SPDSMC_Matalan Report by rana.marsyafira

Rana Fathan Marsyafira 17096134

SECTION 1: CHALLENGES 1a. Challenges Matalan is a British apparel and homeware retail company that has been in the industry for more than 30 years.

Global Challenges

Communications Challenges

The growth of M-Commerce. A substantial percentage of UK’s e-commerce growth has been due to the increase of smartphone ownership (Ecommerce News, 2017). • Purchases made through smartphones (such as through apps and/or websites) in December 2016 has increased by 47% (Business Insider Intelligence UK, 2017). • 80% of mobile engagement with Internet was done through Apps (Fulgoni, 2014) Competition from other brands. The retail landscape is everchanging to adapt with consumer’s demands, company’s goals, and ICT developments (Benady, 2014)

Matalan has 221 stores spread across the UK as well as an online webstore. However, with the advance in technology and the Internet, customers are increasingly searching for convenient ways to shop above anything else (Think With Google, 2017). As a result, customers are now more inclined to shops that provide them an interactive and personalized experience, such as those that have apps as another option of shopping channel (Magrath & McCormick, 2013)

It’s no longer about the ‘consumer choice’ but the ‘consumer control’ (Webb, 2007). ‘Shoppers no longer just want the right brand, they want the 'right now' brand’ (Taylor & Hathaway, 2014). 3

The importance of brand identity. Brand identity is the ‘backbone’ to every successful retailer today (Thomson, 2012). With the increase in choices and information, a strong brand image becomes a ‘competitive advantage’ (Birtwistle & Shearer, 2001).

• The Point of Purchase (POP) is now blurred, with consumers now being able to shop anytime and anywhere, just through clicks on their phone (Taylor & Hathaway, 2014).

When Matalan first debuted in 1985, British local shoppers was instantly keen to the low-price shopping experience. However, the low-price market has now become quite a trend with grocery retailers such as Asda also joining the clothing industry (Hall, 2006). With the vast array of choices, customers today are not only searching for the products they need, but also an experience that they want (Taylor & Hathaway, 2014).

Low price is no longer a unique factor for value retail brands; as Richard Ratner (cited in Finance Week, 2005) stated, ‘everyone is now a discounter…being cheap is no longer enough’. While cheap products still sell, consumers' product selection now depend more on their ‘fitness for purpose’ (Webb, 2007).

Matalan offers a range of products for the whole family. However, Paul Thomas from Retail Remedy stated that Matalan “has lost touch with who its [core] customer is” (cited in Waller-Davies, 2016). This is important as the core customers are the people who drives the majority of the sales and determine the kind of brand identity that Matalan should focus on.

• Contemporary consumers are becoming increasingly brandconscious (Islam & Khan, 2013) and will most likely choose brands that project a personality similar to their selfimage (Birtwistle & Shearer, 2001). • There is a need for retailers to understand the behaviour, desires, and expectations of their core customers in order to establish a selling brand identity (Webb, 2007).

While still highly related to each other, the idea of brand is now an individual entity (Knee, 2002); customers’ buying decisions may be determined by the brand itself instead of the actual products. Industry/Sector Challenges

Justifications (based on trends in the retail industry) • 71% of consumers want to simplify (Kantar Retail, 2013); smartphones help this by enabling customers to search where and which way to shop best suits their conditions (Goller, 2008).

Communications Challenges

Justifications

Fast fashion Information and trends are moving at incredibly rapid speed (Hoffman, 2007, cited in Bhardwaj & Fairhurst, 2010). • Product lifecycle (PLC) has become shorter, as retailers are frequently updating their products to accord with consumers’ demands and the latest catwalk styles (Barnes & Lea-Greenwood, 2010). • Social, cultural, and economic changes are also contributing factors to fast fashion (Sproles & Burns, 1994, cited in Bhardwaj & Fairhurst, 2010)

The aim for any retailers is to provide what customers are searching for or what is currently trending. Customers are now becoming fashion-savvy with the help of the Internet (Bruce & Daly, 2006 cited in Barnes & Lea-Greenwood, 2010); they are constantly updated with the latest fashion news. As a result, • There is competition between brands to reduce their ‘concept to market’ process time and become the first in supplying customers the item they are searching for (Siddiqui et al, 2003). • The industry is now filled with low price market, resulting in more competition (Euromonitor, 2017).

• Islam & Kahn (2013) argue that one of the most important components in fashion is timing, which is predominantly determine by consumers’ demand. • ‘The fading of mass production, increase in number of fashion seasons, and modified [supply chain structures]’ are proofs that fast fashion is affecting the retail industry (Bhardwaj & Fairhurst, 2010) • As consumers become more fashion-savvy, they expect products to continually be refresh (Bhardwaj & Fairhurst, 2010)

The need for offline to converge with online. The online and offline buying process can no longer be seen as separates as contemporary customers combine the two as part of their ‘path to purchase’ (Bowman, 2011; Euromonitor, 2017). • Research by Samat (2014) indicates that digital platform drives not only online sales but also in-store visits.

Retailers that have both online and offline stores need to create a bridge between the two channels and maximize its omni-channel strategies. Customers are now looking for easier access to purchase (Bowman, 2011), which retailers can provide by creating ‘a seamless shopping experience that breaks down the barriers between channels’ (Juaneda-Ayensa et al., 2016). This can be achieved such as through ‘click and collect’ services. Shops that brings easiness to customers tend to always be in favour (Bowman, 2011).

The need for an exciting store experience. Floor (2007) argue that for a retail brand, the store itself is the most important communications tool. Despite the growth of digital commerce, Euromonitor (2017) predicted that the number of in-store visits will remain stable as customers are still interested in seeing the item before purchasing.

One of the factor that distinguish Matalan to any other retailers is their ‘out of town’ shopping experience, hence it is Matalan’s goal to drive people to come to their store. However, Finance Week (2005) states that Matalan has a ‘less than pleasant in store environment’ that causes their products to look cheap and rather unappealing.

A new trend amongst contemporary consumer is ROPO (Research Online Purchase Offline) and “showrooming”, where consumers come to offline stores to experience the products before purchasing it online (Taylor & Hathaway, 2014). • Research by Fulgoni (2014) indicated that one-third of consumers have showroomed, while PwC (2017) found that 52% of global shoppers research online first before purchasing. A customer’s store experience can determine the extent of their loyalty (Floor, 2007), hence stores need to have a moodlifting atmosphere. For example, the availability of Wi-Fi has proven to make customers stay longer in stores (Business Wire, 2015). Little things such as wall colours and the presentation of merchandise makes the big differences as well (Park et al., 2015)

Organization Challenges

Considering that convenience is the key factor for today’s market, ‘out of town’ experience may no longer be fruitful for the urban-living customers. Communications Challenges

Lack of social media presence. • Mintel (2017 cited in Rasmussen, 2016) stated that if a user is following a brand on Instagram, there is a 53% chance that they will shop with them.

Matalan is available on all three most used social media networks namely, Facebook, Instagram, and Twitter. However, Matalan’s social media followers are substantially lower compared to their competition (Appendix A). This results in Matalan’s lack of social media presence which decreases

Justifications As of August 2017, research by We Are Social indicated that there are approximately 3 billion social media users around the world (Kemp, 2017) Social media is no longer just a platform to boost brand awareness; Instagram and

• A strong and engaging social media presence will attract and maintain customers • A strong social media presence is determined by how relevant the content is to the target market (Rasmussen, 2016); it must reflect the behaviour and personality of the audience (Nazir, 2016). Negative offline review Website reviews are an important factor in the construction of retail brand’s image and reputation. • 51% of consumers research online before buying products (Goller, 2008). • For a positive reputation, brands need to satisfy their customers by offering services that conform to the ‘manner and style [they] demand, when and where they demand it’ (Artificial Solutions, 2017).

their brand awareness among the users of the network. Social Matalan Primark Next media Instagram 183k 4.9M 608k Facebook

311k

Twitter

77.2k

213.2k

260k

Today’s retail landscape is largely driven by the consumers (Webb, 2007), hence providing great services for them is important. However, if “Matalan review” is searched on Google, the top two customer review websites indicate Matalan as having 1 star out of 5 (on trustpilot.org) and 2.5 stars out of 5 (on reviews.com) (Appendix B). As a majority of customers research online first before deciding to buy (Samat, 2014; PwC, 2017), these low score reviews may repel consumers from buying the brand.

Facebook recently introduced new advertising formats and business pages which focused on ‘advanced [market] targeting’ and the ability for followers to buy instantly what they see, potentially resulting in direct increase of sales (Kahn, 2016).

Arnold et al., (2005) argues that a fundamental ingredient to have in today’s competitive market is ‘the creation and maintenance of satisfied customers’. With the advance in technology which brings ease to many retail services, customers are now expecting more from retailers to satisfy them. Particularly, customers expect a more personalised service (Gebler, 2000, cited in Siddiqui et al, 2003).

TOP 3 CHALLENGES (in order of priority): 1

Boosting Matalan’s social media presence to increase brand awareness (challenge 7)

Maximizing omni-channel strategies (creating a bridge between online and offline buying process) to give customers more convenience when shopping (challenge 5)

Understanding clearly the target market to establish a strong brand identity (challenge 3) Justification:

• Since 2015, the number of social media users has significantly grown and researchers forecast that it will not slow down anytime soon (Nazir, 2016). It is important hence for retailers to be notably present in the network in order to engage with existing customers and gain exposure to a wide potential of new ones. • Recent innovations from network companies namely Facebook, Instagram, and Google offers an extensive range of opportunities for brands like Matalan to optimize marketing and to reach their audiences at a relatively low cost (Kahn, 2016). • Digital presence can help bring Matalan new customers from both virtual and physical realm (Nicholson et al., 2002) Risks that may occur: • A risk to consider by focusing on a rather social media-centric communications challenges is the possibility that digital presence may not convert to sales. Scholars and researchers have stated that convenience is the number 1 priority for contemporary customers, hence every social media and digital-related strategy must be devised with the aim of providing convenience for customers. • The challenge of competition from other brands (challenge 2) will always remain an issue as the retail landscape will always change and new brands will continually emerge. Combine with the factor of trends (challenge 4), establishing a strong digital presence may not be enough – Matalan needs to find their niche that distinguishes them to other brands.

SECTION 2: OBJECTIVES & CSFs 2a. Objectives Focused communications challenge: Maximizing omni-channel strategies (challenge 5) Objectives outlined below are structured according to Chaffey’s (2016) RACE digital marketing framework.

1Reach

2Act

3– Convert

4– Engage

Objectives

Potential Impact

Potential Risks

Convert webstore visits traffic from 4.14% increase per month to 10% increase per month by December 2018 (SEMRush, October 2017, Appendix C). - Increase the number of Facebook followers from 350k to 800k by December 2018. - Reduce bounce rate from 28.89% to 24% by October 2018 (SimilarWeb, November 2017 – Appendix D) Enhance customers path to purchase journey, proven by: - A 20% increase in the number of click and collect orders by June 2018 (Euromonitor, 2016). - An increase in quarterly conversion rate from 4.45%* to 5.3% by October 2018. *number is the average quarterly conversion rate for retail brands, cited in Chaffey, 2017b. Increase total annual revenue from 6% to 10% increase (Appendix E) by December 2018 through the optimization of mobile services: - Produce a mobile app beyond loyalty scheme and achieve 1000 downloads by December 2018. - Achieve a minimum 33% mobile purchase rate by December 2018. Establish a 15% increase in mailing list engagement by November 2018: - Improve open rates from 20.96%* to 25% by November 2018. - Reduce the number of unsubscribers from 0.28%* to 0.20% by November 2018. - Boost traffic from emails to 10% from 7.26% by November 2018 (Similarweb, November 2017) *Number is the average percentage for mailing list of retail brands cited in MailChimp, 2017.

An improvement in traffic will widen brand awareness and as Fulgoni (2014) argue that digital and offline sales influence each other, this could also increase in-store visits.

Today’s customers are rather ‘journey driven’ and likes to research their options before purchasing (WARC Best Practice, 2016), hence there is a possibility that traffic increase is just merely customers’ research and will not convert to sales. ‘Perceived value is subjective’ (Zeithaml, 1998, cited in Kim & Niehm, 2009). Customers’ path to purchase differentiate between one another; what’s convenient for one may not be for the other.

Providing customers with convenience and valuable experience will increase brand loyalty and possibility of returning (Ellison-Davis, cited in Bowman, 2011).

Euromonitor International (2016) stated that mobile devices are the ‘key to unlocking omnichannel success’. Optimizing mobile services will maximize shopping experiences and ease customers’ path to purchase.

High amount of resources may be needed to build an app, maintain technicalities to keep it effectively running, as well as to place ads for promotion of the app.

Lazenby (2016) argue that email is a great channel to build a personalised relationship with customers while at the same time, reaching a large scale of audiences.

Promotional emails and such may be seen as spam to some customers which may result in a poor brand image (Lazenby, 2016).

Prioritized Objective Justification

Risks that may occur

Objective 3 (increase total annual revenue through the optimization of mobile services) Mobile technology is significantly shaping the retail landscape today (Deloitte Digital, 2013). Fulgoni & Lipsman (2016) found that 70% of digital sales are made through mobile devices and the majority of those purchases are made through apps (Fulgoni, 2014). There is hence a need for Matalan to expand its app to become another point of purchase. Achieving this objective would not only increase revenue but also provide customers the convenience they are searching for. 33% is the value of mobile purchases that Matalan has to achieve considering it was the 2016 average percentage of mobile sales founded by Custora E-commerce Pulse (cited in Chaffey, 2017). Reaching this benchmark indicates that mobile engagement has been optimised and also guarantee ROI of mobile app development. As Matalan stores are located out of town which may not be fruitful for the convenient-searching customers today, Matalan needs to establish an online profile and shopping experiences that drive people to want to take the journey and come to their stores. A risk which may occur for not prioritising the other objectives is hence a poor brand awareness and low rate of in-store visits.

2b. Critical Success Factors CSFs outlined below are the factors needed for objective 3 to succeed. CSFs Risks if not achieve Clear analysis and understanding of target Erdogmus & Cicek (2012) stated that ‘relevancy audiences to segment the market and ensure is the most important factor affecting brand relevant quality content (Earl, 2015). loyalty’; failure in offering relevant content could lead to loss of customers. Resources to hire an app developer and A decline in customers’ satisfaction which could technical maintenance team to ensure lead to an increase in bounce rate as well as responsiveness as well as ease of use of app negative reviews about the brand (Kim & Stoel, and website. 2003). Carefully developed content plan (Chaffey, Failure to provide content that is relevant and a 2017a) based on peak-times of industry loss of opportunity to gain profit during periods calendar (such as Black Friday, Christmas, the when customers are most likely to spend the start of a new school term, etc.). most (Kim and Niehm, 2009). Partnering with messenger-bot companies to Discouraging user engagement could lead to a provide customers 24/7 instant replies and help decline in customers’ satisfaction; potentially (Erickson, 2017). affecting sales (Morgan, 2017). The budget for quality content production (such Customers today are overwhelmed with as hiring people with the relevant expertise and information and data, thus will choose those that the purchase of a camera, editing software, stand out from the crowd (Brito, 2011, cited in models, etc). Erdogmus & Cicek, 2012). Failure to provide quality content is an insufficient reach. Hire an analytical team to analyze insights on Promotions and campaigns are not effectively which content results in a desired outcome, user reach, resulting in excess of production and behavior, and how to improve mobile services. waste of resources. Justification for prioritisation of CSFs Earl (2015) described the retail industry today as ‘the age of the customer’ – ‘companies that win [are those that] know more about their customers’. Thus, to achieve the prioritised objective, it is important for Matalan to understand their audiences thoroughly. The trends and behavior of Matalan’s primary customer will then determine the kind of quality content that the brand has to produce. Moreover, as omni-channel retailing ‘encompasses the digital, the physical, and the experiential’ (Greene, 2016), offering customers convenience through interactivity is essential in achieving an optimum mobile engagement.

SECTION 3: TECHNIQUES & REQUIREMENTS 3a. Critique • Website Matalan’s website performance will be critique against Kim & Stole’s (2004) four-factor dimensions of a quality apparel website. Website Quality Factor Information (i.e. content quality)

Ease of use (i.e. navigation and response time)

Entertainment (i.e. interactivity)

Trust (i.e. security)

Level of impact Justification

Analysis of Current Features The landing page of website presents updated content relevant to the industry peak time. • Content on landing pages clearly represents the brand Online Value Proposition, which is providing for the modern family (stated in Matalan’s About Us page). - Website is easy to navigate • Search box and account page can easily found on top • When scrolling down to view products, there is a ‘back to top’ navigation button • Allow customization as customers can filter how to view and sort products page. - Product information page has detailed description of an item but missing “check in-store availability” feature. - Response time: 3.10 seconds, 67% are caused by images (NeilPatel, November 2017 – Appendix F) Lack of interactive/engaging content for customers. While the website is filled with appealing photos and colour scheme relevant to the theme, there is no video content. The website also doesn’t facilitate direct communication with customers. Matalan uses the word ‘securely’ repeatedly, such as when signing up to become a member and checking out to purchase an item. Additionally, there is also proof of security from third-party companies during checkout (ex. a Mastercard Secure icon) • In 2016, Upguard, a cyber security company, found Matalan to be the least cyber secure company, with a score 352 out of 950, meaning that the brand’s website is highly prone of cyber-attacks (cited in Megaw & Ahmed, 2016).

Impact on focused communications challenge High – contribute really well to the focused challenge ‘The Matalan website operates as an extension of the brick and mortar store by offering the entire product catalogue to customers’ (Google Analytics Case Study, 2014). Think with Google (2014) found that digital connects shoppers with the offline store. As a trend of customers today is research before buying, the website becomes an important point in customers’ purchase journey by providing extensive information that couldn’t otherwise be displayed in-store (Kim & Stoel, 2003). A website thus can be both the starting and end point of their path to purchase. Kim & Niehm (2009) further highlighted that factors of content quality, ease of use, interactivity, and security determine the purchase and loyalty intention of customers.

• Social Media *note: Engagement value (such as likes, comments, and shares) presented below are the 7 days average, accumulated based on content posted between November 11-November 18, 2017. Facebook Reach & Engagement • Followers – 347,979

Content • Content are 95% pictures of the product with a link in

Communication • Customers can contact the brand through the live

Brand Sentiment Generally, the response to the content on

• Traffic data (to website) – 63.96% (SimilarWeb, 2017a) • Profile likes 347,684 • Content likes – 49 • Shares – 32 • Comments – 11 • Post 1-2 content per day Instagram Reach & Engagement • Followers – 200k • Traffic data– 2.27% [categorized in ‘others’] (SimilarWeb, 2017a) • Likes – 250 • Comments – 18 • 1 post a day Twitter Reach & Engagement • Followers – 78.2k • Traffic data) – 1.78% (SimilarWeb, 2017a) • Likes – 8 • Retweets – 3 • 2 posts per day

Youtube Reach & Engagement • Subscribers – 7.9k • Traffic data) – 11.3% (SimilarWeb, 2017a) • Views differ depending on types of video. “The Show” gets the highest views. • No specific timing for content posting.

Level of impact Justification

the description to the webstore • Seasonal campaigns are the only posts that are in video format. • Inconsistent way of posting: some product post uses Facebook’s “products shown” feature while others don’t.

customer help chat box. • Comments on posts are usually inquiries; every comment is replied.

Facebook is negative. People usually comment to complain about their orders or problem with the website (Appendix G)

Content • Similar content to Facebook • Additionally, content includes sponsored posts by bloggers wearing Matalan products.

Communication • Customers can contact the brand through direct message • Comments with inquiries aren’t replied.

Brand Sentiment A majority of the response is positive. Comments are mostly compliment of the products or a user recommending an item to their peers.

Content • Similar content to Facebook & Instagram • Additionally, Matalan also retweets customers’ tweet reviewing or wearing the products

Communication Matalan has a separate account for customer service, namely @MatalanHelp. They reply inquiry every hour.

Brand Sentiment Mostly positive feedback to @Matalan (main twitter account), but the opposite for @MatalanHelp account.

Content • More variety of content compare to prior social media. • Content includes behind the scenes, press release of new collection, trend update, and their talk show called “The Show”

Communication No type of interaction between customers. • Comments are disabled on all videos.

Brand Sentiment As videos usually get more likes than dislikes, sentiment is positive on Youtube, however, this measure is limited as interaction is prohibited on this social network.

Impact on focused communications challenge Depends on which social media As mentioned in prior section, Matalan’s social media presence is relatively low compared to their competitors (Appendix A). This argument is further supported by the fact that only 3.32% of Matalan’s web traffic comes from social media. Even so, Kim & Ko (2010, cited in Kim & Ko, 2012) highlighted that social media has tremendous importance on a brand’s reputation. Because Facebook has the biggest impact on Matalan compare to their other social media accounts, Matalan should prioritize in building a good brand identity and digital presence on the network. This is important as in the omni-channel setting, all forms of digital media become connected. The more people are

engaging in Facebook, could lead to an increase in website visitors, and there is a great chance that those visiting the website will visit the physical store. • Mobile Element of analysis Website

App

Level of impact Justification

Current features Matalan has a mobile responsive website design as the mobile site has the same full information as the desktop version but with designs and navigation that is ‘thumb-friendly” and suitable for device viewing (Lyerly, 2016). The mobile website, however, doesn’t have a phone functionality feature such a click to call/email or a location-based service (Tactile By Design, 2016). Matalan currently has a reward card app as part of their loyalty scheme. • Users have to become a member of the reward card to use the app • There is an Offers, Shop Online, and Store Finder button in the app but when clicked it all directs to the mobile website (Appendix I)

Impact on focused challenge High – contribute really well to the focused challenge Aubrey & Judge (2012 cited in Taylor & Levin, 2014) described the omni-channel customers today as ‘smartphone-enabled, connected consumers’. Contemporary customers are searching for convenience and mobile provides them that by offering an ‘anytime, anywhere’ service (Wang et al, 2015). There is a strong relationship between mobile services and consumer spending (Magrath & McCormick, 2013). Research by Deloitte Digital (2013) further found that the biggest impact on smartphones isn’t on digital sales but the influence it has on in-store purchases.

• Search Engine Marketing Element of analysis Current features Search Engine Optimization • 88.33% of the website traffic is organic (SimilarWeb, 2017b, (SEO) measured by rankings Appendix H) • Most of the organic keywords are brand-specific such as “Matalan sale” or “Matalan home” • When a non-brand-specific term was search such as “Christmas jumpers”, Matalan also appears on the first page Google rd th search result; the 3 or 4 of the list after the sponsored section. Paid Search measured by ads • 11.67% paid traffic (SimilarWeb, 2017b, Appendix H) and PPC (Pay Per Click) • Paid search traffic has dropped down significantly by 85% in the last month (SEMRush, October 2017); this could be suggested because the current PPC keywords aren’t written in the meta-description or can’t be found in the landing page (NeilPatel, 2017) • The most popular paid keyword is “Matalan” with a 2,2 million volume search per month and a CPC of $0.40. Level of impact Justification

Impact on focused challenge High – contribute really well to the focused challenge Over half of Matalan’s website traffic comes from search (SimilarWeb, 2017b), hence, in order to have a high traffic rate to website, Matalan needs to maintain a good quality score to get placed on the highest ranking of search engines. A well-designed search engine strategy, whether through optimization or the use of PPC, can effectively enhance brand’s visibility and exposure (Shih et al., 2012). This would help resolve Matalan’s focused communication challenge as it keeps the brand visible amidst countless competitors on the web.

• Email Element of analysis Types of email

Current features • Twice weekly newsletter on promotions and new collection • No welcome message for users signing up to mailing list

Content

Other factors

Level of impact Justification

• • • •

Basket abandonment email Emails are mobile-optimised Not personalised, doesn’t address recipient by name Promotions of free click and collect services clearly stated on the bottom part of every email • Customers can’t choose the frequency of receiving the emails. • Newsletter sign-up isn’t permission-based and it isn’t clear the kinds of emails that the mailing list will be receiving, only a brief abstract sentence of “latest promotions and promotions”. • It could be suggested that Matalan has a short mailing list subscribers as the brand never promotes their newsletter, compare to other brands who promote it through a pop-up when visiting the webstore or by incentives. Impact on focused challenge Low – has no impact on the focused challenge Campaign Monitor (2017a) argues that even with the rapid growth in technology, email is still the number one channel ‘generating the highest ROI’. However, this maximum impact could only be achieved if email marketing is done right; that is through personalization and interactivity. As Matalan’s current email marketing is weak, the channel has currently little to no impact to Matalan’s omni-channel strategies.

3b. Proposal Focused DSM Communications Objective: Increase total annual revenue from 6% to 10% through the optimization of mobile services (Objective 3) [Channels mentioned are written according to order of priority] •

Website Proposed Tactics Introduce “in-store availability” feature for every product page (Practicology, 2017) • Allowing the webstore online system to ‘have access to accurate real-time information’ on the availability of stocks in every offline store (Gallino & Morrino, 2014). Enhance webstore’s interactivity through: • Incorporating multimedia content, such as videos to landing pages (POQ, 2013) • Introduce live chat-bot to help customers’ query and order process (WARC Best Practices, 2017). Reduce response time to a limit of 1.0 second (Nielsen, 2010) • Reduce file sizes of images • ‘Minify javascript & CSS’ (NeilPatel, 2017)

Justifications Giving customers information about a store’s will encourage customers to engage more in ROPO (Research Online Purchase Offline) as it gives assurance that the product they desire to purchase is available in store (Gallino & Morrino, 2014). This hence will increase webstore traffic, in-store visit, and offline conversion rate. King (2017) highlighted that the modern retail industry is highly driven by customer engagement. • Cisco predicted that by 2020 79% of Internet traffic will come from video (Alibhai, 2016). • Deighton & Grayson (1995, cited in Yoon et al., 2008) asserted that an increasing trend in retail today is conversational marketing; there is a need for brands to interact with customers. Various studies have highlighted the strong correlation between website loading time and user satisfaction (Hernandez et al., 2009). Nielsen (2010) further stated that 1.0 second is the limit before a user’s flow of thought is interrupted.

• Mobile As Matalan has a mobile responsive website design, proposed features introduce to the webstore will be directly available to the mobile site as well. This section will thus focus more on the mobile app. Proposed Tactics Justifications

Introduce a mobile app beyond the Matalan reward card scheme. • Allow customers to make purchases of products with a one-click checkout process (Lee & Benbasat, 2013) • Integrating the app with beacon technology to ‘efficiently alert shoppers of incentives while at the store shelf’ (Fulgoni, 2014). • Completed with an in-app technology such as a chatbot and location-based services to identify the nearest store.

Taylor & Levin (2014) found that in regard to a retail mobile app, users expect it to complete a transaction. • Implementing beacon technology to mobile apps will help ‘track customers shopping patterns’ and send users promotions during their most critical purchase decision (Erickson, 2017). • In-app technology generate apps into “mini computers” (Fulgoni & Lipsman, 2016), making it the fastest and convenient route for customers to find what they’re looking for (WARC Best Practice, 2017).

• Social Media As Facebook generated the majority of Matalan’s social traffic, for now, the proposed social media plan will solely focus on Facebook. Proposed Tactics Produce interactive compelling content other than product posts. • Encourage user-generated content (UGC) (Rose, 2016) by - Introducing the hashtag #wewearmatalan for customers to share pictures, videos, testimonials of the products - Reposting the content shared in the established hashtag. - Repost blog-post by an influencer/blogger featuring the products. • Produce weekly style-related videos (like the ones posted on Youtube) such as Trend Updates, Behind the Scenes, Get the Look, etc. • Encourage discussions by facilitating Q and A through Facebook Live service. Encourage mobile sales through a range of Facebook ads: • A collection ad featuring pictures and videos from the newest campaign – ad will be placed on mobile newsfeed. • Once mobile app is established, place a mobile app ad on users’ mobile newsfeed to push app downloads • PPC ad based on webstores cookies placed on Facebook mobile newsfeed. (IAB, 2015)

Justifications As Evans (cited in Schwartz, 2017) stated ‘it's not just about clicks, but about having a conversation that leads to a conversion’. • UGC offers a cost-effective way to garner more content on platform while at the same time enhancing user engagement (Smith et al., 2012). Gallegos (2016) & Rose (2016) further found that customers are more likely to purchase a product if it is recommended by another person rather than from a brand. • Videos are currently dominating social marketing (WARC Trends, 2017) with ‘Facebook claiming that 100 million hours of video are consumed daily on its platform’ (WARC Best Practice, 2017). • Erdogmus & Cicek (2012) argues that social media is different to other channels in the way that it is related to ‘relationship marketing’; rather than trying to sell, brands have to establish a connection with customers. Each type of proposed ad will be classified with a distinctive purpose based on Stephen et al (2017)’s study: • A collection ad has a persuasion-oriented purpose, specifically to influence customers to visit webstore and buy products of the current campaign. • Mobile app ad is informative; it lets mobile Facebook users know that they can make purchases through the new Matalan app • PPC ad has an arousal-oriented purpose as it triggers customers’ memory of the item they were seeing previously.

•

Email Marketing Proposed Tactics Execute a permission-based email marketing system: • Allow selective opt-in in terms of 1. Frequency (weekly or monthly)

Justifications ‘Permission marketing is anticipated, relevant, and personal (Godin, 1999, cited in Chaffey & EllisChadwik, 2016). With this strategy, emails are more targeted, thus improving response, conversion, and open rates (Rettie, 2002).

2. Content (news, products, or offers) (Chaffey & Ellis-Chadwik, 2016) • Gain express permission by providing a clear outline about the type of information they will be sending (Waterer, 2014) and consider offering an incentive for email subscribers. Compose and perform a ‘welcome contact strategy’: • Send out a “welcome” message email after a user signed up to the mailing list as an introduction to the brand and expectations of the type of emails that will be send out. • Send out a personalised engagement message for users that haven’t been active for a minimum one month by ‘highlighting top content’ or giving a little incentive that is valid for only a limited period of time. (Chaffey & Ellis-Chadwik, 2016)

• Convert email from being a one tone channel into ‘a more interactive, multilayered communications process’ (Farris, 2001) • Content becomes consumer-driven and more personalised, this ensures message is relevant, thus reducing the risk of unsubscribers and a better ROI (Campaign Monitor, 2017b). A welcome contact strategy is a good tool for e-CRM ([digital] Customer Relationship Management). A welcome message is important as it is the first interaction a customer will have with the brand. • 74.4% of customers expect a welcome email when they subscribe to a mailing list (Stacey, 2017) • Welcome emails have higher engagement rates compare to other emails (Walton, 2017); the average open rate is 50%-86% (Stacey, 2017). • Chaffey & Ellis-Chadwik (2016) additionally found that welcome contact strategy increases user engagement rate and conversion rate.

•

Search Engine Marketing Proposed Tactics According to NeilPatel (2017), Matalan has a grade C SEO score (Appendix J), this can be improved by: • On-page optimization: - Modify site codes to ensure that the most popular keyphrases are part of meta-tag and heading copy. • Boost backlinks from social networking sites • Content marketing: - Posting fresh and relevant content that specifically target searches and present keywords (Llewellyn, 2016) (Chaffey & Ellis-Chadwik, 2016) Improve the result of PPC search ads by: • Prioritizing more keyphrases that aren’t brand-specific, but rather retailspecific (ex. instead of keyphrase “Matalan”, place PPC for “women’s clothing) • Refine landing page quality by ensuring that content is coherent with most popular PPC keyword. Top 3 Channels Justification and risks that may occur

Justifications A good ranking on search results page is significantly important as a large percentage of users start on search for retail queries (Chaffey, 2017c) and 62% of users only click on links shown on the first page (Malaga, 2008, cited in Shih et al., 2013). • ‘The number of times the keyphrase is repeated in the text of the web page is a key factor in determining the position for a keyphrase’ (Chaffey & Ellis-Chadwik, 2016). • The higher the quality of content presented on website, the bigger probability it has of being shared, and thus improving backlinks (Llewellyn, 2016). • The presence of a retail-specific information in a keyphrase has higher conversion and CTR compare to brand-specific ones. • If a customer doesn’t see the product/campaign they are searching for directly in the landing page, they will most likely abandon the page, resulting in an increase of bounce rate (Ghose & Yang, 2009).

Justification on order of priority Website – Mobile – Social Media The three prioritised channels are immensely interlinked and cannot work effectively without one or the other. The three channels will help reach the focused objective as they all have a solid foundation in mobile engagement. As Matalan currently has a satisfactory visibility in search engines, not prioritising SEM will not result in any risk. On the other hand, a risk for not prioritising email marketing could be the decline in user engagement. This however can be prevented through new proposed interactive features that will be available on website and mobile app.

SECTION 4: CAMPAIGN PLANNING AND BUSINESS CASE 4a. Integrated Planning OBJECTIVE

Increase total annual revenue from 6% increase to 10% increase by December 2018 through the optimization of mobile engagement and services 2017 2018 CHANNEL TACTIC December January February March April May June July weeks 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 Website Introduce 'in-store availability' Development Trial Launch Weekly inventory update feature Spring/S Feature video content on Fall/Win ummer landing page ter Introduce live chat bot Development Trial Launch Reduce file sizes of images Minify javascript and CSS Mobile Develop and launch new Development Launch mobile application App maintainance (updates) Facebook interactive Introduce the hashtag Launch content #wewearmatalan Repost customers pictures from aforementioned hashtag Share/repost sponsored blog Send proposals for post by a blogger collaboration Produce and upload style Production & weekly uploads videos Facebook Live Q&A Ads Collection Ad Mobile App Ad PPC Ad Everytime a customer visit the webstore then open their Facebook page Email permissionbased

welcome contact strategy

August 2 3

September 1 2 3 4

October 2 3 4

November 1 2 3 4

December 1 2 3 4

Holiday season

Introduce selective opt-in Update newsletter information with clear outline Welcome message email Engagement email for inactive customers only

SEM On page optimization (modify site codes) Content marketing (post content to match popular keyphrase) Monitor backlinks from social network Launch PPC campaign with a retail-specific keyword

Summerrelated content

Fall-related Content

Winter-related content

Rationales for integrated campaign plan: Channels Rationale Website • To keep up with customers’ increasing trend in ROPO, showrooming, and search of interactivity (Fulgoni, 2014), online inventory and chatbot are the primary features that will be develop first. • As videos tend to have large file size, video content will only be available on landing page at the starting month of each fashion season. This is also done to motivate hype for the seasonal collection/campaign (Hooker, 2015). • Website maintenance (reduce file sizes of images and minify javascript & CSS) will be done on the first week of each month to ensure customers’ ease of use and reduce response time. Mobile • Rice (2013) found that it will take a minimum 18 weeks (roughly 4 months) to develop a mobile app. A one month period between development and launch is placed to test the app and establish finest usability for customers. • The most successful apps are updated on average 2 times every month (Yarmosh, 2016) however update frequency is prone to change, depending on user feedback. Facebook • The hashtag #wewearmatalan will be launched at the beginning of the new year with no expiration date. As the hashtag’s popularity will grow, a community will be form as well (Sullivan, 2009) • Because users tend to trust UGC more than other forms of content (Knoblauch, 2014), repost of customers’ testimonials and pictures will take place every week. The content will be 80% organic UGC by customers and 20% sponsored UGC from bloggers. • York (2017a) found that Facebook Live is a great way to ‘create more excitement around product releases’, hence Facebook Live will be done once every 2 months, specifically at the beginning of a new fashion season or the launch of a new collection. Facebook Live will be conducted during lunch time (1pm) on Thursdays as that is the time York (2017b) argue Facebook users are most active. • Collection ads will be run based on fashion seasons (spring/summer, fall, and winter) to boost sales for the seasonal collections. Email & • As email and search engines aren’t the prioritised channels, implementation of tactics will be run starting from June when proposed SEM features on the three prioritised channels have been developed and are performing successfully.

4b. Evaluation and Business Case Key Performance Indicators (KPIs) KPIs outlined below are written according to the order of priority for the respective channels. Website KPIs Targeted Value Relevance to Objective Bounce Rate Reduce and maintain bounce A good bounce rate is an indication that content rate of 24%* by October on web pages are relevant (Waisberg & 2018 Kaushik, 2009). As mentioned previously, relevancy is the principal factor to succeed in • Tech Wyse (2010) stated the omni-channel retail setting. that a very good bounce rate falls between 0%-25%. Conversion Rate Achieve 5.3%* average As the average quarterly CR for UK apparel (CR) quarterly conversion rate by ecommerce falls between 4%-6% (Monetate, Q4 2018 (October-December 2017, cited in Shaleh, 2017), achieving the 2018). specified targeted value ensures Matalan’s spot in the competing industry and a good ROI. Repeat Purchase Achieve an average 30%* Considering the main objective is to increase Rate (RPR) RPR (McEachern, 2017) by revenue, Lantz (2017) found that returning December 2018 customers are more profitable with 75% of revenue normally coming from a repeat purchase. Mobile App KPIs Session Length

Daily Active Users (DAU)

Targeted Value Establish an average 5 minutes* session length by December 2018 *number is the general average for all industry, cited in Shaul, 2016

Relevance to Objective ‘The more time that users spend using your app, the more influential your product can be’. Session length determines how engaged users are to the content presented in an app. It is also strongly correlated with a customer’s brand sentiment and average revenue per user. (Medium, 2017) As mobile apps, particularly retail apps, has a high churn rate even after just 3 days (Adobe Blog, 2016), DAU indicates how interesting the app is – that users are not only installing the app but interacting with it. In 2013, Apple changed its App Store algorithm to prioritise apps with higher ratings and reviews (Mobile Action Team, 2017), this metric hence determines the app’s discoverability. Ratings and reviews are also related to customers’ trust.

Achieve 20%* DAU by December 2018. *number is the general average for all industry, cited in Calonico, 2016 Customer Established a minimum 4.5 Satisfaction stars app with 30 positive measured by reviews* by December 2018. ratings and *number is the average for reviews retail apps, cited in Sefferman, 2016 *important note for website & mobile: Due to limited resources, targeted values presented are the quantity Matalan has to achieve based on the retail industry’s average/benchmark. Pros: The industry benchmarks help Matalan keep track of their competitors, while at the same time ‘staying in sync with the [competitive market standards] and customer needs’ (InspireOne, 2016) Cons: While all apparel brands can be classified as part of the retail industry, companies grow at different paces and also differ in the types of products they sell (e.g. Matalan is a value brand compare to Zara that is a high-street brand). Therefore, for certain instances, a benchmark may not be compatible with the company. KPIs Referral traffic to site

Facebook Targeted Value Increase social referral traffic to 5% by March 2018. • Currently, Matalan has a 3.66% social referral traffic (Similarweb, November 2017)

Relevance to Objective As the website is the main hub for online sales and Matalan doesn’t use Facebook as a point of purchase, driving traffic to the site could lead to an increase in conversion rates, followed by revenue.

Engagement measured by • Social Interaction Index (SII) • Engagement Rate (ER) Reach measured by Facebook followers.

• Increase average SII to 25 from 18 by November 2018 (Appendix K) • Achieve an average 0.13 ER from 0.046 by November 2018 (Appendix L) (NapoleonCat: November 2017) Increase Facebook followers to 800k by December 2018 with steady 50k-60k followers each month (Assumption A)

Compare to the industry’s average ER, which is 0.13 (Rival IQ, 2017), Matalan is significantly behind in terms of Facebook engagement. Because Facebook feed’s algorithm is predominantly based on engagement (Friedman, 2016), ER and SII not only indicate the reach of campaigns but also how effective the campaigns are. The only way Matalan could achieve a desirable referral traffic, SII, and ER is if they established a significant digital presence. While an increase in followers doesn’t ensure revenues, Matalan would still be expanding their brand presence.

Justification on order of priority: A similarity between the majority of KPIs for all three channels is the fact that they are not vanity metrics; they are related to customer retention and how active they are on the respective channels. These KPIs are chosen as they measure impact, particularly to sales and revenue (Patel, 2015). Considering that the number one CSF to achieve the prioritised objective is a thorough understanding of the customers, these KPIs also supply further insights to customers’ buying behavior by indicating which efforts are effective and aren’t (Green, 2016) Risks that may occur: Unlike most engagement metrics that are only visible to the company, vanity metrics such as followers, rankings, etc., are present on Facebook profile page and therefore, shape and determine a brand’s appearance in the digital world. A major risk for not prioritising vanity metrics is lack of brand awareness and presence (Miller, 2017). Evaluation Approaches To evaluate the success of the proposed strategy and plan, Matalan will need to adopt what Stephen Leonard, Alliance & Leicester’s head of e-commerce, described as the “Test, Learn, and Refine” approach (cited in Chaffey & Ellis-Chadwik, 2016). This approach involves close monitoring of the previously mentioned KPIs. For the proposed 12 months’ timeframe, Green (2016) recommends monitoring on a monthly basis to get a comprehensive insight on how things are actually performing and quickly amend those that aren’t performing desirably. This proposed plan is hence prone to change to adapt to unforeseen trends in the industry and expectations of the customers (Morello, 2017). In addition to the KPI benchmark values, performance and effectiveness should also be evaluated against WebInsights diagnostic framework (cited Chaffey & Ellis-Chadwik, 2016). The framework constitutes five measures however only the top three are considered as they are the most relevant to Matalan. The three measures are: 1. Business contribution (in terms of ‘revenue, costs, and profitability’) - One approach to evaluate this is by looking at the monthly ROI; whether cost placed at a campaign has resulted in a profit. The level of ROI will then determine ‘which plan worked and which fell short’ (Morello, 2017). 2. Marketing outcomes (in terms of ‘leads, sales, retention efficiencies’) - Morello (2017) suggests comparing sales number between the current year and the previous year to see whether there are improvements in outcomes. 3. Customer satisfaction (in terms of ‘usability, opinions, attitudes’). - This can be evaluated through customer response such as feedbacks, online review, and overall brand sentiment. Owing to the fact that today’s industry is highly consumer-centric, this approach should significantly be taken into consideration. - Additionally, looking at a competitor’s response and behavior is another approach to evaluate success. If another brand’s performance is highly affected by a campaign then it implies that the campaign was a success (Morello, 2017).

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Appendices Appendix A Social Media Facebook

Matalan

Primark

Twitter

Instagram

Appendix B

Appendix C

(source: www.semrush.com) Appendix D

(source: www.similarweb.com) Appendix E

9 October 2017 Matalan results for the 13 weeks ended 26 August 2017 Matalan, a leading multi-channel fashion and homeware value retailer, announces its results for the 13 weeks ended 26 August 2017. Financial highlights Full price sales increase of 19.6% Total revenue of £259.9m (2017: £245.5m) EBITDA of £22.7m (2017: £15.4m) Closing cash position of £103.6m (2017: £83.1m) overview & Outlook (source: Performance www.matalan.co.uk/corporate/corporate-publications) Commenting on performance Jason Hargreaves, Chief Executive Officer of Matalan, said: “The strong second quarter results round off a spring/summer season where the business has delivered well for customers. We have inspired and engaged with an offer that performs well at full price, providing great design and quality, always at outstanding value. In uncertain economic times, this has really resonated with customers. The full priced sales mix has increased significantly and we are buying and trading at stronger margins. Our operational execution and efficiency has been disciplined. As a result, we have significantly shifted our operating margins and driven a strong performing core business.

During the season we completed the refresh of 24 stores, with a better use of space enabling extended ranges and greater choice. With a modernised shopping environment, this gives an improved customer experience. These stores are performing very well and we will continue to rollout across the estate. Our online growth has accelerated as we continued to improve the customer journey following the successful implementation of the new web platform. Online is now a key customer acquisition route and with the convenience of click and collect in store proving to be extremely popular, this complements our core store business. We will continue to develop functionality and the customer experience through the

Appendix F

(source: www.neilpatel.com) Appendix G

(source: www.facebook.com/shopmatalan)

Appendix H

(source: www.similarweb.com) Appendix I

Appendix J

(source: www.neilpatel.com) Appendix K

Appendix L

Assumptions Assumption A Matalanâ&#x20AC;&#x2122;s biggest competitors, Primark and Next have more than 1M Facebook followers, while as recently (December 2017), Matalanâ&#x20AC;&#x2122;s current Facebook followers are only 350k. Hence, an 800k target is set for Matalan in order to not be so far behind from their competitors. Achieving this value will also expand the reach of campaigns on Facebook as well as Facebook ER. Matalan:

Primark: