Table of Contents Executive Summary Mission Statement Funding Success Factors Section Summaries Company Overview Ownership & OrganizationWhat people are apart of the team Summary of store and what kind of ownership (bullet point) Tactical Plan Company Objectives Short term objectives for the first year of the store (3-5) Long term objectives (3-5) Company Resources What the management does for the store Finaicial Allotment Basic Orientation- overall goals Problems? Bullets (5-7) Market Analysis Customer Profile Psychographics & Demographics Target Market Competitive Analysis Marketing Environment Marketing Strategy Plan Promotional Plan Tactical Plan Pricing Plan Distribution Plan Operations Plan Inventory Control & Management Functions Human Resources Facilities Management Customer Service Financial Plan Appendices A- Resume B- Sources C- Merchandise
EXECUTIVE SUMMARY
MISSION STATEMENT Our mission is to not only provide quality customer service but to enhance the lifestyles our customers through our specialty merchandise offering, all while creating a memorable shopping experience and relationship with our customers. . FUNDING Overtime will allocate the necessary funds for the initial start up of the business from: â—?
Bank, 50%
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Personal Savings, 30%
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Family and friend allowances, 20% SUCCESS FACTORS
1. A concentrated goal for financial success through practiced selling strategies. a. Initiating both collective and personal goals oriented toward strengthening the business will be set for all employees. 2. By recruiting employees who wish to grow both the company and themselves within it; Overtime will have a staff that is driven and goal-orientated. a. With a shared vision for the company felt from all employed will come increased moral, provide more incentive to pursue personal and group goals, 3. By providing exceptional customer service, Overtime will build lasting relations with customers, resulting in continual business. a. Our customers are ultimately who fuel our business. We work to get and keep customers, and this will be done through providing the best customer service. 4. Connecting with the local community and creating relations with the potential clientele is equally as important as our customer service in store. a. Branching out from our store will help solidify our business in the community because we will be able to communicate, embrace, and show support to new and existing clientele. 5. Maintaining and strengthening management geared toward physical resources. a. Maintaining all finances ranging from the sales, overall cash flow, loans, etc, will ensure the business will maintain healthy and continue operations.
SECTION SUMMARIES
COMPANY OVERVIEW
Ownership & Organization At Overtime we pride ourselves in the strength, honesty, and credibility we uphold as both a business and an employer. Our business is owned by individuals who are passionate about this industry, community, and all factors that fall between. As our mission states, we strive to offer the best we can for both our customers and employees. As a small business, we understand the importance of maintaining these relationships, as they are main priorities in the health of the company. The following traits are handful of which we feel express our organization and ownership. ●
We are self-fulfilled: Owning this business has been a long-term goal for our owners. Making this goal a reality is a great example of our self-fulfillment.
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We are future-focused: From daily to long-term tasks, we place equal importance on following through on these goals. By creating a vision for our business we are more driven to turn these goals into tangible success. By focusing on our future we are also understand the importance of the steps of our success, identifying these milestones, and continually finding ways to better strengthen the company.
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We are curious: From our owners, managers, sales associates, and others in the production channel, we all maintain a curious characteristic. This pushes our business further than before. By questioning geared toward daily operations to company policies, we are able to grow as a whole without tension or bitterness felt in our team.
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We are action-oriented: We are constantly working towards goals, working to differentiate ourselves from competition, strengthen communication with our customers, optimize our business, and run a business that both our employees and customers are enthusiastic about.
Company Objectives REVENUE We will double our revenue for our first year first year. ●
Short-term goals to support this:
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Analyze and capitalize on consumer buying patterns.
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To spend time analyzing how our primary competitors work in our market, and find ways to differentiate ourselves.
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This will additionally assist in new advertising campaigns. EXPOSURE Our advertising strategies will at least double our customer base within our first year operations.
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Short-term goals to support this:
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We will increase our monthly advertising budget roughly 15% each month, allowing our business to continue to reach out both for our brick and mortar and online presence.
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We will hire advertising specialists for at least one month to direct our advertising and marketing strategies. CUSTOMER SERVICE Our customers will be at least 90% satisfied with our business, and we will retain this feedback from questionnaires, online reviews, and from work-of-mouth.
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Short-term goals to support this:
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Redesigning our customer service procedures to adhere to our customer-base as necessary.
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Supplying our customer-base with more incentives to shop with us: discounts, in-store events, mailed coupons. EMPLOYEE APPRECIATION Our employees are one of our major priorities, without them our business who crumble. We will celebrate our employees through awards and gifts throughout the year. And awarding those with the strongest work ethic, those with the strongest creative and technical inputs.
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Short-term goals to support this:
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We will highlight an employee each month, celebrating their contributions and passion for the business COMMUNITY OUTREACH We will build and maintain recognition in our community through outreach events and programs.
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Short-term goals to support this:
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Sponsoring high-profile local charities and events art’s related.
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Reward employees who actively promote our business by volunteering in designated community programs and events. Company Resources WHAT MANAGEMENT DOES FOR THE STORE FINANCIAL ALLOTMENT BASIC ORIENTATION ISSUES
MARKET ANALYSIS
DEMOGRAPHICS:
source: clrsearch.com The above chart shows us the Male population of Seattle, compared to both the state of Washington and the United States. Knowing who our target market is, men the ages from 18-44, we can see that our customer makes up roughly 50% of the male population in Seattle. Of the 304,030 total male count in the city, around 150,000 men fall in our target age groups 1. With the median age of 34 years, this too reaffirms the target age group is evident.
The demographic information specific to Capitol Hill is described in the chart below:
source: areavibes.com
1 “2010 Census Profile: City of Seattle�
From this, we have a generalized view of this particular neighborhood. The male to female ratio rates 1.2:1, revealing there is slightly more males than females in this region. 25% of the population over 15 years old is married, and 86% speak English.
Source: areavibes.com
The above graph defines the dominant age groups in Seattle, comparing both the male and female population. Like the previous charts information, we can see the at least 30% of the male population in Seattle is between the ages of 25 to 34. These men fall directly into our target market, age wise. The age groups that deviate closely from our direct market are between the ages 20-24, nearly 9% of Seattles male population fall into this category, and the age group 35-44 makes up about 20% of the male population. With these percentages added up we can come to the conclusion that roughly 50% of the male population in Seattle are of the ages we are marketing too.
To take this further we must find that this population has the specifications and characteristics of our target consumer. First we can start with identifying the educational attainment of the region. With this, and knowing that more educated people are more fashion-conscious, and a comparison of the target male population with educational statistics we will be able to further acknowledge the potential of the region.
source: clrsearch.com Nearly 50% of the Seattle population, over the age of 25, have completed at least Bachelors work or more. Factoring this in with the 50% of the male population falling under our targeted age group we can see that a large portion of our target market have attained a higher education. Knowing that higher income comes with a higher education, we can further pinpoint our consumer. Of the population specifically in Capitol Hill, we can see educational statistics in the graphs below:
source: areavibes.com
The highest category of educational attainment is by far a Bachelors Degree, for both the male and female populations; the male population with a BA is more than 30%, and more than 10% have attained a Masters Degree.
source: areavibes.com
The above chart gives information as the the educational level achieved in Capitol Hill as a whole, disregarding age and sex. 57.3% have attained a BA and 21.6% have attained a MA. When we compare these statistics with the average earnings and unemployment rates by educational attainment (seen in the next chart) we can understand what the incomes of those in these brackets is.
source: bls.gov We can see that of the 30% of the population that have completed at least their Bachelors degrees are earning on average $1,066 weekly. The 18% of the population that has attained their Masters degree are on average earning $1,300 weekly. The total percentage of those who have completed either their Bachelors and Masters degree is about 79% of the total Capitol Hill population, therefore on average this 79% has an income of more than $1,066 weekly.
Male Occupation Statistics, 2010
Above we can see the occupations of adult men in King County, and Washington as a state. Here we can see who is employing our target consumer. 11% of the men in King County work under computer specialties, 8% other management occupations (except farmers and farm managers), and so on. Identifying local employers such as Boeing, Microsoft, University of Washington and Amazon we can affirm these statistics stand true in where our market is employed.
Source: areavibes.com
Knowing the main occupations of Seattle’s male population, we need to know what the incomes of these men is. We target a group of men who bring in around $60,000 annually; the above graphs explains the income of the male population in Capitol Hill, and the source of these incomes. The income groups that are of interest to us make up a majority of the population. More than 18% of the male population make between $40,000-$60,000; more than 12% make between $60,000$100,000 a year; roughly 20% make between $25,000-$40,000 a year. Knowing that our target markets income distribution will expand beyond our $60,000 a year, we can see that roughly 45% of the male population in Capitol Hill have the means financially to shop with us. Information as to the source of this population's income can be seen in the above as well. More than 80% of the male population in Capitol Hill receive their incomes from their salaries. For those who receive their incomes elsewhere, less than 20% are self employed, 40% receive money from various investments; other sources such as social security, public assistance, and retirements each make up less than 10% of these males.
source: seattle.gov
Comparing the cost of living in Seattle to other major cities across the United States, we can see Seattle has relative costs. Being portrayed as the base, 100, we see New York is nearly double and cities in the midwest/ central part of the United States are about on par with Seattle. Understanding this information and knowing that Seattle is a growing city, we can see why Seattle has grown to be such a desirable location. This can be supported by the location of the large companies who call Seattle home as well, the costs here are not terribly high.
source: areavibes.com
To further compare Washington’s cost of living to the Nation, the graph above shows on average various products and services the US consumer purchases. Washington does not deviate from the national average by more than 12% in the categories of milk, fried chicken, ground beef, bread, coffee, gasoline, haircuts and phone services. Washington is more than 12% lower than the national average with the costs of potatoes, wine, and total energy. Though we exceed the national average by more than 12% in healthcare related services. Next we can compare the cost of living in Seattle directly to that of Washington States and the Nation as a whole.
source: areavibes.com
Overall, Seattle is placed at 122, Washington at 101 and the nation at 100 average. The housing index in Seattle is the highest sector in comparison to the nation, at 149. Next, the health care index ranks 119, goods & services at 115, transportation at 113, and groceries at 109. Seattle may not be the most cost efficient city in the nation, though in comparison to the other major cities in the country and compared to Washington state's average Seattle is not out of means. Especially when you keep the educational attainment statistics, income levels, and average ages in mind.
The marital status of our target consumer is important to us, because if the man has a family he has other expenses on his plate. This next graph explains the marital status of the male population residing in the Capitol Hill neighborhood.
Source: areavibes.com
Analyzing this with the other demographic data we have already covered, regarding the dominant male age groups in Seattle we can say with even more confidence that our target consumer is here. This graph states that at least 60% of the male population has never been married, assuming this explains the dominant age group of 24-35 year olds. Of the 20% of men who are married, we need to know how large their households are, specifically the ages of the children they may have.
source: areavibes.com
Of the married couples in Capitol Hill with children, 36% have kids younger than 6, 52% have children between the ages of 6-17, and 13% have children in both these age groups.
PSYCHOGRAPHICS: Of the greater Seattle Metro area, we see how leisure time is spent by the adult population in the following graphics:
source: www.seattletimescompany.com/advertise/pdfs/SeattleMarketOverview.pdf
Understanding how the adult population spends their leisure time, we can better market to their needs and show how our products can become apart of their lives. Brands, such as the North Face, Patagonia, Carhartt, and Columbia are popular in that a large portion of free time activities are spent outdoors. Retailers like Nordstrom and REI act as one stop shops for those in search of these products and brands. Allowing for trendier take on the clothes and accessories necessary for their lifestyle. Free time activities that pertain directly to our target market can be assumed from the data we have collected on their demographics and analysis on their psychographics. We can identify brands they are currently loyal to, where their favorite restaurants are, what media they pay attention to, what sports they keep up with and other characteristics unique to them. ●
Brand Loyalty: Our consumer keeps their local economy in mind, while shopping at small businesses as well as other corporate retailers. Shopping for apparel acceptable both in and out and the workplace. Patagonia, Nordstrom, Nordstrom Rack, Totokaelo, Crossroads Trading Company, and Urban Outfitters are retailers they frequently shop with. Because of their central locations, relevance in current trends, and products offered at costs within means.
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Media Outlets: He reads local newspapers as well as national news, The Stranger, Seattle Weekly, New York Times, and the Wall Street Journal are subscriptions he may have. frequent shopper at local book stores to expand knowledge and his creativity. He watches TV series like Game of Thrones and Jeopardy.
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Socializing happens at popular happy hours around the neighborhood, bars like Montana and The Lookout offer a destination where he can congregate with friends and make new ones. Weekend BBQ’s and other parties occur on weekends and other special occasions that he partakes in. Also hikes, camping trips, and other outdoor activities are planned in the warmer months and take up a large portion of this time.
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Hobbies and social activities correlate with one another. For example, outdoor hobbies occur with the friends he shares this interest with.
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Family events and trips occur throughout the year. Plans are made on each major holiday, and given his work schedule he must plan accordingly. As family is an important part of his life, as both a support system and area he spends time within.
The average “Day in the Life” of our consumer can be assumed in the following… •
Weekdays: Our consumer works a 9-5 job, waking up anywhere around 6:30-7AM. He juices his breakfast, with locally grown organic fruits and vegetables. On his way to work he stops a local cafe, perhaps Vivace, to order an americano and occasionally orders a pastry. Once at work he catches up with his co-workers and settles into his office space. Lunch occurs anywhere between 12 and 2pm. This is when he and a few co-workers head to a deli and order Boar's Head sandwiches, again a local company. After they return to finish the work day. Upon leaving the office, he gives goodbyes to co-workers, and his boss/manager. On his way home he stop in at the happy hour happening at Montana or The Highline, and if so he has already arranged plans to meet up with some friends. An hour or so into the happy hour he heads to the QFC to pick up supplies for dinner, and any other products he is in need of. As he settles into this apartment, he prepares a meal consisting again of organic products, drink a PBR, and plays the latest episode of Game of Thrones.
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Weekends: Our consumer takes full advantage of his days off, meaning Friday night through Sunday are usually planned out. He may have plans to go to a friends party Friday night, or head out to a bar. These night tend to be spent out longer, the work week has exhausted him and he is ready for some fun by now. Saturdays he drives his Subaru into the Cascades with a few friends to either go on a hike or go mountain biking. Either way, he spends Saturdays taking in what the Pacific Northwest offers. Wearing a NorthFace jacket, Nike shoes, and American Apparel tee shirt. After an exhausting yet thrilling day he and his friends head
home and stop in at the Clever Dunes pub for a few beers. After he heads home to relax, and takes a shower using hair products from American Crew. Then puts on the Kill Bill movie series and continues to relax. Sunday are spent either visiting family, or at Volunteer Park. He tends to dress nicer on Sundays, again styling his hair with American Crew products, wearing an OUR LEGACY chambray shirt, 501 Levi Jeans, and pair of Converse. Of the VALS Survey types, there are a few in particular that we should direct our attention to. The three following type descriptions fit the characteristics of who our target consumer identifies. Acknowledging the following VALS types we can further our understanding and pinpoint our market. “Innovators are successful, sophisticated, take-charge people with high self-esteem. Because they have such abundant resources, they exhibit all three primary motivations in varying degrees. They are change leaders and are the most receptive to new ideas and technologies. Innovators are very active consumers, and their purchases reflect cultivated tastes for upscale, niche products and services. Image is important to Innovators, not as evidence of status or power but as an expression of their taste, independence, and personality. Innovators are among the established and emerging leaders in business and government, yet they continue to seek challenges. Their lives are characterized by variety. Their possessions and recreation reflect a cultivated taste for the finer things in life.” 2 Innovators favorite things: •
A rewarding experience
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Problem solving
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Personal challenges
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Authentic products
Innovators is a characteristic of our consumer because it identifies the drive they have. The hard working, take-charge traits help them in personal and work related achievements, whether that be getting a promotion at work or collaborating with equally as driven friends on various creative projects. The natural instinct to innovate expands them intellectually, exposes them culturally and most importantly gravitates them to be active consumers through material possessions because it allows them to look the part as well.
2 http://www.strategicbusinessinsights.com/vals/ustypes.shtml
“Experiencers are motivated by self-expression. Young, enthusiastic, and impulsive consumers, Experiencers quickly become enthusiastic about new possibilities but are equally quick to cool. They seek variety and excitement, savoring the new, the offbeat, and the risky. Their energy finds an outlet in exercise, sports, outdoor recreation, and social activities. Experiencers are avid consumers and spend a comparatively high proportion of their income on fashion, entertainment, and socializing. Their purchases reflect the emphasis that they place on looking good and having ‘cool’ stuff.” 3
Experiencers favorite things: ●
A social-media following
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Being entertained
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Being established
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The ability to purchase The drive to experience more, and create a life more than just the average Joe’s is another characteristic of our target consumer. Experiencers thrive off their curiosity, bringing them place they have not yet reached. This is reflected in their buying behavior because they like to be on trend and up to date with the latest products. Conscious of looks, experiencers defines our consumer even more so. “Achievers are motivated by the desire for achievement, Achievers have goal-oriented lifestyles and a deep commitment to career and family. Their social lives reflect this focus and are structured around family, their place of worship, and work. Achievers live conventional lives, are politically conservative, and respect authority and the status quo. They value consensus, predictability, and stability over risk, intimacy, and self-discovery. With many wants and needs, Achievers are active in the consumer marketplace. Image is important to Achievers; they favor established, prestige products and services that demonstrate success to their peers. Because of their busy lives, they are often interested in a variety of time-saving devices.”4 Achievers favorite things:
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Recognition and rewards
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Peer-group acceptance 3 http://www.strategicbusinessinsights.com/vals/ustypes.shtml 4 http://www.strategicbusinessinsights.com/vals/ustypes.shtml
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Material possessions
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Rules following that leads to success Achievers is another buying characteristic of our target consumer as it reflects their will to achieve. This characteristic resembles a consumer that knows the amount of work they complete will result in something greater. Being very active consumers who are also conscious of their style and appearance, our target consumer can relate directly to this VALS type traits.
Maslow’s Hierarchy of Needs:
source: http://www.21stcentech.com/wp-content/uploads/2011/10/maslow.jpg?w=300
Maslows Hierarchy of Needs helps to better understand in more basic terms where priorities are generally set. This can help identify buying motivators when applied to our target market, with the previous data on our consumers demographics we can achieve this. 1. Physiological Needs: Our consumer takes into great consideration his health and physical well being, an organic buyer and avid outdoorsman who maintains a healthy lifestyle. 2. Safety Needs: Our consumer is in control of his security, whether that be security systems and tactics or means for money to maintain stability. 3. Belongingness and Love Needs: Our consumer finds relationships within his workplace, social life and within his family. He is socially active in his recreational activities, athletics and during the weekends. 4. Esteem Needs: Our consumer has a higher self esteem, stemming from his success in the workplace and having the means to enhance his life through social activities and recreational activities and hobbies. 5. Self Actualization: The combination of the whole Hierarchy of Needs ensures our consumer has reached a healthy and growing level of self actualization. Maintaining both his workplace success, and most importantly accomplishing personal goals brings him to a place of exponential happiness.
MARKET LOCATION: We look to locate our business in the Seattle neighborhood of Capitol Hill. Along 15th Avenue East, a thriving street in the heart of the Hill. The city of Seattle 5 zones out this neighborhood street parking, this particular area offers permits at no cost though. And zoning requirements are only in effect Monday- Saturday 7AM- 6PM. Not to lead on that parking is not available to incoming vehicle traffic, there are areas in which visitors can park, and road signs distinguishing the various factors that will restrict parking opportunities. A natural gathering place for the community, this street is offers opportunity that others do not. The street is abundant with shops, restaurants and bars that draw in consumers and foot traffic plentiful for all. Broadway Avenue, another notable street in Capitol Hill also known for its shopping district is just a few blocks away. 15th Ave E is not far from the Harvard- Belmont Landmark District, a historically protected and reserved neighborhood designated by the city of Seattle. This preservation district “retains its individual identity as an area of fines homes built by the city’s leading financiers, industrialists, merchants, and businessmen in the early years of the twentieth century” 6
5 "Restricted Parking Zone Program (RPZ): Capitol Hill." 6 Historic Districts
MARKET HISTORY: In 2013, Capitol Hill was named by the Art Place Foundation’s “Top 12 Art Places in America”, due to the rich culture and art environment. The Commercial neighborhood, public art, the Sound Transit Art Program (START), the Chamber’s Blitz Art Walk, and because the construction of the 12th Ave Arts building. 7 The Pike/ Pine corridor, running through the center of Capitol Hill was featured in the New York Times Travel as a destination, named in Forbes as one of America’s best “Hipster Cities”. Also, Capitol Hill and all of Seattle is renowned as a foodie destination by Top Chef and Anthony Bourdain's Layover. 8 This helps define the target market we are locating; our consumer is one that associates with this culture. Seattle is notably the hippest in Seattle, and with that we can understand why it is renowned for its artisan foods and known as hipster city. The placement and recognition of these lists is national, attention is brought in and focused on Seattle. A plus for the market, it gives this region a new and evolving reputation. Enhancing it’s already welcoming environment for creative minds and businesses contributing to the projected growth. Capitol Hill began its creative acceptance around the 1920’s. The neighborhood which previously was only home to the lavishly wealthy saw a movement of all kinds of artists flood in. The community experienced a shift in its overall demographics and by the 1960’s became home to a community that embraced the arts and welcomed the LGBT community. As the wealthier relocated to the suburbs, more and more young people moved in and a counterculture was calling this neighborhood home. These descriptions have since then remained the same. Capitol Hill is a neighborhood known for its young, artistic, and non-discriminatory community. 9
7 http://www.caphillchamber.org/files/532.pdf 8 IMDB 9 http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=9841
GEOGRAPHIC ANALYSIS: Connecting routes and parallel streets allow for easy access to the main freeways and highways linking Seattle with local neighborhoods, neighboring cities and access to the freeways that run across the state. I-5, I-90 and Highway 520 are all within a few miles of Capitol Hill. The Light-Rail, Seattle’s take on subway transit, plans to complete the Capitol Hill branch transfer station by 2016. This will link the neighborhood of Capitol Hill with the other major neighborhoods from it to the International Airport in SeaTac. With plans to continue north to the University of Washington up to Edmonds, this Light-Rail will offer easy access and an alternative to bus transportation linking the city of Seattle with its surrounding major cities. Foot traffic has increased the last few years, during the holiday months and beyond. The corner of Broadway and Olive street saw an 11% increase from the 2010-2011 Holiday seasons, from 925 to 1,026 pedestrians.10
CLIMATE CONDITIONS: The “rainy city”, as Seattle is known by, is not drenched year round as some think. The graphics below interpret this, showing conditions allowing for all four seasons of the year. With this though there is no shortage of cloudy days, this is to our advantage though. For who our target consumer is, we must take this information and use to or best benefit. These yearly weather averages give us the ability to anticipate and prepare for the right merchandise, conducive to the time of year. Understanding the amount of rainfall in the Fall/Winter and Spring/Summer months will not only allow us to anticipate what our inventory should be, but also the amount of product necessary. Taking into consideration the amount of foot traffic and how the tourism rates fluctuate throughout the year, we will be able to better manage our marketing and advertising. In relating the weather conditions to the merchandise we will stock, the idea of the “northwest” man is inevitable. It is important that we buy according to the seasons, and our products will accommodate the weather conditions here. Fashion styles we can relate this too can be seen from the grunge scene Seattle created in the 90’s; flannels, denim jeans, button up dress shirts and premium outerwear are all necessary in this climate.
10 https://www.downtownseattle.com/files/file/Dec2011PedCountAnalysis.pdf
MARKET SCOPE ANALYSIS: K. P. I. Key Performance Indicator Major occupation of male population Income, Median Universities/ College Population, Male
98102, West Capitol Hill ~ 5,000 Management, business, science, and arts occupations.
$57,591 Cornish, SCCC, UW, Art Institute 10, 856
98103, Wallingford
98105, University District
~ 5,000 Management, business, science, and arts occupations.
~ 5,000 Management, business, science, and arts occupations.
$57, 387 UW, SPU, SCCC, Art Institute, Cornish 10, 865
$57, 387 UW, SPU, SCCC, Cornish, Art Institute 22, 407
source: factfinder2.census.gov
This analysis of the neighboring zip codes gives us a broad idea of whole the populations are made of. We can now understand the major occupations of the male population, the median income of the male population, and the major Universities/ Colleges. We can see from the estimates that the population of these zip codes are fairly relative. With this we can further understand and acknowledge the male market population here. Management, business, sciences and arts occupations employ most of the working male population, with the median incomes remaining in the $57,000 range. With total male populations similar in West Capitol Hill and Wallingford, we see this number double in the University District. Due to the University located here.
MARKET SIZE & GROWTH RATE:
From 2003 to 2013, the total population of King County has grown from 1,788,082 to 2,044,000. This is a 10.8% population growth rate in ten years. In the years between 2010 and 2012, King County gained 48,286 residents, more than half of these residents came from outside the United States. King County is one of the fastest growing counties in the states, a population growth rate of 3.95% since 2010, ranking 14th on the top 100 most populous counties.11 King County still see’s tears from the economic recession in 2007, though extensive progress has been made. The lowest unemployment records were made in 2010, in the time since then employment numbers have again entered the 1.2 million range. The recovery has been driven largely by manufacturing and professional and business services. With more growth seen from professional and business services, retail and leisure and hospitality. In 2012, the median income for King County was $65,830. 12 The expansion of the Amazon campus, the city of Seattle is set for a extreme changes. Bringing in thousands of employees and anticipating more, the market is seeing growth. The most residential business permits were issued in Seattle since 1984. All within walking or biking distance from the AMazon campus located in South Lake Union, just a walk down from Capitol Hill. The corporation encourages its employees to live within the boundaries, helping Seattle meet its goals for energy efficiency and conservation. Apart of Amazon’s development agreement too is to buy a streetcar for the light rail line that is in place on the campus, and to support payments on bicycle lanes. 13
ATTRACTIVE FEATURES OF THE MARKET:
11 Balk 12 Vance- Sherman 13 As Amazon Stretches, Seattle's Downtown is Reshaped, NYT Aug 25, 2013 Kirk Johnson Nick Wingfield
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The central location of Capitol Hill in proximity to the city of Seattle gives us the upper hand to other regions and businesses here. The city of Seattle sees over 9.3 million tourists annually, who spend roughly $5.5 billion while visiting the city. With Capitol Hill just about a mile away, accessible by bus and car, tourists have this neighborhood to explore. 14
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Attention grabbing features within the neighborhood of Capitol Hill: the Frye Art Museum and the Seattle Asian Art Museum, Volunteer Park Conservatory, Cal Anderson Park. Broadway Avenue and 15th Avenue, streets offering an array of shopping, coffee houses, restaurants, bars and more.
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The style roots of the city are consistent and relate the to climate in a way that gives merchandisers a foundation to buy from. Considering that 6 months of the year have at least 3 inches of rain, we know specific products that are in demand during this time.
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A neighborhood inviting to the LGBT community, the yearly Pride Weekend festivities take over this neighborhood each summer. The Capitol Hill Block Party, a three day music festival that takes hold in several bars, venues and the Pike/Pine corridor of the neighborhood attracts a crowd of music loving individuals each Summer as well.
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The continued construction of the Light Rail, which connects the city of SeaTac and the International Airport with Downtown Seattle will open a station in Capitol Hill come 2016, with construction in place to extend even further North to the University of Washington and University District by 2021, and will end construction in the city of Edmonds, located in Snohomish County. 15
DIFFICULTIES WITH THIS MARKET: ●
The availability of parking poses a threat to our potential market, as street parking is limited and parking lots having hourly fees for use. The neighborhood and surrounding areas are zoned, requiring permits for extended use.
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Indirect competition, as restaurants, bars, and other shopping retailers pose a threat as they can pull our potential customer. Broadway Avenue and 15th Avenue are lined with indirect competition, and for tourists the shopping found in Downtown Seattle also poses a threat.
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The cost of living in Seattle is not nearly as demanding as other major cities, overall Seattle falls in the middle between New York City and Houston. Though the cost of living in Capitol Hill in particular. This neighborhoods cost of living is 31.3% higher than the national average, and 8% higher than Seattle's average. 16
14 Seattle Tourism Report 15 Link Light Rail 16 "Capitol Hill, Seattle, WA Cost of Living Index."
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Crime rates in this neighborhood are particularly high. Theft, burglary and civilian arrests make up these high rates. 17
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Seattle Metro recently passed a bill that will cut bus routes 18, limiting access to neighborhoods within the city and beyond. This is a problem as our some of the population and specifically within our target market may not be able to reach our business.
EXISTING DEMAND FOR OUR BUSINESS: ●
Lack of menswear in the neighborhood brings us to this proposal, the variety and quality available to men within our target market is not adequate. The room for growth here exceptional.
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The projection of this neighborhood's growth points to this as well, the rates of population with the complete demographic background require more retail options.
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As we have identified a large consumer base according to the VALS Types, the achievers, experiencers and innovators are all consumers that care about their images, quality. Considering the existing market for quality menswear is very limited in this neighborhood, we can acknowledge this demand is growing.
PRIMARY COMPETITION: Among the various businesses in capitol, ranging from restaurants to retail, the three clothing stores below are our biggest competitors:
17 Seattle My Neighborhood Map 18 Financial Stability & Sustainability
Address... Brief Description...
What they offer... Why they are competition...
Crossroads Trading
Totokaelo
Urban Outfitters
325 Broadway Ave E Seattle, WA A second hand consignment retailer, with multiple locations in the city of Seattle. New and vintage merchandise at lower affordable prices. Offering new and vintage merchandise, Crossroads is an affordable alternative to our target consumer.
1523 10th Ave Seattle, WA Designer boutique, with a newly expanded mens section.
401 Broadway East, #101, Seattle, WA Fast Fashion, a major retailer known for dressing chic young adults. Fashion, housewares, furniture and novelty items. A moderately priced retailer, UO is an easy alternative for our market. With a large amount of merchandise and store with an aesthetic pleasing to our market.
Fashion, housewares, furniture, lighting and art from all over the world New to the neighborhood, this retailer will draw in our target market form curiosity and for the array of international products.
sources: crossroadstrading.com, totokaelo.com, urbanoutfitters.com
COMPOSITE SWOT: We have created a SWOT analysis of our competitors, reaching points that define their strengths, weaknesses, opportunities and threats. Acknowledging these points and also our own will help us establish various techniques and strategies to use in optimizing the growth of our own business. Our competitors can be cited as: Totokaelo (T), Urban Outfitters (UO), Crossroads Trading Company (CT), or if all are applicable (ALL)
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Strengths Competitors: Products pertaining to fashion, houseware and other ● merchandise (T, UO) ● Excellent customer service and a trained staff (ALL) ● On trend fashions, stylish, innovative and offers individuality (ALL) Over/Time: On trend merchandise, offering a unique style to our ● consumer. ● Smaller scale store, offering one on one help to consumers. ● Offering local and international merchandise. Opportunities Competitors: The growing market, in part because of Amazon and ● other employers will bring in a population within ● walking distance (ALL) The growing support of secondhand goods, as apart of global awareness in this region thrives. (CT) ● Excellent online websites, allowing for an international market to purchase their products (T, UO) ● Over/Time ● The growing market, in part because of Amazon and other employers will bring in a population within ● walking distance. The lack of menswears gives our business little competition. Guaranteed quality products, in comparison to Crossroads Trading Company
Weaknesses Competitors: Expensive, seemingly overpriced products (UO, T) Fast fashion, low product quality (CT, UO) Cluttered store spaces, merchandise is unorganized (CT) Over/Time: The amount of direct/indirect competition in the area. Costs of operation, promotion and marketing to bring awareness to our business Higher priced products may not appeal to all, may be out of their budgets. Threats Competitors: Indirect competition: restaurants, bars, cafes (ALL) Overall expense of the neighborhood: cost of living including rent, groceries, all other living expenses (ALL) Limitation to the neighborhood: parking (ALL) Over/Time: Indirect competition: restaurants, bars, cafes Overall expense of the neighborhood: cost of living including rent, groceries, all other living expenses Limitation to the neighborhood: parking
INDIRECT COMPETITION: Of the various businesses that act as our indirect competition, we have acknowledged those that pose the largest threat as the following: SAFEWAY Address… Brief Description...
1410 E John St Seattle, WA Grocery store
Ada’s Technical Books and Cafe 425 15th Ave E Seattle, WA A bookstore, game store with a cafe featuring espresso and
Liberty 517 15th Ave E Seattle, WA An all-in-one lounge, sushi bar, and coffee/tea services.
What they offer...
Food, drinks, magazines, houseware, and a pharmacy
Why they are competition…
Money must be spent on these necessary items, inturn taking from our business.
pastries as well as electronic toys, kits, gifts Vast selection of new and used books, puzzles that are both physical and electronic, jewelry items, clothing, and book club events Our consumer enjoys all these items, as they are apart of their hobbies. Time and money spent here will take from the potential of our business.
A full bar, featuring liquors and wines from Asia, a full sushi bar, and espresso/tea availability. A favorite way to spend their time, our target consumer enjoys the lounge aspect of this business. A full bar, sushi menu and happy hours will draw him here.
source: safeway.com libertybars.com,seattletechnicalbooks.com
This SWOT analysis is of those businesses (S Safeway, A Ada’s Technical Bookstore, L Liberty) we feel are indirectly our competition. Analyzing their strengths, weaknesses, opportunities and threats will help us in developing our own business plans because we will better understand the indirect competitions stance.
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STRENGTHS Competitors: Has all necessary amenities required to eat, live, and for activities (S) Offers a regular and consistent outlet for socializing (A,L) An appealing interior aesthetic, staffed with friendly and helped people (A, L) OPPORTUNITIES Capitol Hill is gung ho about speciality stores, allowing more room for growth (A, L)
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WEAKNESSES Competitors: Over-priced products (A, L) Limited selection of food (A, L) Saturation of the market (ALL)
THREATS Higher cost for living may take away from business (ALL)
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The growing market in Capitol Hill from ● employers bringing in a larger population (ALL) ●
The expanding food industry will distract from business (A, L) Higher costs of living will raise lease prices (ALL)
ECONOMIC ISSUES: Capitol Hill, Seattle Neighborhood of Interest A survey conducted by the Seattle Department of Transportation and Grow Seattle: Office of Economic Development from September 29th to October 16th, 2011 reveals vital information as to how residents of Capitol Hill and non-residents (visiting from five neighborhood business districts: Admiral District, Ballard, Columbia City Fremont, and Othello) feel toward to what this neighborhood has to offer, why they choose to visit, and what they feel needs improvement: in regards to recreational activities, parks, restaurants/bars/night clubs, coffee/areas of socializing and apparel shops. A total of 1,447 interviews were completed for this survey, on high pedestrian traffic intersections.
58% of non-residents said Capitol Hill was a weekly destination for them throughout the year. Reaffirming the potential this market holds. For residents of the neighborhood, 98% said Capitol Hill was their shopping destination. From this chart we can see how loyal residents are to their neighborhood, and see what a catch Capitol Hill is for non-residents.
The typical reasons for why non-residents chose to visit/shop in Capitol Hill were because of the restaurant and dining options at 44%, along with the socializing aspect due to the various spots for drinks and happy hour at 46%. The other reasons popular with non-residents was to walk around/ sightsee/ visit friends and family at 21%, because of the Arts/ Theatre/ Music scene at 18%, and shopping (non-grocery) at 22%. From this we see how evident our indirect competition is in the neighborhood, with such high percentages in their market.
In questioning, What are the reasons you agree that Capitol Hill is my neighborhood for shopping surveyors responded with “I live here/ nearby/ convenience” at 55%, “Large variety of stores/ Unique shops” at 10%, and “Atmosphere/ Fun” at 5% and “Grocery store/ Farmers Market” at 2%. From this we can where visitors and residents chose to shop and for what reasons. 10% shop in Capitol Hill because of the large variety of stores/ Unique shops, with this we can be assured there is adequate
In questioning, What are the reasons you disagree that Capitol Hill is my primary neighborhood for shopping, the most common answer was “I live elsewhere/ Too far away/ Inconvenient” at 40% , followed by “Prefer to shop elsewhere/ Not primary” at 9%, “Too expensive” at 9%, “Not enough parking” at 8%. Here we can see some negative characteristics of the businesses in Capitol Hill and what factors lead consumers away.
In questioning: What, if anything, would you like to see in Capitol Hill, some of the more common answers regarded the shops available (in variety and numbers, also more independently owned vs. corporate)mentioned 20 times by the surveyors, an increase in bus access and public transit was mentioned 16 times. Larger variety of shop, restaurants, music/ concerts/ clubs/ dance all were mentioned separately 11 times. Cheaper/ Low-cost/ Affordable goods & services were mentioned 10 times. From this we can see what needs improvement in the Capitol Hill neighborhood. Specifically, with the variety of shops, here we can see there is a demand for more business.
City of Seattle The city of the Seattle has just recently (May 2014) agreed to raise the minimum wage from $9.32 to a $15. The quote stated below, coming from “How Seattle Agreed to a $15 Minimum Wage Without a Fight” from the Bloomberg Business Journal, tells how the wages will be put into place, depending on the level of business… “Large employers, with 500 workers or more, would need to pay $15 an hour by 2017. But if they provide health insurance, like the local outdoor retailer REI, they could have an extra year. A small business such as a dry cleaner wouldn’t have to pay $15 until 2021, but a restaurant would have to ensure that workers’ pay, including tips, totaled $15 an hour by 2019.”19 The effect this will have on the local economy remains unclear, as it is difficult to presume the repercussions. Whether the extra cash will flow into the local economy or not, recent studies by the Federal Reserve Bank of Chicago suggest that a $1.75 wage increase (from $7.25 to $9.00) would raise aggregate household spending by roughly $48 billion in the short term, which would in turn increase the GDP 0.3%. 20 With this we can understand how a minimum wage increase may affect the Seattle economy, though we cannot jump to a conclusion. This increase though is not projected to affect the retail business industry. When evaluating minimum wage increases in other major cities, for example San Francisco, the retail businesses did not take a hit from the wage increase. They saw more retail stores begin to open, and pre existing businesses saw no problems regarding employment. This accounts too for individual retail sectors, such as grocery stores, general merchandise stores, or clothing and accessories. 21
TOP 20 REGIONAL EMPLOYERS: 19 Weise, Karen 20 US, Seattle Government 21 IBID
The Boeing Co. Microsoft University of Washington Providence Health and Services Amazon King County Government United States Postal Service Starbucks City of Seattle Nordstrom Inc. Costco Wholesale Corp Swedish Group Health Cooperative Alaska Air Group Seattle Public Schools Virginia Mason Medical Center United Parcel Service
85,000 41,664 29,800 20,240 15,000 (est) 12,993 11,914 10,837 10,479 9,281 8,912 8,586 7,833 6,667 5,696 5,611 5,554
According to the Economic Development Council of Seattle and King County 22, these are the top 20 employers in the Seattle Region. Retail businesses and those holding some support in the retail industry are: Microsoft, Amazon, Starbucks, Nordstrom Inc., and Costco Whole Corporation.
An area's unemployment rate will have a large role in a businesses success, and the kind of businesses around. A stable and growing economy depends on this.
22 Economic Basics, Economic Development Council of Seattle
The above graphic shows unemployment rates as recent of March 2014 in Washington State by county, King County has the lowest unemployment rate at just 5.2% 23. The importance this plays with our potential business is that the cash flow, and local economy here is sustainable and thriving. These very low employment rates in contrast to the neighboring counties show how Seattle has remained the epicenter for Washington's businesses.
LEGAL/ REGULATORY/ TAX/ LICENSING CRITERIA: The city of Seattle offers multiple resources to assist in opening a small business, giving advice in regard to finances, help in obtaining licenses and permits, tax regulations, developing your business
23 “Map of County Unemployment Rates�, Employment Security Department
plan and more. (All information, Grow Seattle: Office of Economic Development: Ten Essential Steps to Start a Business in Seattle24) State Licenses: Businesses are required to obtain a state business licenses. The Washington State Department of Licensing provides regulatory authority over various licensing services, the Department of Revenue processes business license applications and runs the Business Licensing Service. An application is required for Business Licensing Service’s. This application can be used to obtain a Unified Business Identifier number and to register trade names. Business License, City of Seattle: Businesses within the city limits must obtain and annually renew a city business license unless the business activity is specifically exempted from licensing and taxes. Those engaging in business activities within Seattle are required to obtain a Seattle business license, and a branch business license is required for each additional venue doing business. Regulatory License, City of Seattle: A City of Seattle regulatory license in addition to the City business license is required of businesses working within Seattle, unless specifically exempted. Tax Regulations - Formal, State, King County, and City of Seattle: Formal: Unless nonprofit, your business is subject to federal income tax.
State: Washington State does not impose a corporate, unitary, or personal income tax. Most businesses will be subject to a business occupations tax, retail sales/use tax, and state property taxes and state property taxes. The state also imposes taxes on such activities as public utilities, carbonated beverages, fish, timber, tobacco products, litter, refuse collections, petroleum products, and 24 http://www.seattle.gov/economicdevelopment/pdf_files/Ten%20Essential%20Steps%20to %20Start%20a%20Business%20in%20Seattle%202014.pdf
hazardous materials. However, some industries may be able to benefit from one of several state tax incentives. King County: All businesses in King County are required to file a personal property tax affidavit. The King County Assessor’s Office is responsible for assessing personal property used by a business. Personal property typically includes items used by a company to conduct business, and generally does not include property attached to a building or the land. Once a Master Business License is obtained from the state, an account is established for your business and personal property tax affidavits are mailed at the end of each year, requesting information about business assets. City of Seattle: Every person or entity doing business within the city limits is subject to the business license tax unless specifically exempted by the Seattle Municipal Code. Seattle maintains a general gross receipts business license tax and a gross receipts utility tax. Any business whose annual taxable revenue – reportable under the business license tax and earned within Seattle – is less than $50,000 is not required to remit a tax payment. However, a completed annual tax return must be submitted to ensure the City is made aware that no tax is due. No such tax threshold exists under the utility tax. Businesses conducting activities in some industry sectors may also be required to pay City admission or gambling taxes.
SOCIAL ISSUES: Education Levels:
The above graphic shows the education attainment of the population in Seattle compared to the population of the United States. Comparatively speaking, the attainment of bachelor's degrees, graduate or professional degree is exceptionally higher in Seattle then the remainder of the US. 25 Family Size and Structure: The average household size in the city of Seattle is 2.06 persons, the average household size in owner-occupied units: 2.31 persons, and the average household size for renter-occupied units: 1.83 persons. With this, there are 283,510 occupied housing units. 136,362 are owner- occupied and 147,148 renter- occupied. Growth targets are projecting for 47,000 additional households between 2005 to 2024.26
Birth Rates
25 http://www.seattle.gov/economicDevelopment/indicators/images/Economic.Indicators.2011.Augus t.pdf
26 http://www.seattle.gov/dpd/cityplanning/populationdemographics/aboutseattle/housing/default.htm
Birth Rates have fallen to an all-time low in Cascadia (regions include, British Columbia, Washington, Oregon, and Idaho). “Birth rates in each Northwest jurisdiction have been lower at some point in the recent past. From the mid-1970s through the mid-1980s, Washington’s birth rates were lower than they are today. Oregon’s birth rates dipped below todays in the mid-1970s; Idaho’s rates were lower in the late 1980s; and BC’s were lower in the early 2000s. It’s only when you combine all four regions that you see that today’s birth rates have fallen to an all-time low.” Clark Williams-Derry, Northwest Birth Rates: A New Low27 Acknowledging this and relating to the average household size in Seattle being 2.06 persons we can see a direct consequence from these statistics.
CULTURAL ISSUES:
27 Clark Williams-Derry, Northwest Birth Rates: A New Low
Ethnicity and Sensitivity towards Ethnic Mix Seattle has long been down for its liberal characteristics, and welcoming community for people from all walks of life. With that in mind though, the city has experienced in recent years the displacement of minorities. The city core is populated with more White people, while the edges and suburbs become more and more diversified with the outlier races. The overall increase in the minority population also adds to this28. The cultural mix within the city itself is not dramatically diverse, as seen in the graphic below.
Recreation
28 http://www.newgeography.com/content/002220-stories-2010-census-race-and-ethnic-changewashington-state
Capitol Hill is known for the “hip” neighborhood of Seattle. There is no shortage of restaurants, bars, theaters and parks to fuel any recreational activity. Community events, festivals and markets occur throughout the year to help create a sense of community. ●
Pride Festival: The LGBT community in Seattle is celebrated every June in Capitol Hill. Three days are dedicated to this festival, including a parade and other festive events throughout this neighborhood. Local bars and restaurants hold events related to the festival.
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Capitol Hill Block Party: A music festival including local music alongside larger named bands performs each summer in Capitol Hill. The bars and neighborhoods within the proximity of the festival get involved, offering stages for bands, events for attendees and help support the festival itself.
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Seattle International Film Festival: This film festival brings the entire city together. Theaters in Capitol Hill that offer screens for the film festival include the Egyptian theater and the Harvard Exit Theater.
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Seattle Restaurant Week: Occurring each fall and spring season, local Seattle restaurants offer special deals and events to help showcase the uniqueness Seattle has within its restaurants. Numerous restaurants in Capitol Hill are involved, offering residents something to pen into their calendars.
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Frye Art Museum: Funded from the Frye family, old willed money run this free art museum located in Capitol Hill. Along with the museums own gallery, world renowned artists and collections cycle through the museums walls throughout the year.
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Cal Anderson Park: Located right off the Pike/Pine corridor this city park offers baseball fields, soccer fields, tennis courts, and recreational grass fields. Water fountains, benches, dog walkers and sun bathers decorate this park throughout the year.
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Volunteer Park/ Seattle Asian Art Museum: This park/museum feature in the northern section of the neighborhood offer a large city park for all, grass fields for an outdoor activity. The museum celebrates the Asian art in the city and from the past.
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Dicks Burgers: the locally celebrated burger joint has few locations, one being in the heart of Capitol Hill. This walk up burger and milkshake shop is a favorite to locals and renowned to visitors. A step above fast food, this business knows how to feed the late night crowds. Religious Issues: 37.63% of the people in Seattle, WA are religious. Of that, 15.04% are Catholic; 2.99% are LDS; 6.75% are another Christian faith; 0.77% in Seattle, WA are Jewish; 1.46% are an eastern faith; 0.64% affilitates with Islam.29 29 "Religion in Seattle, Washington."
With this information we can plan out major sales. Noting that the most prominent religion is Catholic, we know many will be looking for gifts from Christmas festivities. A winter sale will supplement this, offering something to the consumers who are religious.
IMAGE STATEMENT Our store aesthetic will be singularly focused to our target consumer. With this we will be able to create a store image that will be recognizable, and one that distinguishes us from the rest. The exterior and interior relevant to each other, speaking of more permanent fixtures. As our merchandise renews and trend change, we will keep window displays up to date and keep our merchandise arranged in ways that are easy to shop and pleasing to look at depending on the pieces. Window displays are a “free� advertisement, in the sense that we create them in house on the hours of our already paid staff. We must invest time and money into these, mannequins must be acceptable
and other props must be relevant and pleasing as well. A reoccurring theme will be seen throughout our store, coupling our image with the latest trends will bring a powerful and memorable experience to our consumers. MARKETING MIX: Product
Place We will manage our shipping costs directly, ordered from the source with no middle man beyond the freighting. For example, when we purchase Levi Jeans, we will purchase director from the Levi wholesaler. As for shipping, truck will be the main source for nationally located goods, by barge will the main source of internationally located goods. We will use the freight broker services of B4 Logistics Inc. to assist as our shipment managers. They will keep us informed on market rates, which firms are the most cost efficient and more. • (888) 991-0721, http://b4heavyhaul.com/
Marketing Strategy Plan
PROMOTION MIX: Advertising Strategy Our advertisements will be wholly directed to our target consumers, staying true to the aesthetic most associated and appealing to them. With this, we will be able to keep away from ambiguous ads and make clear what the image of our business is. With the right graphics team we will be able to create an image to our name that catches attention to our target consumer but also a new market of consumers that are drawn to the allure of OVER/TIME. While keeping costs in manageable means, we will successfully become known in the region because of the image we will create. Advertisements
will be commissioned in The Stranger and Seattle Weekly, and we will create an Instagram account, which will be self-promoting as we gain a following. Direct/ Indirect Marketing Strategy Knowing who our target consumer is leads us to know where to place advertisements, and how to pick the medium of these advertisements. We also know that our consumer is media savvy, they are technologically able and prefer easy accessibility with instant gratification. Taking into serious consideration these characteristics we will be able to create a marketing strategy that is to point and cost effective to the best of our ability. Print ads will not be the main source for our advertisements, though because they are relevant to our consumer we must take advantage of this outlet. We will buy ads in only local newspapers, because it makes sense regionally and we will be able to reach a market we may not have before. Newspaper publications such as The Stranger (who operate out of our same neighborhood of Capitol Hill) and Seattle Weekly will be the focus of the print ads. As they are the most cost efficient publications relevant to our market. The Stranger reports that businesses who placed ads in their paper were visited by a Stranger reader 3.7 times a month because of the ad placement, and that of the total Stranger reader population 69% prefer to shop local. With this, readers spend on average $105.85 on apparel in the past 30 days. 30 Digital marketing is where we will put our focus. We will reach our consumer through email as they will have to opportunity to sign up for our newsletters, keep updated on new merchandise and be alerted on store sales. During the sign up for our newsletter, we will also be able to obtain birthdates and have an opportunity to keep track of our consumers shopping experiences and merchandise purchased. We will be able to send birthday coupons to consumers, and perhaps we can allocate past purchases and create coupons for consumers who mainly purchase denim, and those who mainly purchase shoes. Consumers will also be able to complete surveys on their shopping experiences, from which we can internally improve our business. We must take advantage of the digital age we live in; Instagram and Facebook accounts will be made in name of our business. Which will be run by store employees, giving an inside perspective to our business, and to the consumers who follow these accounts they will be able to keep up to date on what we are offering. Also, a website will be made for our business, allowing consumers from a far to 30 http://post.thestranger.com/extras/pdf/sales/2011onesheets/activeconsumerandtravel.pdf
be able to purchase clothing online. Our consumer appreciates accessibility, and with these digital outlets we will be accessible wherever and whenever. Public Relations Strategy With knowing our consumer, we know shopping local is an important deciding factor in their purchases. We can potentially team up with other local businesses in the area, and host events that promote the local economy. With our name on these events we will be seen through the eyes of not only our consumer but also the partnering businesses consumer. Teaming up with a local bar to host a summer BBQ, or collaborating with local designers to create a line exclusive to our business. The options here are seemingly endless, the community we will be located in and the city itself embraces and supports their small businesses so the potential for success in this is likely. Personal Selling and Sales Promotion To keep an allure to our brand, we will have four major sales yearly. The reasoning behind this is that we want to obtain and withhold an image that sets us apart from the competition, four sales a year will show our consumers that our the merchandise we purchase is thought out and selected because of its quality and value. That we do not simply run with the herd of fast retailers such as H&M and Urban Outfitters. Also, with four major sales we will be able to prepare and receive enough profits to be able to make purchases for the coming seasons. Every three months the sale will bring in consumers through both our direct and indirect advertisements and from the awareness of our regular customers. Staff training exercises will be complete monthly, as workshops to refresh our employees on the importance of customer service, the importance of details and how to create an environment welcoming but singular in aesthetics to our consumers. Training will be done to inform our staff on new merchandise, as to what characterizes the pieces and any information that the store managers feel will be important to know. Tactical Plans Secure Location: â—?
We will secure our location in the first two months after beginning the business process. This will include...
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Scouting, searching, comparing locations for review
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Comparing and planning within our means for lease costs
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Comparing and planning location in the neighborhood, and taking into consideration how our neighbors are and research plans for future construction in the area.
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Once agreements are finalized, pass the information to our lawyer who will review and advise as needed. Contact Leasing Agent:
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After finding a location we wish to pursue for our business, we must contact the leasing offices of the building and a lawyer defending our business.
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We will sign papers, lock in costs, and finalize all dealings with the leasing process.
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Once agreements are finalized, pass the information to our lawyer who will review and advise as needed. Interior Design Team & Construction Plans
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Once our location is secure, an interior design team made up of our business creators and a few select interior design professionals will analyze the space and create plans for construction.
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Blueprints and architectural sketches to propose to investors and for the construction team.
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The construction team will go ahead from the blueprints to begin work on the space and create the image desired from the design team.
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As work continues plans will change as necessary, to accommodate the space and work within the budget.
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Once agreements are finalized, pass the information to our lawyer who will review and advise as needed. Management Team:
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Our business creators will work to recruit store managers to help better the business
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In the beginning months we may keep with the business creators to hold this duty once we open.
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Depending on whom we encounter during this process we will be able to judge who will be able to help bring our business to life, and be able to contribute to the planned image of our business.
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Whether or not we hire on managers, we will have workshops pertaining to managerial duties and processes that will be better our business.
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Training on store operations, how to handle monetary transactions, report inventories, order merchandise.
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Once agreements are finalized, pass the information to our lawyer who will review and advise as needed. Contact Vendors:
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In the few months before opening we will contact shipping vendors to finalize prices and exact services
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If needed, reach out to other vendor businesses to ensure we have the most cost effective and efficient service for our business.
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Once agreements are finalized, pass the information to our lawyer who will review and advise as needed.
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We will place merchandise orders based upon current market trends and the decision of investors and our management team. Hiring Process:
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We will look to hire store employees.
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Ads will be placed in our chosen newspapers, as well as craigslist if our store creators will not be able to recruit on a personal level.
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An accountant we be needed to help us plan how to afford and manage hours and pay
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Our lawyer will assist where needed, in dealings with taxes, etc.
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When we chose the employees, they will complete training pertaining to store operations, as the managers have done. Visual Merchandising:
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Once the employees are finalized and trained, and the merchandise has arrived we will begin arranging to store.
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Again we will work with the Interior Design team to ensure the image of our business is pinpointed perfectly.
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Props, sets, and all other product displays will be made and placed accordingly.
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At the end of this process, our store and merchandise will be fully prepared for investors to view and for potential customers to shop. Advertising:
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We will buy advertisements in the Seattle Weekly and The Stranger to advertise for our new business.
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Details on the grand opening will be planned, and released.
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Our store employees and managers will work to create these ads, cost efficient considering our creative team will be able to bring the image of our store to print.
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Invitations we be sent for our grand opening, to fashion professionals in the region, to fashion and business journalists, and anyone else we feel the need to notify of our opening. Opening Day: 10AM- 6PM
The full management team and employees will be at the store one hour before opening, arriving at 10 AM. We will have a toast to our opening, and celebrate our hard work. We will add finishing touches to our set displays, rearrange and add too as necessary. Managers will double check cashiers and make sure cash is in hand for transactions. Hourderves and drinks will be set up, managers will bring these supplies as they arrive. Playlist will be completed and music will begin playing throughout the store We will open the doors at 11AM. The hourderve and drink table will be near the entrance, and signs will be placed on the sidewalk to grab attention of those walking by. For the first few hours- 11AM to 3PM, snacks and drinks we be refreshed as needed. Employees will rearrange and replenish merchandise as needed. And managers and employees will work to engage invitees and customers alike: share knowledge on product, build excitement for our business and most importantly gather customer contact information: email, phone numbers, all information necessary to keep contact. These actions will carry out through the entire business day. In the last few hours of the grand opening day - 3PM to 6PM, we will disburse coupons to all customers who walk in our doors, a discount ticket worth 25% off a single item (void on this grand opening day) and valid for the following 30 days. With this we will draw back in a strong number of customers. The closing duties- 6PM to 7PM managers will close doors, close out cashiers and check change made from the day, employees will disassemble food/drink table, take care of leftovers and dishes. Also, employees will rearrange, replenish, and ensure merchandise displays and other set displays are prepared for the next business day. Lastly, a final toast to the grand opening, to the employees and managers.
Vendor/ Lease Agreements: ●
We will keep our lawyers and accountant on hand through these select months.
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We will scope the vendor market to ensure we have the most cost efficient service
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We will keep in close contact with businesses we buy merchandise from, to build relationships with the merchandise available to us. See more- Manager Meetings
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Occurring every four months, we will update and finalize new agreements pertaining to the business. Refresh and maintain any permits that are near expiration, or any agreement end. Taxes/ Other Payments:
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Our accountant will work alongside store managers to ensure payments are made and money is being sent where it is needed.
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These will be maintained monthly.
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Money going to rental fees, permit fees, utility fees Hiring/ Employee Maintenance:
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With profits in mind, and projections made from continuous market research will we decide whether or not to hire on more employees.
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If it is decided to hire on more, we will talk over with our lawyer and accountant to ensure this decision is realistic and healthy to the business.
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We will come across these decisions every six months, to ensure we have adequate data and numbers to make these decisions.
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Our current employees will undergo necessary training and exercises as decided by store managers to ensure complete satisfaction dealings with customers, and the overall flow of the business. Management Meetings:
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Managers will meet on the first business day of the month to discuss any flaws, share ideas to help the business grow, and any other topics pertaining to the business and overall business environment.
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Sales and promotions will be discussed and planned during these meetings. As well as contact lists updated and customers contacted on information pertaining to sales and other promotions.
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These we occur monthly to keep our management team on top of any issues, to keep everyone updated and in line with future plans.
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Occurring each meeting, managers will look into merchandise for the store.
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We will send our store managers to trade shows PROJECT New York and PROJECTSOLE New York, held in July each year. These conventions have a focus on menswear, men’s accessories and footwear. to seek out innovative designers, build business relations with stable brands, and ensure we will have the best merchandise throughout the year Advertising:
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Every three months our managers and accountant will meet to discuss advertising strategies.
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Sales and promotions will be considered in these advertisement plans, to keep costs level and ensure profits will be made.
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These meetings will plan out the coming three months advertisements: where they are distributed, where cuts should be made, changes in ad design, etc.
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Here we will plan and budget out advertisements that will run in Seattle publications.
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Maintenance Needed:
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Happening simultaneously with advertising plans, here we will plan alterations to the store in design and features.
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Costs will be budgeted with what we have budgeted for advertising.
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Employees will assist in creating store/set displays, and offer help to managers in making decisions for the whole merchandise environment.
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Aging lists: Notifications/ flyers and emails will be sent out to those who sign up for our newsletters notifying of upcoming sales, invite only events and other events/parties hosted in our store.
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Sales
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We will have three major sales a year, to anticipate the following style seasons:
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Occurring in April, August and December. To clear out the previous seasons inventory and bring cash in for new merchandise.
Advertising Reach & Frequency Plans: REACH 200,00031
SEATTLE WEEKLY THE STRANGER FACEBOOK/ INSTAGRAM
Circulation: 81,600 Readership: 587,5200 Dependent on following…
Dependent on following…
FREQUENCY Weekly
SIZE/DURATION
Weekly
¼ Page, Weekly
Daily/ Weekly
Weekly
MONTHLY $400
YEARLY $4800
Web photos, blog posts As current as possible
Performed by employees, Cost would be implied with wages
Performed by employees, Cost would be implied with wages
Media in email would require Photoshop
$9.99
119.88
¼ Page, Weekly
Advertising Budget: We will have modest means when it comes to our advertising budget, meaning we will not exceed or financial means and if need be we will fluctuate our advertising plans according to the health of the business. To get the most of the advertisements we commission, we will direct them to are specific consumer to avoid ambiguity among the audiences who view them.
31"Sound Publishing Buys Seattle Weekly - Whidbey News-Times."
Since the only advertisements we will buy for print will be in the Seattle Weekly and The Stranger publications, we can set aside enough money to ensure these ads will be successful in spreading exposure of our business. That said, we would need approximately $5500 yearly to supplement these choices. As stated in our advertising strategy, we will keep most of our advertising digital. And with that we will need the necessary photo editing and image creating programs; Adobe Photoshop currently has a limited time offer for their program, rates are just $9.99 per month. PRICING PLAN: Pricing Objectives and Strategies Psychological Pricing Pricing that considers the psychology of prices, not simply the economics; the price says something about the product
Market- Skimming Pricing Setting a high price for a new product to skim maximum revenues layer by layer from segments willing to pay for the high price
This pricing strategy will allow us to in a way manipulate out consumer. The difference between $150.00 and $149.99 is technically one cent, though in the eyes of the consumer and because of the purchasing psychology they will be more inclined to purchase our product priced at $149.99 rather than $150.00
This pricing strategy will allow us another outlet in using the buying psychology to our advantage. Setting prices artificially high on our products will let our consumers believe there is more prestige and overall better quality in our products compared to our competitors.
Category Tops
Initial Mark Up 300%
First Mark Down 20%
Second Mark Down 10%
Bottoms
350%
25%
15%
Outerwear
400%
25%
15%
Accessories
300%
20%
10%
Shoes
400%
25%
15%
Promotions Semi Annual Sale Anniversary Sale Clearance Sale Semi Annual Sale Anniversary Sale Clearance Sale Semi Annual Sale Anniversary Sale Clearance Sale Semi- Annual Sale Anniversary Sale Clearance Sale Semi- Annual Anniversary Sale
Stock Turnover: We will aim to turnover our inventory four times a year, as it will be congruent with the style seasons and will allow us to remain on top of current trends. The turnover period being will be every around every 75-91 days, therefore the turnover rate will 3.47-4.0. To calculate the inventory turnover, we will divide the inventory figures into the annualized cost of sales.32
Annual Cost of Goods/ Inventory For example, if we had an annual cost of goods sold at $1,500,000 and the cost of the inventory was $400,000 our inventory turnover rate would be 3.75
$ 1,500,000 $ 400,000
= 3.75 Turnover Rate
Terms of Payment: We will work with our vendors to establish our payment options, pertaining to our credit with them. The sale discounts we receive from our vendor will prompt us for payments on the credit sales We will work the discount of 2/10 N30 when we begin business with the vendors. With putting in payments within the ten days, we will receive a 2% discount (2/10) otherwise full payment must be made within thirty days (N30) If paid within 10 days: $10,000 X 98% = $9,800 due within 10 days If paid within 30 days: $10,000 is due Once we begin and grow our close relations with the vendors, we will work toward the discount of 2/10 N30+90. This will allow us another ninety days to complete payments to our vendors.
32 http://www.accountingtools.com/inventory-turnover-ratio
Distribution Plans: Off-Site Sales We will want to have a strong social media presence, and by doing so we will receive free promotion as we build our following. For starters, we will create a store Instagram account. Our store employees and managers will run this account; posting photos of new merchandise, outfit ideas, photos of themselves to portray each employees style incorporating our products. Instagram will be the forerunner to our actual website. Our Instagram feed will act as our store lookbook. As for our store website, we will have to commision a professional photographer for our merchandise portraits. Here we will again be able to utilize photoshop to enhance the photos. We can use online template examples in formatting the layout of the website. On the website, payments will be made through PayPal. A trusted and safe payment transaction, our online consumer base will easily be able to make purchases. It is important that we be accessible to those consumers who cannot be physically in store, and the option to purchase online will be appreciated and utilized. PayPal’s usage fee’s33 can be seen in the following:
33 https://www.paypal.com/us/webapps/mpp/express-checkout?mpch=ads&mplx=3484-1581102056-0
Forms of Payment Instore credit/debit transactions will be made using the SquareUp system. This application will require an iPad, and offers a full stand. This reader takes any and all major card type and charges 2.75% of every $100. This company offers this system with no sign up fees, no monthly fees, no activation fees, no inactivity fees, no cancellation fees, no chargeback fees, and no bank routing fees. 34 This SquareUp system will connect to cash till, for all cash transactions so we will be able to make change. Also, a receipt printer connects.
34 https://squareup.com/pricing
Means of Shipping & Pricing When we need to ship merchandise to our customers, we will use the services provided by GSO. This service is the most cost efficient, compared to that of UPS and FedEx. We will apply shipping rates to these transactions, a set price of $9 per order, but if the customers order is over $150 we will offer free shipping. GSO’s shipping rates are as follows:
source: gso.com