Six Month Buying Plan | FASM 245 Madeline Mulvihill Jessica Rivera Madison Daley
M I S S I O N S TAT E M E N T Ralph Lauren has always stood for providing quality products, creating worlds and inviting people to take part in our dream. We were the innovators of lifestyle advertisements that tell a story and the first to create stores that encourage customers to participate in that lifestyle.
HISTORY OF RALPH Ralph Lauren, the iconic man behind the brand, comes from a rag to riches story that began in the Bronx, New York in 1939. Born Ralph Lifshitz, he got his start working for Brooks Brothers before moving to Beau Brummell where he
began designing his own men’s neckties known for their wider cut, which he branded under the name “Polo.” It was here that Lauren began to solidify his “look.” Soon after he began selling at major department stores, including Bloomingdales.
Ralph’s American dream began to take off here, as he created a whole brand based off of his own Americana idea of luxury. By 1970, Lauren had a full collection including womenswear, and by 1972, the short sleeved collared Polo shirt featuring the iconic pony icon was born. The affluent polo player man was dreamed up by Lauren as his idea of an entrance into an elite society, and was then executed into the world through the polo logo. Since the birth of the polo shirt, it has expanded into a full fledged brand, among many. Ralph Lauren currently has over ten brands within the company and 493 company owned stores internationally. While the brand is currently in a transitional phase, it is looking towards the future as Patrice Louvet has been named the new CEO.
BRAND INDENTITY
Ralph Lauren Polo’s iconic preppy aesthetic is rooted in the American dream. The brand identifies itself as accessible yet luxurious, as their widespread presence and price assortment makes them within reach to a multitude of customers. Every aspect of the Ralph Lauren brand returns to lifestyle, as Ralph himself built the brand upon the idea of an affluent, well to do man. The current addition of restaurants, cafes, and home wear secures the idea that the Ralph Lauren customer can live their daily life enveloped in the brand. Ralph Lauren caters to a luxury market as well as a middle class market through Ralph Lauren Collection, Black Label, and Polo Sport collections.
SCOPE AND SIZE
Polo Ralph Lauren currently inhabits 144 stores and has 272 Polo Factory locations globally, with a Polo flagship location in London. The brand ranges from outlets to traditional retail stores, which can both be found internationally. The brand offers mens, women’s and children’s products in varying categories from accessories to home. Recently, the brand closed their flagship location on New York’s Fifth Avenue which garnered media attention. Alternatively, they have recently opened locations in Hong Kong and London.
TRADEMARKS Ralph Lauren Cor p. owns its most famous Polo player on a hor se trade mark in the U.S. and 120 other countries. Owned trademarks include:
POLO CONSUMER
He embraces all aspects of the lifestyle brand by sipping on Scotch at the Polo Bar and by attending openings of new flagship stores in foreign lands such as Hong Kong, where he feeds his adventurous side. The Polo man remains current on sporting events, and dresses in the brand when he plays himself. He is middle to upper class and can be found in bustling cities during the week and in quieter outdoor areas on the weekends.
THE
The quintessential Polo man ranges in age from 18-35. He was raised wearing Polo and has been surrounded in it by the men in his family from a young age, cementing his own heritage in the brand. He is ambitious and driven, making Polo the perfect lifestyle brand to surround himself with, He has strong core values and beliefs and admires a fresh look, and Polo heightens this through its clean cut apparel.
Direct Competitors
Tommy Hilfiger:
Hugo Boss:
Hugo Boss’s addition of their Orange Line also offers competitive prices and a wide product line to compete with Polo. Their expansion into lifestyle products also poses a threat. Its relaunch as casual denim wear has also helped the brand.
J.Crew:
J. Crew offers pairings with Drakes and Comme Des Garcons that also appeal to a wider range of customers that Polo might miss. Their private labels also gear towards the same market as Polo. J Crew’s brand heritage also remains similar to the strength of their brand.
COMPETITORS
Tommy Hilfiger’s recent Tommy X Gigi collection has posed a threat, as they are now appealing to the millennial generation while offering more current and trendy styles. Tommy Tailored, Tommy Jeans and Hilfiger Denim also target the same customer successfully on different price levels, something Polo does as well. Hilfiger also offers a similar product assortment to Polo, and maintains a similar target customer.
Indirect Competitors
COMPETITORS
Discounted Stores:
Discount stores like TJ Maxx and Marshalls pose a threat to Polo as well. Their competitive prices and constant markdowns provide customers with constant deals. Consumers can also get the same product Polo sells to its customers.
Amazon:
Amazon’s convenience for its shoppers is their biggest advantage over their competitors. Their unparalleled pricing also strengthens the online retailer, leading customers to them for the best deal. Their wide product range also poses a threat.
SPONSORSHIPS R alph L auren has elong ated their Americ an brand by sponsoring several sporting events, including Wimbledon, the United S tates G olf Association (USGA), and t he US O pen. T hey have also dressed player s for the US O lym p ic s. T he pairings are perfect for the brand as it is rooted in the American dream, which has b een seen achievable through success in athletic s. T he addition of the Polo logo as seen wid ely by those who watch such events as well p ro vides brand recognition and ex tra public ity, cementing the brand as an American stap le.
EXPANDING THE LIFESTYLE
Ralph Lauren currently owns and operates four restaurants, Ralph’s Coffee in London and New York, RL in Chicago, Ralph’s in Paris and the Polo Bar in New York. Ralph’s Coffee is a combination of the intimacy of Ralph’s Paris and the after hours cool of the Polo Bar. RL represents the luxury of a swanky private club with the luxury of full dining accommodations, cocktails and a raw bar. Ralph’s Paris opened three years ago, and guests have responded well to the 17th century town house look with French stables lining the inside.
The restaurant acknowledges its American roots through their contemporary menu, Brooklyn brunches and famous cocktails. Finally, The Polo Bar is a prestigious venue that is similar to a country club in atmosphere. The restaurant is dimly lit and decorated with equestrian paintings and trophies. The Polo Bars timeless and classic feel has made it a New York staple. Each establishment reinforces the lifestyle aspect of the brand, allowing customers to be consumed in Ralph Lauren.
TRENDS
PO LO FAS H IO N TR EN DS
Polo is a brand that remains classic in its style. When it comes to new trends, Polo Ralph Lauren simply incorporates new colors into its looks to reinforce their classic products. Polo shirts often get an on trend revamp by the use of ombre colors new patterns. The brand’s main goal when releasing new collections is to maintain their staple basics that keep customers coming while keeping them relevant and fresh.
POLO CONSUMER TRENDS
Consumers are no longer looking for a one-stop shopping experience. They are more inclined to look for one specific item. Millennial’s have learned to appreciate uniqueness or customizable goods and they have lost the need for brand identity. Online retailers are offering lower pricing which is obviously more appealing to all consumers. This becomes a huge threat to brick and mortar stores, as people are always looking for a bargain. Even though Ralph Lauren has control over their own pricing, this factor discourages consumers to go to brick and mortar stores when online alternatives are readily available and easy. A viable solution would be to boost visual merchandising and focus on customer service as a more ‘phygital’ experience.
TECH TRENDS Euromonitor states the number of internet users reached 76% of the USpopulation in 2016, which grew from less than 70% in 2011. Luxury online sales grew significantly by 14%, to hold 13% of overall sales In 2016 internet retailing registers current value growth of 13%, to reach USD312.1 billion Omni-channel brands offer day delivery or free pick-up, ping and handling costs
consumers samewhich saves shipon both ends.
Third party merchants account for a 34% share of retail value sales in 2016, whilst Amazon.com remains the leading individual player, with a 13% share of value sales 1Q17 Fiscal Report, Ralph Lauren declined of 6% in global e-commerce revenues. PVH Corp. (PVH) reported a 20% increase in its e-commerce business in the last quarter. VF Corp. (VFC) reported a good 30% increase last quarter.
THE WAY FORWARD PLAN -Company will refocus on the core of what has made Ralph Lauren the iconic company it is today and get closer to the consumer than ever before. -The main reasons for the company’s poor performance in recent times has been a result of a decline in department store sales, the rise of fast fashion retailers, and the company’s own out of date supply chain model. -Since hitting a peak of $188 three years ago, the company’s stock price has tanked almost 50% to $99.76 on July 25th. -Ralph Lauren will evolve ing and shopping experience
its to
product, marketincrease desirability.
-The Company will also rightsize the cost structure and implement an ROI-driven financial model to free up resources to invest in the brand and drive high-quality sales. -As a result of its Way Forward Plan, the Company expects to stabilize performance in Fiscal 2018 and pivot to growth off of a smaller, more profitable base in Fiscal 2019, with improving operating margins in both fiscal years. -In Fiscal 2020, the Company is targeting market share growth and a mid-teens operating margin.
S
W
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T
STRENGTHS Strengths for the brand include a strong sense of brand heritage, which leads to high brand recognition and customer loyalty. Ralph Lauren’s technology innovation, particularly through it’s smart mirrors, has proven the brand is ahead of new technology to meet growing customer needs. The brand also capitalizes on customized goods, which fulfills a demand in the market. The company’s wide range of prices and merchandise helps to nurture their wide consumer base as well. Ralph Lauren’s unparalleled focus on the customer experience and lifestyle side of the brand through its addition of restaurants and sponsorships also continues to align them as ahead of customer needs.
WEAKNESSES Weaknesses for Polo Ralph Lauren include piracy and fake imitations. These things are largely out of the company’s control, and they weaken the perception of the brand. The over-saturation of Polo in major department stores is also a weakness, as the redundancy often paints Polo as tired and not fresh and cool. The lack of loyalty or rewards program also weakens the brand.
O P P O RT U N I T I E S The expansion of an internet presence could be a primary source for future growth, as the Millennial generation does the majority of their shopping online. It also offers convenience to many shoppers. This expansion could include their social media, as it is a free and effective way to advertise. Their current expansion into the Asian market is a positive thing, and its expansion further could also be a possible opportunity. Future collaborations with influencer’s, other designers, or hotel chains could further the brand’s presence while making it fresh. The brand experience in the brick and mortar locations could be strengthened through the addition of technology and new inclusions as well.
T H R E AT S Similar products being replicated at lower costs pose a threat for Polo. European full priced and wholesale businesses suffering from the weak economic conditions along with the negative impact of the strength of the US dollar could be an issue in the future. The over-exposure of merchandise in lower end department stores also weakens the brand perception and brand value for Polo Ralph Lauren.
CORE COMPETENCIES
Polo Ralph Lauren remains relevant to consumers today, as its strong brand identity as well as long history and brand recognition makes it hard to forget. Their global presence reinforces their mission in all that they do as a brand and their customer loyalty is strong and unwavering. Polo reaches a wide customer base not only through their global presence, but through their placement in several different leading department stores, making them easily accessible to shoppers. Polo’s sponsorship of major American sporting events also reinforces the brand’s mission and relevancy.
L O O K I N G F O R WA R D
Ralph Lauren Names Patrice Louvet its New CEO
Looking Forward Louvet, who starts on July 17, has served as the group president of global beauty at Procter & Gamble since February 2015. As a member of Ralph Lauren's board of directors, Louvet will report to executive chairman and chief creative officer, Ralph Lauren, and the rest of the board.
“Finding the right partner to work with me to take us forward in our evolution has been my primary focus over the last several months and I am thrilled that Patrice is joining our talented team. He’s an enormously skilled business leader with a deep passion for the consumer and a sophisticated understanding of building global brands. This, combined with his collaborative working style, transformation experience and intense focus on results, will put us in a stronger position as we move toward the future.” - Ralph Lauren
S TAT E M E N T O F O P P O R T U N I T Y At Polo Ralph Lauren, we believe in a strong brand heritage and how far timelessness can take us. We stay true to this while improving upon current trends and customer needs to always keep shoppers returning for more great quality. The quintessential Polo shopper believes in the history of what we do at Ralph Lauren, and as time wavers, our style does not. We believe the buying plan we have created will allow for the upcoming opportunities for the brand to help it grow. We acknowledge that the brand has been in a transitional phase, so we’ve created a space where Polo can only improve.
SIX MONTH BUYING PLAN
C O R P O R AT E P L A N
As Ralph Lauren suffered from brand overexposure, the company has been declining in net sales over the past three years. The Way Forward plan should drastically improve this decline as it is predicted result in a 5% net sales increase in the next 5 years. To start this transition, we predict a slower net sales decrease of -1.5% for Spring/ Summer 2018. While the Corporate sales are down, there is a planned increase for the gross margin of 4%. Gross profit margin is the difference between sales and the cost of goods sold divided by revenue. This represents the percentage of each dollar of a company's revenue available after accounting for cost of goods sold. The increased prediction is based off of a 5 year plan of +15%Â Â increase in Gross Margin for Ralph Lauren Corporate of 2022.
T O P L I N E C O R P O R AT E P L A N
POLO 6 MONTH BUYING PLAN Mens Apparel for Polo Ralph Lauren has proven itself to be the backbone of the company accounting for 32.5% of the total net sales. While the overarching company is decreasing in sales, Polo has remained to stay fairly consistent. We predict the Polo sales will increase in 1% for Spring Summer 2018 from the directed focus implemented in the Way Forward Plan. There is no real planned change in Gross Margin as the scope and size of the brand stays unaffected from the Way Forward Plan. Largest points of interest between months are the June and March. June represent the highest sales value of 20%, which is primarily due to Father’s Day. March is the lowest sales month as it is after the winter seasonal sales where the market as a whole sees a short lul in sales. Overall the monthly sales for Spring Summer does not vary nearly as drastically as the Fall Winter seasonal monthly sales.
ASSORTMENT PLAN For this chart the number of styles provided in each main category represents all styles presented online. From this number, we estimated how many styles were strictly in the respecting brick and mortar store fronts.
The reasoning in providing the sub scope and size categories under each apparel segment is to show difference in amount of inventory carried. All doors represents the inventory minimum for every US brick and mortar space, Middle represents the amount of inventory held be the averagely sized store, and Top represents all inventory carried in the largest spaces.
I N S T O R E L O C AT I O N S
750 N Michigan Ave, Chicago, IL 60611
CHICAGO
NA N T U C K E T
Polo Ralph Lauren 16 MAIN STREET 508.228.9451
C H I C AG O A S S O RT M E N T P L A N Chicago Tops Vs Bottoms
38%
62%
Tops
Bottoms
NA N T U C K E T A S S O R T M E N T P L A N
Nantucket Tops Vs Bottoms
30%
70%
Tops
Bottoms
POLO MENS SWIMWEAR ASSORTMENT Polo Mens Swimwear Assortment Nantucket Total Expected Retail Receipts Swim Bet Sellers Short Short Length 4.5 Inch Hawiian Swim Trunk 5.5 Inch Hawiian Swim Trunk 5½ Inch Gringham Swim Trunk Medium Length Long 8.5 Inch Kailua Trunk 8.5 Inch Kailua Trunk Print Total
$6,593
# On Hand
Colorways
Patterned
Sizes
%
Retail Price
Total Receipts
12 36 20
1 3 0
0 0 2
6 6 6
10% 31% 22%
$59.50 $59.50 $75
$714.00 $2,142.00 $1,500
24 12 0
2 1 7
0 0 2
6 6 6
23% 13% 100%
$65 $75 $66.80
$1,560 $900 $6,816.00
Chicago Total Expected Retail Receipts Swim Bet Sellers Short Short Length 4.5 nch Hawiian Swim Trunk 5.5 Inch Hawiian Swim Trunk 5½ Inch Gringham Swim Trunk Medium Length Long 8.5 Inch Kailua Trunk 8.5 Inch Kailua Trunk Print Total
$23,736.00
# On Hand
Colorways
Patterned
Sizes
%
Retail Price
Total Receipts
24 168 48 0
1 7 0
0 0 2
6 7 6
7% 50% 18%
$59.50 $59.50 $75
$1,428.00 $9,996.00 $3,600
48 24 0
2 1 7
0 0 2
6 6 6
16% 9% 100%
$65 $75 $66.80
$3,120 $1,800 $19,944.00
FINAL THOUGHTS Polo Ralph Lauren is a brand built on heritage that exhibits just how far classic style can go. Despite our current transitional phase, our buying plans create a space where Polo can only improve. Our implementation of the Way Forward Plan will also help Polo to increase in net sales. We are confident that Polo Ralph Lauren’s strength as a brand will continue to keep customers returning as we progress and improve.