ZARA
HISTORY Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 by Amancio Ortega and Rosalia Mera. It is the flagship chain store of the Inditex Group, the worlds largest apparel retailer. The fashion group also owns brands such as Massimo Dutti, Pull and Bear, Uterque, Stradivarius and Bershka. The first store featured low-priced lookalike products of popular, higher-end clothing fashions. The store proved to be a success, and Ortega began opening more Zara stores throughout Spain. During the 1980s, Ortega started changing the design, manufacturing, and distribution process to reduce lead times and react to new trends in a quicker way, in what he called “instant fashions�. The company based its improvements in the use of information technologies and using groups of designers instead of individuals (Annual Report,2012).
REVENUE Net sales
10,541 million euros ($14,428 Million USD)
Online sales of over 600 million euros (Inditex Group) Contribution of ZARA to the total sales of the Inditex Group
66.11%
buSINESS mODEL Zara fully understood the importance of vertical integration and the means to design and launch new fashion items quickly.
Characteristics of its Business Model Produces limited quantites of items. This strategy works two ways, according to Hansen. First, it encourages customers to come back to the store often. It also means that if the shopper wants to buy something, he or she feels that they have to buy it in order to guarantee it won’t sell out. Zara also uses over 80% of production locally in Spain and doesn’t outsource production to low cost countries (like China) which help reducing the lead time and also control delivery timing. Dispatches new styles twice a week in their stores which differentiate it from other fashion stores.
The tight integration of design, planning, merchandising and production enables the company to be flexible and therefore able to respond quickly to any market need.
Mission statement Through Zara’s business model, we aim to contribute to the sustainable development of society and that of the environment with which we interacts. To democratize fashion by offering the latest fashion in medium quality at affordable prices. What differentiates Zara’s business model from that of its competitors is the turnaround time, and the store as a source of information. Zara’s vertical integration of design, just-in-time manufacturing, delivery and sales; flexible structure; low inventory rule; quick response policy and advanced information technology enable a quick response to customer’s changing demands.
Strengths Succesfull business model with a productive and effective supply chain. Affordable latest high fashion trends Well founded company, part of the Inditex Group Vertical systematization of product process Brand recognition worldwide Prime location Positive brand image Established customer base Actively seeking to grow the company Commited to sustainability
Weakness Low quality clothing Don’t spend in advertising Lack of online stores in many countries Repeated sales out-of stock Centralized distribuition system
Opportunity Growth of the fashion market Social media engagement and interaction Online marketing strategy Expanding into emerging markets (BRIC)
Threats Emerging new competitors Cheaper alternatives Changing consumer behavior, new preferences
Price / accesability matrix Competitors
AVERAGE PRICE
ACCESABILITY
ZARA
$341.84
947
HM
$149.37
1504
ASOS
$980.55
118
URBAN OUTFITTERS
$651.49
173
$368
380
NEW LOOK
$352.03
612
MANGO
$334.97
1305
EXPRESS
$439.35
340
FOREVER21
$93.05
243
GAP
$191.37
736
$721
350
NEXT
TOPSHOP
The calculations and Excel sheets can be found in the appendix at the end.
Current Distribuition Volume of sales 10,541 million (euro) Brick and Mortar:
86 countries to its network of 1.925 stores
E-Commerce and M-Commerce :
22 countries
Franchise Stores :
194
Zara stores are company-owned, except where local legislation forbids foreigner-owned businesses; In those cases, Zara franchises the stores. This strategy is chosen for high-risk countries which are culturally distant or have small markets with low sales forecast like Saudi Arabia, Kuwait, Andorra or Malaysia. Zara’s franchisees follow the same business model as their own subsidiaries regarding the product, store location, interior design, logistic and human resources. However, they are responsible for investing in fixed assets and recruiting the staff. Zara gives franchisees the chance of returning merchandise and exclusivity in their geographic area, although Zara has the right to open its own stores in the same location (Annual Report 2009).
Current Communication and promotional activities Annual Spend Figures:
0.5%
of their sales goes to advertising.
Traditional ZARA advertises through its:
-Store locations
-Window fronts
-Catalogues
-Zara bags
“The stores constitute the chain’s main advertising medium. Their chief characteristics include: preferred locations, meticulously designed window displays, unique internal and external architectural design, tailored coordination of the product, excellent customer service” (Annual Report 2009)
In-Store Event Opening Nights Zara’s in-store events are exclusively for the grand opening of major stores. Normally they invite to beautiful organized cocktail parties, where they provide music, food and beverages, as well as their assortment of clothing. Every single opening of the stores are called “Dear...“ and followed by the city or place they are opening in, the last opening was in Seattle, and the event was called “Dear Seattle“. They held and invitationonly cocktail party for about 1,000 people.
DEAR SEATTLE
Digital ZARA in Social Media Zara has taken advantage of the free advertising that is social media. -Facebook -Twitter -Youtube channel -Pinterest account. In addition to Zara’s own social media accounts, there are numerous blogs dedicated to Zara style and looks. All of their social media outlets have photos of their merchandise, lookbooks, campaigns, and their “People” marketing campaign to entice customers to purchase and then share their look through Zara Social Media and Blogs.
Their Facebook page has over 18 Million likes and at the moment has over 92K people talking about them. The frecuency of the posts is about once every two days.
Their Twitter account has over 373,843 thousand followers, and they post once every two days.
Their Pinterest page has over 57,699 thousand followers.
Zara’s Youtube Channel has close to 2 Million video views, they post videos once every six months.
ZARA APPS Zara also advertise its lookbook on all its apps. Enjoy the latest fashions for women, men and children. Find all the latest from ZARA online: Lookbook, People, Campaign and more weekly contents. Online shopping. Improvements to maps, store section, scanning and notifications. 1. Ipads and Iphones 2. Blackberry 3. Android 4. Any Window smartphone or tablet
New Strategic Initiative An integrated strategy offering interactivity via a dedicated smartphone or tablet app, combining image recognition, a virtual closet and the integration of social media Augmented reality will complement the experience, allowing consumers the opportunity to scan, post, share and shop items of Zara; with the integration of social media consumers can share their photos to the sites making the availability for other people to shop the looks. Additionally, consumers will be able to access all their product history in Zara and create a virtual closet, creating boards with the items, save other Zara products and share content, effectively creating a digital scrapbook.
Key Objectives The creation of Zara by PEOPLE , an efficient app, in which the integration of social media, image recognition technology and the interaction with a virtual closet, will result in one of the most interactive ways to shop. Achieve a seamless consumer facing multi-channel experiences Build awareness by introducing this integrated app as the most interactive way to shop, on every social media platform, launching videos on the Zara YouTube Channel, placing ads in-store and in the Zara website. Improving the m-commerce distribuition channel Zara already has. Create a direct relation with LTU technologies and Apple, as the suppliers for technologies to make this app a possibility.
PORTER 5 Forces Analysis BUYER POWER
BARGAIN POWER OF SUPPLIERS HIGH
COMPETITIVE RIVALRY SUPPLIER POWER
SUBSTITUTES
THREAT NEW ENTRANTS
o Number of suppliers: Low, just Apple, Google, Windows and Blackberry offer the service to develop mobile commerce. o Uniqueness of services : Very unique, only suppliers of apps that drives the forces of M-Commerce, without it mobile commerce wouldn’t exist because consumers cant get the seamless experience of an app to shop comparing it to the mobile websites. Also the fact that mobile commerce is all about the convenience of the service that other competitors may not offer. o Your ability to substitute: The ability to substitute is HIGH, in between the four suppliers you have so little you can choose from. o Cost of changing: This is high as well, changing to another supplier means the cost of the new equipment that can range between $300 to $1400 dollars. Suppliers have a strong power for the only fact that they provide the unique service that drives mobile commerce to exists in the first place. Without them mobile commerce would never have penetrated as it have because the use of mobile websites is not as seamless as apps.
BARGAIN POWER OF BUYERS HIGH
THREAT OF NEW ENTRANTS MEDIUIM
o Number of customers: High, there is a massive amount of consumers harnessing mobile commerce everyday but not as big amount as e-commerce or brick and mortar, but still is a category that has had an incredible growth in the past years. o Price sensitivity: Low, it doesn’t mean that mobile commerce is more expensive than the other channels of shopping, it costs the same to shop through your mobile. o Ability to substitute: High, there is other ways of shopping, brick and mortar, e-commerce, catalogues and TV. E-commerce and Brick and Mortar are still larger than mobile commerce. o Cost of changing: Low, it doesn’t cost to change to other channels of shopping, its just the convenience the mobile commerce offers.
o Time and cost of entry: Low the cost to entry the market is relatively low, creating the app is very affordable. Launching your company in mobile commerce is low, the Apple store for example charges 99 dollars to provide the outlet for consumer to acquire the app. o Economy: High, the entry cost can be low but mantaing the mobile channel is cost efficient. Planning and creating a seamless distribution channel for the app is time consuming as well as cost efficient. For this to happen efficiently companies need to hire personal for running the mobile commerce, be well funded to create an efficient logistic and distribution in the long run. o Barriers to entry: High, to entry the field of mobile commerce it is required to have a varied and big assortment to provide consumers with. Having already brand awareness can be helpful too.
Looking at the bargain power of consumers, it is true that it is high but the statistics for the future give us the advantage of entering this promising marketing. It is predicted that US would reach $38.4 billion this year on m-commerce sales only supporting the idea that the amount of buyers is growing through time. THREAT OF SUBSTITUTION MEDIUM o Substitute performance: Medium, there are other methods of substitution such as e-commerce, brick-and-mortar, catalogues and TV, but they don’t have the convenience of having the equipment in their hands at all times. Looking at the statistics provided by it states that people spend an average of 97 minutes a day in their phones, being the first media consumption habit. o Cost of change: It has a Low cost of change since it is easy and viable to prefer the other options for shopping. The threat for substitution is relatively high because there are other ways of shopping that have existed for a long time, but they dont offer the convenience of the portability of having the opportunity to use mobile commerce at everytime and everywhere.
COMPETITIVE RIVALRY HIGH o Too many competitors: HIGH, there are many apps to perform mobile commerce, offering similar products and in different ways. Some are more interactive; other very straightforward like their websites. o Common products: High, there are thousand of mobile apps to provide similar services or to sell similar products, in our case apparel. There is an intense rivalry inside the mobile commerce world, millions of apps compete for providing similar services or sell similar products , also you can price compare items through certain apps, and that will keep the rivalry between competitors for prices and uniqueness. In our case we see an advantage even though the competition shows HIGH, we are providing a new service, harnesing new technology and the integration of social media, something that the competitors havent done yet, that gives us opportunity to enter the market.
LTU Technologies
Ractionale / Justification
+ Image matching technology makes it possible to link offline to digital content simply by taking a picture with a mobile device. The action is similar to scanning a code, however, image recognition analyzes and searches based on the visual content captured with the mobile device – hence no code needed.
Best Practice
Image description (Indexation): The first step toward making an image searchable is to create a descriptor of the image content. LTU engine computes a visual signature for every image that describe its visual content in terms of color, shape, texture and many higher order visual features. These descriptors are also called image DNAs.
The technology behind Zara’s new app is called Augmented Reality, basically it recognizes an image by the recognition algorithms embedded in an item of clothing. We found that LTU technologies could provide us the service; their engine features three instantaneous steps: image description, image search and image matching, all this makes possible the image recognition of each item. Additionally they provide social media monitoring, this means they identify all the Zara products posted by users. the information on the right will explain with detail the proces of LTU technologies. With the creation of this app we are addressing several best practices, we are harnesing technology that is the image recognition, the integration and sharing in social media, and a virtual closet that offers consumer an extra service.
LTU engine is the foundation for visual search: image matching, similarity search, and color search. Visual search is using one image to find other images. Visual search based upon the content of an image, rather than based on textual information. Two key technologies of visual search are image description and image search:
Image search: Image search is the comparison of one image signature with another, or with millions of other signatures. LTU’s proprietary architecture includes a special comparison technology by which an image signature can be compared at extremely high speed with other image signatures. The core data for LTU engine is the signature, also called the image DNA, not the image itself. Image signatures are presented in the “Create Application” section of the “Administrative Interface” guide below (“Related, LTU“) .
Apps already using image recognition to shop Many shopping apps have already integrated the image recognition feature to create an interactive discovery process when shopping, but our app is slighty different, it uses the technology backwards, consumers that already have shoped in the Zara stores uses the image recognition to facilitate and inspire new users to shop the look put to together by already customers of Zara by sharing it in different social media sites. As I stated before many shopping apps already uses image recognition, for example: Shopgate provides a mobile commerce platform that enables merchants to easily sell their products via the Shopgate marketplace and create branded mobile commerce applications and mobile sites. The platform includes advanced features including shopping cart and payment system, QR code scanner, image recognition, mobile couponing and much more (LTU Mobile App). Kaniti brings thousands of trendy products available in the shops around you right to your iPhone. Discover, spot and share thousands of trendy products from your favorite brands and shops. LTU technologies provides the unique feature to locate the product you are looking for by taking a picture of it (LTU Mobile App). Flow Powered by Amazon is an augmented reality app that lets you discover information about items around you. With Flow you can identify tens of millions of products, including books, DVDs, and packaged household items like a box of cereal or a box of tissues. You can also quickly scan and dial phone numbers or launch websites effortlessly (“Flow by Amazon�). But what these apps dont offer is a sharing features in the social media sites, that interactivity that creates our shoppers to buy from the inspiration of other instantaneously. Inmobi, the largest independant mobile advertising, predicts a 15% increase in mobile commerce in 2014, with 83% of respondents planning to conduct mobile commerce in the next 12 months (InMobi Report 2013). This only supports the fact that shopping habits are changing and will continue to grow for the mobile commerce in the upcoming years. This is an opportunity for our initiative since we are creating a new shopping app for mobile only and we are adding the interactivity with brand new technology and with social media.
Apps already sharing in social media to shop Many shopping apps have already the feature of sharing their looks online, each example posted above approach the feature differently, for some sharing to social media is about marketing and promotion campaigns, others use it to create a new way of shop and other just for given the costumer the ability to post their tastes on social media. Zara by People will feature all of it in one single strategy, it will allow customer to show their style with others.
SHARE
forever21 for a chance to be Insta-famous, F21 has created a platform where costumers can share your most recent F21 merch all styled up by tagging your Instagram photos with #F21xMe. We’ll be featuring our faves on the The Now Blog, on the website, and on our Instagram feed! Go get snappin!
White House Black Market has asked shoppers to share photos of themselves on its web site, on Instagram or on Twitter wearing the retailer’s clothes as part of its fall #WearWhatWorks marketing campaign. The retailer says it hopes the page inspires other shoppers’ fashion choices. “It is one thing for us to show shoppers how we would style an item but it is another thing for our customers to show how they’re wearing our clothes,” says Wells. topshop app allows consumer to share any individual item they like on any social media site. The goal of the marketing campaing of White House Black Market is the idea we want to achieve with our app, the representative of the company couldnt say it in a better way, “It is one thing for us to show shoppers how we would style an item but it is another thing for our customers to show how they’re wearing our clothes,” says Wells (WhiteHouseBlackMarket). The fact that customers themselves are posting and styling their own looks makes other customers identify with an everyday person ather than a model or a maniqui that carries the looks, by consumers wearing the clothes it tells a story and others can relate with it. This is what drives us to create this app to see how consumers respond to it.
Market Trend Pinterest, Facebook and Instagram
NUMBER OF USERS Facebook 7 billion users Pinterest has 104 million users Instagram 150 million active users AVERAGE SPEND WHEN REDIRECTED TO A SITE Facebook users spend on average $85 when redirected to a site. Pinterest users spend on average $180 when redirected to a site. INFLUENCES Facebook influences 10% of transactions in a site Pinterest influences 7% of transactions in a site IMPORTANT FACT 32% of online buyers in North America have made a purchase as a result of seeing an image on a social image-sharing site, such as Pinterest (Bloomberg).
After reviewing the statistics and facts presented, it can be said that social media do influence shoppers to make purchases, thats why we found a great opportunity integrating these sites to our app. Consumers have the choice to share their image in three different sites, Pinterest, Facebook and Instagram, because we found that each site succeeds in different aspects, Facebook has a greater ‘stickiness’ and ‘ higher conversion rates’, Pinterest generates higher order values and Instagram is the most visited site in a day, 70% of Instagram users check at least once a day. By providing the three platforms we have a bigger presence and a bigger influence on more users.
Market Trend and Consumer Behaviors
Mobile Commerce Usage In the past few years we have felt and saw the changing trends in mobile media consumption habits. The 2014 report of InMobi, reiterate that mobile devices have become integral to everyday life, but moreover, that trust and reliance on mobile devices has increased and are expected to have a significant impact on mobile commerce in the upcoming years. To support this idea its better to look at the statistics and facts that follows:
Media Consumptions Habits
Looking at the chart we can strongly say that users are spending more time on mobile, mainly for their online access, shunning desktops, and engaging in multi-screening behavior if they do watch TV. This again proves and support an opportunity for our mobile initiative.
Mobile Media Activities
The number one activity for mobile devices is the use of social media, since social media is a vital step in our initiative this is a strong statistic to reassure us that people still is much involve in social media sites.
Impact of Mobile Ads Through the Purchase Funnel M-commerce and Shopping
Mobile has clearly emerged as an influential channel that influences consumer’s purchasing decision process from beginning to end. Of those polled, 48% states that mobile ads impacted their purchasing decision, and 52% were influenced by mobile ads to buy something via their mobile.
Changes in Consumer Behavior Today we are experiencing a hyper-Informed consumer that wants to embrace a visual culture and relies in reviews of others. Additionally they have become more demanding and sophisticated at the time they shop, the only way they can choose one business rather than another is for that business to differentiate with service. After looking at the facts and statistics for social media sites and the growth in the mobile market trend, it can be stated that consumer demands a more visual culture as I stated before, images validate and capture interest, hence the rise of sites like Pintrest, Instagram and others. According to the Search Engine Journal, images ranked higher than product-specific details, descriptions, ratings or reviews in driving purchase decisions.
Mobile Commerce is rising, an increase of 15% is expected in this year (InMobi Report) . With smartphone penetration on the rise, more consumers than ever before are using their mobile devices to research product information and to shop directly from their phones. There is a good window for Zara to introduce this new initiative, this report supports and shows that the mobile platform can have a real and measurable impact on businesses: The use of mobile, targeted mobile advertising, and responsive websites can drive consumer traffic and dramatically increase sales. With the new strategic initiative of Zara app, we will be penetrating certain habits and preferences that todays consumer have, we will provide and differentiate by giving that additional service of an integrated mobile app, tapping the demand for mobile commerce growth, embracing a visual culture by providing the integration of social media sites with shoppers images of their look, and the fact that the consumers are styling and wearing the look will give others a visual review of how the product looks and the satisfaction it has provided that consumer. Mobile devices such as smartphones and tablets – with their content, commerce, entertainment and communications sophistication – have enabled consumers to run their work, home and play lives with the utmost freedom, untethered and uncommitted to nothing but their own satisfaction and instant gratification (Mobile led-Shift). The only choice for marketers in the upcoming years is penetrate mobile commerce, constant statistics show the future growth of mobile commerce, and the changing consumer will expect seamless experiences in the mobile platform.
Learn HOW TO use it... NEW features:
The app URL will be embedded in the image to redirect instantenously to the ZARA app to finish your purchase
Upgrade or Download the APP
How it will look on social media?
Once you click on the look you will be immediately redirected to Zara App, with the items used to complete that look, and the two buttons to select the size and added to the shopping bag.
Click to get the look
Click to get the look
P l a n F o r E x ec u t io n Our plan for execution consist on three phases, the development, promotion and the analysis of the sales once the app has been launched. The first phase will take about nine months to develop in total, basically consist in the research of the technology and the logistics of the integration with third party systems in this case social media. Afterwards it is necessary to create a partnership or agreement with the companies involved, in this case, LTU technology that will provide the image recognition technology and Apple since will feature our App in their online store. Later will develop all the design aspect of the software, which takes 18 weeks from start to finish (ReadWrite). Parallel of designing the software, the integration of the image recognition and the third party will be added, in this case social media to share the photos. The final months is about given the final touches to the app by testing it for a couple of months, and then choosing the assortment that will exist in the launching of the App. The second phase is the promotion aspect, this will be developed when the testing of the app happens, it involves the designing of the ads for the Zara website announcing this new feature and the ads for the social media sites, as wells as the creation of the video for the YouTube Channel and the in-store event for the launching day. Zara features videos in their YouTube Channel when launching a new season lookbook, it will be a great idea to launch a video for their new approach for mobile commerce. Finally the lauching of the ads will happen a couple of months prior the launching of the actual app, and will continue for a month or two after the launching. The entire promotion aspect lasts about 6 months (BrandProfitability) Lastly the analysis of sales is the last thing in the schedule since it is developed after the app is launched, it will check the performance of the app, the sales according the assortment and the growth of sales in the company if there is any. For a visual format of the plan we can refer to the figure 1.1.
M a r k e t r es e a r c h a n d r & D App Creation Creating a fully functional and polished app takes a team about 18 weeks from start to finish. That include both front-end design and user interface as well as back-end integration like push notifications, user management and authentication, caching and sharing through social channels. (ReadWrite) Integration with Third Party Systems (Social Media) Complex apps will talk to a company’s database, pull information and spit it out for app users. Sometimes an iPhone app may be integrated with an existing website for fetching information. Or even connecting to a Customer Relations Management software system to store data from the app user. And these days may iPhone apps connect users with social media to share, comment or review the product or service while using the app. Or the app may need integration with a payment gateway so that users can order products/ services via the app. Most of the above integrations need APIs to be developed and involve extra development efforts to achieve the goal of the application being developed. Such integrations with external, third party systems take a good amount of time and impact the timelines of the project. Cost and Design Uploading an app only cost $99 dollars a year in the App Store, and if you are a designer that could be the only investments for the App, but if designing and the logistics of creating an app is hard for the creator, there are designers as low as 1,000 dollars that can create it, but it can reach to $300,000 depending on the complexity of the app. (Bluecloud Solutions). After researching about the market we found out that we should plan ahead and set aside a large fund to invest in this app, we are a complex application that will integrate third party systems and integrate new technology, this will take time and money to create an efficient and usefull app.
Long term b e n e f i ts INDUSTRY By being the pioneers of launching an app with image recognition and the integration of social media in one single platform, we will be changing the way people shop, we will give an additional service to the already growing mobile commerce. CONSUMERS With the new strategic initiative of Zara app, we will be penetrating certain habits and preferences that todays consumer have, we will provide and differentiate by giving that additional service of an integrated mobile app, tapping the demand for mobile commerce growth, embracing a visual culture by providing the integration of social media sites with shoppers images of their look, and the fact that the consumers are styling and wearing the look will give others a visual review of how the product looks and the satisfaction of the current customer OVERALL Since Zara is absent in many aspects of the advertsing and promotional world, this will make Zara able to test new waters, will be more involved in social media sites, growing their target market as a result of increasing sales, traffic in-store and brand awareness.
MARKET Analysis
SIZE OF THE FA S H I O N MARKET IN THE USA
$41.68
Mobile commerce will generate billion of the total $262.3 billion of ecommerce sales for the year. This would be an increase of 68.2% from 2012 and account for 16% of total ecommerce sales (eMarketer).
Future Growth Projections By 2017 Mcommerce sales are expected to easily exceed
$100 billion and reach over $113 billion which would be a CAGR of 28%.
Political +The United States of America is a federal republic with autonomous state and local governments. +The United States has a stable democratic political system and a strong legal system. +One of the least corrupt countries in the world. +Freedom of Speech.
Economic
Social
+ The U.S. economy is the largest and most advanced in the world, with GDP of more than USD 15 trillion.
+ The income distribution in United States has a big gap, it still is a highly stratified society, being the top 1% an average of $1,318,200 and then the bottom 40% an average of $17,300.
+ Interest rates are at historic lows due to accommodative monetary policy, which is expected to continue through 2014. + Modest growth is expected to continue nearterm driven by improved business and consumer confidence, lower unemployment rates, improved global growth and the easing of recent tax hikes and government spending cuts. + Relatively low unemployment rate of 6.6 +Different sales tax in each state; this is applied for online purchases too (range from 4% - 8%). +Used expansionary fiscal policy to stimulate the economy, leading to a substantial increase in the budget deficit. The total government spending in 2013 was 6.1 trillion dollars (“Government Spending in the USA�).
+Population growth of 0.9%, this states that the population growth rate of United States is of slow pace. + The age distribution in the USA has the most concentrated category by 40% those who have 25-54 years old, the rest is divided relatively equally. + Social mobility is fairly stable over time in each of the nine census divisions of the U.S., even though they have very different levels of mobility.
Technological
Environmental
Legal
+The United States is one of the most technologically advanced country in the world.
+There is a growing environmental agenda and the key stakeholders are now becoming more aware of the need for businesses to be more proactive in this field.
+ Taxation laws: State constitutions uniformly grant the state government the right to levy and collect taxes. Limitations under state constitutions vary widely.
+R&D investment totaling $68.1 billion +Broadband Internet Access. +Pioneer of new discoveries and new inventions, such as the computer, laptop, smartphones, tablets. Starting working with Augmented Reality and Image recognition in the US air force. +The smartphone market in the US is maturing, with the total number of users climbing from 140 million in 2013 to 207.4 million in 2014. At that point, smartphones will have a 63.5% penetration rate among the overall population. +US tablet penetration reaches 35%. +Space and Research technology NASA.
+ Primary energy sources take many forms, including nuclear energy, fossil energy and renewable sources. These primary sources are converted to electricity, a secondary energy source, which flows through power lines and other transmission infrastructure to your home and business.
+ Advertising Laws: Federal and State governments have passed additional advertising laws that protect consumer privacy and ensure fair and truthful advertising practices online. + E-commerce regulations: Requires that all commercial web sites make the following information directly and permanently available to consumers via the website: the company’s name, postal address and email address, the company’s registration number, any Trade or Professional Association memberships and the company’s VAT number. +Regulations for any commercial communication – that is any email or even SMS text message – used in providing an “Information Society Service” must display the information above. + Price Regulations also require that all prices must be clear and unambiguous, and web sites must state whether the prices are inclusive of taxes and delivery costs. + Distance Selling Regulations must show the following information, the identity of the supplier, the main characteristics of the goods or services, their price, arrangements for payment and delivery; and the existence of the right of cancellation (“Online Business Law”).
PESTEL coMMENTS Overall United States has one of the most stable political systems with continuous growth, even though the budget deficit increased in the last year its for the own sake of stimulating the economy. Like any other countries the United States has their set of rules for any e-retailing business and transaction, as well as their advertising, the regulations are fair for the business and for the consumer. The taxation can be complex since there are different taxes for each state but this means that the burden to collect the sales tax would be on the Internet seller and then the seller would have to pay the sales tax to the state where the purchaser resides. The country is still highly stratisfied but the majority of concentration resides on the range of 25 - 50, luckily inside this range lays our target market. In the technological aspect we found great opportunities since it carries a broad brand Internet access, primordial for our initiative since we require Internet for the functioning of the app. They are the pioneers of the augmented reality technology, and they are continuing to improve that technology , they have a large R&D fund that show us the importance of development in many fields around the country. Lastly in the legal side, the laws and regulations enforced by the USA for online retailing, are fairly reasonable, bottom line they are for the security and transparency process for both the business and the consumer. Overall, the risk of introducing a new distribuition channel in USA is relatively low, this means it looks promising to launch a new way of business in this country, it is a country with a great window for investment and growth, it seems that in every aspect of the analysis they are very stable, which is a major reasurance to launch the service in the USA.
K E Y P L AY E R S A N D COMPETITION
KEY PLAYERS APPS W/ Augmented Reality This are they key players that already are using similar technology, Augmented reality or AR technology can actually overlay the virtual world on real-world environment with the help of a smartphone or tablet. Considering the potential, there are few fashion retailers implanting AC technology. Shopgate provides a mobile commerce platform that enables merchants to easily sell their products via the Shopgate marketplace and create branded mobile commerce applications and mobile sites. The platform includes advanced features including shopping cart and payment system, QR code scanner, image recognition, mobile couponing and much more (LTU Mobile App).
KEY PLAYERS APPs integrating social media Apart of AR technology, our app will have sharing functionality, which allows you to share your favorite news pieces and reports with friends through social media. Forever21, WB, Topshop, and Nordstrom are apps that are also implementing our technology to share across social media. forever21 for a chance to be Insta-famous, F21 has created a platform where costumers can share your most recent F21 merch all styled up by tagging your Instagram photos with #F21xMe. We’ll be featuring our faves on the The Now Blog, on the website, and on our Instagram feed! Go get snappin!
Kaniti brings thousands of trendy products available in the shops around you right to your iPhone. Discover, spot and share thousands of trendy products from your favorite brands and shops. LTU technologies provides the unique feature to locate the product you are looking for by taking a picture of it (LTU Mobile App).
White House Black Market has asked shoppers to share photos of themselves on its web site, on Instagram or on Twitter wearing the retailer’s clothes as part of its fall #WearWhatWorks marketing campaign. The retailer says it hopes the page inspires other shoppers’ fashion choices. “It is one thing for us to show shoppers how we would style an item but it is another thing for our customers to show how they’re wearing our clothes,” says Wells.
.American Apparel is adopting Augmented Reality to bring the online experience offline. By using its augmented reality app, consumers are able to scan product signs, which brings up a number of options that should be familiar to online shoppers.
topshop app allows consumer to share any individual item they like on any social media site.
Thirdlove Fit is more important than ever with online clothing purchases. A trusted fit can drive more return sales and loyal clients. The app that features image recognition, will allow women to size themselves for a bra with just two selfies in a tank top.
NORDSTROM Find all your designer duds right here. Browse personalized product recommendations, search for your favorite brands, read customer reviews and make purchases on the go. You can also find a store near you and check to see if the item you want is available there, or scan bar codes in-store to check product information and availability elsewhere. Another feature you’ll want to use: create a wish list for yourself and send it to friends.
KEY Suppliers LTU TECHNOLOGY LTU engine is a robust and scalable image recognition platform – offering a comprehensive suite of visual search functionalities. Additionally it offers social media monitoring (LTU). HOLITON Is an award winning digital creative studio specialising in emerging technologies. Crafting premium 3D digital experiences for a growing network of pioneering digital luxury organisations including Richemont, LVMH, Swatch Group and Gucci Group across the emerging digital fashion and accessory sectors. Our creative augmented reality solutions bring audiences closer to brands, connecting digital to retail by delivering memorable retail experiences online, in-store and through mobile (HOLITON). AURASMA Since launching in 2011, Aurasma has quickly risen to become the world’s leading augmented reality platform with over 20,000 partners operating in over 100 countries.
direct and indirect competition direct As of right now, there are no apps that combine both features of the image recognition and the integration with social media, and the avaiability to shop from those photos posted. But it is most definitely that we can influence our competition on doing something similar in the upcoming years or maybe months. All our competitors have the funds and capabilities to create this initiative and apply it to their brand. One competitor that launched something similar but does not involve image recognition is Forever21, as previously mention in the key players they already are integrating social media but they have many steps in the process that we are skiping. They ask their customer to upload their favorite Forever21 outfit to their blog, then Forever21 looks for the pieces in the photo to embedded it and create a link to the items. This means this initiative is not instantenous and is much time consuming. If we look the idea as a whole they later on can improve the initiative by adding the augmented reality to save all those steps. To acquire Augmented Reality service is very affordable, this means our competitors such as TopShop, Express, HM, Mango and so on, can definitely apply the technology and our initiative to their apps.
INDIRECT Amazon Flow Amazon has long been developing this tech, released in 2011 through an app called Flow. The feature lets users snap a photo of a product instead of scanning the barcode or typing the name of the item into a search bar. It will then pull up the product from the photo, so customers can purchase it instantly. SEPHORA the leading beauty specialty retailer, and Pantone LLC, the global color authority, unveil SEPHORA + PANTONE COLOR IQ and their virtual mirror, the most advanced foundation-matching tool available in North American beauty retail., IKEA An icon will appear on the device display, which gives users access to the AR mode. The app then instructs the user to close the printed version of the catalog and place it in the spot where the customer intends to put the new furniture. The approximate dimensions of the virtual furniture are based on the size of this physical, real-world IKEA catalog. There are more companies implementing AR technology both in app and instore. This gives the customer a different and unique experience, and making their shopping easier. Shopping for furniture can be a really tricky and with the new app, you are now able to make this experience effortless.
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