Mackenzie Dakin | Lauren Springett | Erin Wilbur FASM 410 Winter Quarter Retail Management Pop-Up Shop Alessandro Cannata
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Executive Summary Company Structure Future Growth SWOT Analysis Perceptual Map Current Distribution Advertising / Promotions PESTEL Analysis Size of Market Competitors Target Consumer Store Design Product Plan Current Communication Financial Plan
EXECUTIVE SUMMARY Adidas by Stella McCartney is a unique partnership between active wear and fashion. Since 2005, Stella McCartney has partnered with the active wear mega-brand to design collections of high-performance active wear for women. The joint venture has grown into a great success, but the brand’s limited global infiltration and low brand awareness is restricting their growth potential. By opening an Adidas by Stella McCartney pop up shop in Rio de Janeiro during the one and a half months of the Summer 2016 Olympic Games, the brand will gain global awareness and have the opportunity to test a new potential market.
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COMPANY OWNERSHIP & REVENUE
Herbert Hainer, CEO of Adidas Group
Stella McCartney, Creative Director of Adidas by Stella McCartney
Adidas is a publicly traded company on the Deutsche Bรถrse stock exchange. The stock is part of the DAX-30 index, which includes only the largest German companies listed.
MISSION STATEMENT We are committed to being a responsible, honest, and modern company built on a passion for an active lifestyle.
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ADIDAS COMPANY HISTORY Founded in 1949 by Adolf Dassler, Adidas is a German multinational company that manufactures and designs sportswear, athletic shoes, and accessories. Today, Adidas is the largest sportswear manufacturer in Europe and the second biggest in the world.
STELLA MCCARTNEY COMPANY HISTORY Born and raised in London, Stella McCartney graduated from Central St. Martins in 1995. Launched in 2001, McCartney launched her own fashion house under her name in a partnership with Kering as a 50/50 joint venture. Stella McCartney’s commitment to sustainability is evident through-out all her collections and is part of the brand’s ethos to being a responsible, honest, and modern company. A lifelong vegetarian, Stella McCartney does not use any leather or fur in her designs. Her collections include women’s ready-to-wear, accessories, lingerie, eyewear, fragrance and kids.
COLLABORATION HISTORY
Born and raised in London, Stella McCartney graduated from Central St. Martins in 1995. In 2001 McCartney launched her own fashion house under her name in a partnership with Kering as a 50/50 joint venture. McCartney’s commitment to sustainability is evident throughout all of her collections; it is a major part of the brand’s ethos to being a responsible, honest, and modern company. A lifelong vegetarian, Stella McCartney does not use any leather or fur in her designs. Her collections include women’s ready-to-wear, accessories, lingerie, eyewear, fragrance and kidswear.
S N PL A W TH RO G RE TU FU
Stella McCartney will return to her role as creative director of the British uniforms for the Summer 2016 Olympic Games in Rio de Janeiro. The U.S. athletic apparel market is set to grow by nearly 50% by 2020, allowing Adidas by Stella McCartney to grow as Adidas’ top performing sector. Globally, Latin America is Adidas’ fast growing market, allowing Stella McCartney’s collaboration with the Olympic Games to be a huge opportunity for growth within the region.
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SWOT ANALYSIS Adidas by Stella McCartney SWOT Analysis Strengths Weaknesses Use of high-quality and sustainable materials • Positioned as premium brand in strategic wholesale partners • Functional and fashion-centric designs • Adidas has a reputation for producing high performance, dependable athletic wear • Stella McCartney has a reputation for producing fashion forward feminine tailoring Opportunities •
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• • • •
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Population is driven by a trend toward healthier, more active lifestyles International expansion Strong push towards more fashionable active wear Expansion into other disciplines Sponsorships and endorsements
• • • • •
Limited global infiltration Young company with a low brand awareness Only 3 stand alone stores worldwide High price point Only caters to women
Threats •
•
•
Active wear industry is very fragmented, with many companies competing from discount brands to high-end fashion labels Strong sportswear rivals with more established brand awareness Increasing number of similar collaborations between fashion brands and sportswear companies
BRAND IDENTITY MATRIX ADLER: ADIDAS
PRODUCT
PERSON
Succesful Industry leader Culturally relevant German Athletic Diverse
SYMBOL
ORGANIZATION
Adidas is a highly recognizable brand that is best known for their distinguishable logo and classic designs. Contributing to consumer recognition of the brand as a successful, diverse, industry leader, the company incorporates high profile athletes and celebrities into their advertising campaigns.
BRAND IDENTITY MATRIX PRISM: STELLA MCCARTNEY
la McCartney
Product Features, Symbols & Attributes - sharp tailoring - sexy femininity - sustainable
Physical
Beliefs & Association - devoted - fashionable - cultured
Relationship
Reflection Customer’s View of the Brand -modern -ethical
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Character & Attitude - natural confidence - cool - inspired
Personality
Culture
Set of - Values - ethically minded - innovative - collaborative
Self-Projection
Internal Mirror of Customer as User of the Brand - I feel feminine - I feel unique
PRISM: ADIDAS BY STELLA MCCARTNEY
idas by Stella McCartney Product Features, Symbols & Attributes - feminine - clean - modern
Physical
Beliefs & Association - fashionable - quality - unique
Relationship
Reflection Customer’s View of the Brand -chic -wearable
Character & Attitude - innovative - confident - funcitonal
Personality
Culture
Set of Values - ethically minded - innovative - collaborative
Self-Projection
Internal Mirror of Customer as User of the Brand - I feel sporty - I feel stylish
These prism matrices give an overall view of how the consumer relates and interacts with the Stella McCartney and Adidas by Stella McCartney brands. In addition, they highlight the internal attributes and values of the companies.
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PERCEPTUAL MAP
Accessibility
Price
* Accessibility based off number of countries operated in, not e-commerce ** Adidas by Stella McCartney based solely off Adidas by Stella McCartney exclusive stores
* Accessibility based off number of countries operated in, not e-commerce ** Adidas by Stella McCartney based solely off Adidas by Stella McCartney exclusive stores
PRICE / ACCESSIBILITY MATRIX Shoes
Tops
Bottoms
Jackets
$175
$110
$95
$140
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Nike
$160
$65
$70
$120
120
Under Armour
$80
$40
$55
$80
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Reebok
$85
$40
$65
$90
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Puma
$90
$40
$50
$75
40
Adidas by Stella McCartney (exclusive stores)
Countries operated in
These four competitors were chosen because they are all medium to large athletic wear companies and have store locations in Brazil. The price matrix was determined by the pricing of four different categories in each company. Since the goal of the pop-up shop is to increase the global accessibility and awareness of Adidas by Stella McCartney, the accessibility matrix was determined by the number of countries that the companies operate in.
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CURRENT DISTRIBUTION & JOINT VENTURES Adidas by Stella McCartney currently sells at over 400 Adidas locations in over 40 countries. There are three standalone Adidas by Stella McCartney stores located in Miami, Beijing, and London. In addition, the brand is sold in various Nordstrom and Harrods locations in stores and online and various third party retailers. In 2010, Adidas, the official sportswear provider for Team Great Britain appointed Stella McCartney as Creative Director for the British team kit for the London 2012 Olympic and Paralympic Games. McCartney oversaw the creation of every aspect of the national team’s performance kit, the first time a British team kit has been designed by a fashion designer. This joint venture is also continuing for the 2016 Olympic Summer Games in Rio de Janeiro. In addition, Adidas by Stella McCartney collaborated with Topshop to create an athletic leisure line targeted towards a younger demographic. The line is sold in Adidas, Nordstrom, and Topshop stores and online.
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ANNUAL FIGURES Stella McCartney’s estimated annual revenue in 2012 was $120 million and grew an upwards of 8% in 2014. Adidas’ annual revenue in 2013 was $16.75 billion. Initially, Adidas by Stella McCartney’s projected sales were $15 million in 2005, with a triple digit growth within the first year. Adidas has grown between 3-14% in the last eight years.
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CURRENT ADVERTISING
Adidas by Stella McCartney utilizes both print and digital advertising. The brand releases videos of their new collections to showcase the movement and versatility of the designs. The brand also uses various social media outlets such as Facebook, Instagram, Pinterest and YouTube. The collection is showcased under both the Stella McCartney and Adidas Women social media names. The Adidas Group spent $389.9 million on advertising in the U.S. in 2013.
DIRECT ADVERTISING / SALES PROMOTIONS
Adidas uses direct marketing incentives once consumers sign up for email newsletters from their website and a sales promotion of 15% off following sign up. Adidas also offers free shipping after purchasing a certain amount from the website. Stella McCartney offers email newsletters via her own website.
*All other online retailers selling Adidas by Stella McCartney will have varying sales promotions
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Political • Proactive and stable government • Fiscal and monetary policy tightening to bolster public finances • Lower inflation to prevent economic upturn • High corruption • Labor unions and political parties pressure the government
Economic • One of the fastest growing economies in the world • Low unemployment rate • • • • •
High tax burden for citizens and businesses High duty tax Economy marred by recession and high inflation 1 Brazil Real = $.36 to the U.S. Dollar Benchmark interest rate at 12.25%
Social • Growing middle class • Punctuality not enforced • Young population • Economic inequality • Education lacking • Bulk of national wealth belongs to elite class
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Technology • • • •
Increasing intercommunication and global communication Increased accessibility of information technology Highest levels of patents applications in South America Push towards the development of a stronger technological structure
• Lack of national and international collaboration
Environmental • One of the most complete environmental legislations in the world • Environmental habitats under threat from economic and demographic growth • Extensive legal and illegal logging allows for increased habitat destruction and fragmentation
Legal • Bi-lateral agreement on avoiding double taxation • • • • • •
Regulation laws on pricing models Strong labor unions Judicial delays Restriction on foreign investment Taxation varies across states increasing complexity and compliance costs Regulations for opening new businesses
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SIZE OF MARKET The Brazilian retail market is growing at an incredible rate with positive trends in economic growth, a rapidly expanding population, and rising disposable incomes are the key factors behind the growth in Brazil’s retail sales. Easier access to credit and the rise of a wealthier middle class also help the value of the retail segment. The lifestyles of middle and upper income groups reflect those of their equivalents in developed countries and overall purchasing power has been growing. In 2009, As the biggest consumer market in Latin America and also one of the world’s major emerging markets, Brazil provides a significant market for international consumer goods companies struggling to expand in developed regions. Brazil’s retail sales were $415 billion and grew to $759 billion within the next five years. Sportswear sales in Brazil are equivalent to $1.4 billion USD and greatly contribute to the rise of the retail market. From 2013 - 2020 Brazil’s consumer expenditure is predicted to grow by 43.4%.
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NIKE
Founded in 1964 by Philip Knight and Bill Bowerman, Nike is one of the most widely recognized brands in the world. Nike is a leading player in the athletic footwear and apparel industry and establishes strong emotional connections, maintaining lifelong relationships with their consumer. Nike has a global supply chain with more than 1,000 factories worldwide. Operating in 120 countries, Nike has 858 retail stores worldwide with 57 doors in Brazil. Nike leads the sportswear market in Brazil with 12.1% market share. Brazil is Nike’s 4th largest market behind the United States, China, and Japan. With a revenue of $8 billion USD in 2014, Nike is one of Adidas’ top competitors within the industry.
PUMA Established in 1924 by German Brothers Adolf and Rudolf Dassler, Rudolf split with his brother to create Puma. The sportswear brand became publicly traded in 1986 and joined the Kering Group in 2007. Puma recently appointed Rihanna as the Creative Director in 2014. Puma is the top retailer behind Nike, Adidas, and Reebok with a revenue of $3.7 billion USD in 2014. Operating in 40 countries worldwide, Puma employs more than 5,000 people in consumer facing positions. With over 600 stores worldwide, Puma has two retail outlets in Brazil.
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361 DEGREES 361 Degrees International Ltd was established in 2002. 361˚ was launched in 2004 to represent the company’s goal to meet the athlete’s need for professional functionality with an added degree for innovation and creativity. 361˚ is a major Chinese supplier of shoes and sports goods with more than 7,800 branches in mainland China. The company is currently expanding globally to Europe, the Middle East, and Latin America. 361 Degrees International Ltd includes 361˚, 361 Kids, and Innofashion. The company currently has a brand of their headquarters and showrooms set up in Brazil. 361˚ was appointed an Official Supporter of the 2016 Olympic Games in Rio de Janeiro.
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INDIRECT COMPETITION
Hotel Copacabana Palace by Orient Express
Antiquarius
Olympic Merchandise
Teatro Municipal Opera Theatre
The indirect competition that Adidas by Stella McCartney will face will be various local attractions, restaurants and lodging surrounding the Olympic area. Additionally, targeting both local Brazilians and global consumers, Olympic merchandise will be a competitor for the pop-up shop.
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HOTELS
Hotel Copacabana Palace by Orient Express Relais & Ch창teaux Hotel Santa Teresa Sofietel Rio de Janeiro Copacabana Arena Copacabana Hotel Porto Bay Rio International Hotel
RESTAURANTS
Antiquarius Aprazivel Marius Degustare Porcao Ipahema Satyrican
ATTRACTIONS
Teatro Municipal Opera Theatre Museu Historico Nacional National Museum of Brazil Museu de Vida Village - Mall
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TARGET CONSUMER BRAZILIAN CONSUMER Demographic: Women ages 25-40 Annual income <$50,000, College educated Population: 5,600,000 Area: 1,255 sq km (485 sq mi) Lifestyle:
Brazilian women enjoy spending time at the theater, the beach and soccer games. Majority of Brazilians are Roman Catholic and have a relaxed work ethic. Physical appearances are extremely important to Brazilians thus, exercise is an important part of life in Brazil. In fact, the country has the second biggest fitness industry in the world after the U.S.
Behavioral:
Brazilians use the Internet an average of 3.4 hours a day. Additionally, Facebook is extremely important in Brazil. Facebook was the top mentioned site by Brazilian Internet users when they were asked which site they use most as an information source. The business model of several Brazilian markets is based on emotional consumption. Brazilian consumers are expressive and they gravitate towards emotions and feelings. Consumers look for happiness through what they buy. The tendency in Brazil is related to the â&#x20AC;&#x153;fashionâ&#x20AC;? concept, by which people are not buying to fulfill a need but to appease cravings and emotions created by the products.
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OLYMPIC CONSUMER
Information gathered from the global Olympic consumer was taken from data collected from the 2014 FIFA World Cup. Also hosted in Brazil, the soccer event attracted 3 million locals and 600,000 international fans. The positive effects of the World Cup are expected to spill into 2015 and the Summer 2016 Olympics Games, supporting a double-digit growth in Brazil. The last Summer Olympics in London attracted 680,000 international visitors, though because of the location, most were European. The attendees of the London Olympics spent $3.25 billion during the Games, and it is projected that customers purchasing the tickets were women from upper middle class families.
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STORE LOCATION
The unemployment rate in Brazil, as of March 2014, is 5.03%. Additionally, as of March 2014, current youth unemployment in Brazil is 14.44%. This means that many Brazilians are looking for jobs and could be available to assist building and staffing the pop-up shop. However, Brazil’s labor system is complex and costly. It is governed by the CLT (Consolidation of Brazilian Labor Laws), and its principles are grounded in the country’s federal constitution, which makes changes extremely difficult. Concerning infrastructure, roads remain the primary means of transport in and around Brazil – both for passengers and for freight purposes. Some of the roads underwent a major revamp and expansion, just in time for the 2014 FIFA World Cup and the 2016 Olympic games. In addition, various rail services are under the control of a number of different public and private operators. Also, Brazil’s air transport infrastructure is relatively well developed. In fact, there are about 300 airports in the country, of which around 50 are major commercial ports. In turn, 21 of these are international airports. Lastly, with all of the rivers in Brazil, there are approximately 50 000 kilometers of navigable waterways in the country. There are about 15 seaports or harbors along the coast, and there are two on the mammoth Amazon River. Corumbá is an international waterway on the Paraguay River. During the Rio de Janeiro Olympic games buses, metros, suburban rails and major urban arterials will provide the transportation between venues for attendees .
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In regards to legal issues, a foreign company can apply to open branches in Brazil by submitting an application to the Brazilian government. There are several formalities that have to be fulfilled, including the filing of documentation with the National Department of Registry of Commerce (DNRC). The process of registering a new business can be lengthy, since it involves as many as 15 different procedures. Foreign companies must appoint a representative (who does not need to be a native Brazilian but must be a resident in Brazil) to act on their behalf.
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STORE DESIGN
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The Adidas by Stella McCartney Pop-Up Shop will be located within the Olympic Park as its own freestanding building. The 432 sq. foot space will feature merchandise from the Spring Collection. The space includes a full size wall advertisement and various fixtures for displaying merchandise. These include two freestanding clothing racks and five shadowboxes to display smaller merchandise. The fitting room is located in the back right corner, and includes a full-length mirror and stool. The left wall within the pop-up shop will feature shelving for shoes and various accessory items. Customers that wish to try on shoes may do so on the bench in front of the shelving unit. These fixtures will encourage the consumer to discover the Adidas by Stella McCartney brand and grow to be loyal and returning customers.
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PRODUCT PLAN
BRL 144. 74
BRL 668.14
BRL 222.68
BRL 578.98
BRL 222.68
BRL 178.15 BRL 445.38
BRL 133.6
BRL 244.97 BRL 200.41
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BRL 244.97
BRL 167.01
BRL 356.30
BRL 334.01 BRL 400.83
BRL 334.01 BRL 378.57
BRL 222.68
The product assortment featured in the Adidas by Stella McCartney pop-up shop will be items already in her currently selling product line. Each item chosen reflects the aesthetic and lifestyle of the Brazilian customer, while showcasing a variety of items that can cater to many different consumers.
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CURRENT COMMUNICATION
The Adidas by Stella McCartney pop-up shop will be promoted through a number of different channels, including event marketing, social media marketing, print marketing, promotional marketing, and viral marketing. The Adidas by Stella McCartney launch event will be held the day before the store opening and the opening ceremonies. The daytime event will take place from 2-4 pm and will include a juice bar and vegan appetizers provided by local establishments. In addition, a DJ will provide a lively atmosphere. During the launch event, consumers will receive 15% off their entire purchase and the first 100 guests will receive a promotional gift that includes a branded water bottle and reusable shopping tote.
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Due to the importance of social media in Brazilian culture, Instagram, YouTube, Facebook, and Twitter will be utilized before and during the Olympic Games in order to promote the Adidas by Stella McCartney pop-up shop. Instagram and Twitter will continue to be used as a marketing tool post Olympic Games to further promote the brand. Prior to the start of the Games, Adidas by Stella McCartney will be featured in Brazil Vogue and Claudia Magazine, both of which are highly influential to the Brazilian consumer. Promotional marketing will include a branded tote to all patrons that enter the store, which will include a catalog inside. The catalog will feature the current lookbook for the collection sold within the pop-up shop. Adidas by Stella McCartney frequently utilizes videos to promote the current collections. This video will showcase the featured collection as well the wearibility and functionality of the garments in tandem with the Olympic Games and the spirit of Rio de Janeiro.
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FINANCIAL PLAN
The Adidas by Stella McCartney pop-up shop will be open for six weeks, spanning the Olympic and Paralympic Games. The first week of the pop-up shop, the earnings are low due to the initial start-up costs. Furthermore, week four has a low earning due to the break between the end of the Olympic Games and the start of the Paralympic Games. In total, the Adidas by Stella McCartney pop-up shop is projected to earn BRL 61,247, which equates to $20,000 USD. The sales forecast for the Adidas by Stella McCartney pop-up shop reflects the anticipated foot traffic for the store, while incorporating the average basket of the merchandise and the footfall.
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Mackenzie Dakin | Lauren Springett | Erin Wilbur FASM 410 Winter Quarter Retail Management Pop-Up Shop Alessandro Cannata