STRATEGIC MEDIA DELIVERY – MEDIA RATIONALE
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Student Information Client Name: Old Navy Product/Brand: Old Navy menswear Name: (Kay)Wing Man Liu Instructor’s Name: Colin Robey Media Objectives Objective(s): With Old Navy reach 50.0% of M30-54 who lives in the Atlantic and Prairies market with HHI over $75,000 per year, an average of 5 times per week in August, September and December. i.
Product (What) Based on the media brief, Old Navy menswear will be advertised.
ii.
Target (Who) Based on the media brief, the target of Old Navy is between 30 to 54-year-olds men, who make an average HHI of more than $75,000 per year.
iii.
Reach (How Many) To deliver a 70.0% weekly reach of the target group during the campaign. Some people are in the Old Navy target group but might not be aware of Old Navy. Reach is important for the campaign as it helps to make this target audience aware of Old Navy and can see the ad at least once.
iv.
Frequency (How Many) To gain an average weekly frequency level of 5 against the target group during the campaign. Based on the media brief, Old Navy wants to encourage more price switchers to purchase from the brand. Also, Old Navy’s market share decreased in 2018 from 2015 as Canada
STRATEGIC MEDIA DELIVERY – MEDIA RATIONALE
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Goose raised its market share, so Old Navy needs to get back the loyalty from customers. Therefore, frequency is important for the campaign. v.
Measurement (How Many) The weekly reach is 70.0%, and the weekly frequency level is 5. Thus, GRPs for the campaign is 350.
vi.
Seasonality (When) To spend media dollars accordingly:
Month
J
F M A M J
J
A
S
O N D
Sales% 4 4
4
7
8 10 7 14 12
6
9 15
Plan%
0
0
0
0
0 36
0 0
0 0 34 30
August, September, and December had the highest annual sales throughout the year at 14.0%, 12.0%, and 15.0% respectively. This is because many people begin shopping in August and September for back to school, and December is Christmas, so more people will shop in December. December is the first seasonal priority, and August and September are the second and third seasonal priorities. The agency should plan the spending that reflects the priorities. Therefore, the plan% will set up at 36.0% for December, 34.0% for August, and 30.0% for September. vii.
Scheduling Strategy (When) Massed strategy will be used for this campaign. As the plan% only sets up in August (34.0%), September (30.0%), and December
(36.0%), Old Navy should use a massed scheduling strategy to advertise more in these three months. Because massed scheduling strategy is a type of scheduling places advertising during the demand for seasonal or specific periods.
STRATEGIC MEDIA DELIVERY – MEDIA RATIONALE
viii.
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Geography (Where)
Region
CDN POP %
Category Users Brand Users CDI BDI BOI %
%
Planned Spend %
Atlantic
6.7
7.5
6.0
112
90
124
10.7
Quebec
23.1
22.0
12.4
95
54
176
21.2
Ontario
38.8
37.2
45.9
96
118
81
35.8
Prairies
18.0
20.4
15.7
113
87
130
22.0
BC
13.3
13.0
20.1
98
151
65
10.3
The plan will spend more money (based on %) in Atlantic (10.7%) and Prairies (22.0%) as based on the media brief, the top regional priorities would be Atlantic and Prairies. ix.
Priorities
The list of the objectives in order of priority: 1 Frequency 2 Seasonality 3 Reach 4 Scheduling Strategy 5 Geography Frequency is more important than the others because Old Navy needs to get back the loyalty from customers. Then, the seasonality is the second priority because of the highest sale months have more people shopping, and it can affect Old Navy sales.
STRATEGIC MEDIA DELIVERY – MEDIA RATIONALE
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Media Rationale Media Strategy i.
Newspapers -
Newspaper is recommended as the primary medium for this plan because: 1. 21.2% of the target is medium/heavy to heavy digital newspapers readers (6.6+ digital newspapers a month) which will allow the ad to be viewed multiple times – helping to satisfy the frequency objective of 5 listed in the media brief. 2. 59.4% of the target audience has read/ looked through a digital edition of a newspapers in the past week, which will allow the ad to be viewed - helping to satisfy the 70.0% reach required in the media brief. 3. Newspapers can be purchased regionally, Atlantic and Prairies are key priorities listen in the media brief. Ability to increase weight levels in the key markets – satisfying the regional objectives listed in the media brief. 4. Newspapers can be purchased seasonally, August, September, and December are key priorities listened in the media brief. Ability to increase weight levels in the key markets – satisfying the seasonal objectives listed in the media brief. 5. Among the competitors, only George had advertised in the newspaper, George has a 100.0% share of voice in newspapers – it is important to not allow George to own this medium. 6. Newspapers have editorial support; the ad can be placed in the men fashion section as Old Navy targeting men and the product is menswear. 7. Newspapers have a short lead time, newspapers allow booking the Ad space in daily newspapers 2 days in advance, providing quick turnaround - satisfying the Old Navy runs various offers or promotions when its competitor does any promotions. 8. Newspapers can be purchased by specific weight level; Old Navy plans to use massed strategy for the scheduling strategy of the campaign. Newspapers can satisfy Old Navy’s scheduling strategy. 9. Newspapers can present details information, so Old Navy can show its efforts to promote environmental improvements. Consumers tend to purchase a product from companies that have a positive impact on environmental issues.
STRATEGIC MEDIA DELIVERY – MEDIA RATIONALE
ii.
5
Radio -
Radio is recommended as the primary medium for this plan because: 1. The target is 38.0% more likely a medium/heavy radio listener (10.5 hours radio per week) which will allow the ad to be listened multiple times - helping to satisfy the frequency objective of 5 listed in the media brief. 2. 81.7% of the target audience has listened to the radio yesterday, which will allow the ad to be listened - helping to satisfy the 70.0% reach required in the media brief. 3. Radio can be purchased regionally, Atlantic and Prairies are key priorities listened in the media brief. Ability to increase weight levels in the key markets – satisfying the regional objectives listed in the media brief. 4. Radio can be purchased seasonally, August, September, and December are key priorities listened in the media brief. Ability to increase weight levels in the key markets – satisfying the seasonal objectives listed in the media brief. 5. The competitor advertised in radio; the competitor had a 63.9% share of voice in radio – it is important to not allow the competitor to own the medium. 6. Radio can be purchased by specific weight level; Old Navy plans to use massed strategy for the scheduling strategy of the campaign. Newspapers can satisfy Old Navy’s scheduling strategy. 7. Radio can be purchased during different day parts. Men’s underwear is one of the product lines in Old Navy menswear, and the target put the underwear on in the morning – Old Navy ability to reach the target when they are more receptive to the message. 8. Radio can be used to a specific channel. Old Navy can advertise its contribution to environmental protection effort in an environmentally relevant channel. Consumers tend to purchase a product from companies that have a positive impact on environmental issues.
Student Information Category: Menswear Brand: ​Old Navy
Category Research for Menswear in Canada Market Analysis
Euromonitor International. (2019, November). Menswear in Canada, Country Report
The Menswear market in Canada experienced sales of over $10.6 billion in 2018. This represents a growth of over $1.1 billion in sales or 12.4% versus 2013. The market has experienced year over year increases since 2013 within a range of 1.6% to 3.2% (Euromonitor, 2019).
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Euromonitor International. (2019, November). Menswear in Canada, Country Report
The Men's Nightwear segment in Canada experienced sales of $63.8 million in 2018. This represents an increase of $6.7 million in sales or 11.7% versus 2013. The market has experienced year over year increases since 2013, within a range of 1.7% to 3.0% (Euromonitor, 2019). The Men's Outerwear segment in Canada experienced sales of just over $9.9 billion in 2018. This represents an increase of close to $1.1 billion in sales or 12.3% versus 2013. The market has experienced year over year increases since 2013, within a range of 1.6% to 3.2% (Euromonitor, 2019). The Men's Swimwear segment in Canada experienced sales of $56.3 million in 2018. This represents an increase of $ 7.0 million dollars in sales or 14.2% versus 2013. The market segment for Men Swimwear has experienced year over year increases since 2013, within a range of 1.9% to 3.4% (Euromonitor, 2019). The Men's Underwear segment in Canada experienced sales of $583.9 million in 2018. This represents an increase of $70.1 million in sales or 13.6% versus 2013. The market has experienced year over year increases since 2013, within a range of 1.9% to 3.2% (Euromonitor, 2019).
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Euromonitor International. (2019, November). Menswear in Canada, Country Report
The Men's Outerwear segment is the largest segment accounting for 93.4% share of the market in 2018. This segment is more than 14 times larger than all other market segments combined. All other market segments are relatively small segments when compared against the Men's Outerwear segment. Accounting for 6.6% share of the market in 2018 when all three - Men's Nightwear, Swimwear and Underwear - segments are combined (Euromonitor, 2019).
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Euromonitor International. (2019, November). Menswear in Canada, Country Report
The Men's Jeans sub-segment of the Men's Outerwear Segment in Canada experienced sales of $1.1 billion in 2018. This represents an increase of $62.3 million in sales or 5.7% versus 2013. Though the sub-segment has experienced an overall increase in sales since 2013 both growth and decline were present within a range of -0.7% to 3.2% (Euromonitor, 2019). The Men's Jackets/Coats sub-segment of the Men's Outerwear Segment in Canada experienced sales of $2.1 billion in 2018. This represents an increase of $292.1 million in sales or 16.0% versus 2013. The sub-segment has experienced year over year increases since 2013, within a range of 1.8% to 4.0% (Euromonitor, 2019). The Men's Jumpers sub-segment of the Men's Outerwear Segment in Canada experienced sales of $694.4 million in 2018. This represents an increase of $72.1 million in sales or 11.6% versus 2013. The sub-segment has experienced year over year increases since 2013, within a range of 1.3% to 3.4% (Euromonitor, 2019). The Men's Shirts sub-segment of the Men's Outerwear Segment in Canada experienced sales of $951.9 million in 2018. This represents an increase of $132.3 million in sales or 16.1% versus 2013. The Men's
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Shirt segment experienced the greatest increase in sales growth. The sub-segment has experienced year over year increases since 2013, within a range of 1.6% to 4.4% (Euromonitor, 2019). The Men's Shorts/Trousers sub-segment of the Men's Outerwear Segment in Canada experienced sales of $2.6 billion in 2018. This represents an increase of $302.9 million in sales or 13.0% versus 2013. The sub-segment has experienced year over year increases since 2013, within a range of 1.8% to 3.5% (Euromonitor, 2019). The Men's Suits sub-segment of the Men's Outerwear Segment in Canada experienced sales of $1.0 billion in 2018. This represents an increase of $132.9 million in sales or 14.9% versus 2013. Though the sub-segment has experienced an overall increase in sales since 2013 both growth and decline were present within a range of -0.1% to 4.5% (Euromonitor, 2019). The Men's Top sub-segment of the Men's Outerwear Segment in Canada also experienced sales of $1.0 billion in 2018. This represents an increase of $132.8 million in sales or 14.9% versus 2013. The sub-segment has experienced year over year increases since 2013, within a range of 2.1% to 3.6% (Euromonitor, 2019). The Other Men's Outerwear sub-segment of the Men's Outerwear Segment in Canada experienced sales of $283.2 million in 2018. This represents an increase of $4.6 million in sales or 1.7% versus 2013. Though the sub-segment has experienced an overall increase in sales since 2013 both growth and decline were present within a range of -3.0% to 2.0% (Euromonitor, 2019).
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Euromonitor International. (2019, November). Menswear in Canada, Country Report
Within the Men's Outerwear segment, the largest sub-segment, accounting for 26.6% share of the market in 2018, was Men's Shorts and Trousers. This segment has experienced a steady increase in segment share of 3.5 share points from a 26.4% share of the market in 2013 to 29.9% in 2018 (Euromonitor, 2019).
Euromonitor International. (2019, November). Menswear in Canada, Country Report
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Gap Canada Inc is the number one company in the Canadian Menswear market with a 17.7% share of market in 2018. The company has experienced a share decline of -2.1 share points from 2014 to 2018 (Euromonitor, 2019). Nike Canada is the second-largest company in the market with a share of 13.5% in 2018. The company has experienced a share decline of 0.8 share points from 2014 to 2018 (Euromonitor, 2019). Canadian Tire Corp Ltd is the number three Menswear company, represented by the companies Denver Hayes Label, with a 13.5% share of the market in 2018. The company has experienced a slight share decline from 2014 to 2018 of 1.2 share points (Euromonitor, 2019). Loblaw Cos Ltd represents the number four company, represented by the companies Joe Fresh label with a 10.8% share of the market in 2018. The company has experienced a share decline of 1.0 share points from 2014 to 2018 (Euromonitor, 2019). Canada Goose Holdings is the only major menswear manufacturer that has experienced serious growth in market share since 2014. Most of this market share growth has been at the expense of Gap Canada Inc (Euromonitor, 2019).
Euromonitor International. (2019, November). Menswear in Canada, Country Report
The top five brands of the Menswear market in Canada for 2018 are Nike, Joe Fresh, Canada Goose, Old Navy and Hugo Boss according to market share. Nike is the number one brand in the Canadian Menswear market representing a 3.2% share of market in 2018. Loblaws’ Joe Fresh is the number two brand in the market with a share of 2.8% in 2018. Canada Goose experienced a market share increase of 1.5 points between 2015 and 2018, rising to number three in the market with a share of 2.8% This rise
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for Canada Goose, caused Old Navy to move down to number four brand, representing 2.3% of market share. Lastly, Hugo Boss, at number five represents 2.2% of the market for 2018 (Euromonitor, 2019).
Euromonitor International. (2019, November). Menswear in Canada, Country Report
The Menswear market in Canada is expecting to experience sales of over $11.6 billion in 2023. This represents a growth of $632.9 billion in sales or 6.0% versus 2018. The market will experience year over year increases within a range of 0.4% to 2.4%, demonstrating that the rate of growth is slowing in the industry (Euromonitor, 2019). Environmental Scan Technological Factors Technological improvements are impacting the Menswear throughout its entire supply chain. Artificial intelligence is being used to produce key insights on trends to both expedite the initial design process and better predict demand for hyper-localized products (Kochar, 2018). Together, IBM and the Fashion Institute of Technology develop an Artificial Intelligence System to determine this kind of data to optimize production, sales and also reduce cost and waste (Arthur, 2018). This is an opportunity for the Menswear market as it allows for more efficient and effective clothing production which will drive sales and make for large. Retail e-commerce will reach CA $64.56 billion this year, which represents a 21.1% increase from last year's e-commerce sales and will represent 10.0% of all retail sales (Briggs, 2019). Therefore, as online
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sales increase from the use of e-commerce, so do the areas in which menswear retailers can reach select target markets and encourage them to make purchases. Thus, e-commerce is an opportunity for the Menswear market to increase. Environmental Factors The fashion industry has a large impact on the environment and on the world's limited natural resources. It is the second-largest polluter in the world, following the oil industry. Environmental damages are increasing as the industry grows. Fast fashion focuses on speed and low costs in order to deliver frequent new collections inspired by runway styles. But it is particularly bad for the environment, as pressure to reduce cost and the time it takes to get a product from design to shop floor means that environmental corners are more likely to be cut (Pestle, 2018). Criticisms of fast fashion include its negative environmental impact, water pollution, the use of toxic chemicals and increasing levels of textile waste. Therefore, environmental factors, particularly air and water pollution, are a threat to the fashion industry. Social-Cultural Factors The positive performance of within the Menswear Market in Canada can be attributed to men’s growing interest in fashion, urban and younger Canadian men are shifting personal attitudes towards fashion and style, and showing more interest in physical appearance and the latest fashion trends (Euromonitor, 2019). As men become more willing to spend on fashion, retailers have turned towards menswear. This shows an opportunity for the Menswear market in Canada. In recent years, there has been a shift to casual workplace attire. Workplaces in Canada have adopted more flexible dress codes, moving away from traditional suits and ties. Shirts have become a key workplace staple, with the decline of the traditional suit and tie “uniform”, and consumer demand for convenience in terms of garment care and fit has driven innovation in shirts. Casual clothing maintained a stronger performance in comparison with formal clothing in 2018 (Euromonitor, 2019). This was driven by the athleisure trend, which makes casual clothing and sportswear more acceptable for both work and after-work hours, as well as the continued shift in workplace dress codes away from traditional formal clothing to casual clothing. Therefore, as consumer demands shift from formal wear to leisurewear the Menswear market will notice lasting growth and opportunity. Canadians show a keen interest in being less wasteful by making choices that do not negatively impact the environment and by supporting businesses that adhere to ethical business practices. As mentioned under “Environmental Factors” the Clothing industry will need to adjust business models to maintain operation, this also applies when viewed from the consumer’s perspective (Pestle, 2018). As consumers
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become increasingly aware of environmental concerns many are basing purchasing decisions on such factors. Therefore, organizations within the industry must respond to the growing demand for sustainably sourced products, or else they risk facing a serious threat in the market. Demographic Factors Canada’s ageing population is also supporting the growth of casual clothing, with many older men prioritizing comfort and a more casual dress style in retirement. As men enter a new life stage, personal clothing needs have changed. This a potential opportunity for clothing companies to grow by offering menswear to males at every age (Euromonitor, 2019). Legal-Regulatory Factors The Fashion Industry must follow a multitude of legal rules and regulations to operate within Canada. One significant regulation organizations in the industry must also follow are the rules securing and maintaining workers' rights. However, when clothing companies have products made in foreign countries, such regulations are brought to question and determining if an article of clothing is ethically sourced becomes more convoluted. This is a threat to the Menswear market in Canada - as more policies are placed on clothing organizations it will become more difficult and more expensive to operate and sell in Canada. Competitive Factors Menswear in Canada is a highly fragmented and competitive category. A diverse range of large and small domestic and international brands and designers, as well as private label products, compete for consumers’ attention. Gap Canada Inc, as shown in the charts under the “Market Analysis” section of the report, was the top player in menswear in 2018 in value, through its three brands Gap, Old Navy and Banana Republic (Euromonitor, 2019). Old Navy was the top performer in the company’s brand portfolio in 2018. Old Navy recorded double-digit value growth in 2018, as its value-focused products resonated with budget-aware consumers. Because one company dominates in the sales for Menswears in Canada this is a threat to any smaller organizations or any entering the market, however, for Gap Canada Inc. this is an area of strength.
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Brand Analysis - Old Navy Menswear Old Navy’s Menswear Marketing Mix Product Old Navy, within Canada, carries a huge selection of Menswear apparel in its marketing mix product portfolio. Old Navy offers its male consumer base items from categories of outerwear, footwear, swimwear, sleepwear and activewear. They have various sizes available according to the body type, which usually includes S, M, L, and XL as well as more accommodating sizes based on width and length (Gap Canada Inc.) . Gap Inc. has pledged too targets for it brand Old Navy. Old Navy will help scale and drive impactful improvement in water-savings efforts and sustainable cotton sourcing, while helping to educate the brand’s customers on the importance of more sustainable apparel production (Gap Inc). [As established in the “Environmental Scan” section of the report environmental concerns are a growing threat to the clothing industry. Gap Inc. has already managed to address and find a solution for the growing concern. The company should consider advertising the promotion through the means of an advertorial within a fashion magazine or native advertising in online.] Price Old Navy targets customers from lower-middle to middle-class income groups. In order to comply with the demands of such customers, Old Navy has marked the prices of products accordingly. Old Navy maintains a value-focused product that resonates with budget-aware consumers. Old Navy runs various offers to encourage more price switchers to purchase from the brand. In order for Old Navy to hold its share in the marketplace, they must continue to provide a plethora of choices that act as a cheaper alternative for budget shoppers (Zigu, 2017). Place In 2001, Old Navy began its international expansion with the opening of 12 stores in Ontario, Canada. Old Navy has set a goal of opening 100 locations by the year 2020 (Patterson, 2017). As of now, Old Navy has 78 stores across Canada. The majority of the stores are found in Ontario, with a small portion located in the other nine. There are no Old Navy stores in the territories.
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Promotion Advertising Campaigns Old Navy heavily utilizes television and digital display forms of media to conduct most of the brand’s advertising campaigns in Canada. Such a vehicle selection allows for the brand to reach target markets in a timely manner to correspond with in-store and online promotions (Pasquarelli, 2017). [The added element of 30-second brand sells on select radio stations to leverage brand awareness. Radio has the added benefit of strong targeting capabilities when it comes to localized markets and time-sensitive promotions]. Old Navy, recently, has been targeting individuals and increasing sales through the use of mobile initiatives that include the use of banner ads that drive consumers to its mobile site, as well as in-store locations (Kats, 2016). [As a clear extension, O ld Navy may want to consider display video ads to drive traffic to the brand’s online site and physically to the stores. Video is currently driving the growth in display advertising within Canada, while the search business is slowing down (Rody-Mantha, 2019). Therefore, such a transition will appear natural, but may produce better metrics.]. Social Media Old Navy is on Twitter, Instagram, Snapchat, Facebook, Pinterest, Youtube and LinkedIn. However, their only Canada specific media platform is Twitter, the other six are American based. Also, there is no clear link to any of the company’s social media platforms on Old Navy’s official website. The content on Old Navy’s social media platforms are heavily geared towards women and little connect is specific to menswear. The main campaign that is published across all Old Navy’s platforms is the brand’s latest “Hi, Fashion” promotion (Pasquarelli, 2017). The idea explored the use of fashion in a light-hearted and fun manner, rather than be taken so seriously, which is a message Old Navy has always tried to communicate. [With each social platform containing an immense amount of content, should consider promoted ads as a cohesive method to reaching the brand’s target audience.] Community Involvement Gap Inc. and the United Nations Foundation announced that they will partner during Pride Month in June to raise awareness and funds for UN Free & Equal, a global campaign of the United Nations Human Rights Office to promote equal rights and fair treatment for LGBTI+ people globally. This year marks the fourth consecutive year of the partnership (Gap Inc). In extension, Gap Inc. employees, including those under the Old Navy division, attend local pride parades throughout the month of June every year since 2012. This includes the Pride hosted downtown Toronto of 2019.
[With G ap Inc. already contributing to
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the LGBTI+ community through the U nited Nations Foundation and by participating in local Pride Parades, the company should consider sponsoring the event and in corporate Out-of-Home media elements to promote the brand during the event.]
Current Users - Demographics Brand Specific Data Old Navy Men’s Clothing - Age Age
CDN POP %
Users %
Index
14-17
5.5
4.3
76.7
18-24
10.8
8.6
80.2
25-29
6.5
4.9
75.2
30-34
9.8
13.1
133.8
35-39
7.1
12.5
175.5
40-44
8.2
13.1
160.9
45-49
8
11
137.5
50-54
8.2
9.6
117.6
55-59
8.5
8
94.4
60-64
8.1
5.3
66
65-69
8.9
5
56.9
10.5
4.5
42.7
70+
Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy
59.3% of Old Navy users for men's clothing are 30 to 54 year-olds. They are at least 17.6% more likely to be Old Navy users (Vividata,2017). Old Navy men's clothing are 75.5% more likely to be between the ages of 35 - 39 years old and account for 12.5% of Old Navy menswear users.. As mentioned before, Old Navy represents a 17.8% share of the market in 2017, which is the fourth most popular brand in 2017 (Euromonitor, 2019). As this share of the market is ranked in the top 5 brands by market share, the popularity among all ages will continue to increase.
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Old Navy Men’s Clothing - Gender Gender
CDN POP %
Users %
Index
Male
49.5
61.3
123.8
Female
50.5
38.7
76.7
Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy
61.3% of Old Navy users for men's clothing are male. They are at least 23.8% more likely to be Old Navy menswear users (Vividata, 2017). As the trend of the emerging ‘male power shopper’ continues, retailers and brands can leverage this in the company's product selection and messaging strategies (Forbes, 2019). This makes it very easy for brands such as Old Navy to launch new products without the worry of it not selling because men are looking beyond what they need and more about desires. Old Navy Men’s Clothing - Household Income HHI
CDN POP %
Under $25,000
Users %
Index
12.7
7
54.9
$25,000-$34,999
9
6.8
76.3
$35,000-$49,999
12.4
9.5
76.4
$50,000-$59,999
8.7
8.4
96.2
$60,000-$74,999
10.8
12.5
115.3
$75,000-$99,999
14.9
12.9
86.7
$100,000-$124,999
12.6
15.4
122.5
$125,000-$149,999
7.2
10.1
140.3
$150,000 - $199,999
6.6
10
153
$200,000 Or Over
5.2
7.4
141.8
Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy
55.8% of people with a HHI of $75,000.00-$200,000.00+ are Old Navy menswear users. The largest segment within the current users is $150,000.00-$199,999.00. 10.0% of Old Navy menswear users have a household income of $150,000.00-$199,999.00. Those within that income level are 53% more likely to be Old Navy menswear users than those with other household incomes (Vividata,2017). When looking at income quintiles, individuals apart of the highest income quintile are spending $6,256.00 a year on clothing, (Statistica, 2017). This means that the more disposable income households have, the more they will spend on clothing as per chart shows above. This also means households are able to spend more money on brand names such as Old Navy.
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Old Navy Men’s Clothing - Education Education
CDN POP %
Users %
Index
No Certificate or Diploma
12.8
10
78.6
Secondary/High School Graduate
18.8
15.7
83.7
Trade Certificate/Diploma
11.6
11.4
98.1
University/Other Non-University Certificate
24.9
25.7
103.4
Bachelor's Degree
18.4
21.8
118.4
Post Graduate + Degree
13.5
15.3
113.1
Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy
People with a bachelor’s degree represent 21.8% of Old Navy users purchasing men’s clothing, and are at least 18.4% more likely to purchase men’s clothing. This demographic of users has the highest index. The largest percentage of users in this category are those with a University/Other Non-University Certificate, representing 25.7% of users. However, these users are only 3.4% more likely to purchase clothing (Vividata, 2017). This would make those with a bachelor’s degree the most effective user segment to target. Old Navy Men’s Clothing - HH Structure/Status HH Structure/Status
CDN POP %
Users %
Index
Couple With Children Living at Home
42.4
58.2
137.2
Couple - No Children Living at Home
21.1
15
70.9
7.7
5.9
76
12.5
5.9
47.5
9.1
7.3
79.8
15.1
8.3
54.8
7
7.7
109
Adult With Children Living at Home Adult Living Alone Adult Sharing Accommodation Empty Nesters Other Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy
58.2% of couples with children living at home are purchasing mens clothing, and they are at least 37.2% more likely to purchase mens clothing. On the opposite side of the spectrum, all the other household structures apart from the “Other” category are under indexing, being at least 20.2% less likely to purchase mens clothing (Vividata, 2017). The large gap in the index as well as the vertical percentage between couples with children living at home versus all the other household structures is largely due to the fact that
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parents with children living at home allocate more money to clothing costs for their children than other household structures do. With the combined income of both parents, there is also more disposable income (Davis, 2019). Category Specific Data Men's Clothing Personally Bought in the Past 12 Months - Age Age
CDN POP %
Users %
Index
14-17
6.99
6.11
87
18-24
10.59
9.86
93
25-29
6.3
5.82
92
30-34
9.66
9.79
101
35-39
7.18
7.66
107
40-44
7.81
8.47
108
45-49
7.86
8.84
113
50-54
8.05
8.65
107
55-59
8.33
8.7
104
60-64
7.9
8.74
111
65-69
8.77
8.08
92
10.22
9.03
88
70+
Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy
35-64 year-olds account for 51.1% of Men's clothing personally bought. They are at least 4% more likely to be personally purchasing men's clothing (Vividata,2017). Men's clothing purchasers between 45-49 year-olds are 13% more likely to be personally buying men's clothing and account for 8.8%. According to Statistics Canada, in 2017, 40-54 year-olds are spending approximately $4,441.00 per year on clothing, (Statistics Canada, 2017). In the chart above, the age group which stands out the most for purchasing men's clothing is ages 45-49 years old. Men's Clothing Personally Bought in the Past 12 Months - Gender Gender
CDN POP %
Users %
Index
Male
49.43
64.96
131
Female
50.56
35.04
69
Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy
Males account for 65.0% of the purchase of Men's clothing. They are at least 31.0% more likely to be personally purchasing men's clothing (Vividata,2017). It’s becoming more popular for men to shop for
16
themselves and express personal style (Forbes, 2019). Men have many more options for shopping than they did several years ago. Men's Clothing Personally Bought in the Past 12 Months - Household Income HHI
CDN POP %
Under $25,000
Users %
Index
12.69
10.43
82
$25,000-$34,999
8.65
7
81
$35,000-$49,999
12.81
11.59
90
$50,000-$59,999
7.86
7.8
99
$60,000-$74,999
11.12
11.06
99
$75,000-$99,999
14.35
14.94
104
$100,000-$124,999
12.33
13.89
113
$125,000-$149,999
7.79
9.4
121
$150,000 - $199,999
6.9
7.68
111
5.48
6.23
114
$200,000 Or Over
Vividata 2017 Q3 Readership and Product Database Menswear​/Old Navy
52.1% of people with an HHI of $75,000.00-$200,000.00+ are purchasing men's clothing and are at least 4% more likely to be purchasing men's clothing (Vividata,2017). The largest segment within the current users is $125,000.00-$149,999.00. $125,000.00-$149,999.00 accounts for 9.4% of purchasing men's clothing and are 21.0% more likely to be personally purchasing men’s clothing. As mentioned before, when looking at quintiles, people who make the highest income are spending $6,256.00 a year on clothing, (Statistica, 2017). When moving down the list, households in the fourth quintile are spending an average of $3,904.00 on clothing per year, (Statistica, 2017). Households in the third quintile are spending an average of $3,044.00 on clothing per year, (Statistica, 2017). Households in the second quintile are spending an average of $2,383.00 on clothing per year, (Statistica, 2017). This shows that households within the highest of quintiles are spending more money on clothing as they have more disposable income. Men's Clothing Personally Bought in the Past 12 Months - Education Education
CDN POP %
Users %
Index
No Certificate/ Diploma
14.8
13.07
90
Secondary/High School Graduate
18.9
18.21
96
University/Other Non-University Cert.
24.6
24.07
98
Bachelor's Degree
18.5
20.08
108
17
Post Graduate + Degree
12.4
13.04
105
Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy
At least 2.0% of people are less likely to be purchasing men’s clothing. The largest segment is users with a Bachelor’s degree, which is responsible for 20.1% of the purchases towards clothing and are 8.0% more likely to be making the purchases. Moving forward, male university students are more likely to shop online than in-store than female university students are, about 24.6% of males shop online while females shop about 16.1%. Men's Clothing Personally Bought in the Past 12 Months - Household Structure HH Structure
CDN POP %
Users %
Index
Couple With Children Living at Home
43.23
47.87
111
Couple - No Children Living at Home
20.99
23.62
112
7.7
5.85
76
12.32
9.14
74
9.11
7.81
86
16.17
15.68
97
6.65
5.71
86
Adult With Children Living at Home Adult Living Alone Adult Sharing Accommodation Empty Nesters Other
Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy
Couples with Children Living at Home are at least 11.0% more likely to purchase mens clothing. The Household segment with the largest number of users is Couples with No Children Living at Home, which accounts for 23.6% of users who are 12.0% are more likely to purchase men’s clothing. Studies have shown that in the average Canadian household, the amount of clothing items that were purchased amounted to $3,551.00 in the year of 2013. However, in the years to follow, the purchases made towards clothing started to decline each year except for 2017, with a total of $3,430.00.
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References
Arthur, R. (2018, January 15). Artificial Intelligence Empowers Designers In IBM, Tommy Hilfiger And FIT Collaboration. Retrieved from https://www.forbes.com/sites/rachelarthur/2018/01/15/ai-ibm-tommy-hilfiger/#4ead4e9c78ac. Briggs, P. (2019, June 27). Canada Ecommerce 2019. Retrieved from https://content-na1.emarketer.com/canada-ecommerce-2019. Davis, J. (2019). How Much Money Do Parents Spend on Their Kids' Clothes? Retrieved from https://www.livestrong.com/article/1005266-much-money-parents-spend-kids-clothes/. Environmental Impacts of the Fashion Industry. (n.d.). Retrieved from https://www.sustainyourstyle.org/old-environmental-impacts​. Euromonitor International. (2019, November). Menswear in Canada, Country Report Gap Inc. Canada. (n.d.). Homepage. Retrieved from https://oldnavy.gapcanada.ca/. Gap Inc. Product Sustainability. (n.d.). Retrieved from https://www.gapincsustainability.com/product/product-sustainability Highest quintile average. (n.d.). Retrieved from https://www-statista-com.library.sheridanc.on.ca/statistics/596583/highest-quintile-average-annua l-household-expenditure-in-canada/. Household spending by age. (n.d.). Retrieved from https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=1110022701. Kats, R. (2016, June 17). Old Navy strengthens mobile strategy via targeted summer campaign. Retrieved from https://www.mobilemarketer.com/ex/mobilemarketer/cms/news/advertising/10615.html. Kochar, S. (2018, May 9). 5 Top Trends In Fashion Manufacturing Technology. Retrieved from https://www.techpacker.com/blog/5-top-trends-in-fashion-manufacturing-technology/. Patterson, C. (2017, March 16). Old Navy to Launch 8 Canadian Stores in 2017 . Retrieved from https://www.retail-insider.com/retail-insider/2017/3/old-navy. Pasquarelli, A. (2017, July 28). Old Navy Succeeds By Saying Bye to Celebs and Hi to Fashion.
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Retrieved from https://adage.com/article/cmo-strategy/celebrities-brand/309938?CSAuthResp=1::5188852:0:24:s uccess:F6369CD62A062295D2870C5DBCD2A443.
PESTLE Analysis Of The Fashion Industry. (2018, March 28). Retrieved from https://pestleanalysis.com/pestle-analysis-of-the-fashion-industry/.
Petro, G. (2019, January 25). The Rise Of The New Male Power Shopper. Retrieved from https://www.forbes.com/sites/gregpetro/2019/01/25/the-rise-of-the-new-male-power-shopper/#24 464e7a3367. Rody-Mantha, B. (n.d.). Display to account for half of Canadian digital ad spend: study. Retrieved from http//:mediaincanada.com/2019/08/12/display-ads-to-account-for-half-of-digital-ad-spending-study Sector, I. (2012, November 22). Regulations and standards. Retrieved from https://www.ic.gc.ca/eic/site/textiles-textiles.nsf/eng/h_tx03203.html. Vividata 2017 Q3 Readership and Product Database Menswear/Old Navy Zigu. (2017). Old Navy Marketing Mix (4Ps) Strategy. Retrieved from https://www.mbaskool.com/marketing-mix/products/17483-old-navy.html. Household spending, Canada, regions and provinces. (2019, October 10). Retrieved from https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110022201. Bankson, K. (2010, January). University Student Shopping Patterns: Internet vs. Brick And Mortar. Retrieved from file:///Users/reneeedwards/Downloads/274-Article Text-1063-1-10-20101116.pdf.
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Student Information Category: Menswear Brand: ​Old Navy
Leisure Habits/Personal Characteristics Analysis of Target Market - Psychographics Characters M30-54, HHI $75.0M+, Men’s Clothing Leisure Habits/Personal Characteristics %
Index
Leisure Activities (Summary) [Camping]
31.3
139
Leisure Activities (Summary) [Entertaining At Home]
52.7
128
Leisure Activities (Summary) [Sports- Bicycle Riding]
38.8
155
Leisure Activities (Summary) [Gourmet Cooking]
23.6
131
Leisure Activities (Summary) [Photography]
27.9
119
Diet/Health- Statements [Agree-I consider my diet to be very healthy (NEW)]
56.8
117
Shopping- Statements [AgreeShopping online makes my life easier]
46.9
148
Shopping- Statements [Agree-I think that well-known brands are better]
41.3
116
Self-Perception/Personality-St atements[Agree-I have a keen sense of adventure]
59.9
125
Personal Interest- Statements [Agree- Regular exercise is an important part of my life]
61.8
111
Vividata 2017 Q3 Readership and Product Database. Path: Menswear.
1
A Day in the life Nick is a 35-year-old male from Mississauga, Ontario. Nick enjoys entertaining at home (Vert% 52.7, Index 128) while impressing his company with his gourmet cooking (Vert% 23.6, Index 131). While Nick is entertaining he tends to make more nutritional food as he considers his diet to be very healthy (Vert% 56.8, Index 117). A typical day for Nick includes starting his mornings with exercise. He believes that regular exercise is an important part of his life (Vert% 61.8, Index 111). For exercise, Nick likes to go bicycle riding (Vert% 38.8, Index 155). Sometimes while on a bike ride, Nick will stop to take some photographs, as he has a keen interest in photography (Vert% 27.9, Index 119). On the weekend, Nick likes to go camping (Vert% 31.3, Index 139) because he believes he has a strong sense of adventure (Vert% 59.9, Index 125). Nick is considering buying his friend a sweater from Old Navy for his upcoming birthday, he plans on using Old Navy’s online store. Because when Nick does shop, he typically browses online as he believes online shopping makes life easier (Vert% 46.9, Index 148). Nick will only purchase certain brands because he thinks that well-known brands are better (Vert% 41.3, Index 148).
Media Habits Analysis of Target Market - Media Habits Magazine Usage M30-54, HHI $75.0M+, Men’s Clothing Magazines (Print) %
Magazines (Digital)
Index
%
Index
Light
17.8
111
6.8
107
Medium-Light
19.9
125
9.4
116
Medium
18.4
118
10.7
112
Medium-Heavy
16.3
106
11.2
126
Heavy
10.7
69
11.9
131
Vividata 2017 Q3 Readership Study. ClearDecisions. Path: Media Usage
2
38.3% of the target audience is medium light-medium print magazine readers (Vividata, 2017). The media consumption for medium-light users is 0.2 - 0.8 issues per month and these users are at least 25% more likely to be medium-light print magazine readers (Vividata, 2017). The media consumption for medium users is 0.8 - 1.7 issues per month and is at least 18% more likely to be medium print magazine readers (Vividata, 2017). 23.1% of the target audience are medium-heavy- heavy digital magazine readers (Vividata, 2017). The media consumption for medium-heavy users is 3.6-10 issues per month and is at least 26% more likely to be medium heavy users for digital magazine users (Vividata, 2017). The media consumption for heavy users is 10.1+ issues per month and are at least 31% more likely to be heavy digital magazine readers (Vividata, 2017). Newspaper Usage M30-54, HHI $75.0M+, Men’s Clothing Newspaper (Print) % Light
Newspaper (Digital)
Index
%
Index
34.2
102
6.0
95
0.3
100
8.4
131
Medium
15.5
109
4.6
111
Medium-Heavy
18.7
121
8.7
168
Heavy
14.4
96
12.5
230
Medium-Light
Vividata 2017 Q3 Readership Study. ClearDecisions. Path: Media Usage
34.4% of the target audience is medium to medium-heavy print newspaper readers (Vividata, 2017). The media consumption for medium to medium heavy users is 0.1- 4.1 issues per week and these users are at least 9% more likely to be medium print newspaper readers (Vividata, 2017). 21.2% of the target audience is medium-heavy to heavy digital newspaper readers (Vividata, 2017). The media consumption for medium-heavy to heavy users is 6.6 + issues per month and is at least 68% more likely to be medium heavy digital newspaper readers (Vividata, 2017).
3
Internet Usage M30-54, HHI $75.0M+, Men’s Clothing Internet % Light
Index 8.5
88
Medium-Light
25.0
118
Medium
24.4
114
Medium-Heavy
10.8
93
Heavy
14.4
99
Vividata 2017 Q3 Readership Study. ClearDecisions. Path: Media Usage
49.4% of the target audience is medium-light to medium internet users (Vividata, 2017). The media consumption for medium-light to medium users is 8.5-21 hours per week and these users are at least 14% more likely to be medium-light internet users (Vividata, 2017). Internet via Mobile Usage M30-54, HHI $75.0M+, Men’s Clothing Internet via mobile %
Index
Light
34.0
97
Medium
41.0
127
8.2
73
Heavy Vividata 2017 Q3 Readership Study. ClearDecisions. Path: Media Usage
41.0% of the target audience is medium internet via mobile users (Vividata, 2017). The media consumption for medium users is 4-21 hours per week and such users are at least 27% more likely to be medium internet via mobile users (Vividata, 2017).
Television Usage
4
M30-54, HHI $75.0M+, Men’s Clothing Television %
Index
Light
17.7
99
Medium-Light
25.0
144
Medium
18.5
111
Medium-Heavy
13.6
119
8.3
54
Heavy Vividata 2017 Q3 Readership Study. ClearDecisions. Path: Media Usage
43.5% of the target audience are medium to light-medium television users (Vividata, 2017). The media consumption for medium-light to medium users is 8.5-21 hours per week and these users are at least 11% more likely to be medium-light television users (Vividata, 2017). Radio Usage M30-54, HHI $75.0M+, Men’s Clothing Radio % Light
Index 9.4
69
Medium-Light
20.8
115
Medium
22.8
122
Medium-Heavy
18.5
138
Heavy
11.8
79
Vividata 2017 Q3 Readership Study. ClearDecisions. Path: Media Usage
62.1% of the target audience is medium-light to medium-heavy radio listeners (Vividata, 2017). The media consumption for medium-light to medium-heavy users is 3-10.5 hours per week and these users are at least 15% more likely to be medium-light to medium-heavy radio listeners (Vividata, 2017) Additional Data Magazine
5
●
50.1% of the target audience has read/ looked through a digital edition of a magazine in the past week and are at least 24% more likely to read/look through a digital edition of a magazine (Vividata, 2017).
●
69.5% of the target audience has read/ looked through a print version of a magazine in the past week and are at least 5% more likely to read/look through a print version of a magazine (Vividata, 2017).
●
31.4% of the target audience uses a personal smartphone to access the digital version of magazines and are at least 23% more likely to use a personal smartphone to access the digital version of a magazine (Vividata, 2017).
Newspaper ●
59.4% of the target audience has read/ looked through a digital edition of a newspaper in the past week and are at least 27% more likely to read or look through a digital newspaper edition in the past week. 72.5% of the target audience has read/ looked through a digital edition of a newspaper in the past month and are at least 20% more likely to read or look through a digital newspaper in the past month (Vividata, 2017).
●
39.8% of the target audience uses a personal computer to access the digital versions of newspapers and are at least 38% more likely to use a personal computer when accessing digital versions of newspapers (Vividata, 2017).
Radio ●
81.7% of the target audience has listened to the radio yesterday and are at least 12% more likely to listen to the radio yesterday (Vividata, 2017).
●
41.0% of the target audience spends less than 1 hour listening to the radio on the weekends and are at least 21% more likely to spend 1 hour listening to the radio (Vividata, 2017).
●
30.3% of the target audience spend 1 to 2 hours listening to the radio on weekdays and are at least 16% more likely to spend 1 to 2 hours listening to the radio (Vividata, 2017).
●
53.7% of the target audience are listening to classic rock albums on the radio and are at least 39% more likely to listen to classic rock albums (Vividata, 2017).
6
Television ●
34.0% of the target audience spends 1 to 2 hours watching television during weekdays and are at least 33% more likely to spend 1 to 2 hours watching television (Vividata, 2017).
●
38.0% of the target audience spends 2 to 4 hours watching television on the weekend and are at least 22% more likely to spend 2 to 4 hours watching television (Vividata, 2017).
●
71.0% of the target audience has watched/ streamed online in the past 30 days and are at least 18% more likely to watch or stream online in the past 30 days (Vividata, 2017).
●
39.3% of the target audience has used a computer in the past 7 days to stream online and are at least 13% more likely to use a computer in the past 7 days to stream online (Vividata, 2017).
●
48.4% of the target audience has been streaming movies in the past 7 days and are at least 27% more likely to stream movies in the past 7 days (Vividata, 2017).
Internet/ Social media ●
91.8% of the target audience have accessed internet/ social media from a mobile device in the past 7 days and are at least 13% more likely to access the internet or social media in the past 7 days (Vividata, 2017).
●
66.4% of the target audience have accessed internet/ social media in the past 30 days at work and are at least 74% more likely to access the internet or social media in the past 30 days at work (Vividata, 2017).
●
32.7% of the target audience spends less than 1 hour on social media and are at least 23% more likely to spend less than 1 hour on social media (Vividata, 2017).
Out of home OOH Advertising Types-Seen Past Week-Any ●
77.4% of the target audience has seen any format of roadside billboard advertising in the past week and are at least 15% more likely to see any format of roadside billboards in the past week (Vividata, 2017).
7
●
59.1% of the target audience has seen any format of gas station advertising in the past week and are at least 19% more likely to see any format of gas station advertising in the past week (Vividata, 2017).
●
36.1% of the target audience has seen any format of elevator advertising in the past week and are at least 17% more likely to see any format of elevator advertising in the past week (Vividata, 2017).
●
36.0% of the target audience has seen any format of washroom advertising in the past week and are at least 11% more likely to see any format of washroom advertising in the past week (Vividata, 2017).
OOH Advertising Types-Seen Past Week-Digital Screens ●
46.1% of the target audience has seen digital screen advertising on roadside billboards in the past week and are 53% more likely to see digital screen advertising on roadside billboard in the past week (Vividata, 2017).
●
27.4% of the target audience has seen digital screen advertising in shopping centres/malls in the past week and are at least 16% more likely to see digital screen advertising in shopping malls in the past week (Vividata, 2017).
●
22.2% of the target audience has seen digital screen advertising inside/ outside retail stores in the past week and are at least 36% more likely to see digital screen advertising inside or outside retail stores in the past week (Vividata, 2017).
OOH Advertising Types-Seen Past Week- Other Formats ●
64.1% of the target audience has seen other formats of advertising on roadside billboards in the past week and are 10% more likely to see other formats of advertising on roadside billboards in the past week (Vividata, 2017).
●
51.2% of the target audience has seen other formats of advertising at gas stations in the past week and are at least 19% more likely to see other formats of advertising at gas stations in the past week (Vividata, 2017).
8
●
43.3% of the target audience has seen other formats of advertising on inside/ outside a bus in the past week and are 12% more likely to see other formats of advertising inside or outside a bus in the past week (Vividata, 2017).
Geography Category and Brand Development Index Analysis Region
CDN POP % Category Users % Old Navy Men’s Clothing Users %
CDI BDI BOI
Atlantic
6.7
7.5
6.0 112
90 124
Quebec
23.1
22.0
12.4
95
Ontario
38.8
37.2
45.9
96 118
Prairies
18.0
20.4
15.7 113
BC
13.3
13.0
20.1
54 176 81
87 130
98 151
65
Vividata 2017 Q3 Readership and Product Database. Path: Menswear/Old Navy.
Ontario is the region with not only the largest population percentage, but it also represents 37.2% of men’s clothing users - of which 45.9% purchase men’s clothing from Old Navy. Although the Ontario market holds a competitive advantage in regards to population and converted users of Menswear, the region would not be a priority market for Old Navy due to the low brand opportunity index of 81. This highlights that Ontario users are less likely to purchase Menswear, however, when users must decide what store to purchase from, it will more likely be Old Navy. A similar situation has occurred in British Columbia, where the category development index was dramatically lower than the brand development index and thus the brand opportunity index to be extremely low.
Therefore, such markets would not be a priority if campaign
objectives were to expand sales or increase brand awareness, but rather to enforce top-of-the-mind awareness and reward loyal users. The two geographic priorities for this market are the Prairies and the Atlantic region. The reason why both of these markets are geographic priorities is that both have a high CDI, with the Prairies having a CDI of 113 and the Atlantic having a CDI of 112. This means that people buy men’s clothing, but according to the BDI, Old Navy men’s clothing is not a favourite in those regions. However, the BOI for both of those regions is very high, with the Prairies having a BOI
9
of 130 and the Atlantic of 124. This means that there is a great opportunity in both of these markets to attempt to convince people to purchase Old Navy’s brand of Men's Clothing. The goal is to create a need for consumers in the Atlantic and the Prairies region. Old Navy’s Retail Location by Region Region
Population
# of Stores
People Per Store
Atlantic
2,070,700
8
258,838
Quebec
7,186,600
13
552,815
Ontario
12,058,500
45
267,967
Prairies
5,612,600
21
267,267
BC
4,143,900
16
258,994
Atlantic Canada has the smallest number of stores out of all the other regions in Canada. There are 8 stores, which breaks down to 258,838 people per store. Although the other regions have a larger number of stores and more people per store, the Atlantic region should be prioritized because there is a better return on investment and a better opportunity. The people living in this region have better access to Old Navy stores than people living in Ontario or the Prairies do. Seasonality
Men’s Clothing Shopping Sales Pattern Month
J
F
M
A
M
J
J
A
S
O
N
D
Sales %
4
4
4
7
8
10
7
14
12
6
9
15
The table above shows the sales pattern of Men’s Clothing throughout the year, from January to December. As shown, from the months of January through March, the percentage of sales for men's clothing is at its lowest point. This is heavily due to the fact that the majority of shopping is done in both December and in the summer months.
10
December is the busiest month of the year for retail sales, largely due to the fact that it is the holiday season, and both men and women are buying large amounts of men’s clothing in light of the Christmas season. Furthermore, Boxing day starts the first day of the best sales week in the year for retail stores (Vincenzo, ​2012​). Therefore winter, specifically the month of December, would be the first seasonal priority for this market. The second and third priorities would be the summer months of August and September, with August representing 14% of annual sales throughout the year and July representing 12%. This is largely due to the fact that many individuals, in general, begin to back to school shopping. Though this may seem applicable only to Children's Clothing, many retailers offer incentives for full family purchasing (Global News, 2018).
11
Competition Analysis of Competition Old Navy’s two main competitors in the Canadian market for Menswear are Loblaws, Joe Fresh label and George represented in the market by Walmart. The two brands, Joe Fresh and George offer a similar line of Menswear Clothing to that of Old Navy. The three labels offer casual styles, as well as business-professionals attire at competitive price points. Also, the brand shares in the Candian Menswear market for Old Navy, Joe Fresh and George are close in value (Euromonitior, 2019). Demographic Comparison Current Users - Demographics %
Index
%
Index
%
Index
%
Index
%
Index
Age
Gender
HHI
Household Status
Education
30 - 54
Male
$100,000.00 +
Couple With Children Living at Home
Bachelor's Degree
61.3
123
30 - 54 51.0
103
30 - 59 54.6
101
59.3
118
114
53.2
83
$35.0M $75.0M
Male 62.5
136
$35.0M $75.0M
Male 56.6
70.5
126
61.8
102
58.2
137
Couple With Children Living at Home 55.3
130
Couple With Children Living at Home 45.9
108
21.8
118
Bachelor's Degree 20.8
113
University Certificate 24.1
97
Vividata 2017 Q3 Readership and Product Database. Path: Menswear/Old Navy.
All three competitors - Old Navy, Joe Fresh and George - attract a similar user, however, there are some key differences. Firstly, those purchasing Menswear for these three brands is male (Vividata, 2017). Though it may seem obvious, this is an important fact to highlight because it shows men are shopping for clothing personally - rather than letting female significant others
12
select a style of clothing (Petro, 2019). Any communication will, therefore, require a location that largely attracts a male audience. Another common similarity among the current users for each competitor is age. Old Navy and Joe Fresh’s current users are between the ages of 30 - 54 years old (Vividata, 2017). The George brand is only slightly different from the two competitors, with a target demographic of 30 - 59 years old (Vividata, 2017). This demonstrates that the target demographic for each competitor is in a life stage of early to middle adulthood. Each life stage is associated with distinct psychographic and behavioural traits. Many in this period of life are in a relationship, developing a family and defining personal careers (Stangor & Walinga, 2014). This is reinforced by the fact that all three competitors’ currents users have a household status stating the main users are coupled with children living at home and are educated in ways that have shaped a career (Vividata, 2017). The main difference between the current users for Old Navy, Joe Fresh and George is household income. Old Navy users are estimated at having a household income of $100,000.00 or over, while both Joe Fresh and George users have a projected household income of $35,000.00 - $75,000.00 (Vividata, 2017). It is important to note that Joe Fresh users are under indexing in this category, under-indexing in this category, while George users are at least 2% more likely to have a household income of $35,000.00 -$75,000.00. The fact that the two brands are offered at superstores may be the main reason for such a dramatic difference from Old Navy’s current users who offer products in premium retail malls. Overall, the three brands share an extremely similar target market, which further reinforces Old Navy, Joe Fresh and George as competitors. Marketing Comparison Joe Fresh Joe Fresh is an apparel brand and retail chain created by designer Joe Mimran for a Canadian food distributor, Loblaw Companies Limited. Joe Fresh is promoted as a stylish and affordable apparel brand that includes adult wear for both men and women. The line of clothing is available at 1,450 retail locations, including over 350 Loblaw locations, 1,100 Shoppers Drug Mart
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locations and 11 freestanding stores (Joe Fresh, 2019). For the year 2018, the label held 2.8% of brand shares for the Menswear market in Canada, while Old Navy, accounted for 2.3% of brand shares (Euronmoitor, 2019). Joe Fresh offers a variety of products for Menswear specifically, including activewear, both formal and casual outerwear, underwear, sleepwear and swimwear. Joe Fresh also has a mobile application that allows its users to shop the brand’s entire collection and have it delivered directly to shoppers (Joe Fresh, 2019). Joe Fresh has the marketing support of the parent company - Loblaw’s - affiliated with a network of brands. The Presidents Choice Optimum Card, for example, is an advantage to being a part of the Loblaw Corporation. The PC Optimum Card allows for an in-depth insight into consumer purchasing behaviour in select markets (Loblaw Companies Limited, 2019). The demographic target of Joe Fresh users are males, 30 to 54 years of age, with a household income of $35,000.00 to $75,000.00. The primary users of Joe Fresh are a part of a couple with children. Joe Fresh users have received a Bachelor’s Degree (Vivadata, 2017). Joe Fresh maintains various touchpoints to reach its target market, with a well-developed media mix. The company currently has an account on Snapchat, Facebook, YouTube, Twitter, Pinterest and Instagram (Joe Fresh, 2019). Joe Fresh has run successful campaigns with the use of a wide selection of media vehicles. The brand’s latest campaign, “Free Your Fresh”, incorporated the use of out-of-home, digital and print marketing (Loblaw Companies Limited, 2019). Joe Fresh launched The Joe Fresh Centre for Fashion Innovation, in partnership with Ryerson University. The company had funded the university with a million-dollar grant when it had started in 2015. The Joe Fresh Centre for Fashion Innovation was established to aid Canadian start-ups in all fashion-related fields, including design, production, technology and professional services. The innovation centre continues to assist Candian entrepreneurs in fashion (Loblaw Companies Limited, 2015).
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George George is an apparel brand created for and represented by Walmart in the Menswear Candian marketplace. The brand offers men’s casual and dress clothing, shoes, and accessories. The brand is named after designer George Davies, who originally came up with the brand, in 1990 for the British supermarket chain Asda. When Asda was acquired by Walmart in 1999, the new parent company began distributing George clothes to its other markets, eventually entering the Canadian market. Walmart Canada operates a growing retail chain of more than 400 stores nationwide. The company’s stores and supercenters carry nearly 20,000 apparel products, roughly 35.0% of which is menswear (Walmart Canada, 2019). Walmart, through its George clothing label, offers Menswear including activewear, both formal and casual outerwear, underwear, sleepwear and swimwear. In terms of market share, Walmart’s George collection has represented 1.9% of the Canadian Menswear market consistently for the past five years, while Old Navy, accounted for 2.3% of brand shares in 2019 (Euronmoitor, 2019). For all marketing activities, including advertising, the George brand relies on the support of its parent company, Walmart. Walmart runs frequent promotions, with available discounts across all seasons. Walmart employs a diversified media mix, ranging from television commercials to billboards, social media and even the company’s eCommerce platform (AdExchanger, 2019). In its fiscal year ending in January 2019, Walmart invested more than three billion dollars in advertising, the highest for the retail company in five years. This was an increase of 400 million dollars compared to what the company spent in the previous year (Statistics, 2019). Though the budget is allocated to all of Walmart’s collections, and not solely George Menswear, the company communicates a message of lifestyle apart of which includes the label’s menswear. Since 2003, Walmart Canada has supported Red Cross operations in communities across Canada. Since the partnership began, the company has donated and raised more than 40 million dollars in disaster relief funding. These funds include flood relief operations in Quebec, Manitoba and Saskatchewan. The relationship between Walmart Canada and the Canadian Red Cross is one of the largest partnerships within the worldwide Red Cross Movement and all
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its national Societies. Also, every year, Walmart Canada customers are invited to contribute to the invaluable humanitarian work the Red Cross accomplishes in Canada (Red Cross, 2019). As the top supporter of Children’s Miracle Network for more than 20 years, Walmart donates and raises funds for Canadian children’s hospitals through numerous initiatives both in-store and at the corporate-level and has donated and raised more than $100 million to this important organization. By partnering with regional and national organizations, Walmart Canada is able to make a bigger impact and deliver on our mission of supporting Canadian families in need (Walmart Canada, 2019). Geographic Comparison
Competitive Geographic Analysis Region
Old Navy BDI Joe Fresh BDI
CDN POP %
Menswear CDI
George BDI
Atlantic
6.7
112
89
129
153
Quebec
23.1
95
54
44
97
Ontario
38.8
96
118
103
97
Prairies
18.1
113
87
130
106
B.C.
13.3
98
150
133
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Vividata 2017 Q3 Readership and Product Database. Path: Menswear/Old Navy.
Old Navy Old Navy’s highest brand development index, 150 is for the province of British Columbia. Therefore, residents of British Columbia are 50% more likely to shop Menswear at Old Navy. In British Columbia, against its competitors, Old Navy has the highest brand development index in this market. The brand also has the highest brand development index in Ontario, with users being 18% more likely to shop at Old Navy’s Menswear. In both British Columbia and Ontario, the category index is under-averaging, with consumers being less likely to shop Menswear (Vividata, 2017).
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In these markets, Old Navy holds the competitive advantage, as when users do decide to purchase Menswear, users are more likely to choose Old Navy of its competitors. Because in both environments Old Navy’s BDI is greater than the CDI, the brand is less likely to find areas of opportunity in the markets. Old Navy has a large opportunity in the Quebec market with a BOI of 176 - meaning Old Navy is 76% more likely to find opportunities in this market (Vividata, 2017). However, Old Navy’s competitor, Joe Fresh also has an opportunity for growth in this market. Old Navy is also 24% more likely to reap opportunities in the Atlantic, but the brand must recognize that its competitors’ BDIs are over-indexing in the market, and have achieved top-of-the-mind awareness. There is also an opportunity for Old Navy in the Prairies of 30%, but competitors either hold a competitive advantage or also have potential opportunities in the market (Vividata, 2017). Joe Fresh In British Columbia, the brand development index for Joe Fresh is 133. This is the highest index number for Joe Fresh when compared against the other regions. This represents that Menswear users, in British Columbia, are 33% more likely to shop at Joe Fresh (Vividata, 2017). The brand is also over-indexing in the Atlantic Region, Ontario and the Prairies. In the Atlantic, Menswear users are 29% more likely to be users of Joe Fresh. In Ontario, the brand is over-indexing by 3%, whereas, Old Navy has generated an interest of 18% from Menswear purchasers (Vividata, 2017). In the Prairies, Joe Fresh has an index of 129, making the brand 29% more likely to be chosen by Menswear users. Lastly, in the Prairies, Menswear users are 30% more likely to purchase from Joe Fresh (Vividata, 2017). In the Prairies, Joe Fresh holds a competitive advantage, as the brand has a high brand development index. Especially since it is in a market where the category index is also high. This is a significant fact as it demonstrates, individuals are 13% more likely to purchase Menswear in the Prairies and when purchasing, users are 30% more likely to choose
Joe Fresh. Joe Fresh actually has a brand development index than the
category development index, which is higher in all markets, except for Quebec. This is important to note because this represents the brand’s only area of opportunity.
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George George’s brand development index is highest in the Atlantic, over-indexing at 53%. Demonstrating that users of Menswear in the Atlantic market are 53% more likely to choose the George label when shopping for Men’s Clothing (Vividata, 2017). This is also the only market where George has a BDI greater than the CDI, and is, therefore, the only market where the label holds a competitive advantage. The only other market segment where George’s BDI is over-indexing, but not greater than the market CDI, is in the Prairies. In the Prairies, Menswear users are 6% more likely to make a purchase with George. However, because the label’s brand development index is lower than the category development, the company has areas of opportunity within the market. George’s brand development index is below average in Quebec, Ontario, and British Columbia. However, with the category indexes also below average, the brand only has more chance of opportunity in British Columbia (Vividata, 2017). Share of Voice Comparison Menswear Retailers - Share of Voice (%) Brand
News.
Magazine
OOH
Radio
TV
Online
Old Navy
0.0%
0.0%
0.0%
36.1%
0.0%
100.0%
Joe Fresh
0.0%
0.0%
0.0%
23.9%
100.0%
0.0%
George
100.0%
0.0%
0.0%
40.0%
0.0%
0.0%
Total
100.0%
0.0%
0.0%
100.0%
100.0%
100.0%
Doucette, Marc. (October, 2019). “R_Competitor Spending All.” Sheridan College. Slate, Assignment 02.
The media form that Old Navy and its two competitors, Joe Fresh and George, are currently competing against one another in is radio, as all three companies have some portion of ad spend allocated to the medium. George owns the majority of radio ad space, accounting for 40% of the media and therefore, has the loudest voice when compared to its competitors (Doucette, 2019). Old Navy is currently the only brand advertising online, and therefore, has the total share of voice. This means Old Navy’s message is not directly competing against Joe fresh and George to be heard. For online advertising, Old Navy holds an advantage over its competitors. Also, Old
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Navy spends $1,083,226.00 in online advertising, meaning that it will be challenging for Joe Fresh or George to spend enough money to have the brands’ messages as any real competition (Doucette, 2019). Joe Fresh owns the total share of television ad spend and George owns the total share for newspaper ad spend in the Menswear market. Should Old Navy want the majority share of either media, the company would have to spend more than $762,140.00 on television advertising and more than $16,509.00 in newspaper advertising (Doucette, 2019). Old Navy, Joe Fresh and George do not have any ad spend in neither magazine nor newspaper and thus, have no share of voice in either medium. Therefore, should any one of the three companies buy magazine ad space or newspaper ad space, the message would have a total share and not face any direct competition (Doucette, 2019). Spend by Medium Comparison Menswear Retailers - Spend by Medium (%) Brand
Total
News.
Magazine
OOH
Radio
TV
Online
Old Navy
100.0%
0.0%
0.0%
0.0%
47.5%
0.0%
52.5%
Joe Fresh
100.0%
0.0%
0.0%
0.0%
46.0%
54.0%
0.0%
George
100.0%
1.5%
0.0%
0.0%
98.5%
0.0%
0.0%
Doucette, Marc. (October, 2019). “R_Competitor Spending All.” Sheridan College. Slate, Assignment 02.
Overall, all three competitors choose to spend the media budget on two media vehicles, instead of developing a multifacet media mix. Old Navy spent $2,061,852.00 for ad space, Joe Fresh spent $1,410,255.00 in ad real estate and George had a total media expend of $1,100,150.00 (Doucette, 2019). Old Navy spent $1,083,226.00 in online advertising - it represents 52.5% of its media budget. Joe Fresh has allotted 54.0% of the company’s media budget for television advertising, having spent $762,140.00 to acquire a total voice in television ad space (Doucette, 2019).
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George, who owns the total share of voice for newspapers only allocates 1.5% of its budget towards the media form, spending only $16,509.00 on newspaper advertising form its total media allowance of $1,100,150.00 (Doucette, 2019). All the brands have allocated part of the media budget dollars to radio advertising. Therefore, each brand is competing for its message to be heard. George is allotting most of its budget to radio and is spending more than the other brands within this media form - spending $1,083,641.00 on radio advertising alone. Old Navy is spending $978,626.00 on radio representing 47.5% of its budget, while Joe Fresh is spending $648,115.00 and it represents 46.0% of its budget (Doucette, 2019).
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https://www.walmartcanada.ca/our-story/our-business. Walmart Canada. Preparedness & Relief. (2019). Retrieved from https://www.walmartcanada.ca/community-giving/disaster-preparedness-and-relief. Walmart. (March 28, 2019). Wal-Mart Stores, Inc advertising cost worldwide in the fiscal years 2014 to 2019 (in billion U.S. dollars) [Graph]. In Statista. Retrieved from https://www-statista-com.library.sheridanc.on.ca/statistics/622029/walmart-ad-spend/
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