Nicole Realmuto London College of Fashion Product Development Summer 2012
London College of Fashion
Nicole Realmuto
Introduction to Buying Office My name is Nicole Realmuto and I am the buyer for Harvey Nichols at the Knightsbridge, London location, focusing on the new line of lingerie by Alexander McQueen. Buyers have an enormous amount of responsibilities and skills need to strive in this field. The main responsibilities as a buyer can include developing products for the house brand, to negotiate of product prices (delivery and payment terms), research and evaluate markets and products that are applicable to the company one is employed by, must communicate with suppliers, product teams and senior management of company, work with the merchandising planning controls (over finance, available areas, historical evidence and trends), and a senior buyer must manager the rest of the buying team. We, as buyers, have an incredible amount of functions to make sure our job is completed fully. Buyers must have a few key qualities to make one acceptable for the positions, these being creative, innovative, ambitious, assertive, be proficient in mathematics, have experience with interaction with people (customers, superiors and team) and have competent communication skills. The buyer is not the only one in the office. Under the buyer, there is an assistant buyer and buying assistant. The assistant buyer can have a range of responsibilities, many being spread through the different departs and delegating the functions of the buyer. The buying assistant, also known as the buying clerk is the first step to becoming a buyer, they are responsible to do whatever the buyer and assistant buyer tell the to, some things may include organizing the office, filling swatches and doing administrative duties. There is also the merchandising team, including the merchandiser-‐responsible to estimate sales and plan stock levels to reach the target sales and margins, give regular analysis and report the Product Development
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progress of the stock levels, sales performances and stock purchase to senior management, to work with the buyer on range planning to maximize commercial opportunities for products, to manage intake and commitment to accommodate stock requirements of the business, to manage stock distributions and to manage and develop the merchandise and distribution team. Directly under the merchandiser is the assistant merchandiser responsible to deputize the responsibilities of the merchandiser and manage responsibilities for junior members of the team. There is also the merchandise assistant, which is related to the planning functions. There is also a garment technologist who is responsible for the development of quality control. Another member of the team is the designer, who is responsible to research trends and product ideas, create a fashion direction and a mood, customer and product story-‐boards, present to senior management, produce range of products, finalize product groups with buyers, develop specification sheets, develop seasonal products styling records and accompany buyer on trip to suppliers. The buying department does not only interact with the merchandisers, the garment technologist and the designer. The department also works with sourcing, marketing and public relations departments. The buying office has four private offices, one for the buyer, merchandiser, garment technologist and designer, with four cubicles in the middle of the offices for the assistant buyer, buying assistant, assistant merchandiser and merchandising assistant. See diagram below (the doors being red rectangles).
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Introduction to Harvey Nichols
Harvey Nichols is a high-‐end department store, founded in 1831. The department
store has numerous brands and types of women’s wear, menswear, beauty and food & wine products. The first store was opened as a linen shop on the corner of Knightsbridge and Sloane Street. Less than fifty years after the current building was built. In 1919 Harvey Nichols was bought by Debenhams and then later became part of the Burton Group in 1985. In 1991 the store was acquired by Dickson Concepts International Ltd and refurbished the entire food market, restaurant, bar and café. In 1996 Harvey Nichols was listed in the London Stock Exchange and opened it’s second store in Leeds. The London-‐ based store has now expanded overseas and has stores in China, India, Ireland, Saudi Arabia, Scotland and Turkey. Introduction to Alexander McQueen
Alexander McQueen is a British born fashion designer, who is best known for his in-‐
depth knowledge of bespoke tailoring and his provocative shows that often had a theme of strength and fragility and emotion power and raw energy. His final collection at Central Product Development
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Saint Marten College of Art was bought entirely by Isabella Blow, which launched McQueen into the fashion industry. Since then, he has had numerous successful shows and now is merchandise is available all over the globe. Gucci now owns the Alexander McQueen company. Sarah Burton has been head of women’s wear since 2000 and after Alexander McQueen’s death in 2010 she was named the creative director for the company.
Importance of Marketing Being a buyer for Harvey Nichols focusing on the lingerie line by Alexander McQueen understanding the market and business is vital. I will show the importance of marketing by using the Marketing Mix Case Study, a SWOT analysis, geo-‐demographics, market segmentation, ACORN, fashion attitude and roger status, the innovation curve, VALS, and a defining customer board. Marketing Mix Case Study
Harvey Nichols
Product
Menswear, Women’s wear, Beauty, Food & Wine
Price
High-‐End, Luxury
Promotion
In-‐store, Online, Word-‐of-‐Mouth
Place
Knightsbridge, London
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Strengths:
Nicole Realmuto Weaknesses:
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Customer interest
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Smaller customer base
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Innovative product base
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Not mass-‐market
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High-‐end market
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Many locations in numerous countries
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Exclusive brands
Opportunities:
Threats:
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Not many stores of competition
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Recession
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Many people visit areas of
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Consumer Purchasing
Harvey Nichols’ locations
To continue on with the importance of marketing, customers at Harvey Nichols are
part of the A, B and C categories in the ACORN classification. Below is the diagram of ACORN categories. Customers range from wealthy achievers to better-‐off executives. Due to the range of ACORN classifications customers their shopping patterns and lifestyles are much different. For instance, some customers spend a great deal and shop regularly and on contrast many people buy one thing every once in a while.
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Explaining through the Rogers segmentation, customers are Early Adopters: individuals who buy emerging trends and Early Majority: individuals who pick up on a trend when it is established (as seen in the diagram below). Harvey Nichols customers are experimentals, achievers, and I-‐Am-‐Me for the VALS classification.
The geo-‐demographics for a range is vital because it gives information leading to
purchasing behaviour, which ultimately leads to profits and revenue for the retail and the brand. The region is central London, because this range will only be at the Knightsbridge location, which is a retail area of the city. As for demographics the customers of this line are
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women, with professional occupations as managers and executives. These women have a range of incomes starting at £100,000 annually and above. The customers of this range will be age 25 to 35 years old. Some of the customers will be married and starting families and others will be single and focused on their career first. The sizes and heights of the target customer will vary, but they will be between a size 6 and 12. For a further example of customer see the pen portrait below.
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Range
In fashion retail a ‘RANGE’ is an assortment of products, which is developed under
different categories to sell to customers. This range is a concession of Alexander McQueen lingerie for the Harvey Nichols department store. This is a growth of Alexander McQueen’s previously branded company. The width of range is as follows. The concession has eight pieces ranging from different styles of briefs, braziers and cami-‐knickers. All of the pieces are extremely well made and made of quality fabrics. The range has a gothic and romantic inspiration and all pieces are incredibly feminine. The depth of the collection is as follows. The range is entirely fabricated of lace and silks. There is a basic colour scheme to keep the focus of the garments on the construction and design details. The three colours are black, deep red, and nude. There are three different styles braziers, four brief styles and one cami-‐knicker in the capsule-‐collection. The design details that the range focuses on are line and texture. With the colour and the fabric choices the collection is very cohesive. Historical Evidence vs. Trend Forecasting
Different retailers and brands use different combinations of historical evidence and
trend forecasting when planning the creation and development of a range. Stores that have conservative merchandise and continuously sell the same products rely on historical evidence to rationalize the range. On the opposite, some stores that are more trend
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oriented focus on trend forecasting to plan a range. An example of a conservative store is Talbots and an example of a trendy store is Topshop.
Harvey Nichols uses more trend forecasting, but also historical evidence. The ratio is
65% trend forecasting and 35% historical evidence, both being essential for the range planning. Alexander McQueen uses 80% trend forecasting and 20% historical evidence when designing a new collection. The mix must be right for the brand and or retailer. Designers play a huge role in trend forecasting because must trends start at the high end and move onto the high street.
The Electronic Point of Sale (EPOS) is technology that facilitates the collection of the
sale of goods or services to the customer. EPOS is making the collection of what is bought easily recorded giving retailers the information of which products are selling best and by how much. This makes the buyers job much easier because they are able to draw relationships from previous products to current and estimate what will sell and how much it will sell. Seasons/Phasing The phasing of a collection refers to when the product is put into the store. This range will be in Harvey Nichols in the Autumn/Winter 2013 season. Buying for this collection will occur very far in advance before the merchandise hits the sales floor. Due to the fact that this is a luxury and because it is a concession collection this range will have a long shelf life. The collection will be on the floor from week 37 to 52. It will act as the core
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of the diagram below because of the nature of the collection.
SKU’s/Colourways
SKU (Stock Keeping Units or Single Kinetic Unit) are used to break down specific
details for both the customer and retailer. Customers use the SKU to find the right size and style and the EPOS system can send the right information about garments. Each garment has a specific SKU and barcode. The SKU explains the season, design, colour, size and if needed the sub-‐category.
For this range the SKU’s are broken down as further explained.
1 -‐ BRAND MCQ-‐ McQUEEN 2 – SEASON 1 AUTUMN/WINTER 3 – DESIGN 1 BRIEF A HIGH-‐WAISTED B HIP HUGGERS 2 BRAZIER A STRAPLESS B DOUBLE STRAP C TURTLE-‐NECK D TRIANGLE SHAPED 3 CAMI-‐KNICKER Product Development
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Nicole Realmuto
DEEP V-‐NECK
4 – COLOUR 1 BLACK 2 DEEP RED 3 NUDE 5 – SIZE (BRA SIZE) A 6 (28) B 8 (30) C 10 (32) D 12 (34) E 14 (36) 6 – SUB-‐CATEGORY (BRA CUP SIZE) 1 A CUP 2 B CUP 3 C CUP 4 D CUP 5 DD CUP This range has six pieces, all but one piece has three colourways. The SKU’s without the sizes are listed below.
FRENCH BRIEFS MCQ11B3 CAMI-‐KNICKER MCQ13A1 MCQ13A2 MCQ13A3 LACE BRAZIER MCQ12B1 MCQ12B2 MCQ12B3 LACE BRIEFS MCQ11B1 MCQ11B2 MCQ11B3 HIGH-‐WAIST BRIEF MCQ11A1 MCQ11A2 MCQ11A3 TRIANGLE-‐SHAPED LACE BRAZIER MCQ12D1 MCQ12D2 MCQ12D3
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Sizing
The sizing for this range is exceptionally important especially with lingerie; if the fit
is not perfect the garments will not work properly. Sizing for this range will be as follows. Braziers are sized A-‐DD Cup sizes and from 28-‐36 inch measurements. The cami-‐knicker and briefs are sized from UK sizes 6-‐14. The majority of the merchandise will be bought from the middle sizes (as seen lower), but because lingerie is so important to fit there are multiple sizes being produced.
Sourcing
Sourcing plays a pivotal role with the quality of a garment. The sourcing of the
garment is so important also because of the labor used to make the range, for example child labour is cheaper and looked down up, but if a garment is made by a seamstress that is well paid it gives more value, socially and quality-‐wise, to the garment. The pro of a third-‐world country sourcing for the garment is that the prices will be less expensive, however the quality will suffer. The con for sourcing within a first-‐world country is that the price can be significantly higher, but the quality will be better. For the range all pieces will be made in the United Kingdom. Product Development
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Pricepoints
Price points are vital for sales, as well as the right price for the garments. There are
multiple theories of the ways to price a garment. There is the price curve explaining the relation of price and volume sold. There are psychological pricings with different endings of the price.
The price curve is a diagram that shows the association between price and volume
sold. By using the price curve it is evident that the products with prices in the middle range make the most revenue. The lowest priced items have a higher volume, but that does not correlate into revenues because of the low price. To contrast, the highest priced items sell the smallest amount of volume, and that does not bring huge revenues because of the prices due to the low volume. See diagram below.
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Many retailers use a pricing theory known as psychological price points. In this case
the prices end in 50p, 95p or 99p to offer a perceived value. For a retailer like Harvey Nichols and brand like Alexander McQueen psychological price points do not make sense. A perceived value is not what the price is about for this concession; the price is used to show the luxury and quality of the products.
When pricing a range many things need to be taking into account. There must be
logical price gaps and the garments must be priced to earn a profit. The buying profit is the difference between the cost price (CP) and the retail selling price (RSP). The cost price of the garment is the price that is paid by the retailer to the manufacturer/design house. The CP includes the C.M.T or the cost, make and trims of the garment and/or garment components. The retail selling price is the price the customer pays for the garment. From the RSP and CP the gross margin or gross profit is derived. See equation that follows. RSP -‐ CP = Gross Margin
The retail selling price is often 300%-‐400% of the cost price due to the overheads of
the retailer. These can include: store rent, rates, staff wages, head office costs, travel, utilities, distribution costs and markdowns/sales/returns. Markdowns, sales and returns are a huge factor because often only 85% of garments are sold at full retail price. After all of the overheads the profit is usually much lower, but it is considered the net profit. Retailers know their overheads tremendously well and know exactly what the mark-‐up needs to be to make a profit. The mark-‐up is the margin. A standard margin for retailers is 66.67% (three times the cost price). See below to explain how margins are found. How to Calculate the Margin: Selling Price -‐ Cost Price x 100 = Margin Percentage Selling Price Product Development
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Example: Selling Price -‐ £30, Cost Price -‐ £10 (30 -‐ 10) x 100 = 66.67% 30 Conclusion
This product range has sixteen pieces, all being cohesive, but still varying. The
collection stays true to Alexander McQueen’s brand image because of unique style details, colours and fabrics. Alexander McQueen has unmistakable garments; this new lingerie collection continues this aesthetic. Here is a justification of all six styles. The French knickers are in this range because they are incredibly feminine and comfortable; these are the softest item in the collection. The French knickers are only in the nude colour to continue the soft theme. The cami-‐ knicker is composed of silk and lace, with underwire for support in the top if it. The lace is transparent and goes into a deep v-‐neck. The back of the garment is also mainly made of lace. The cami-‐knicker is in the collection to bring a one-‐piece of lingerie into the collection. The range needed different pieces, which is another reason the cami-‐knicker is in it. The lace brazier uses blocking to combine structure and the softness of the lace. The back of the bra is almost bare to show the body more than the construction. This shape will work really well on must sizes. The lace briefs cover what must be covered but leave the rest to be only covered by transparent lace. The high-‐waist brief is used to not only slim the body with lines and curves, but also continue a separate shape and cut for lingerie. The triangle shaped brazier is in the collection for a simple brazier with a twist with the racer back and the lace top of the brazier. All pieces of the collection have distinct design details and are incredibly well made distinguishing this range from the competition.
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FRONT
FRENCH KNICKERS MCQ11B3 SIZES AVAILABLE: 6-‐14 COST: £25 RETAIL SELLING PRICE: £100 MARGIN: 75% COLOURS: NUDE FABRIC: SILK COUNTRY OF ORIGIN: UNITED KINGDOM
BACK
DETAIL
COLOURS
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FRONT
BACK
CAMI-‐KNICKER MCQ13A1 MCQ13A2 MCQ13A3 SIZES AVAILABLE: 6-‐14 COST: £200 RETAIL SELLING PRICE: £800 MARGIN: 75% COLOURS: NUDE, BLACK, DEEP RED FABRIC: SILK, LACE COUNTRY OF ORIGIN: UNITED KINGDOM
COLOURS
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HIGH-‐WAIST BRIEF MCQ11A1 MCQ11A2 MCQ11A3 SIZES AVAILABLE: 6-‐14 COST: £120 RETAIL SELLING PRICE: £480 MARGIN: 75% COLOURS: NUDE, BLACK, DEEP RED FABRIC: SILK, LACE COUNTRY OF ORIGIN: UNITED KINGDOM
COLOURS
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FRONT
BACK
LACE BRAZIER MCQ12B1 MCQ12B2 MCQ12B3 SIZES AVAILABLE: 28-‐36 A-‐DD CUPS COST: £100 RETAIL SELLING PRICE: £400 MARGIN: 75% COLOURS: NUDE, BLACK, DEEP RED FABRIC: SILK, LACE COUNTRY OF ORIGIN: UNITED KINGDOM
COLOURS
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FRONT
LACE BRIEFS MCQ11B1 MCQ11B2 MCQ11B3 SIZES AVAILABLE: 6-‐14 COST: £75 RETAIL SELLING PRICE: £300 MARGIN: 75% COLOURS: NUDE, BLACK, DEEP RED FABRIC: SILK, LACE COUNTRY OF ORIGIN: UNITED KINGDOM
BACK
COLORS
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FRONT
BACK
TRIANGLE-‐SHAPED LACE BRAZIER MCQ12D1 MCQ12D2 MCQ12D3 SIZES AVAILABLE: 28-‐36 A-‐DD COST: £105 RETAIL SELLING PRICE: £420 MARGIN: 75% COLOURS: NUDE, BLACK, DEEP RED FABRIC: SILK, LACE COUNTRY OF ORIGIN: UNITED KINGDOM
COLOURS
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