Dior Pop-Up Shop
Stockholm, Sweden FASM 410 Professor Alessandro Cannata By: Reese Timberlake, Ryanne Frazier, Meagan Henry, Erica Garcia
Executive Summary
Mission Statement “ True Luxury requires genuine materials and the craftsman’s sincerity. It is only meaningful when it respects tradition.” - Christian Dior
Christian Dior Group is a solid, affluent and highly achieved luxury brand. Under LVMH Moet Hennessy Louis Vuitton, the Dior brand is characterized by outstanding resilience in an economic climate of such monetary uncertainty. Christian Dior aligns itself with the principles of quality, alliance, tradition, and innovation. Dior’s market responsiveness (especially as it pertains to retail) is highly action-oriented, thanks to their talented team ambitions. There are many Dior Key Success Factors that contribute to this world-renowned success. These include: quality, an entrepreneurial spirit, the strive to pass on expertise, brand exclusivity, and the drive to surpass themselves. The value of quality is highly appreciated throughout the country of Sweden, and Christian Dior is a brand that encompasses that. Sweden - a country of tremendous innovation rooted in folklore tradition - will prove to be a promising environment for a brand with such entrepreneurial spirit. Dior seeks to inspire, and they have the financial and artistic means to do so. However, for plans of new international retailing, results are subject to various types of uncertainties that don’t have to be accounted for in homeland-national territory. For Dior, these include changes in customer purchasing power, the value of operation assets located abroad, economic changes that are not necessarily simultaneous from one geographic location to another, and provisions of corporate or tax law, customs regulations or import restrictions imposed by some countries that may penalize Dior. Other, less fiscal risks and threats to take into account include vast cultural differences between France and Sweden, an inability to timely identify a Swedish target market and individual target customer, and seasonality concerns. Fortunately, the plan to open the pop-up shop during Christmas time will serve as an excellent opportunity to cater to such an unidentified target market’s tastes and behaviors. The Christian Dior Brand does not currently operate anywhere in Sweden. The opportunity to open a store in the country’s capital is an exciting new opportunity. Starting smaller with an impermanent Christmas season pop-up shop will surely add a new air of excitement and lust after the Dior brand and their beautiful, timeless pieces. Dior has stood the test of time, through innovation, expansion and transformation. Sweden will welcome Dior’s elegance warmly, even during such fiercely cold months.
History
1946: Backed by Marcel Boussae, Christian Dior found his own couture house in Montaigne, Paris.
1947: His first collection, called The New Look, is launched.
Miss Dior perfume is created. Pierre Cardin begins at Christian Dior as the “leading man,” and remains there until 1950.
1948: The luxury ready-to-wear house is established in New York
1968: The Dior Perfume company is sold to Moet Henessey. 1973: Creation in France of the ready-to-wear fur collection. This will then be manufactured under license in the United States, Canada, and Japan.
1978: Bankruptcy of Marcel Boussae group, assets are
purchased by the Willot Group.
at the corner of 5th Avenue and 57th street.
1981: Willot Group declares bankruptcy.
1949-1950: The licensing system is created. Dior goes on to
1984: Investors led by Bernard Arnault, takes control of former
license all accessories. Within three years, all couture house will copy this system.
1955: Yves Saint Laurent becomes Christian Dior’s assistant. Launch of Dior lipstick, starting the beauty line for Dior.
1957: Christian Dior dies of a heart attack. Yves Saint Laurent is appointed artistic director.
1960: Yves Saint Laurent leaves Dior, Mare Bohan succeeds him and create the Slim Look in 1961.
Willot Group.
1988: Christian Dior takes a 32% equity stake in the share capital
of LVMH, stake is revised in 1994 to 41.66%.
1996: John Galliano is named creative director of Christian Dior couture.
2001: Hedi Slimane, new creative director for the Homme line,
presents his first collection.
2012: Raf Simmons is named artistic director of the ready-to-
wear, Haute Couture, and accessories collections.
Dior Business Model
From Single Brand to Luxury Conglomerate
Christian Dior defined a new business model in the post-war years, establishing Ready-to-Wear boutiques and licensing deals; his designs were coped and sold in the USA as well as Europe. Many consider Dior’s model to be a forerunner of fast luxury fashion. Now, Dior is divided by the Couture Management Group and the LVMH Management Group. Creative Director Raf Simons has complete freedom over Dior’s designs. Dior Ready-to-Wear, Accessories, and Beauty have a simple yet broad Business Model. Dior sells RTW, Accessories and Beauty mainly through Dior flagships around the world. Select Dior accessories are sold in department stores such as Bergdorf Goodman and Barneys NY. Select Dior beauty is sold in department stores such as Macy’s and Bloomingdales, as well as at Sephora. Dior has also opened concept shops, such as the Dior Homme boutique on 30 Avenue Montaigne in Paris, instilled by previous designer Hedi Slimane. Dior makes most of their profit from licensing agreements, cosmetics, perfume, and accessories. With the influence of couture houses and designers changing over time, only a small clientele can afford the time and expense demanded by true couture clothing. Therefore, Dior has adopted a business model that allows them to generate most profit off of smaller accessory goods and beauty products via wholesale channels and Dior flagships (Basics Fashion Management 101).
Corporate Structure
Executive & Supervisory
Statutory Auditors as of June 30, 2014
Company Profile Dior is the ultimate symbol of Elegance, Excellence and Luxury. In the 21st
Century, Dior continues to define elegance and style with the same audacity that inspired Monsieur Dior when he launched his house. Products: From the renowned Bar suit to the grandest evening gowns, the famous Lady Dior bag to the Dior VIII watch and Bois de Rose jewelry, the Dior Addict lipstick and the best selling J’adore perfume, DIOR’s creations constitute an unmatched universe. Christian Dior’s vision has always been ahead of its time, fascinating women with his ability to combine utmost modernity with timeless elegance.
Current Position Dior’s ready-to-wear accessories are on the more exclusive side in comparison to their competitors. They provide a very limited amount of accessory goods to be distributed through wholesale channels. Their ready-to-wear and haute couture pieces are only distributed through Dior boutiques or upon request. Dior sells luxury goods at a high price point. Leather goods can range from $3,000$6,000, while a ready-to-wear dress can typically range from $3,500-$5,000.
Company Growth >> Grow within their directly operated boutiques >> Base their market on demand from “aspirational� customers rather than from the wealthy elite >> Focus on keeping their brand at a certain level of prestige by emphasizing quality, innovation and creativity >> Use visual storytelling to advertise products
Brand Identity Matrix
SWOT Analysis Strengths >> Strong Luxury brand name & image >> Strong presence over numerous luxury avenues across the world >> Various product lines >> Excellent branding & advertising strategies >> Upper management >> Support young fashion artists & designers
Opportunities >> Expanding in emerging markets >> Expanding in other regions >> Focusing on green initiatives >> Investing in the male market
Weaknesses >> Presence in a limited market >> Low revenue & presence in Latin & South America >> Low brand recognition amongst men
Threats >> Tough, existent competition >> Increasing number of new designers in luxury fashion >> Animal rights groups
>> Prestigious >> Exemplifies fashionable fabulousness >> Internationally pleasing >> Visually impacting >> Timeless aesthetic >> Vibrant color and design
>> Loyalty proves satisfaction >> Rewarding >> Personalized targeting >> Engaging relationships >> Customers trust Dior
>> Glamourous products >> Depicts luxury >> Elegant sophistication >> Feminine >> Exclusive >> Genuine materials and craft
>> City Woman >> Upscale >> Affluent >> Chic
Physical
Relationship
Personality Culture
>> French >> Luxurious elegance >> Vision of beauty and happiness >> Respects tradition >> Creative originality
Reflection Self Projection >> She feels beautiful when wearing Dior >> She feels of high class >> Her clothing makes a statement >> She feels a bond between her and the product
Distribution Dior has distribution in 6 continents, 44 countries, totaling 146 doors. All accessories are under licensing agreement as well as the ready-to-wear collection, which is manufactured under license in the United States, Canada, and Japan.
Annual Spending Figures
Dior Advertising Dior puts exceptional effort into strategizing the way they advertise. They strategize their advertising methods through their campaigns, digital magazine, YouTube channel, IPhone app, and their social media sites; Facebook, Instagram, and Twitter. When it comes to campaigning, Dior pursues in-style celebrities to model their latest and greatest achievements at the time. In their latest campaign, “Be Dior,” Dior decided to use twenty four year old actress, Jennifer Lawrence. In the campaign shot by photographer Paolo Roversi, Lawrence poses in sleek Dior dresses with minimal makeup to capture the “natural aura of Jennifer Lawrence” (Kinonen). Dior features these campaigns within all of their advertising methods. Dior’s magazine and iPhone app brings the latest and the best ranging from runway shows, make-up items, perfumes, skincare products, ready-to-wear collections, and watches.
Direct Marketing Initiatives Dior’s latest direct marketing initiative includes an interactive mobile-to-desktop tactic between their website and iPhone app. This initiative works by entering a device-specific four-digit code found on their mobile website for WonDiorland. By using this tactic the Dior consumer can come across further content refined from the brand’s latest fragrance, Dior addict. This direct marketing initiative coordinates with Dior’s developing approach for their fragrance launch and not only encourages consumer interaction within the brand’s online platforms but also accommodates them with exclusive Dior content using a community based campaign (Barkho).
Campaigns
Market Analysis Change took place in the Swedish fashion industry around the start of the Millenium. A new generation of architects, chefs, and designers no longer took inspiration from other countries abroad, but instead looked in their own backyard. The Swedish Industry today is focusing on sustainability, functionality and affordability, and is thriving on their blogging culture. By analyzing our target consumer we were able to identify key industry factors, and key players in Sweden that support this new movement.
P.E.S.T.E.L. Political
Economic
Social
Technological
Environmental
Legal
PROS PROS PROS - The Government of the Kingdom of Sweden - The average household disposable income per - Swedish etiquette involves the ritual Operating as a collegial body capita is 27,456 USD enactment of equality with collective responsibility - The inflation rate in Sweden was recorded at - Value “Lagom”: avoid extremes in reference to - Riksdag ruled by Prime Minister Kjell Stefan -0.30 percent in December of 2014 social behavior, everything in Löfvén CONS moderation - Political parties are stable - There is a considerable gap between richest and - Participation in the arts is heavily promoted Five of current seven have been poorest; the top 20% of the population through many cultural centers, public represented in Riksdag since 1921 earn more than four times as much as the libraries, open shopping streets, and - Job stability and security are highly valued bottom 20% communal music schools give citizens 70 per cent of Swedish workers belong to - 1 Swedish krona amounts to $0.12 USD an opportunity to exercise their creativity a union, making Sweden one of the most The Swedish central bank has cut its main CONS unionized countries in the world interest rate to zero in an attempt to - Stores and shops close early, and many in CONS combat deflation. The cut of 0.25% was businesses close in July for a four to six - Added tax value is 25% bigger than expected, and led to a fall in week holiday period the krona against the dollar and the euro - Only work until 5 pm PROS PROS PROS - Sweden has the most digitally connected - Swedes avoid plastic as much as possible, all - Swedish Consumer Agency with a National economy in the world, and its Board for Consumer Complaints located in stores will provide paper bags or boxes forward-thinking culture fosters - Sweden is in the front line as the world embarks Stockholm innovation on a shift to more sustainable energy - Sweden is part of the EU, therefore most goods - Known for innovative thinking and design; systems can be bought from other countries with birthplace of pioneer such as H&M, - In 2005, Sweden introduced a special five-year out restrictions, although VAT and duty Spotify, Skype, Electrolux, and Ikea may still apply program designed to boost energy CONS - Heavy emphasis on gender equality at home and efficiency in industry. - Engineering products comprise more than half of - Huge investments in energy consumption in the work place Sweden’s exports – nearly 54 percent. - There are over 3,000 wind turbines in Sweden - Part of the European Agency for Health and Electronic equipment, machinery and Safety at Work for wind power motor vehicles are the most important - Allemanstratten: gives everyone the right to - The Swedish Work Environment Authority goods in this category enjoy Swedish outdoors. This is written into the Swedish Constitution
Sweden: Industry Analysis The Swedish fashion industry continues to grow with total sales amounting to 237 billion kronor in 2013, exports counting for 62% of this figure. (Boost for Swedish Fashion Industry Abroad) Sweden is an export dependent country, with more than half of what Sweden produces being exports. In 2011 sales totaled SEK 206 billion, however of this number only 83 billion are sold in the domestic market. Although the fashion industry in Sweden continues to grow in size, so does the amount of exports. Exports in Sweden attribute to 60% of the sales, while 40% remain domestic. The high ratio of exports to the domestic market is primarily due to H&M. The Swedish global company exports approximately 94% of sales. (Portnoff)
Including H&M
Excluding H&M
Stockholm Stockholm is the capital of Sweden and the most populous city in the Nordic region with a total population of 2.2 million in the metropolitan area. Stockholm is the cultural, political, and economic center of Sweden, encompassing over one third of the country’s GDP. In recent years tourism has played a big part in Stockholm sales. Stockholm County is ranked as the 10th largest visitor destination in Europe with over 10 million commercial overnight stays per year. (Welcome to the Capital of Scandinavia)
Key Players Stockholm houses some of Sweden’s most stylish shops and boutiques showcasing innovative Scandanavian design. Swedish culture is very tradition based and therefore Stockholm has lots of vintage fashion and antique stores. In terms of luxury brands and designers Stockholm has high-end department stores as well as retailers that carry designer brands. Brick and mortar designer shops are less frequent because the antique stores or traditional Swedish boutiques stand on there own, rather than the luxury designers.
Nathalie Schuterman - An exclusive boutique that
stocks high-end international designers such as: 3.1 Philip Lim, Bottega Veneta, Miu Miu and Christian Louboutin.
Nordiska Kompaniet - A luxury department store
that has all the must-have Scandinavian fashion pieces as well as international designers.
Anna Holtblad
- Known as one of the pioneers of contemporary Swedish fashion. Over the past two decades Holtblad has stayed true to her idea of timeless Scandinavian fashion. Her price ranges from a loose fitting t-shirt at SEK 766 to a Mohair blend coat at SEK 4,196.
Sturegallerian - One of the most exclusive shopping malls in Sweden. Sturegallerian has over 50 luxury boutiques and gourmet restaurants. It’s a favorite of Stockholm’s elite and royalty is often seem shopping here.
Functionality & Affordability
The fashion industry in Sweden has always been ahead of its time. When designers were still putting large logos on garments in the 1990’s Sweden began producing functional everyday wear, making Swedish fashion cool. Brands like Acne and Cheap Monday came on the scene with huge popularity because they created clothing the young generation could afford. Michael Elmenbeck, one of the curators and founders of Bon Magazine stated: “We wanted fashion we could afford. I guess it is part of our socialist heritage. Just look at H&M and IKEA, it has shaped us.” H & M is still synonymous with Swedish fashion today because of the functional, trendy, and affordable pieces it offers. (Dagliden)
Sustainability
Sustainability has become very important to Swedish fashion designers.
Gudren Sjoden is a pioneer of sustainable fashion focusing on using textiles and natural materials that fit all ages and figures. Shoe Company, Swedish Hasbeens, entered the market in 2006 producing sustainable handmade collections in small factories, emphasizing respect for people and the environment. (Swedish Fashion From Catwalk to Sidewalk)
Blogging
Yvan Rodic, a regular attendee of Stockholm Fashion Week, says the country’s blogging culture contributed to its global success. “Sweden is a pioneering country when it comes to blogging,” he says. “In the last decade, people from around the world have started looking at Swedish blogs for inspiration -- mostly to enjoy the photos since they don’t necessarily understand the language.” Readers have then been educated on the brands and how to create outfits without spending a fortune. “I think this was a perfect match for the world of blogging since it promotes individuality and helped Sweden become a mini phenomenon in fashion,” Rodic says. (Stenman)
Consumer Demographic Being that our Dior pop up shop is being held in Sweden, we wanted to focus on the luxurious Swedes born in the later millennial generation, also known as Generation x consumers, and the baby boomers as our target customers. The Sweden population is estimated to be 9,723,809 people with 1, 385,000 of those people making up the Stockholm population. 50.9% of the Sweden population is between the ages of 25 to 64. The median age in Sweden is 41 years old with a population growth rate of 0.79% (Sweden). As for the baby boomer generation, 77 million people were born between 1946 and 1964. This baby boomer age group is greater in terms of size and percent of the population in the U.S. for the first time ever. The 55 and over age group authorizes more than three-fourths of wealth. The boomer median family net worth is three times higher than younger generations and they have an average annual disposable income of $24,000. Baby boomers outspend all other generations by an estimated $400 billion dollars each year on consumer goods and services (Resources). Generation x adults range in age from 30-44 years old. In 2009, the total population of this generation was a total of 49,660,301 people. The median household income for the generation x consumer is $73,601 between the ages of 30 to 34, while the median household income for ages 35 to 39 and ages 40 to 44 range from $81,107 and $84,278 (Demographic). 33% of consumers believe that a household income of more than $250,000 is what is necessary to consider themselves as “wealthy” consumers (Who). Consumers, who make $200,000 annually, spent $141 per month on apparel items for themselves. 60,000,000 consumers earn more than $100,000 a year while 80,000,000 consumers earn less than that. According to the Cotton Incorporated Lifestyle Monitor Survey, 23% of consumers bought luxury apparel in 2014 (Keeping). For our pop up shop in Stockholm, Sweden, we at Dior believe that these demographics fit our consumer and believe that our consumer will help constitute a successful pop up shop.
Demographics >>> Male >>> 40 years old >>> Physician >>> Annual income of $207,000 Psychographics >>> Educated, Admirable, Sophisticated. Behavior >>> Traveler, Reader. >>> Enjoys shopping for his wife and making her happy with designer products. Has great taste.
Meet Angelina & Ella
Meet Alva & Denisa
Demographics
Demographics
Demographics
Demographics
>>> Female
>>> Female
>>> Female
>>> Female
>>> 28 years old
>>> 34 years old
>>> 37 years old
>>> 41 years old
>>> Fashion Blogger/Swedish Socialite
>>> Accountant
>>> Software Developer
>>> Lawyer
>>> Annual income of $120,000
>>> Annual income of $140,000
>>> Annual income of $185,000
>>> Annual income of $190,000
Psychographics
Psychographics
Psychographics
Psychographics
>>> Educated, Sophisticated, Admirable.
Behavior
>>> Extra ordinary mixture of romanticism, feminism, and sense of modernity. >>> Traveler, Interested in all things art. Fashion forward.
>>> Educated, Elegant, Mature.
>>> Educated, Admirable, Selfless.
Behavior
Behavior
>>> Avid shopper, Loves dining with friends. >>> Takes work extremely serious. Fashion forward.
>>> Traveler, Reader, Dog Lover. >>> Enjoys treating her family and friends to great gifts.
>>> Educated, Sophisticated, Admirable.
Behavior
>>> Traveler, Avid Shopper, Reader. >>>Takes work extremely serious, Fashion forward, Interested in the fine arts.
Consumer Lifestyle
Stockholm Consumer Lifestyles Sweden continues to lead in Western Europe when adopting the internet. When looking towards the fashion industry this has put brick and mortar stores under an increasing amount of pressure because internet retailing is flourishing. Consumers are engaging in “showrooming” - where they can inspect a product in store before purchasing later online. Additionally Sweden is leading the world in “M-Commerce” (Mobile Commerce). The Economist newspaper noted that “97% of Swedish mobile phone users could pay for goods at participating businesses.” Sweden has shown that m-commerce can be safe and easy, something that has previously prevented it’s adoption in the past. This has also lead swedes to go completely cashless. The Swedish consumer is a huge fan of payment cards, so much so that large bank branches and even some retailers are completely cashless. In 2010 shops have been prohibited from adding a surcharge for use of a payment card which has encouraged this trend. Some worry that this will leave the less fortunate consumers without a payment card behind, however with 95% of Swedish consumers having a bank account this is not likely. (Consumer Lifestyles in Sweden)
Consumer Psychographic Our Consumer is Geographically located in Stockholm while purchasing our products. They are also international cultural travelers from all over the world. Our Dior consumer has many Interests. They are an avid shopper, reader, fashion blogger, and traveler. They value art and fashion as a hobby, making their purchasing motives fashion forward. Dior makes our customers Opinions & Beliefs show by wearing the clothing. They enjoy designer and luxury items where price sensitivity does not exist. They believe that Dior makes a statement, it’s sophisticated, and projects a confident self-image. The consumer wearing Dior has many quality Personality traits. They are admirable, elegant, educated, mature, and sophisticated. These customers are loyal to the brand, and they buy different items across the product range.
Behavioral Information Our customer grew up in the age of advancing technology. The Specific Technology Usage of our consumer is growing. As a millennial, they are constantly using these devices in their favor for shopping, blogging, and social media purposes. They are a social generation who socialized while consuming products, media and services. It has been predicted that in 2015, millennial annual spending will grow to $1.4 trillion by 2020, representing 30% of all retail sales. Online shopping, shopping from mobile devices, and preferences for “new entries to the marketplace” over established brands, will continue to grow and challenge existing retailers (The Year of the Millennial 2015 Predictions).
Sales Potential The biggest selling period in Stockholm is between Christmas and New Years. Mellandagarn, which means “Middle Days,” is the best shopping week in all of Sweden. Stores drop their prices significantly to get rid of excess stock after Christmas. During this time signs are everywhere saying, “REA!” meaning sale in Swedish, alerting consumers of the low prices. (Naughton)
Estimating Competition
Dior’s pop-up shop will be placed in the exclusive shopping district in Stockholm dating back to 1855. Bibliotekstan is home to international and Scandinavian high-end design boutiques. Although this will drive more foot traffic into our store, this also increases our competition. Our direct competitors will be neighboring shops: Louis Vuitton, Prada, Burberry, Michael Kors, Marc by Marc Jacobs, and Stella McCartney.
Area Attractions
The Shopping Habits of our consumer is not only growing on an e-commerce basis, but also in brick-and-mortar stores. Studies have shown that millennial’s prefer tangible products. Companies that offer an online and physical location provide millennial’s with what they want, and when they want it.
A great place to shop luxury designers is in Bibliotekstan. Stockholm’s most affluent shopping district is found in the downtown area named Bibliotekstan. This area is home to Scandinavian luxury designers as well as international boutiques. This area will draw in a lot of foot traffic during the holiday season for natives as well as tourists.
In Stockholm, Sweden, consumers purchase products based off of sufficient information stating if their purchase will be a reasonable necessity. Since they’re buying limited products and consuming less, the value of the purchase is important to them. This key trait gives luxury brands like Dior an advantage over other businesses because they offer the high quality, one of a kind products Swedish customers are looking for.
The area is very well organized with the positioning of the international and Scandinavian luxury designers, sportswear, accessories, restaurants, and cafes. The city also offers many tours of the location to help consumers navigate the area and get the most out of their shopping day.
Area Factors With an expected population rise of 200,000 inhabitants between 2000 and 2030, Stockholm is committed to creating a sustainable community and reducing CO2 emissions to zero by 2050.
>> Focusing urban development near transit stations has been a priority in Stockholm. Along these stations, the city is broken up into many compact, self-sufficient districts that contain homes and a wide variety of businesses. These districts are mixed-use, with workplaces and shops built close to residential areas.
Pedestrian Traffic: Over the last 15 years, Stockholm has cut pedestrian deaths by 31% and overall traffic deaths by 45%. Last year, Stockholm city suffered only six traffic deaths, or about 1 per 150,000 residents. >> The congestion charge has reduced traffic in the city center by 15%-20% or approximately 100,000 trips. Travel times have reduced 30-50%. CO2 emissions have, however, decreased by far less since there has been a slight increase in the suburbs. (Eco Mobility)
Public Transportation: Stockholm’s public transit network consists of three metro lines, three shuttle trains, two local train connection lines, three
light rail lines, 17 bus routes, and an inner-city boat. A single ticket system is valid for all systems throughout the city. The city has coordinated schedules between all modes, to minimize waiting time. The central train station is the hub where all public transport lines meet. - Car journeys by county residents across the charging zone have declined, and journeys by public transport have increased. - Stockholm is often praised for its comfortable, efficient and safe transportation. >> Stockholders are always heedful of their beautiful surroundings, and this has led to many inner city buses running on Eco-friendly fuels such as ethanol. The Stockholm underground is also known as the world’s longest art gallery as so many of its stations are adorned with the works of different artists. (Eco Mobility)
Vehicular Transportation / Parking: Stockholm Parking has 22 park-and-ride facilities strategically placed around Stockholm outside of the
congestion fee toll area. These facilities are easy to find and rather inexpensive to use – the parking fee for the whole day is usually only 20SEK. You can find all the information you need about our park-and ride facilities by going on their website. (Stockholder)
Infrastructure: Sweden possesses a modern transportation network, regarded as a vital component of equitable wealth distribution. Sweden’s energy sector is strong, with energy production and usage per capita being among the highest in Europe. Sweden is among the world’s leaders in information technology, computer hardware, software, and services. It has the highest number of phone lines (combined fixed and mobile) per capita, as well as the highest percentage of Internet users in the world. (Eco Mobility)
Human Resources >> Sweden has hundreds of thousands of the most luxurious, innovative architecture and contacting firms in the world. >> For Swedes, sustainability is not just a construction initiative, but it is a way of life. >> By 2022, a completely new city will have grown up around Stockholm Arlanda Airport. The goal is to create an environmental technology center to bring together research, innovation and established companies in the field of sustainability and environmental technology. The environmental profile of this new district is based on the extensive climate work already being carried out at Arland. (Sweden.se)
Legal Issues >> As the European Union is a Customs Union, goods can be bought from other member countries without restrictions - although VAT and excise duty can still apply. >> Sweden is a member of the WTO >> Swedish Consumer Agency is a Swedish Government Agency that answers to the Ministry of Agriculture, Food, and all Consumer Affairs with a National Board for consumer Complaints (located in Stockholm). Its main task is to issue non-binding recommendations on the resolution of disputes between consumers and business operators. A person can, free of charge, file complaints against a company. If the company does not follow the recommendation from ARN, the consumer has the possibility to take the matter to court. (Sweden.se)
Strategic Process Plan
Beauty Product Plan Style
# of Styles
5
1
3
3
1
Color
Star Kew Gardens Coquette Diorette Spring Les Rouge Primerose Milly Park Avenue Nuit Rose Ivory Light Beige Medium Beige Honey Beige Dark Beige Mocha Peach Rose Chery Lady Red Lucky Pink Star Fuchsia Navy Nude Pink Amber Pink Golden Honey Amber Cinnamon
Retail Price
Clothing & Accessories Product Plan Style
Style
# of Styles
Color
# of Styles
Retail Price 4
296
2
Brown Black
3/8/15
Color
Sizes
White
S, M, L
Black
S, M, L
Green
S, M L
Brown
S, M, L
Retail Price
42331 SEK
Dresses Gold Black Gold 5
Silver Black
one size
4274.43 SEK
one size
29260.70 SEK
Silver Black Round
448
1 363
507
2
Lady Incognito Junon Rose Metal Nuit Lucky
n/a
Black Tortoiseshell
Sunglasses
Black Red
228
5
Green White Brown
Bags
1015
7
457 Shoes
Black
36, 37, 38, 39, 40
Red
36, 37, 38, 39, 40
Grey
36, 37, 38, 39, 40
Brown
37, 38, 39
Navy and Black
37, 38, 39
Purple and Brown
37, 38, 39
Turquoise and Brown
37, 38, 39
8466.20 SEK
Floor Plan
Design of Physical Space
Details of Physical Space The Seasonal Dior pop-up shops market image is consistent with Dior’s image and strategy, while also enhancing customer experience with our Christmas themed space. Since this is a holiday pop-up shop, the design of the space invites customers inside with an extravagant facade, visually appealing open box window displays, and an entry way that leads through a Dior Christmas art display that provides customers with the ultimate Christmas shopping experience. Our store atmosphere is lightly enhanced with Dior scents, and soft Swedish holiday music that offers familiarity with the brand to connect with the customer. The interior space is designed with visual customization in mind, focusing on appropriate light fixtures, furniture, flooring materials, and decor that flows with our Christmas aesthetic. The physicality and environment of this retail space stimulates each customer by providing a tactile, sophisticated interior where every object adds a purposeful touch. The floor plan of Dior’s pop-up shop is designed for a ground level space in the luxurious Stockholm area Bibliotekstan. Customers must venture through the opulent entrance that then leads them to the open floor plan where merchandise and customer service departments are located. The free-flow layout allows customer traffic to flow in an unstructured manner, although merchandise is strategically categorized with appropriate space for maximum product exposure and customer convenience. Merchandise is presented using an ideaoriented presentation technique. This plan offers flexibility to our customers while also encourages impulse buying and browsing. The Safety, Security, and Asset Protection is assessed by incorporating security personnel at the entrance. The construction of the space took the knowledge of deviant behavior in mind by designing the entire space to be seen visually, at all times. The space in the store is limited, and only a small amount of merchandise is being sold which makes theft less of a factor. Bibliotekstan also implements appropriate security systems within all of their retail spaces.
Communication & Promotional Plan Pre-Launch
September
November
Launch
December
January
Post Launch
Feb. 1-7
Feb. 8-14
Media
Dior Social Media
Personalized promotional gifts (invitation to cocktail party included) for important personnel Christmas giveaway with purchase
Bloggers reviews and photo shoots of Dior pop-up shop venue and products purchased Outdoor promotion (public transportation advertisement's) Advertising in magazines Dior Christmas video Opening Cocktail Party (Last night of Pre-Launch only) **Refer to Appendix for written rational **Refer to Cost Sheet for Promotional pricing
Financial Plan
Budget for Execution
LOCATION FOOT TRAFFIC PER DAY 1000
PERCENTAGE OF CONVERSION
Footfall Conv. % Avr.Basket
(MKUP 60%)
Income Statement: Revenue Total Revenue Cogs Build of Space Interior Fixtures Storing Wages Rent and Utilities Logistics Janitorial Promotional Activites Legal and Permits Flight (2) Hotel (2) Ipad (4) Total Expenses Total Profit
Month 1 Month 2 SEK 1,626,889.60 SEK 4,880,668.80 SEK 6,507,558.40 SEK 195,226.75 SEK 585,680.26 SEK 425,661.00 SEK 292,084.00 SEK 1,006.00 SEK 1,006.00 SEK 151,255.00 SEK 151,255.00 SEK 320,000.00 SEK 320,000.00 SEK 101,506.99 SEK 13,596.00 SEK 13,596.00 SEK 3,724,476.33 SEK 92,000.00 SEK 30,570.00 SEK 334,800.00 SEK 16,960.00 SEK 6,770,679.33 SEK (263,120.93)
PRODUCT Dress Bag Shoe Basic Sunglasses Scarves Gloves 2 Necklace Earrings Bracelet Rings Foundation Lipstick Blush Eyeshadow Eyeliner Nailpolish Perfume Bronzer
Interior & Exterior: Interior Fixtures Sofa Table Lamp Chandelier Chair Candlestick Clock Decorative Ornament Table Pillow Total Costs
SEK SEK SEK SEK SEK SEK SEK SEK SEK
Unit Costs 78,924.00 2,300.00 4,550.00 90,585.00 395.00 3,325.00 2,750.00 7,735.00 450.00
Units
1 2 1 2 1 1 1 2 2
SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK
Cost 78,924.00 4,600.00 4,550.00 181,170.00 395.00 3,325.00 2,750.00 15,470.00 900.00 292,084.00
AVR.PRICE Dress Bag Shoe Basic Sunglasses Scarves Gloves 2 Necklace Earrings Bracelet Rings Foundation Lipstick Blush Eyeshadow Eyeliner
SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK
Nailpolish
SEK
Perfume Bronzer
SEK SEK
COGS %
SEK
SEK SEK 12% 10% 8% 7% 7% 6% 10% 5% 5% 3% 2.00% 5.00% 2.00% 2.00% 4.00% 2.00% 7.00% 3.00% 100%
SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK
0.1 Month 1 2000 0.02 40,672.24 TOT.REV Month 1 1,626,889.60 650,755.84 Month 1 195,226.75 162,688.96 130,151.17 113,882.27 113,882.27 97,613.38 162,688.96 81,344.48 81,344.48 48,806.69 32,537.79 81,344.48 32,537.79 32,537.79 65,075.58 32,537.79 113,882.27 48,806.69
SEK
SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK SEK
0.2 Month 2 4000 0.03 40,672.24 TOT.REV Month 2 4,880,668.80 $ 1,952,267.52 SEK Month 2 585,680.26 488,066.88 390,453.50 341,646.82 341,646.82 292,840.13 488,066.88 244,033.44 244,033.44 146,420.06 97,613.38 244,033.44 97,613.38 97,613.38 195,226.75 97,613.38 341,646.82 146,420.06
Month 1 AVR.UNIT 5 5 15 30 27 16 1 2 1 1 62 275 87 62 265
Month 2 AVR.UNIT 14 16 46 90 81 49 4 5 3 4 186 824 262 186 796
228.42
142
427
1,015.20 473.76
112 103
337 309
SEK 42,300.00 29,610.00 8,460.00 3,807.00 4,230.00 5,922.00 126,900.00 46,530.00 84,600.00 38,070.00 524.52 296.10 372.24 524.52 245.34
6,507,558.40 2,603,023.36
COGS
SEK 2,603,023.36
Written Rational
Appendix
(Communication & Promotional Plan)
The pre-launch for Dior’s Stockholm holiday pop-up begins two months prior to the opening of the store. During this time, Dior will be advertising the shop on their social media (Facebook, Instagram, Twitter, E-commerce, smart phone app, and Blog.) There will be a short promotional video made during our pre-launch that will be posted throughout the entire duration of our pop-up through various social media networks. In addition to using social media, advertisements will also be placed in one of the most commonly read magazine in Sweden - Sweden’s ELLE Magazine during September, and November (ELLE Magazine Advertising.) Based off of our customers daily transportation activities, there will be outdoor promotion on the outside of local public buses during our prelaunch as well as while the store is open to invite any gift buyers (Bus Advertising Prices and options.) There will be a personalized promotional gift basket of Dior makeup products sent to important personnel including: elite customers, magazine editors, high profile bloggers, and celebrities in the surrounding area. Within the basket, there will be an invitation to the Grand Opening cocktail party which will be held the night before opening day in December. All of our customers will receive a limited addition Dior Christmas Ornament with their purchase. **Refer to Income Statement and Cost Sheet for ROI
Written Rational
(Financial Analysis)
To begin, we determined an average of 1000 footfall per day based on the area we are located in. This gave us a number of 2000 in foot traffic for month one, and 4000 in month two. The first month has a lower conversion rate of only 10% of total footfall per day in the area because consumers are still learning about the boutique, whereas in month two we have a 20% conversion rate because the consumers are more aware of our location and shop. Additionally we will be open 20 days out of each month, so the final equation used to determine the foot traffic per month was total foot traffic per day in the area (1000) multiplied by 20 (days we are open in a month) multiplied by the conversion rate. We came about our average basket figure from first determining average prices of our products sold, and then determining on average what consumers would buy day to day. For example we have our wealthier consumer who is buying Dior’s high end jewelry, and then we also have the consumer on a budget who might just stop in to buy Dior’s perfume or a lipstick. From this analysis we determined 10 baskets (see appendix) and then found the average price of all 10 baskets. After finding our basket pricing we found our total monthly revenues from multiplying our dayto-day footfall (2000 for month one) by a conversion rate, and then by the average basket per month. Again the conversion rate was higher in the second month because consumers are more aware of the boutique. Lastly, we found our cost of goods sold by multiplying our revenue by 40% because our markup is at 60%. After finding the pricing of our goods, revenues, and percentages per product category, we dove into other costs we might need. This includes but is not limited to: hotel and air fare, legal permits, iPads for sales associates, interior fixtures, rent, wages, and logistics. Please see the appendix for all reasoning and citations for our pricing.
Pricing Information
Pricing Information
Rent of Space:
Basket Pricing:
Technology:
Building & Design of Space:
Storing:
Basket 1 Dress Basket 2 Bag Basket 3 Shoes Basket 4 Sunglasses Basket 5 Necklace Basket 6 Earrings Scarve Basket 7 Bag Bracelet Basket 8 Foundation Lipstick Blush Basket 9 Perfume Eyeliner Basket 10 Ring
Sales Associate Salary:
$
5,000.00 $
5,000.00
$
3,500.00 $
3,500.00
$
1,000.00 $
1,000.00
$
450.00 $
450.00
$
15,000.00 $
15,000.00
$ $
5,500.00 $ 500.00
6,000.00
$ $
3,500.00 $ 10,000.00
13,500.00
$ $ $
62.00 $ 35.00 44.00
141.00
$ $
120.00 $ 29.00
149.00
$
4,500.00 $
4,500.00
AVR.BASKET AVR.BASKET
$ SEK
4,924.00 40,672.24
Employees Per Hour Per Day 5 $12.00 $96.00 Total Managers 2 n/a n/a Total Final Total Final SEK Janitorial Per Hour Per Day 2 $10.00 $80.00 Final SEK
Logistics Pricing:
Per Week $480.00 n/a
Per Week $400.00
Per Month $1,920.00 $9,600.00 $4,100.00 $8,200.00 $17,800.00 SEK 151,255.00 Per Month $1,600.00 SEK 13,596.00
Interior Decor
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