders will be the key consumers who are targeted.

• Mintel also suggest that higher spending consumers are more interested in Made in Britain products and would be willing to pay a premium for these products, while midspending consumers would be interested as long as the product felt special or exclusive.

• The price range of Hertiage will, on average be 10-15% greater than current John Lewis own-label clothing, justified by the collection’s high quality promise and transparency ethos, and will appeal to the high-spenders who are willing to pay a premium. * See appendices 1 for John Lewis ‘How we Shop, Live, Look’ report.

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2 . 1 . 3 M a r k e t i n g T y p o lo g i es The Heritage Collection consumers fall into four typologies as identified through primary and secondary research. These are:

• Modern Mothers

• Rurbanites

• Fabs

• Conscious Non-Conformists • The four typologies have been selected through research based on their attitudes towards ethical manufacturing or locally made fashion, their ages (25-50) and affluence.

• Fabs and Modern Mothers have also been selected based on their profile fitting the current John Lewis customer.

• Further primary research has identified favourite brands, magazines and lifestyles.

• All consumers prefer to buy higher priced high quality garments than cheaper fast fashion, and for this reason are the most suitable consumer groups to advertise the collection to.

• All take an interest in health and wellbeing to varying extents, and all of them use the internet and social media to different degrees, providing a strong platform to advertise the collection and communicate the brand message directly to the consumer.

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M o d e r n M ot h e r s ( M o M o s ) • AB Females in their mid 30s - early 40s.

• They have children but don’t let them define their lives.

• The products they buy have to be honest and straight forward - from beauty to food, they are not interested in celebrity endorsement.

• Their interest in fashion and trends is exhibited through their preferred magazines, blogs, favourite brands and their wardrobe, although their financial priorities lie with their family and health and wellbeing, so they prefer to buy from high street brands such as Whistles, Kin by John Lewis and Mango.

(LSN: Global, 2013a)

- “Having my child is the best thing I’ve ever done but I love my life.

Many women change their life, I added him to my life.”

(Modern Mother - LSN: Global, 2013a)

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R ur banites • Urban women in their 20s-30s who have grown up in a globalised world.

• A desire to bring up their children to respect their environment and be conscious consumers.

• Shun fast fashion for slightly more classic products that are built to last with heritage or a story behind them.

• Will pay more of a premium for products as long as they’re good quality and have been made locally, supporting local communities and craftsmanship.

(LSN: Global, 2013b)

- “Locally made, lovingly made, locally sourced goods, or thriftstore finds that come with a story woven into their fibres.”

(Rurbanite - LSN: Global, 2013b)

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The Fabs • 50+ women who refuse to conform to the style that brands tell them they should be wearing at their age.

• Favour brands like Whistles and Cos who are fashion forward but promote a more classic styling, rather than an age stereotype.

• They don’t respond well to celebrity endorsement and prefer brands that are honest about their product.

• A higher spending power amongst these consumers compared to most younger consumers is down to their children being grown up and their lack of mortgage, resulting in increased disposable income.

• A desire to retain a sense of power and control in their lives, means they’re still progressing up the career ladder, despite nearing retirement age.

(WGSN, 2013) • “Over-55s are more interested in clothes being made in Britain, with four fifths of older consumers stating this is important.” (Mintel, 2013)

- “Traditional ideas about old age are changing and our preconceptions about what it means to be old, as well as traditional life stages and career paths are no longer valid.”

(WGSN, 2013)

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C o n scio us N o n - C om fo r m ists • Early to late twenties with a relaxed attitude to life which is reflected in their personal style.

• Enjoying their youth and engage with all forms of modern technology, particularly social media.

• Previously bought high street clothing that has been made in Britain, and would buy again from a range with a similar ethos and design.

• Despite a strong interest in the latest trends, they shun fast and cheap fashion so as not to be a clone of their peers, and would rather shop in COS than Topshop, despite the higher price point.

• This is largely down to their awareness of what goes on behind the scenes of fast fashion manufacturing and as a result they have started to shop more consciously.

Please refer to Appendices 2 for primary research transcripts.

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P sych o g r ap hic P r o file The Heritage Collection target market sit between late to early adopters. The range, although inspired by current season trends, will feature more basic items and classic shapes to ensure it appeals to the wider audience, and is therefore unlikely to appeal to innovators.

Conscious Non-Conformists have a strong interest in fashion and more of a disposable income due to their young age, but tend to steer clear of more mainstream trends.

Modern Mothers have less of a disposable income due to having a family to pay for, but are still interested in fashion and wearing the latest trends.

Fabs have the highest amount of disposable income out of the four typologies due to being in higher paid positions in their careers, and having less dependency on their money. They like to follow fashion and trends, but don’t want to be mutton dressed as lamb.

Rurbanites prioritise their family and wellbeing when it comes to their income. They shop more consciously than the other typologies and are more aware of items’ worth. Their young age means they’re still interested in fashion, but they’re less likely to buy into key trends.

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Innovators 13%

Early Adopters 38%

Conscious Non-Conformists Modern Mothers

Fabs Late Adopters 34%

Rurbanites

Late Feeders 12%

Bargain Hunters 3%

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2.2 Product

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2 . 2 . 1 P r o du ct O v erv iew A trend driven, easy-to-wear Spring Summer ‘14 collection that sits well amongst the current fashion offering at John Lewis.

Styles will be casual, flattering and versatile with a focus on key season colours which compliment a selection of prints from the John Lewis Textile Archives.

The look is sophisticated, feminine and fun, while allowing the customer to focus on the ethics, quality, and most importantly, the heritage of the collection.

An additional printed accessories range sits alongside the clothing range beautifully, retailing at a lower price point but using the same ethos as the clothing, this range features a selection of toiletries and cosmetic bags, as well as homeware and technology cases.

An inspirational mood board for the collection can be found on the following pages.

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O r igin al A r chiv e P r ints In celebration of John Lewis’ 150th Anniversary in 2014, key prints selected from the John Lewis Textile Archives will feature on products in the main collection, as well as a small collection of accessory products which will allow customers to buy into the collection at a lower price point.

The selected prints will compliment the key colour palettes and silhouettes as identified in the Spring/Summer 2014 trend pack.

Printed garments will make a statement among the plain pieces in the collection, and will have more of an exclusive feel to the consumer as they are identifiable with the brand.

Selected original prints from the archive and their key colour components can be seen on the following page, prints may appear differently on the finished product due to manipulation of the images to show a more realistic product image.

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Pantone 503

Pantone 458

Pantone 564 Pantone 553

Pantone 190 Pantone 5145 Pantone 5115 Pantone 4655 Pantone 5415

Pantone 393U

Pantone 393U

Pantone 393U

Pantone 393U

Pantone 393U

Pantone 393U

Pantone 393U 45

Pantone 393U

2 . 2 . 2 C AD R a n g e P l a n • The following two range plans show the main fashion range and printed accessory offering for Heritage with RRP and margins.

• The main collection features a selection of dresses and separates, which were highlighted in primary research as being key items for the target market throughout Spring/Summer.

• These pieces are offered in a range of on-trend colours/fabrics, with a selection of prints from the John Lewis Textile Archives. (Please see Trend Pack for inspirational trend boards.)

• The additional printed accessory range features lower priced products such as toiletries bags and technology cases in a range of archive prints. This was highlighted in primary research as being key for some consumers who want to buy into the collection at a lower price point. * Range plan can be viewed in further detail in Appendices 3 or the Range Plan pack.

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M ain C o llectio n R an ge P lan

with

Margins

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M ain C o llectio n R an ge P lan Mid Length Circle Skirt 70% Viscose 30% Polyester RRP- £89 Actual Cost- £29 Margin- 67% Sizes - 8-18 Qty - 800 Distribution - Top Stores/Online

Slim Leg Trousers 95% Cotton 5% Elastane RRP- £85 Actual Cost- £28 Margin- 67% Sizes - 8-18 Qty - 1000 Distribution - Top & Mid Stores/Online

Longline Crossover Pencil Skirt Lace- 57% Polyamide, 43% Viscose Plain/Printed - 60% Cotton, 40% Viscose Lining - 100% Polyester RRP- £99 Actual Cost- £37 Margin- 63% Sizes - 8-18 Qty / Distribution - 1000 / Top Stores/Online 48

M ain C o llectio n R an ge P lan

Printed Boxy T Shirt 70% Viscose 30% Cotton RRP- £75 Actual Cost- £29 Margin- 61% Sizes - 8-18 Qty / Distribution - 2000 / Top Stores

Boxy T Shirt 70% Viscose 30% Cotton RRP- £69 Actual Cost- £24 Margin- 65% Sizes - 8-18 Qty / Distribution - 2000 / Top & Mid Stores

Drape 3/4 Sleeve Top 70% Cotton, 30% Polyester RRP- £59 Actual Cost- £18.35 Margin- 69% Sizes - 8-18 Qty / Distribution - 2000 / Top & Mid Stores 49

M ain C o llectio n R an ge P lan Sleeveless Shift Dress Lace- 57% Polyamide, 43% Viscose Plain/Printed - 60% Cotton, 40% Viscose Lining - 100% Polyester RRP- £125 Actual Cost- £41 Margin- 67% Sizes - 8-18 Qty / Distribution- 1000 / Top & Mid Stores

Contrast Bib Shirt Dress with Tie Waist 70% Viscose 30% Polyester RRP- £99 Actual Cost- £31 Margin- 65% Sizes - 8-18 Qty / Distribution- 1000 / Top & Mid Stores

High Neck Skater Dress with Zip Lace- 57% Polyamide, 43% Viscose Lining - 100% Polyester Plain/Printed - 100% Cotton (No Lining) RRP- £135 Actual Cost- £42 Margin- 69% Sizes - 8-18 Qty / Distribution -1000 / Top & Mid Stores 50

M ain C o llectio n R an ge P lan Printed Strappy Slip Dress Body- 70% Viscose, 30% Polyester Lining- 100% Polyester RRP- £129 Actual Cost- £41 Margin- 68% Sizes - 8-18 Qty / Distribution - 800 / Top Stores

Textured Jersey Tunic Dress 100% Cotton RRP- £79 Actual Cost- £26.10 Margin- 67% Sizes - 8-18 Qty / Distribution- 1000 / Top & Mid Stores

Drop Hem Oversized Shirt 70% Viscose 30% Polyester RRP- £75 Actual Cost- £22.60 Margin- 70% Sizes - 8-18 Qty - 1500 Distribution - Top & Mid Stores/Online 51

P r int C o llectio n R an ge P lan

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with

Margins

P r int C o llectio n R an ge P lan Large Toiletries Bag with Handle 100% Coated Cotton RRP- £29 Actual Cost- £8.40 Margin- 71% One Size Qty - 7,000 Distribution - Top & Mid Stores/Online

Medium Toiletries Bag with Pockets 100% Coated Cotton RRP- £29 Actual Cost- £9.00 Margin- 69% One Size Qty - 7,000 Distribution - Top & Mid Stores/Online

Small Makeup Pouch 100% Coated Cotton RRP- £15 Actual Cost- £4.90 Margin- 67% One Size Qty - 7,000 Distribution - Top & Mid Stores/Online 53

P r int C o llectio n R an ge P lan Square 45x45cm Pillowcase 100% Cotton RRP- £20 Actual Cost- £5.90 Margin- 71% One Size Qty - 7,000 Distribution - Top & Mid Stores/Online

Medium Tablet Clutch with Hand Strap 100% Coated Cotton RRP- £35 Actual Cost- £10.80 Margin- 69% One Size Qty - 7,000 Distribution - Top & Mid Stores/Online

iPhone 5 Snap Case Plastic RRP- £25 Actual Cost- £6.10 Margin- 75% One Size Qty - 7,000 Distribution - Top & Mid Stores/Online 54

P r i m ary R es ear ch F eedback “The prints are so pretty and really unique, it’s nice to know there’s a story and a history behind the range. The collection is very visually appealing.”

(Crump, 2014 - Rurbanite)

“I’d definitely buy some of the separates, especially the printed tops. They’d look great with basics I already have in my wardrobe like jeans and smart trousers.”

(Cave, 2014 - Modern Mother)

“I can see myself buying some of the pretty summer dresses, they’re flattering styles and look classic and timeless. They’re an investment piece as I’d wear them year after year.”

(Peters, 2014 - Fabs)

“I love the range, it’s so different to any other British made collection on the high street. I’d buy some of the tops and dresses for me and toiletries bags and cases for friends/family as gifts.”

(Smith, 2014 - Conscious Non-Conformist)

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2 . 2 . 3 S o u r c i n g S t r at e gy John Lewis currently produce their own brand fashion ranges Collection, Collection Weekend, Kin and John Lewis Woman in factories in China, Egypt, Europe, India and Turkey.

Heritage will be manufactured solely in Britain, using a small selection of CMT factories around London and the north of England.

For the first collection, all fabrics will continue to be outsourced from the countries listed above due to lower cost, however as consumer demand grows, British made fabrics will be considered as development for future collections.

- “John Lewis has never forgotten its heritage. Our buyers work with more than 4,000 suppliers in over 80 countries to find the best for our customers, but we support British manufacturers and suppliers wherever we can.�

(John Lewis, 2014b)

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C r i t i c a l P at h

H

Market & Consumer Research/Insight

Business Strategy

Fabric Supplier

Raw Materials

Email Marketing

H H Review Ranges

ric es ab ori r F ct ito Fa on & M lier s pp Su

PR Launch & Events

Buyer Trips & Factory Research/Visits

Raise Orders

EDI

Fabric Shipped to UK factory

Manufacturing

Product Development

Pre Retail

Promotional Campaigns

Despatch to Stores

Transport to DC

Pack

Social Media

Magazine Coverage

Stores receive collection

H

H

Advertising & Promotion

Sell Collection

Start of season

Analyse Sales Figures

Replenish Stock

Summer Clearance

Clear Stock

End of Season

Design & Development August - Sept 2013

Preparation & Transporting March 2014

Sourcing & Production Sept 2013 - Feburary 2014

Advertise & Market Collection March - June 2014

Analyse & Report Sales

Retail/Sales March August 2014 57

2 . 2 . 4 S u s ta i n a b i l i t y & E t h i c a l M a n u fa c t u r e • Heritage by John Lewis will support local craftsmanship and businesses, in compliance with the existing John Lewis Corporate Social Responsibility (CSR).

• The John Lewis approach involves:

• Ensuring products are safe to use and comply with legislation.

• Ensuring they source products responsibly.

• Ensuring they support those in the supply chain in obeying the law, respecting their

employees and reducing their impact on the environment.

• The Responsible Sourcing Code of Practice at John Lewis looks at areas including Pay, Working hours, Working conditions, Health and safety, Child labour, Forced labour, Employee representation, Equality of treatment, Environment and Animal welfare. * See Appendices 4 for full Responsible Sourcing Code of Practice.

“Our customers trust our products and this goes beyond safety and quality. As a responsible retailer, the Partnership aims to source products from long term sustainable supply chains, which minimise environmental impact and create trust and value for everyone involved.”

(John Lewis, 2014c)

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2.3 Pr ice

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2 . 3 . 1 P r icin g P o licy / A r chitectur e • The key pricing objective for the collection is to make profit and receive a healthy return of investment, while maximising sales of the collection and John Lewis as a whole.

• Heritage Collection’s pricing reflects the cost of manufacturing the garments in the UK and, as a result, will sit around 10-15% higher than John Lewis’ own label competitors; Kin and Collection.

• Profit margins of between 60 and 75% have been achieved throughout both ranges. This is lower than average but realistic for the size of collection and the higher manufacturing costs than the current fashion offering at John Lewis.

• Pricing has been kept at a similar price point to the direct leading competitor - M&S Best of British.

• Pricing policy will mirror John Lewis’ current policy for their fashion ranges to maintain a consistency within the brand. John Lewis often use a Price Skimming method where products are priced at more of a premium to give a luxury feel.

•To maintain consistency, prices are in whole pounds, ending in either 5 or 9, with entry level printed products such as toiletries bags and tablet cases maintaining the same policy but at a lower RRP.

77% of primary research respondents said they would be willing to pay a premium for clothing which had been manufactured in Britain.

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Exit £75

Exit £99

Exit £135

r ts

Entry £79

es ess Dr

S ki

Entry £89

rs

Entry £75

use Tro

s Top

Entry £59

Exit £75

Exit £35

s Acc

Entry £15

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2 . 3 . 2 P r i c e B a n d M at r i x The graph shows entry, exit and median level price points for the collection.

• As previously identified, the clothing collection is sold at a premium level for John Lewis, with the lowest priced item being a £59 top, and the highest price £135 for a dress.

• Mintel research mentions that although this is considered a premium, the high level of interest in Made in Britain from higher spending consumers suggests that they would be willing to pay a higher price for these products.

• It is also suggested that mid-spending consumers would buy into the collection at the higher price point too, as long as they felt they were buying a special or exclusive item.

• The lower priced accessories in the collection allow low-spending consumers to buy into the collection at less of a premium price range. Prices for this collection range from £15 for a cosmetic bag and £35 for a technology case.

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£150 £140

Dresses

EXIT £130 £120

Skirts

£100 £90

Trousers

£110

MEDIAN £70

Tops

£80

£60 £50

£30

Accs

£40

£20 ENTRY

£10

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2.4 Place

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2 . 4 . 1 D i s t r i b u t i o n S t r at e gy • Distributed throughout a selection of John Lewis’ 30 full range department stores nationally.

• Due to manufacturing the collection in small quantities and retailing at 40% higher than other John Lewis sub-brands, it is not financially viable to sell the collection in every department store as footfall and spending per customer is much lower in some of the smaller stores.

• The chosen selection of full range department stores are split up into Top and Mid stores, with more premium product and product in limited quantities being distributed to Top stores only.

These are larger branches with a higher footfall and ranked near the top of best performing stores.

• The entire collection will also be available online from the John Lewis website, allowing customers who do not live near one of the selected stores to order the products and have them delivered to their local store via Click & Collect - a method which “now accounts for 40% of purchases made on johnlewis.com.” (John Lewis, 2013b)

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T o p S to r es

M i d S to r es

Bluewater

Aberdeen

Cardiff

Brent Cross

Oxford Street

Cribbs Causeway

Peter Jones

Glasgow

Stratford City

Heathrow Airport (opening 2014)

High Wycombe Kingston Milton Keynes

j o hnle w is . com

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“I don’t like to buy clothing without feeling the fabric and quality first so I’m definitely more likely to go into store. I don’t tend to browse online either, I go shopping more as and when I need to.”

“I’ve started to shop online quite recently and I find it efficient and painless, but I really struggle to know my size in clothing so I tend to browse for that online then buy in-store.”

(Crump, 2014) - Rurbanite

(Peters, 2014) - Fabs

“I do most of my shopping online, I don’t have time to go into shops so this is a very quick and easy option.”

(Cave, 2014) - MoMo

2 . 4 . 2 O m n i C h a n n e l R e ta i l i n g Flagships A larger amount of square foot selling space will be greatly beneficial to Heritage sales, and allows the more premium product such as the printed t-shirts and dresses to appear more exclusive to the customer by only being available in these larger stores. Flagships are in larger UK cities with higher tourist attraction, allowing the collection to reach overseas consumers.

Stores John Lewis’ store sales were up 3% for the first half of 2013 (Rigby, 2014) and they do not believe that online shopping is taking over the high street. The majority of the collection’s target market still shop in-store as they like to touch and try on clothing. A core collection available in smaller stores brings awareness of the collection to existing and new consumers, allowing them to buy into the brand without having to shop outside of their comfort zone.

E-Commerce John Lewis online sales have grown 19.2% in the last year alone. (Rigby, 2014) with 64% of existing John Lewis customers shopping online and in-store, while 16% shop solely online (John Lewis, 2013b). With the full collection available online, it reaches a mass audience, as well as overseas consumers.

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M-Commerce & Apps 42% of John Lewis’ online traffic comes from mobile devices (John Lewis, 2013). In a time when we are so reliant on technology, it is essential to use these channels in order to maximise sales and increase customer engagement. Customers will be able to access the Heritage app on their mobiles and have instant access to the mobile site with information about the collection and products.

Social Media Brand image must be consistent across all channels, with John Lewis ‘ focusing so heavily on their customer service and trustworthy image, they must be able to communicate directly and effectively with their consumer using the methods that they currently use.

“The omni-channel approach we’ve developed and refined allows the purchasing route for any item to flow seamlessly across online, mobile and shops.”

(John Lewis, 2013) 71

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2.5 Position

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POSITION

2 . 5 . 1 P r i c e / S t y l e M at r i x The graph shows that the market for Women’s high street fashion that has been made in Britain is sparse, particularly in the more fashion forward area of the market. Heritage fills the gap for a more trend led, British made mid-high priced range.

C o m p e t i to r M at r i x Primary and secondary research has shown that the key competitor for Heritage will be the M&S Best of British collection which launched in 2013. As Marks and Spencer is already a main competitor for John Lewis, it is important to keep up to date with what the brand is doing and finding ways to continue bringing the existing customer back to the store.

Other competing brands will be existing John Lewis’ own label ranges, which are cheaper in price but similar in style and target market to Heritage.

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Positionings of brands already competing in the Made in Britain market

High End

Heritage Collection brand positioning

Gap in the Mar ket

Innovative

Value High End

&DAUGHTER

JAEGER

HOBBS

COS

M&S BEST OF BRITISH BARBOUR

Traditional

WHISTLES SOMERSET ALICE TEMPERLEY

COLLECTION BY JOHN LEWIS KIN BY JOHN LEWIS M&S LIMITED EDITION

Innovative

M&CO MADE IN GREAT BRITAIN

Value

Ranges made in Britain

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C o m p e t i t o r A n a ly s i s • Evaluating competitors provides an accurate representation on how the collection will sit in the market amongst the competing brands.

• The four key Heritage competitors that were previously identified through primary and secondary research are:

• Whistles • Kin by John Lewis • Marks and Spencer Best of British • Somerset by Alice Temperley

• As the collection fills a gap in a new market, there are few brands who are currently competing, meaning competitors must be based on factors such as price, style and target audience.

• The only competitor who manufactures all product in Britain is Marks and Spencer Best of British, allowing them to be seen as a direct competitor.

• Other competing brands are all sold in John Lewis, have similar product and market their products at the same broad market as Heritage.

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Pricing This information shows whether Heritage is able to match the direct competitor in price, allowing John Lewis to keep their ‘Never Knowingly Undersold’ promise, as well as showing where it sits amongst the competing brands who do not produce their clothing in Britain. *Prices shown only represent those of the same product categories as used in Heritage, and do not represent the full ranges.

Heritage by John Lewis £135 £15 £75

M&S Best of British £179 £19.50 £92

Kin by John Lewis £99 £15 £45

Whistles £695 £35 £95

Somerset by Alice Temperley £160 £39 £97

0

25

50

75

100

Exit Price

125

150

175

Entry Price

200

225

Average Price

250

275

300+

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P r o du ct / R an ge M&S Best of British

Chart Title

• Collection made up of 36 pieces, with a near equal amount of accessories, coats/jackets and tops.

• These are pieces that customers would spend more money on as they are versatile and can be worn in multiple outfits.

• Heritage will not sell Coats/Jackets yet as prices would be too high for the introductory collection, however could be added to a future collection if the first one sells well.

Dresses 12% Accessories 25%

Skirts 10% Trousers 5%

Tops/Shirts 23%

Coats/Jackets 25%

Product Comparison Best of British Floral & Spotted Dress with Wool Style - Sleeveless Shift dress Knee Length V-Neckline Price - £179 Fabric - 39% cotton, 34% wool, 27% polyester Lining- 95% polyester, 5% elastane Colours - Blue, Grey, White, Black

Contrast Printed Dress Style - Sleeveless Shift dress Knee Length High round neck Price - £125 Fabric - 60% Cotton, 40% Viscose Lining - 100% Polyester Colours - Beige, Pinks, Purple, Blues, Red, White.

Sizes - 8-18

Sizes - 6-18

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Androgynous, Plain, Tailored, Workwear, Smart, Co-ordinates.

P r o du ct / R an ge Whistles

Chart Title • Whistles’ Spring/Summer ‘14 range consists of 346 pieces.

• The range carries more accessories than other lines, with an equal amount of dresses, skirts and trousers.

Dresses 10% Skirts 9% Accessories 37%

Trousers 10%

• Casual and smart tops are the biggest part of the Whistles clothing range.

• Tops sell well for the brand because they are interchangeable and versatile pieces at a lower price point.

Coats/Jackets 5% Tops/Shirts 29%

Product Comparison Tessa Sporty Crepe Top

Boxy T Shirt

Style - Boxy Half Sleeve

Style - Boxy Half Sleeve

Price - £75

Price - £69

Fabric - 100% Polyester

Fabric - 60% Viscose

40% Cotton

Colours - Peach

Colours - Pale Pink

Minimalist, Trend Driven, Wearable,Versatile, Luxe Aesthetic

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P r o du ct / R an ge Kin by John Lewis

Chart Title

• Collection made up of 80 pieces, with an equal amount of accessories and tops.

• Accessories are a new addition to the Kin line for Spring/ Summer after the success of the clothing line when it launched in 2013.

• These allow customers to buy into the sub-brand at a lower price point than the rest of the collection.

Dresses 9%

Skirts 4%

Accessories 29% Trousers 17%

Tops/Shirts 29%

Coats/Jackets 12%

Product Comparison

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Float Grid Print Dress

Textured Tunic

Style - Shapeless Tunic Dress Knee Length Round Neck Short Sleeves

Style - Shapeless Tunic Dress Knee Length Round Neck Half Sleeves

Price - £59

Price - £79

Fabric - 100% Viscose

Fabric - 100% Cotton

Colours - Blue, White

Colours - Peach, White

Scandinavian, Minimal, Oversized, Prints, Clean Styling, Co-ordinates.

P r o du ct / R an ge Somerset by Alice Temperley

Chart Title

• Collection made up of 110 pieces, with tops taking up a majority of the range.

• The collection is the first designer collaboration at John Lewis and was the highest and fastest selling brand when it launched.

• The collection have recently expanded into lingerie, bridal and childrenswear in their third season.

Dresses 19% Accessories 23% Skirts 5%

Trousers 11% Tops/Shirts 33%

Coats/Jackets 9%

Product Comparison Organza Skater Skirt Style - Midi Length Skater/Circle Fitted Waist

Mid Length Circle Skirt Style - Midi Length Skater/Circle

Price - £130

Price - £89

Fabric - 100% Polyester

Fabric - 70% Viscose 30% Polyester

Colours - Cream

Colours - Metallic

Grey

Feminine, Floaty, Longline, Floral Prints, Elegance, Sophisticated

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P r o m ot i o n / B r a n d in g M&S Best of British

Clean, Minimal, Simple, Young Models, Black & White, Sepia Tones, Androgynous.

(Collection only sold online)

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P r o m ot i o n / B r a n d in g Whistles

Colour, Clean, Simple, Young Models, On-Trend Styling, Feminine, Consistent

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P r o m ot i o n / B r a n d in g Kin by John Lewis

Promotional video on website.

Black & White, Family, Clean Cut, Simple, Modern, New, Countryside

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P r o m ot i o n / B r a n d in g Somerset by Alice Temperley

Campaign.

Promotional launch video.

Colour, Feminine, Nostalgic, Aspirational, Luxury, British, Dreamy

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P lace M&S Best of British • Collection now retails online only (March 2014), although originally retailed in the London flagship.

• Window displays featured in flagship windows.

• Collection featured on Marks and Spencer social media sites (Facebook, Instagram, Twitter)

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P lace Whistles • Collection retails in stores, concessions and online. • Social Media presence (Facebook, Instagram, Twitter)

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P lace Kin by John Lewis & Somerset by Alice Temperley • Both ranges retail in flagship, online and a wide selection of stores carrying fashion departments.

• Kin products are featured among others in window and mannequin displays, whereas Somerset tend to appear in their own branded window and mannequin displays alongside the concession space.

• Products from both ranges feature heavily on John Lewis social media account (Facebook, Instagram, Twitter, Pinterest) but there are no designated accounts for the brands resulting in no direct communication between the brand and the customer.

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People -

Psychographic Profile

Innovators 13%

Whistles

Early Adopters 38%

Somerset by Alice Temperley Heritage by John Lewis Kin by John Lewis

Late Adopters 34%

M&S Best of British

Late Feeders 12%

Bargain Hunters 3%

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2 . 5 . 2 C o m p e t i to r E va l u at i o n Price • Heritage sit comfortably amongst its competitors, with Whistles having the highest entry and exit levels in comparison due to an increased range of premium fabrics such as leather and silk.

• Heritage is priced slightly lower than the direct competitor M&S Best of British, although this collection uses slightly more premium fabrics. This allows the collection to keep to the John Lewis price promise of ‘Never Knowingly Undersold’ without compromising on quality.

Product • Heritage carries a similar style to all competitors, with the closest being Somerset, Whistles and Kin, which are feminine, minimal and classic with a focus on key prints and on-trend shapes.

• Heritage carries 18 products (6 accessories and 12 apparel) making it half the size of the smallest range M&S Best of British, however Heritage have more colour/print options for each product. The collection will expand in size in its following seasons of retailing, however the current size is realistic for the start-up range, especially considering the higher manufacturing costs.

“I love investing in the simple, versatile styles that Whistles and Kin carry. If Heritage are offering these products but manufactured in Britain then it gives the brand a major advantage over competitors.”

“I’d buy Heritage instead of M&S Best of British if I were buying UK manufactured clothing. The M&S one is frumpy and bland, especially for a Spring collection.”

(Peters, 2014) - Fabs

(Cave, 2014) - MoMo

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“For me, transparency is key to a collection like Heritage.

Informative as well as lifestyle videos add a new depth to a brand and inspire me to buy the products featured.”

“I like products that are promoted with a natural image. I don’t respond well to images that promote glamour and an unobtainable lifestyle” (Crump, 2014) - Rurbanite

(Smith, 2014) - C.N.C

Promotion • Heritage promotion and advertising will take inspiration from Kin and Somerset, as their advertising style fits the Heritage branding. The creative direction behind the promotion for these brands will remain the same for Heritage to keep a level of consistency among John Lewis subbrands.

• Videos and lifestyle images create a level of aspiration for the customer of these brands and will be a suitable form of advertising for Heritage, allowing customers full transparency into how and where the collection has been made.

Place • Heritage will retail in a smaller amount of John Lewis stores than Somerset and Kin due to its high price point and smaller collection size, however could be introduced to more stores in future seasons.

• The collection will sell the full product range online, as well as having its own social media accounts, allowing customers to engage directly with the brand and find out more about it.

• With M&S no longer retailing in-store, Heritage would have the advantage of being more widely available to customers in a selection of stores as well as online.

People •Due to the varying age range of the Heritage consumers and their different attitudes to fashion, they’re more likely to sit in the lower part of Early Adopters.

• The range is a mix of classic and trend driven pieces, and is similar in style to Somerset, Kin and Whistles, however the Whistles customer tends to be slightly younger and have more of a focus on fashion than the Somerset or Kin customer.

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2.6 Promotion

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2.6.1 Branding • The Heritage brand represents quality, trust and transparency, and allows women to feel confident, comfortable and feminine while wearing the collection.

• John Lewis have built up a loyal customer base over the last 150 years due to their consistently customer-friendly brand image, always promising to provide them with the highest quality at the lowest price on the high street.

• It is important for the Heritage Collection to embrace the John Lewis values and promote them in order to celebrate the heritage of the company and teach others about it.

“John Lewis are very good at what they do and it’s why I’m often a repeat customer. I receive service there like no other store. The shopping experience is pleasant, friendly and easy- and that’s all I want from a shop really.”

(Cave, 2014) - MoMo

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“I’ve always had so much trust in John Lewis and the quality of their products and customer service, I feel like I’m really valued there as a customer, it’s a lovely experience.”

(Peters, 2014) - Fabs

B r a n d DNA

Personality

Friendly, Ethical, Proud

Trust, Quality, Respected

Ethical, Transparency, Informative

Flattering, Ageless, Simple

Smart, Feminine, Trend Driven

High Quality, Premium High Street

Stylish, Wearable, Ethical Fashion

Values

Emotional Benefits

Physical Benefits

Attributes

Positioning

Essence

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P ack agin g

BACK

Promotional Tote Reusable canvas tote given away with purchases of 2 or more items in top stores and online.

FRONT

Circular print image available in two designs.

Printed onto bag using heat transfer.

Paper Carrier Small or medium carrier to be used when purchasing 1 item from the collection in top and mid stores.

One print option available on both bag sizes.

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S w in g T ag

FRONT

British manufacture symbol will be shown on each swing tag with “This product has been manufactured in Britain using the finest craftsmanship.”

K BAC

Important to inform the customer as it’s the main USP for the collection.

Serial code to track process of product online. Information on who the product was made by and which UK factory it was made in.

Separate circular tag displaying product’s print will vary depending on print. This part will draw attention to and encourage sales of printed items.

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Logo & Name

John Lewis branding has been black and green since the company started. To maintain the image of heritage and brand history, the original and widely recognised John Lewis colours have been used in the brand logo.

• ‘Heritage’ suggests the vintage inspired aesthetic of the products and the history behind John Lewis.

• The logo maintains a level of consistency within the John Lewis ranges by using the same black John Lewis logo alongside the brand name. This informs the customer that the range carries the same principles as other John Lewis collections.

• Calligraphy font is inspired by old John Lewis logo typefaces that carried a similar aesthetic. The chosen typeface looks friendly and trustworthy - an important part of the John Lewis branding.

• “by John Lewis” maintains consistency with other brands that carry the John Lewis name. For example, ‘Collection by John Lewis’ and ‘Kin by John Lewis’.

• Logo will appear on all signage for the collection in store, swing tags, packaging, product labels and across all social media platforms, e-commerce site and mobile app.

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2 . 6 . 2 E x p e r i e n t i a l R e ta i l i n g Interactive Technology • Two iPads in each concession space in top stores.

•IPads will display the brand’s app which can be downloaded by customers for free from the app store.

• Features include an interactive lookbook to browse and buy products, enabling customers to engage and interact with the brand through personal and impersonal interaction.

• Information about the history of John Lewis.

• Technology is currently used in John Lewis branches in the form of stand alone computers to browse and buy online, as well as price checking scanners, although these are not brand specific.

“Interactive technology adds a new dimension to the shopping experience.”

(Lam, 2013) 99

Visual Merchandising • Remaining consistent with current fashion displays at John Lewis, with inspiration coming from competing brands Somerset, Kin, Whistles and COS which are all similar in style and target audience.

• Simple VM to reflect branding and allow key print pieces to stand out. Concession space will be small in size, particularly in mid-stores so VM will make use of all space, using wall mounted fixtures.

• A display table will sit in the middle of the concession space in top stores with folded clothing, a half-body mannequin and a range of the accessories. The table will not feature in mid-store displays.

• VM props will include seating upholstered in vintage floral prints to fit in with range aesthetics.

• Natural fixtures in raw materials with a stripped back aesthetic to promote the craftsmanship and heritage that has inspired the range.

• Mannequin displays will be used next to the concession space in stores, as well as one window display in each top store selling the collection. * An inspirational concept board for the VM style can be found on the opposite page.

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MINIMAL

RUSTIC COMFORTABLE

NATURAL

RAW FINISHES 101

Customer Reward Loyalty Card • To promote customer loyalty to the Heritage brand and encourage their repeat custom, each time a Heritage piece is bought in-store or online, they will receive a stamp on their loyalty card. Once 5 stamps have been obtained, they will receive a £10 John Lewis gift voucher as a reward.

• For online users, the card will have a serial code which can be linked to their Johnlewis.com account and will register each time they purchase a Heritage item online.

• A barcode on the card can be scanned at tills in John Lewis stores to see how many stamps the customer has received online.

• John Lewis and Waitrose have already successfully introduced customer loyalty cards into their individual brands, where customers receive promotional vouchers each month linked to their cards. * A loyalty card mock up can be seen on the opposite page.

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2 . 6 . 3 M a r k e t i n g S t r at e gy Objectives

• Build a following.

• Inform through transparency.

• Maintain relationships with existing consumer.

• Create excitement around the brand.

• Encourage brand awareness and interaction.

• Encourage sales.

• Celebrate the John Lewis history.

• Primary and secondary research has identified the forms of marketing that the target audience respond best to. All of the targeted consumers use social networking and shop online to varying degrees, while further primary research has identified the publications that they read.

• John Lewis already successfully use social media, E-commerce, M-commerce and some target media to showcase their products to the target market. This will be a key part in building a following and maintaining the relationship with the existing customer.

•Heritage will continue to target the same market, as well as introduce a new type of consumer by engaging with them on new and pre-existing platforms.

• Primary research has identified that consumers would not respond to celebrity endorsement, and believe that the transparency ethos of the collection should be reflected in how the product is marketed.

Social Media , PR , Adver tising , Digital Mar keting, Lookbook 104

Social Media

“I’ve ‘liked’ some brands on Facebook and have been able to find out about special offers and promotions in-store. I like being able to see other customer’s feedback on the brand and how it’s dealt with. It makes me trust them.”

(Peters, 2014) - Fabs “I like seeing behind the scenes footage on Instagram and different images that haven’t been published on a brand’s website, it’s exciting and new and makes the product feel more exclusive.”

(Smith, 2014) - C.N.C

• Heritage are able to engage and communicate with the target audience in an inexpensive and efficient way.

• Essential for making all areas of the collection transparent as audience are able to see ‘behind-the-scenes.’

• Social Media interaction attracts both an older and younger consumer, and allows them to interact with the brand via feedback and comments. This is beneficial for both the brand and the consumer as feedback can often lead to changes.

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PR • All of John Lewis press coverage and digital marketing campaigns are looked after by the London based PR agency, Rain Communications.

• To maintain consistency and existing relationships, Rain will continue to look after all of the digital and print promotional activity for Heritage.

PR Strategy • 1 pre-launch press release informing press of the influences and story behind the brand.

• Press samples sent to key fashion bloggers and celebrities.

• 1 in-store launch event for press the day before store launch.

• Magazine and newspaper coverage pre-launch in target publications. *For further information on PR activity, please refer to the Integrated Marketing Strategy pack.

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Advertising Targeted Publications for Campaigns & Press Coverage

• John Lewis rarely run advertising campaigns through magazines other than their own John Lewis Edition Magazine.

• Competing ranges Somerset, Kin and Collection by John Lewis are advertised heavily on the John Lewis website and social media sites, with some campaign images being featured in magazines such as Sunday Times Style magazine and Stylist magazine.

• The above publications already run press coverage on new product launches at John Lewis and will continue to be targeted for Heritage as they are also publications which are read by the target market.

• For Heritage, it is important not to detract from the ethics of the collection by making the advertising too ‘glossy’ as this presents an image to the customer that the purpose of the collection is purely aesthetic.

“I read fashion magazines like Harpers and Elle so I’m able to keep up to date with the latest trends. I don’t respond well to celebrity endorsement but a good fashion campaign will make me buy something.”

(Cave, 2014) - MoMo

“I don’t tend to buy something that has been endorsed by a celebrity. A model wearing something in a magazine is enough but celebrity endorsement seems fake and dishonest. I can’t relate well enough to any celebrities” (Peters, 2014) - Fabs 107

D i g i ta l M a r k e t i n g

• As well as ad campaigns, Heritage will also run campaigns through its social media sites which allow consumers to get involved and engage with the brand 24/7.

• Instagram will be the most useful tool for this, where a campaign such as ‘#myJLheritage’ will allow followers to post pictures that make them nostalgic or remind them of their upbringing, as well as images of them wearing items from the collection, styled in their own way. This responds to a pre-existing trend on Instagram where people post their ‘outfit of the day’ using ‘#ootd’.

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Lookbook • Lookbooks will be sent out to press with their launch event invitation, introducing the collection to them and the story behind it before they see it in store. This should encourage some press coverage before the launch event.

• Key illustrated looks shown with inspiration and product details including colour, price, stock number and available size options.

• Printed items also show the featured print above the product details to show the original image and how it’s been applied to the product.

• The lookbook features an introduction to the collection at the beginning with information about the story and influences behind the range.

* Please refer to launch pack and lookbook for further details and images.

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110

2.7 Per suasion

111

g Swing ta

with ser

ial code Mobile and Tabl

et App

Persuasion Methods: Transparency & Trust via: Serial Codes, Informative Videos/E-Comm/Social Media Allowing the consumer full insight into how and where their product has been made via the above methods will engage the consumer with the brand, and provide them with information in a time of increased demand about a product’s origin and ethical factors. Increased consumer trust will be highly beneficial for the brand.

Attitude over Age via: Not promoting the collection to one age group by using a variety of marketing techniques.

By not being too specific about the type of customer who will buy into the brand, it allows the true USP of the collection to shine through by bringing high quality ethical British made fashion to those who want it, rather than focusing on who it’s been designed for.

Tr u s t 112

|

Quality

|

Loyalty

Facebook page

Press Launch

Emotion via: Informing customers of the John Lewis heritage and brand story.

The primary purpose of the Heritage Collection is to teach new customers about the John Lewis history, and remind the existing loyal customers of the brand story and values. Traditionalism is a key marketing tactic which enforces a brand’s story and will lie at the heart of the Heritage collection to appeal to customers and encourage their emotional patronage.

Celebration via: Launch Events/Parties/Exclusive & Limited Edition Products Loyal John Lewis customers will feel more involved with the brand and its story by being able to attend special product launch events and parties to celebrate the 150th Anniversary. This type of loyal customer will be attracted to the Heritage brand because of the way it celebrates John Lewis and its history.

Friendly

|

Engaging

|

Histor y 113

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3. Business Planning

115

3 . 1 S ales R ev enue • The sales revenue for Heritage by John Lewis has been calculated by predicting how many units will be sold altogether, based on sales information from other John Lewis sub-brands.

• Realistically, the clothing and accessories collections are likely to be able to sell around 90% of all units made, with accessories being sold in higher quantities due to the lower price point.

• Key financial drivers contributing to the collection’s sales will include:

• Promotional campaigns

• Social media promotion

• Pieces worn in press

• Launch events

• Printed accessories for customers to buy into the brand at a lower price point • Retail sales are predicted to total £2,147,310

3.2 Expenditure • Key costs for Heritage will mainly come from manufacture - manufacturing in the UK is much higher than the countries that John Lewis have previously used for garment manufacture. Total cost price: £753,400 • Aside from manufacturing, key expenditure will come from:

• Staff salaries of those involved in all areas of the collection including Buying,

Merchandising, Marketing and Designing. £204,000

• Use of Rain PR consultancy for press coverage. £50,000

• Advertising & Marketing (promotional campaigns in media) £1,014,000

• Building a website extension, mobile website and brand app £70,000 * For full Cash Flow Statement, See Appendices 4

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3 . 3 C a p i ta l F u n d i n g • Due to high start up costs, Heritage will be unable to receive a return on investment in its first year of running. Research into John Lewis’ most recent financial statement has suggested that they would be able to invest at least £200,000 in the range, less than 1% of their current cash equity.

• By the third year of the collection running, John Lewis will not need to continue investing in Heritage as it should become self sufficient due to lower manufacturing costs, reduced overheads and less promotion needed.

The Three-Year Plan • The brand is expected to increase sales each year as the collection expands and develops.

• Sales are predicted to increase 15% in the first year and 10% in the following year.

Year 1 - £2,147,310

Year 2 - £2,469,406

Year 3 - £2,362,041

Heritage by John Lewis Balance Sheet Gross Revenues Expenses Overheads Office Costs In-­‐Store Technology Salaries Design Photography Design & Press Samples Manufacturing Travel Advertising & Digital Campaign Press Packs Digital Materials (App/E-­‐Comm) PR VM Launch Event Total Expenses Total Investment Net Income Net Income + Investment

Debit

Credit £ 2,147,310

£ 12,000 £ 12,000 £ 1,000

£ 204,000 £ 30,000 £ 10,000 £ 2,400

£ 753,400 £ 10,000 £ 1,014,000 £ 1,500

£ 70,000 £ 50,000 £ 200,000 £ 20,000 £ 2,390,300 £ 200,000 -­‐£ 242,990 -­‐£ 42,990

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4. SWOT Analysis

119

4 . 1 S t r e n gt h s • Heritage by John Lewis fills a gap in the market for a high street women’s fashion range that has been manufactured in Britain, with only one other brand currently doing this.

• The collection appeals to the existing John Lewis customer, as well as introducing a new type of conscious shopper - this customer may also start to buy into the homewares that have been produced in Britain as they begin to trust John Lewis.

• Matches the direct competitor M&S Best of British in price for most products, fitting John Lewis’ ‘Never Knowingly Undersold’ price promise.

• Celebrates the 150th Anniversary and brings the brand heritage to customer’s attention.

• Range provides both low priced entry level products as well as higher priced clothing, attracting a wider range of customer and appealing to all ends of the target market.

• Transparency to manufacturing processes allows a level of trust to be built between the customer and brand.

4 . 2 W ea k nes s es • Collection retails at a higher price than current John Lewis own label ranges and may detract some existing customers as a result.

• High cost of manufacturing and desire to meet competitor prices has resulted in a margin that is typically quite low for a company like John Lewis.

• No pre existing relationship with a clothing factory in UK could prove problematic as no trust level has been built yet.

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4 . 3 O ppo rtunities • Producing fabric in the UK for future ranges.

• Lowering the cost price if a relationship is built with the suppliers/manufacturers, allowing the collection to achieve higher margins in the future.

• Future product line expansion into fashion accessories, footwear, childrenswear, menswear and homeware.

• Opening up a new UK based factory to produce future collections in and keep to John Lewis’ plan of repatriating textile manufacturing and increasing sales of British made products in their stores. (The Telegraph, 2013)

4 . 4 T h r e ats • More high street brands are beginning to manufacture products in Britain at lower prices, giving the range a higher amount of potential competitors in the future.

• Rising costs of raw materials and labour could have an impact on the collection’s retail prices.

• The celebration of the brand’s 150th anniversary will only be valid in 2014, risking the chance of losing customers.

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5. Conclusions

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Through extensive research and analysis, a clear gap in the market has been identified for John Lewis to launch a brand new ‘Made in Britain’ collection for the fashion, socially and ethically conscious woman.

Key findings through research have identified that: • Higher spending consumers are looking for clothing made in Britain and would spend a premium on these products • Primary research further identified that the average John Lewis customer spends between £70-£150 in a single transaction, thus fitting into the ‘high spenders’ category as identified by Mintel.

• From this information, four typologies were identified as being the most suitable for the collection to target, with all consumers varying in age from 25-50+. All of the consumers follow fashion and trends, and would be attracted to the collection because of its trend driven style combined with a transparency ethos.

“It’s becoming more of a necessity to understand where your clothes have come from, and in a time where technology and communication is at the heart of everything we consume, it’s inexcusable to hide this information from customers. ” (Peters, 2014) - Fabs

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Further investigation into John Lewis’ financial and commercial successes identified that John Lewis are seeing substantial increases in their fashion market share and sales of own-label ranges, and looking to introduce more UK made product lines into stores to increase sales of these products by 15% by 2015. This information further justifies why Heritage by John Lewis is a step in the right direction for the department store.

To ensure that the brand met the ethos of John Lewis, their existing marketing strategy was analysed and led to the building of a strategy that puts the customer at the heart of the brand, allowing them to engage with the brand through social media. John Lewis are known for their customer priority, ensuring they retain brand loyalty.

John Lewis are constantly building on their omni-channel success, introducing new ways for their customer to shop with the brand in a seamless experience. Heritage utilises that success and expands on it by allowing the customer to shop via every digital platform including social media and e/m-commerce.

Key stages for development could include customisation and crowd sourcing, further ensuring that the customer is at the forefront of the range, and involving them in key stages of manufacture to reinforce the transparency ethos.

“You don’t realise how little fashion is made locally and ethically until you start looking for it, and then the results will really shock you.”

(Crump, 2014) - Rurbanite

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