THE CHILDREN’S
PLACE New Strategic Initiative
Faith Newton | Manfei Li | Savannah Weghorst | Francoise Urdaneta
The Children's Place, Inc. is the pure-play children's specialty apparel retailer in North America. They offer apparel, accessories, footwear, and other items for children. They design, contract to manufacture, sell at retail and wholesale, and licenses to sell trend right, high-quality merchandise at value prices. The company also markets apparel under the Children's Place, Place, and Baby Place brand names.
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Company Overview History Mission Corporate Structure Revenue Future Growth Plans SWOT Market Overview Current Positioning Current Distribution Current Communication and Promotion Customer Loyalty
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Customer Overview Demographics and Psychographics Customer Profiles
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Omnichannel Audit In-store Audit Online Audit
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New Strategic Initiative The Mom Space Rebranding Industry and Consumer Trends The Parent’s Space Goal
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Technology and Implementation Tech and Development Companies Operational Considerations 6 Month Implementation Plan Implementation Gantt Chart
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Visualization
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Future Competition
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Communication and Promotional Plan 6 Month Promotional Plan Monthly Themes and Weekly Subtopics Visualizations
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Conclusion
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COMPANY OVERVIEW
HISTORY 1969
Founded by two graduates of Harvard Business School, David Pulver and Clinton Clark.
1982 1982-1986
Sold The Children's Place to Federated Department Stores Added on average 20 stores a year, spreading mostly through malls across the northeast and midwest
1990-1992 1997 2004-2007
Lost $60 million in financial trouble Became publicly traded on the NASDAQ exchange Owned and operated 335 Disney Stores through a subsidiary Hoop Retail Stores LLC
2013
Joined Alliance for Bangladesh Worker Safety along with other North American apparel retailers
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“The Children’s Place mission is to be the best specialty retailer of children’s apparel and accessories in every neighborhood in which they operate, offering the best value and outstanding customer service every day, while enhancing shareholder value.”
MISSION 08
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CORPORATE STRUCTURE
Institutional Shareholders
The company is now publicly owned and traded in the NASDAQ stock market. The Board of Directors is made up of nine members, including Chairman Norman Matthews. The executive management team has fifteen members. The key members are the following: Jane Elfers - Chief Executive Officer Michael Scarpa - Chief Operating Officer Pamela Wallack - President, Global Product Anurup Pruthi - Chief Financial Officer John Kovac - SVP, Chief Information Officer
VANGUARD GROUP INC 2,425,654 BLACKROCK INC. 2,099,433 ROYCE & ASSOCIATES LP 1,124,532 DIMENSIONAL FUND ADVISORS LP 840,177 JPMORGAN CHASE & CO 806,129
Stock Information Total Number of Holders: Total Shares Held: Total Value of Holdings:
295 22,729,133
2,579,756,596
*Jane Elfers CEO 11
REVENUE
Q1 2017 Financials Revenue Gross profit Gross profit margin Net income
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436.7 m 170.6 m 39% 36.2 m
The Children’s Place’s revenue was reported to be $436.7M in Q1, 2017. Annual Net Sales in 2016 was reported to be $1,785M.
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FUTURE GROWTH PLANS
“The Children’s Place continues to make significant progress on their key strategic growth initiatives; superior product, business transformation
through technology, alternative channels of distribution and fleet optimization. Developing and implementing a best-in-class personalized customer contact strategy is their single biggest opportunity.� 15
S
w
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O T
Strengths Unique price-value positioning Strong brand image Low cost expert sourcing
Weaknesses The stock price is moving lower and may yet weaken further. Weakness in store/mall traffic Lacks a strong omni-channel presence
Opportunities Implement and optimize mobile app Continue international expansion Elimination of under-performing stores to optimize fleet of stores
Threats Slowdown of birth rate Pressure for lower prices Children’s market is highly competitive
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MARKET OVERVIEW
The total sales of Childrenswear in 2016 was $31,570 million USD, and the sales will keep growing in the next 5 years. The year over year growth in 2016 was 3.6%; however, in the next 5 years it might slow down year by year. Girl’s apparel accounted for a big part of the sales which was $12,051 million and the sales of boy’s apparel was $10,367 million. Currently, Carter’s, Old Navy, Walmart, Nike, and The Children’s Place are the top 5 Childrenswear brands in the market. 18
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CURRENT POSITIONING
The Children’s Place is very promotionally driven. They sit with Carters and OshKosh B’gosh in similar pricing and trend. The Children’s place has a pretty even mixture of mainstream clothing or basics, and trend-driven fashion choices. Carter’s brands, who account for the largest share of the childrenswear market, are the direct competition for The Children’s Place. 20
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CURRENT DISTRIBUTION
1,026 Retail Stores in N. America 644 mall stores 219 strip centers 135 outlet stores 41 street locations 22
161 Franchise Locations Across 19 Countries Using 7 Different International Partners
Retail Store Locations
Sales Distribution (2017) Stores
Online
Wholesale
Total
# of Locations
1026
1
161*
1188
Sales (000's)
$1,254,045
$313,511
$217,760
$1,785,316
% of Sales
70%
18%
12%
100%
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CURRENT COMMUNICATION & PROMOTION Multichannel Marketing: store front windows, in-store marketing, internet marketing, and customer loyalty program
Advertising Spending (Million)
58K
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24K
2016
2015
2014
$26.4
$27.9
$30.9
2.2M
316K
The Children’s Place currently only advertises in-house. They use their MyPlace Rewards loyalty program to capture email addresses. They send promotional emails to their customers as well as posts to various social media platforms, the main one being Facebook. They use in-store signs and window signs to promote product and sales.
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CUSTOMER LOYALTY
*8 Million MyPlaceRewards Members Account for 74% of Sales 26
12% of Sales in 2016 Were Transacted on the Private Label Credit Card 27
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CUSTOMER OVERVIEW
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TARGET CUSTOMER PSYCHOGRAPHIC SEGMENTATION For the achiever customer, family comes first so the consumer would purchase clothing and choose to spend money on their children The experiencer customer would want the level of fast fashion and trendiness of The Children’s Place.
DEMOGRAPHIC SEGMENTATION The target demographic is the female mother from ages 26-40. She doesn’t have disposable income all the time, but when she does, she spends it on her family. She lives in a suburban area, and works a day to day job. She is in the middle-middle class with an average income range of 69K.
Strivers attempt to keep up with popular trends and tend to wear their wealth and perception is everything. All of the consumers are driven by practicality and sales promotions. They believe that even though they spend money on their children, they realize for children it’s typically quantity.
ACHIEVER EXPERIENCER STRIVER 31
Rachel Age: 27 Occupation: School Teacher/ Cheer Coach Income: $47,650 (individual) $132,751 (combined) Location: Maryland She is up on the latest trends from her students, and her children are her first priority. She saves her weekends for family time. Rachel is always ready for a sale because she knows her little girl, Lara, is all about the newest trends. 32
Luisa Age: 4 1/2 Occupation: PreKindergarten socialite Income: Weekly Allowance of 5 monies Location: Atlanta She was voted Best Dressed in Preschool and graduated cum laude. Luisa always wants the newest style, but she never asks. She simply spills a couple drops of spaghetti or her favorite juice... 33
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OMNICHANNEL AUDIT
INSTORE AUDIT
STORE WINDOWS The theme of the windows was promotional sales of 40% and 60% off. There were not mannequins on display. The product assortment shown were basics and sweaters. 36
FRONT ENTRANCE The front entrance displayed fashion items, jeggings and sweaters. The main theme of the store is christmas/holiday/winter. There was not a designated area for primary and secondary selling area. The store offers basics, t-shirts, jeans, shoes and baby clothes.
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OTHER COMMENTS IN- STORE
The sales associates were friendly and helpful. The checkout is located at the middle side of the store. This was the only point of purchase. There were 30%-50% off everything. The return process is very easy: 45 days with a receipt, otherwise only an exchange. 39
ONLINE AUDIT
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Very easy to navigate, the website is very clean and simple. The website is currently offering sales on everything for the holidays. The checkout process is very simple with three steps.
Suggested Improvements They did not have much of an omni-channel presence. The only seamless experience was that you could return online items in the store or that the customer’s MyPlace rewards could be pulled up in the store or online. We would suggest that customers could create profiles including their children’s size, gender, and style preferences and based on the average growth rate for a child, the database could estimate what size the child would wear over time. Then the website or future app could suggest items based on the profile. 41
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NEW STRATEGIC INITIATIVE
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The Mom Space Rebranding The Mom’s Space is currently an exclusive space for a select group of moms to give feedback. We want to rebrand it as “The Parent’s Space”, an online community center/ blog for parents to ask questions, tell stories, and get advice. Every week would have a different topic to be discussed. In addition, each store would host a local “Parent Time” event for mothers or fathers in the community to meet and discuss their lives, troubles, and stories about their children once a month. This will increase customer loyalty and interaction, increase sales, elevate the brand image by adding a sense of community, and increase consumer satisfaction by optimizing an open channel communication. 45
Industry Trends Increased Demand for Experience Increased Number of Children Bloggers Increased Interest in Kidswear Booming “Mommy and Me� Market
Consumer Trends Low brand loyalty in Childrenswear Increased Demand for Community and Customer-Generated Content 46
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THE PARENT’S SPACE GOAL
With the push in the market towards lifestylecentric selling, The Mom Space rebranding would take The Children’s Place from simply a clothing retailer- to a holistic community and lifestyle brand. Our new strategic initiative would prove useful in net profit and store traffic as well as brand loyalty and customer engagement. 49
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TECHNOLOGY & IMPLEMENTATION
TECH & DEVELOPER COMPANIES
for website design and user experience on the n e w “ Pa re n t ’s S p a c e ”
machine learning about the customer for future buys and just overall knowledge about the consumer 52
for the app management and creating a useful and cohesive app experience
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The Children’s Place would need to hire new employees or promote current employees to oversee and run this initiative. The two positions that would need be filled would be a full time writer and blogger to oversee and run the Parent’s Space blog and social media as well as a Store Event Coordinator for each individual store who would be in charge of the monthly local events. The Parent’s Space would also need to consider popular parent/child bloggers who have a substantial following who could be featured on the Parent’s Space blog. Training content would need to be created in order to train the Store Event Coordinator on his/her roles and responsibilities as well as training content to ensure that all store employees are informed about the initiative so that they can promote in within the store and local community.
OPERATIONAL CONSIDERATIONS 54
Full-Time Writer & Blogger Specialist Job Duties/Responsibilities: Choose subject matter that interests readers Manage the blog community by moderating and responding to comments Attend local events and capture high quality videos to create sizzle reels.
Store Event Coordinator Job Duties/Responsibilities: Location scouting for monthly Parent’s Space meetings Promoting the event each month at local schools and businesses Signing up customers to attend Parent’s Space meetings Setting up the local event Encouraging sales associates to tell customers about the Parent’s Space
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6 Month Implementation FEBRUARY: Research the following: Market research, blogs/blogger trends, successful blogs, and technology and software companies. MARCH: Meet with developers to discuss the needs and wants for the user interface. Huemor and App Annie begin acquiring data to build the user interface. Begin hiring Full-Time Writer and Blogger Specialist. Begin screening process in-store to promote or hire a contracted salary employee whose main responsibility is events. Also begin scouting for current bloggers who could be brand ambassadors and featured bloggers on the Parent’s Space. APRIL: Huemor and App Annie will begin and finish the User Interface. Begin creating promotional material. MAY: Begin testing the user interface to look for improvements and final edits. Create training material for store employees. Finalize all hires at corporate and store levels. JUNE: Pre-promotion begins. Begin the training for store employees. JULY: Launching the new function of the mobile app. Automation Anywhere begins compiling information about the customer
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Implementation Gantt Chart 2/1/18 Market Research Research Blog/Blogger Trends Research Successful Blogs Research Technology Companies Meet with Developers to Discuss Wants and Needs of UI Developers Begin Their Own Research and Data Collection Recruit Full-Time Writer and Blogger Specialist Recruit In-Store Event Coordinator Recruit Bloggers to Become Brand Ambassadors Developers Develop User Interface Create Promotional Material Test UI and Make Improvements/Final Edits Create Training Material for Store Employees Pre-Promotion for The Parent's Place Train Event Coordinators and Employees Launch The Parent's Place Automation Anywhere Compiles Information
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2/21/18
3/13/18
4/2/18
4/22/18
5/12/18
6/1/18
6/21/18
7/11/18
7/31/18
8/20/18
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VISUALIZATIONS
The App
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The Blog
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FUTURE COMPETITION
e Carter’s is the leading brand of children’s clothing, gifts and accessories in America, selling more than 10 products for every child born in the U.S. Their designs are based on a heritage of quality and innovation that has earned us the trust of generations of families.
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Gymboree Group, Inc. is a specialty retailer, operating stores with highquality clothes and accessories for children. The company was founded in 1976 based on San Francisco Bay Area. Their family of brands includes Gymboree, Janie and Jack, and Crazy 8. Currently they are operating over 1,300 retail stores in the United States and Canada.
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COMMUNICATION & PROMOTIONAL PLAN
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6 Month Promotional Plan
June (pre-promotion): Facebook and Instagram posts each week detailing The Parent’s Space. Promotional video for Youtube to be shared on multiple platforms. July (launch): Bag stuffer with purchase containing information to sign up. July-November: each month will have the following: 1 Instagram post for each blog topic of the week Share the blog post to Facebook each week 1 Facebook post for month’s theme 1 Facebook live at local event 1 Sizzle reel for Youtube from the local events 1 Email blast to all customers to remind to sign up for Parent’s Space 1 Email blast to Parent’s Space members reminding them to sign up for local event In store signage at register for each store with information of local event time & place.
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MONTH THEMES & WEEKLY SUBTOPICS
July: Summer Week 1: Staycations- Free And Cheap Summer Activities Week 2: Summer Date Nights Week 3: Clothing To Beat The Heat Week 4: Emotionally And Mentally Preparing For Back To School 72
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August: Back to School Week 1: Dressing Your Kid For Back To School Week 2: Quick And Easy Lunch Box Meals Week 3: Flu Season Week 4: After School Activities That Won’t Make You Want To Pull Your Hair Out Week 5: Relaxation Techniques. When Your Kid’s Away, You Can Play.
September: Babies Week 1: Feeding Week 2: Swaddling Week 3: Baby Proofing Week 4: Dressing your Baby for Fall 75
October: Fall Week 1: Fall Accessories for You and Your Child Week 2: Fall Drinks for Adults When you need to take a break Week 3: Family Photos Week 4: Halloween Costumes
November: Family Week 1: How to Have a Cellular Free Family Dinner Week 2: Preparing to See the Extended Family Week 3: Thanksgiving Week 4: Post-Black Friday Blackout. Share Your Deals and Stories 76
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PROMOTIONAL VISUALIZATIONS
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The Children’s Place is a kidswear brand that focuses on fast fashion and promotional sales. They are beginning to implement technology in order to provide a seamless experience. On the other hand, their customer is used to the promotional sales and they lack a strong omnichannel presence. With the push in the market towards lifestyle-centric selling, The Mom Space rebranding would take The Children’s Place from simply a clothing retailer- to a holistic community and lifestyle brand. Our new strategic initiative would prove useful in net profit and store traffic as well as brand loyalty and customer engagement.
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CONCLUSION
https://craft.co/the_childrens_place/competitors http://media.corporate-ir.net/media_files/NSD/PLCE/reports/Code_Conduct.pdf https://seekingalpha.com/article/4074460-childrens-place-retail-stores-plce-ceo-jane-elfers-q12017-results-earnings-call-transcript http://www.nasdaq.com/zh/symbol/plce/ownership-summary http://www.fundinguniverse.com/company-histories/the-children-s-place-retail-stores-inc-history/ https://www.facebook.com/childrensplace/ https://www.childrensplace.com/us/home http://phx.corporate-ir.net/phoenix.zhtml?c=120577&p=irol-irhome http://www.carters.com/ http://www.gymboree.com/
SOURCES
Faith Newton | Manfei Li | Savannah Weghorst | Francoise Urdaneta Fall 2017 FASM 415 Prof Mary Alonso