Acne Studios.
BA Fashion marketing & communication, Level 5, 2018-19 5FAMK004C Marketing Techniques and Strategy 2 CWK1 Abel Díaz – Andrea Romero Word count: 2545
1 Distribution System Research Flagship store
1. Description of the format Nowadays, we live in the era when generations seeks for experiences rather than materialistic goods. In this way, customers are looking for added value to their purchase. Flagship store has become the delivery of their actual needs in various ways. Based on this fast, this kind of retail format is relevant in a today’s retail word. Flagship store is one of several distribution formats operating on the market nowadays. The core meaning of ‘flagship’ in a way of terminology relates to the word ‘the lead’. In addition, it is taken from naval tradition, where the flagship is the main ship in the whole fleet. This meaning has been kept till today and transmitted to distribution system as well. It is the leading store in the retail chain. Even though there can be variations in the meaning, flagship store always takes the position of either the first store of the brand, the biggest store or the one with added value such as entertaining customers experience. In the same way, it can be the newest, largest or the best-known store. These are usually located in the most prominent areas and occupy large areas what makes them more spacious than other retail formats. In the same way, flagship store usually includes the biggest stock of the rest. Besides serving as the biggest one, there as several other purposes of the flagship nowadays. They take a role of the showcase for the brand and being the destination of special experience and entertain for customers. The aim is always to attract many customers. Depending on individual store, there are several experience variations. It can be touristic attractions, architectural sight seen or a spot where art meets business too with creating decor or design. For example, the interior environment of Acne Studios flagship stores includes cultural and architectural attributes of its location combined with their brand style. (Trotter, 2019)
2. Data Nowadays, flagship stores’ role is to create a brand image and tell the story and offer the experience. “Flagship stores bring a brand’s true personality to life,” Jaime Bettencourt, SVP of business development at Mood Media, told Business Insider. “They not only reach and connect with their customers at the moment they are shopping, but they also have a halo effect on the entire brand.” Brands use flagship stores as an image of marketing, retail and visual merchandising together. After years of flagship development, there are several innovative in-store services offered in flagship stores. These include extra in-store services. Services and different activities vary based on different brands’ values and purposes. One example is presented in new Nordstrom flagship store in New York. They have decided to create a small in-store department for men shoe tailoring. Besides that, there is also a launch of a bar with a restaurant. There are other ways too how brands operate within their flagship stores. For example, omni-channel experience. Brands use more channels to strengthen the brand storytelling by using various channels. Most commonly, there is a combination of advanced technologies used in the store with online experience of shopping. For example, Nike has launched its application which enables customers to explore the store experience if they have downloaded the app. I t one way of engaging with customers using and merging various channels together. Another way of engagement through flagship stores are events organized in the shop. Customers are given the opportunity to say their opinions and share their stories. In this way, they are connecting at the emotional level what can have a positive impact on brand’s business. This example has been presented by Glossier flagship store in New York. Despite of many new flagship stores opened, they are still considered to be encounters of the fashion retail world because of high investments to its space, design and environment for customers’ experience. (Business Insider, 2019)
3. Future According to today’s statistics, flagship stores have high potential to become arcades of the fashion market in the future. New generation of customers seeks for experiences besides physical goods. In order to offer customers experience, there is a necessity of spacious location where various activities can happen. Based on this fact, flagship stores are suitable option to choose. Nowadays, flagship stores offer an experience of architecture or design besides fashion. However, customers’ demands increase fast and in order to keep them entertained, market has to introduce new opportunities. Based on this fact, executives retail executives bring new innovations to flagship stores. According to LSN, about 55% of retail executives will invest to in-store experience till 2020. The key feature is going to be technology. 3D fitting rooms, or electronic devices which enables clients to see whether the garments fits them properly though augmented reality is accessible already. According to this fact, there are other innovations coming. These will take customers into augmented reality as well. However, there is an added value of doing different activities in real time. So, instead of just trying on some good, customers will be able to see themselves in the video doing activity by their choice. For example, Nike open flagship store where customers can run on the treadmill in various places in the world. To sum it up, Flagship stores are the future retail space where marketing is put over sales. The purpose is to create enough entreating concepts to get customers out of their house to the store. They are up-to-date digital theaters where customers can engage with the brand om another level. (Boisselet, 2019)
2 2 Distribution report Distribution report
About the brand
Acne studio is a worldwide famous fashion brand operating at the luxury market all around the world. It was found by John Johannson and his creative team in 1996 in Stockholm, Sweeden where it is still based and have its headquarters. They are specialised in contemporary men and women ready to wear goods including clothes, footwear, accessories and denim. Besides offering fashion, Acne Studios is multidisciplinary brand which has focus on art, architecture and graphic design. These aspect are usually applied in the store of Acne Studio, which are the most important marketing and visual point for them. Currently, there are 45 shops worldwide, including flagship stores located in Stockholm, Paris, Tokyo and others. In addition, Acne Studios is socially responsible brand and being member of FWF (Fair Wear Foundation) who helps to improve labor conditions.
History of the brand Acne Studios was found in 1996 by four young creative people with desire to create something new in a way of brand marketing and visual identity.Acne studio is a Swedish brand found by John Johansson. His main interests are design, architecture, photography and contemporary culture. The brand which has been created by 4 creative young people who worked in Acne team with main focus on graphic design and film production in 1996. Later in 1997, these four creatives have decided to create their own Acne Studios brand where they will apply thei architectural and graphic skills into fashion. At first, they started to manufacture jeans. Their first 100 paird were designed by John Johansoon . They were made from high quality denim and had red detail on itself. John has given them to hie family and friends. Because of its unique, it has caugh the attention of public and media. John was contacted by Vogue and several other magazines immediatelly and easily entered the world of fashion. The success key of Acne was probably brands multi-discipline studio including fashion products, but alsi furniture, magazines, books and exhibitions.
Points of sale
Retail formats:
Shop in a street Flagship store
There are more than 45 stores over the world Acne Studios is independently owned Flagship stores are located in Paris London Milan New York City Los Angeles Tokyo It sells its products through its own stores in Australia, Belgium, China, Denmark, France, Germany, Hong Kong, Japan, the Netherlands, Norway, South Korea, Sweden, the United Kingdom, and the United States; retailers worldwide; and online. The company is headquartered in Stockholm, Sweden with additional offices in Paris, New York, Oslo, and Copenhagen.
Competitors
1. EVERALANE 2. REFORMATION 3. GANNI 4. TOBI 5. VICTORIA ROAD
Positioning map
Target segmentation Women and men Aged between 20-45 Middle & upper class with higher income Educated Usually work in creative industries including fashion, graphics design and architecture Like traveling, art, shopping
Product segmentation The company offers coats and jackets, shoes, jeans, dresses, knitwear, tops, blouses, sweatshirts, suit jackets, trousers, skirts, swimwear, miniature collection, bags, leather goods, eye-wear, underwear, acne papers, and gift cards for women; and outerwear, jeans, shirts, T-shirts, knitwear, sweatshirts, suit jackets, trousers, shorts, shoes, swim-wear, miniature collection, bags, leather goods, eyewear, underwear, acne papers, and gift cards for men. Acne Studios AB designs and manufactures ready-to-wear, footwear, accessories, and denim products for men and women.
Women Ready to wear Outwear Knitwear Sweatshirts Blouses T-shirts Suit jackets Dresses Jeans Trousers Shorts Skirts Swim-wear Children
Accessories Scarves Bags Small leather goods Hats Eye-wear Jewelry Other accessories
Men Ready to wear Outwear Knitwear Sweatshirts T-shirts Shirts Suit jackets Jeans Trousers Shorts Children
Accessories Scarves Bags Small leather goods Hats Eye-wear
Location
Passeig de GrĂ cia, 89 08008 Barcelona Spain
Architecture & High fashion We have chosen this location based on brand positioning and previous research about brand’s criteria. Acne studios chooses locations which are occupied by luxury fashion segment and places with represents culture and architecture of the city as well. In this case, Passeig de Gracia is the most suitable location for Acne Studios store because it is combination of high fashion brands and traditional Gaudi’s architecture. The shop is going to be located at the corner on the right side of the road from La Pedrera, which is one of the most typical Gaudi building. The store will be at the corner, in order to have spacious location with big windows to increase transparency and see interior of the shop. Furthermore, the place is easily reachable because of various public transport options close by including Diagonal metro station. People who are willing to invest money to clothes are usually concentrated in this area as there are various luxurious brands. In addition, it is very central area with a lot of tourists passing by.
Accessibility & Public transport The area of Passeig de Gracia occupies the main centric part of Barcelona. In this way, there are many options in the way of public transport how to reach the location. For example, metro station Diagonal or Passeig de Gracia. In the case of buses, there are links which stop at the bus stop called La Pedrera, located few meters away from the store. In addition, it is also easily accessible by walking.
Daily footfall by hours
Shop premise
Passeig de Gracia 89 300 m2 4000 eur\m2 per month
Product references
Men
Women
Product references
Range of prices Men
Women
HOW AND WHAT
DO WE OFFER?
Tactogram
*
M&W
Men and women
I have taken product categories from Acne studios website. I have decided to sell product categories of both men and women. There are several divisions including destination, proffered, occasional and convenient. Categories are going to occupy different percentage of the whole sortiment, based on the needs on my customers.
Destination 80%
M&W
M&W
M&W
M&W
M&W
M&W
Proffered 12%
M&W
Convenient 7%
M&W
Occasional 1%
M&W
Store premise The store is going to occupy the corner of the building. The entrance is at the corner.
Customers’ flow in the shop
Customer flow direction goes from the right side thorough the shop to the back and then the path goes on the left side leading to the cash desk and exit.
TOTAL SQUARE METERS: 310 M2 SALES SQUARE METERS: 300 M2 RENTAL FEE PER MONTH: 4 000 EUR
DESTINATION Orange circles: These are gondolas in different styles and variations including all pieces of destination creating outfits, jackets, t-shirts & shirts, pants, skirts, footwear and accessories.
Small blue rectangles New collection ready to wear including tops and pants This part of the store is occupied by the destination and new collection. In order to present the key pieces and attract customers.
ROUTINE Blue rectangle in the back This section of the shop is located in the back. There are going to be routine category which does not include the new collection.
PREFERRED & OCCASIONAL Shoes, handbags, swim-wear, accessories
CONVENIENCE CASHIER
Store interior
Acne studios is a brand which besides offering its collections plays a lot with the interior of the shop. They are selling their the experience of the places too. The strategy is to combine aspects of Acne Studios brand with local culture and architecture. In this way, Acne Studios in Barcelona will include several easily recognizable Gaudi’s units. These are going to be full of colors and eye catching. In contrast, the rest of the shop including walls and the main backbones of the store are going to be in neutral, white, grey, brown or light pink color to keep the minimalism spirit of the brand. Furthermore, as Acne is a luxury brand, there is low number of pieces in the shop. We are going to put several products in the shop, however, it will not be filled with many garments. Shop will give the feeling of large breathable and luxury space and make people focus on the interior as well.
White columns are going to be replaced by ones which will be inspired by those from Park Guell.
Walls are going to be covered by mirrors in Gaudi style
Small colorful application in Gaudi style are going to be place at the edge of the store stairs. The pink color of the stair will be kept as it is the key feature of the brand.
Wooden seats will be replaced with Gaudi’s style benches from Park Guell.
The floor next to the table will be constructed by small colorful glazed tiles. Table in Gaudi style, neutral color and specific shape
Thematic decor
There are going to be several huge sculptures located in the store to attract customers with shop environment and give them special experience of unique Barcelona Acne Studios store. Motives are again from Park Guell.
Financial part Total units sold forecast
Average prices and discounts
Taxes and commissions
Expenses Initial investment
Operative expenses
Staff expenses
Demand creation expenses
Stock buying and CPC
Staff calendar Staff in Acne Studios Barcelona is going to work 5 hours per day. There are going to change according to morning and afternoon periods. The shop will have three Store Managers. Two are going to change based on morning and afternoon and the third one come in the case one of the first two are not able to come to work. Employee from number 1 to number 10 are shop assistant. Based on the fact that the store occupies huge space, we need many shop assistants located in different parts of the shop. There are going to work five of them in the morning, five in the afternoon. There is going to be one more extra person, ware house support employee, who is going to take care of ware house.
Morning
Afternoon
The new Acne Studios flagship store in Barcelona is going to be opened on Passeig de Gracia 89. According to the target group and brand positioning and strategy, this location is the most suitable one. In the same way, based on the fact Acne Studios company chooses the location with specific architecture and culture related to the city, this area includes many cultural aspects which create the right environment. The store is going to be located at the corner and occupy 310 m2 with the premise in the same of rectangle. The location and the premise of the store is suitable based on the fact it is going to be a flagship store and huge space is necessary. In addition, spacious location will enable customers to see products better. Also, the premise is suitable because of the special interior decor which are going to be located in the store. Like wise, it will create typical minimalistic store atmosphere of Acne Studios. Last but not least, there are going to be used large windows what will highlight the space in the shop and pedestrians will be able to see inside while passing by. According to previous researches done, there are going to be product categories for women and men. There are going to be several collection during the year, which are going to change according to seasons. On the other hand, there are going to be several routine categories kept all year long. The investment has been analyzed by taking into the consideration several categories. These are total units sold, gross sales and expenses ( staff, operational expenses, demand creative expenses and stock buying. After calculating and taking in account total investment, we have been gotten the positive ROI which equals to 32%. In order to be prosperous, the ROI of the company has to equal at least to 15% to 20%. In this way, the results show that the opening of the Acne Studios flagship store in Barcelona would be the right step to do.
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Boisselet, G. (2019). Why flagship stores are the arcades of the future. [online] Retail | LS:N Global. Available at: https://www.lsnglobal.com/retail/article/22872/why-flagship-stores-are-the-arcades-of-the-future?fbclid=IwAR30Rafy9F57a3PQrQ8eQ-OcZGouekhe9A89BbBDZqJiMDRnaypoWHF2I2k [Accessed 11 Apr. 2019]. Business Insider. (2019). The flagship store of the future will be nothing like the industry has seen before. [online] Available at: https://www.businessinsider.es/whatflagship-stores-will-look-like-in-future-2019-2?r=US&IR=T [Accessed 11 Apr. 2019]. The Balance Small Business. (2019). What Is a Retail Flagship Store and Where Are the Best Ones?. [online] Available at: https://www.thebalancesmb.com/definition-of-flagship-stores-retail-2892224 [Accessed 11 Apr. 2019]. The Real Deal New York. (2019). Flagships have survived the retail carnage – but are they bulletproof?. [online] Available at: https://therealdeal.com/2017/08/25/flagshipshave-survived-the-retail-carnage-but-are-they-bulletproof/ [Accessed 11 Apr. 2019]. Trotter, C. (2019). What is a flagship store? - Insider Trends. [online] Insider Trends. Available at: https://www.insider-trends.com/what-is-a-flagship-store/ [Accessed 11 Apr. 2019].