ETSY x MACY’S T H E N E W S T R AT E G I C I N I T I AT I V E
CELINE AQUINO | DOMINIQUE HOLCOMB | SETH MARK | NICOLE NG | NICOLE STEFFE
Introduction
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Macy’s Overview ............................................................................................................................................................................................7
TA B L E OF CONTENTS Etsy Overview ....................................................................................................................................................................................................11
Current Target Consumer ...................................................................................................................................................................15 Seller Selection .................................................................................................................................................................................................19
The New Strategic Initiative ..........................................................................................................................................................21 Implementation
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Market Analysis ............................................................................................................................................................................................27 Proposed Target Consumer .............................................................................................................................................................29
Launch .......................................................................................................................................................................................................................33 Communication & Promotional Plan ................................................................................................................................37.
Operations – Time & Action .......................................................................................................................................................39 Financial Plan ..................................................................................................................................................................................................41 Conclusion .............................................................................................................................................................................................................43
INTRODUCTION Macy’s has been around for over 150 years, and has adapted to meet their customers’ needs during that time. To combat dropping sales, Macy’s has had to rethink their strategy to attract new customers which means becoming more appealing to a younger demographic– the millennials. The Herald Square Flagship store in New York City recently underwent renovations and a shop was created for millennial customers that included an Etsy stocked shop. After researching the current market, new technology in retail, Macy’s, and Etsy a new strategic partnership was imagined to optimize the results for both Etsy and Macy’s and their customers.
MARKET OVERVIEW
There is not much numerical data on the size of the handmade market, but with careful research inferences can be made. In 2011, Etsy’s sales were $525.6 million and in 2012 they were $895.1 million. In 2013, Etsy had over 17,000 sellers in the five boroughs of New York City that generated sales of about $50 million. To continue to grow, Etsy has partnered with other big retailers like West Elm and Nordstrom (Thau, 2013). Although the handmade market is wide, with many price points and potential customers– it’s significant enough to attract the attention of Amazon. The multi-billion-dollar company launched a handmade marketplace in October of 2015 with 5,000 sellers offering over 80,000 products. While Amazon varies with Etsy on seller fees etc., it’s still a huge company with a wide audience tapping into the handmade market (Leinbach-Reyhle, 2015).
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HISTORY Founded in 1858, Macy’s is a department store owned by Macy’s Inc. along with Bloomingdale’s. As of 2016, Macy’s Inc. operates about 870 stores in the United States, District of Columbia, Guam and Puerto Rico under the names Macy’s, Macy’s Backstage, Bloomingdale’s, Bloomingdale’s Outlet and Bluemercury.
M I S S I O N S TAT E M E N T “Our goal is to be a retailer with the ability to see opportunity on the horizon and have a clear path for capitalizing on it. To do so, we are moving faster than ever before, employing more technology and concentrating our resources on those elements most important to our core customers.”
CURRENT OWNERSHIP Terry J. Lundgren – Chairman & CEO
CURRENT REVENUE $27.1 Billion
FUTURE GROWTH PLANS Macy’s have closed and are still planning to close about 100 stores, 14% of its stores, next year as they are aiming to become more focused in a competitive market. (CITATION)
MACY’S OVERVIEW
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STRENGTHS Macy’s is owned by Macy’s Inc., one of the top Omni-channel retailers in the United States. Macy’s is a brand engraved in American culture with a strong reputation and vast customer base. As of 2016, Macy’s has 769 stores with its flagship store located in Herald Square Manhattan, New York City, one of the top tourist attractions in the city. The location was recently renovated to attract foreign tourists and millennials. Macy’s has a wide range of brands and a vast product offering, from homewares to apparel.
WEAKNESSES Macy’s employee turnover rate is high and therefore would contribute to higher costs. Macy’s Inc. only owns Bloomingdale’s and Macy’s, very few compared to most other department stores. The brand lacks global recognition as they only have stores in the US; this could cause them to miss out on the large flow of tourist in Manhattan. Macy’s has had a 5.7% decline in sales for the first six months of the current fiscal year due to an oversaturated brick-and-mortar presence; as the number of stores increased, exclusivity decreased. As Macy’s becomes less of a destination store customers leave.
OPPORTUNITIES As popularity grows for online shopping, this is a chance for Macy’s to further enhance their online shopping experience for customers. With emerging markets, it would be plausible to expand into Asia since it is already currently carrying smaller sizes at the Herald Square store for the high number of Asian tourists. By closing locations, focus can turn to the branding of the stores to generate more foot traffic and gain brand loyalty. Expanding current service offerings could create experience for customers while shopping and post shopping. In order to gain an edge, existing private label brands could be further developed to obtain and attract customers with products exclusive to Macy’s.
OPPORTUNITIES Macy’s competitors are beyond just department stores; due to the increase in popularity for online shopping, online retailers have also become Macy’s competition. Department stores have struggled since the 2008 global financial crisis and the growth of online shopping has further added to the pressure. There are also other department stores in Manhattan, including Barneys New York, expanding to multiple locations and staying relevant by making their stores a destination. Fast fashion brands like H&M and Zara, on the other hand, are also contributing to a drop in apparel sales.
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POSITION IN THE MARKET
CURRENT PLACEMENT
C U R R E N T C O M M U N I C AT I O N & PROMOTIONAL ACTIVITIES
796 Stores Sales Volume – $27.1 billion Annual Spend Figures: $1.59 billion Distribuition Model – Omni-channel Department Store Current Advertising Activities: Macy’s has an Chain advertisement on a variety of platforms from traditional television ads, print, to online through their website and social media platforms, i.e. Facebook and Instagram. Macy’s also has large events such as the Macy’s Thanksgiving Day Parade which attracts more than 3 million people to the streets of New York City and 50 million people via television. CRM: Macy’s is a part of the Plenti loyalty program, it is free to join and members can use points as cash. The Plenti loyalty program also includes companies such as AT&T, Rite Aid, and Expedia.
MACY’S OVERVIEW
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HISTORY Etsy is a platform for artists and crafters to sell their products to customer. It was founded in 2005 and it went public in 2015. They have 979 employees, 40 million items for sale, 1.7 million active sellers, 27.1 million active buyers and $2.39 billion annual gross merchandise sales.
M I S S I O N S TAT E M E N T “Our mission is to reimagine commerce in ways that build a more fulfilling and lasting world�
CURRENT OWNERSHIP Public Company
CURRENT REVENUE $2.39 billion annual gross merchandise sales
FUTURE GROWTH PLANS Etsy had a rough first year as a public company as shares fall 77% to $8.32 from a high of $35.74. However a 33% revenue growth has been reported in the third quarter of 2016. There is also significant growth in mobile visits, with 65% in 2016 compared with 60% in 2015. Etsy also recently acquired Blackbird Technologies, it is a machine learning company that complements and augments existing search capabilities. This is to help improve the quality and relveance of search on Etsy.com so customer can easily find what they are looking for.
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ETSY OVERVIEW
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POSITION IN THE MARKET
CURRENT PLACEMENT Channels of Distribution – Online & Etsy Wholesale Sales Volume Distribution – $2.39 billion annual gross merchandise sales Distribution Models – Online
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C U R R E N T C O M M U N I C AT I O N & PROMOTIONAL ACTIVITIES Annual Spend Figures: $12,210,000 (2015) Current Advertising Activities: Digital marketing focused on product listing ads and affiliate marketing campaigns. CRM: Unlike purchasing from big retailers, Etsy sellers are more personal when it comes to dealing with customers. Packages are packed carefully, usually alone with a business card and handwritten note to thank the customer. If there are any issues or questions, the customer can easily contact the seller.
STRENGTHS Etsy has over 40 million items for sale with people buying and selling from all over the world. The site has 1.7 million active sellers and 26.1 million active buyers mostly from North America and Europe. Despite the decline in sales, they did generate $2.39 billion annual gross merchandise sales in 2015. Etsy has an event calendar and hosts local events to connect with the Etsy community in real life. Etsy has also managed to gain and retain millennial customers through offering unique products.
WEAKNESSES Etsy is oversaturated with a lot of sellers and similar products, and there is a lack of control in quality due to the vast number of products available on the website. Since allowing sellers to “get extra help,” there is a huge increase of “non-crafters” and products can now be manufactured in large scales, taking away from the original appeal of handcrafted items. Etsy is also the worst performing IPO of 2015; shares fell more than 50% since its first day of trading. Since going public, many sellers are not getting enough incentive for them to continue selling their goods on Etsy and many leave the site once reaching a certain scale. Sales are slowing causing merchants who are paying for their service to leave. There is also a disconnect on social media platforms; for example, you are unable to shop from their product photos on their Instagram profile.
OPPORTUNITIES Etsy could organize collaborations with Macy’s and other retailers such as Whole Foods or Nordstrom to reach broader clientele. With around 7 million followers on their social media platforms it would benefit Etsy greatly to create a seamless experience for customers on these platforms. Providing better benefits or supplemental services for sellers would help gain and establish loyalty and hopefully prevent them from leaving.
T H R E AT S Leading online retailers such as Amazon, who recently launched their own handmade marketplace, have taken action to enter the crafted goods market. Etsy sellers are leaving for similar platforms including Dawanda and Shopify, which charges less for listing and takes away less of sales from sellers.
ETSY OVERVIEW
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CURRENT CUSTOMERS MACY’S The customers currently still shopping at Macy’s are typically within the Baby Boomer generation and have been loyal customers for years. Macy’s customers are middle class women with an average income of $50,000 and have a stable job after receiving their Bachelor’s degree. This customer prefers to buy quality products, but wants to buy those products at a reasonable price with some additional discounts.
ETSY Etsy, however, does not have a specific target customer. The “typical” Etsy customer is a person who prefers handmade goods that you can’t find at any store. This customer is actively seeking unique products, but likes the option to compare different small businesses that make similar products.
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MACY’S x ETSY STRENGTHS A partnership with Macy’s would most likely attract returning customers to Etsy after seeing Etsy products at an iconic, trustworthy brick-and-mortar retailer like Macy’s. The Macy’s “One Below” area is filled with a range of products aimed toward shoppers under 35, which is Etsy’s current target customer. While Etsy is a smaller brand, many shops have managed to foster brand loyalty with many loyal customers and have gained massive social media followings.
WEAKNESSES A very limited selection of sellers are being featured in the One Below Etsy shop at a time, which not have any impact on preventing sellers from leaving Etsy. Although the products are unique, they lack recognition which may cause a customer to hesitate when making a purchase decision. Products in the shop may also compete internally with other products available at Macy’s.
OPPORTUNITIES The end-use customer is someone who is willing to spend money on a product that is not branded and millennials who want unique products not available to everyone. A collaboration between Macy’s and Etsy where one seller is featured or where sellers create an exclusive line of products for Macy’s could be more effective that the current format. The current Etsy shop only collaborates with sellers within New York; collaborating with sellers outside of the city or even the United States could generate better results.
T H R E AT S Although being featured within Macy’s would expose the Etsy seller to a larger and possibly more influential clientele, they also run the risk of connecting with manufacturers or retailers who are willing to partner with them, causing Etsy to still lose sellers as they become successful and no longer need the website. Revenue generated from the shop may not be enough to pay off for both Macy’s and the sellers in the long run.
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OUR CONCLUSION Though Macy’s has made an effort to attract the millennial demographic, their current Etsy shop-in-shop at Herald Square in New York City has not been very successful. The handmade market is still fairly new and numerical data is sparse but we can infer the market is growing and has great potential; so much so that it has even attracted the attention of Amazon, who launched their own handmade marketplace in October of 2015. Macy’s is an iconic, established brand with a strong reputation. Etsy, though a newer company, promotes innovative culture and is full of unique products millennials appreciate. Considering Etsy has the current target customer Macy’s wants to appeal to, a partnership between the two would be mutually beneficial. In addition to Macy’s expanding their target market, Etsy can add value for customers by offering a truly unique brick-and-mortar experience. Our strategic initiative incorporates multiple forms of technology to provide an exciting retail experience along with customizable products for both Macy’s and Etsy shoppers.
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S E L L E R S E L E C T I O N & R AT I O N A L E
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The Etsy seller featured in our Macy’s shop concept is Ohhio (pronounced ah-yo) which is a Ukraine based knit goods and supplies company. According to their website, the company was founded in December 2015 with a successful Kickstarter campaign. The Etsy shop, despite being less than a year old has made over 4,000 sales. Ohhio is a unique company in that not only do they sell quality products, but they offer videos and supplies so a person can DIY their own products. Originally the company only sold merino wool products, but in November 2016, they launched another campaign to fund their Ohhio Braid products– a washable, vegan, and hypoallergenic version of the original chunky knit blanket. The chunky knit blanket is currently trending in a lot of places, and Ohhio press mentions can be found BuzzFeed, Business Insider, Mashable, Fast Company, The Huffington Post, and Slate. Ohhio’s social media presence includes Instagram with 197k followers. Despite not having an official Facebook page, Ohhio makes its rounds in the form of shared articles. Ohhio is a brand that truly went viral based on their large following and sales numbers within less than a year. This kind of excitement is perfect for attracting new customers into Macy’s by pairing this Etsy seller with their own brick-and-mortar shop.
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THE NEW
STRATEGIC INITIATIVE Key objectives for the Macy’s and Etsy partnership include widening the demographics of Macy’s customer base and providing an adequate brick-and-mortar shopping experience for Etsy shoppers, creating an exciting and shoppable experience that generates sales, and incorporating compelling technology to enhance customer interaction. Long term benefits of the objectives mentioned consist of positioning Macy’s as a 21st century retailer that appeals to a wide range of age groups, changing the reputation of Macy’s from a retailer that struggles to capture the attention of millennials, and to continue to help Etsy grow as a company while offering curated products to their new and seasoned customer base.
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T H E I M P O R TA N C E O F T E C H N O L O G Y With technology being at the forefront of retail industry trends, it’s important to match the correct technology with the right product in order to give customers the best experience. A study by MasterCard showed that eight out of ten people use a computer, tablet, smartphone, or in-store technology for shopping (The Omnishopper Report, 2016). The incorporation of technology into retail has become a norm for many companies both big and small, and is part of several industry trends. Currently, many millennials are interested more in experiences rather than material items (Schlossberg, 2016). By including strategic technology based on industry trends, Macy’s can stay up-to-date and appeal to a new market of tech-savvy young people. Etsy will be able to enhance their presence by offering products in a brick-and-mortar store, despite being an online retailer. According to Vend University, a few industry retail industry trends include: more payment options, in-store mobile devices, growing social media presence, and curated product options. The new Levi Strauss men’s shop in Macy’s flagship store currently attracts customers with interactive displays and custom laser bar (Levi’s, 2014). With the incorporation of touchscreen technology in the Ohhio Macy’s shop, Macy’s is creating a more cohesive and interactive customer experience in the home department of the store.
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T H E N E W S T R AT E G I C I N I T I AT I V E
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O U R I M P L E M E N TAT I O N The technology for the new Macy’s and Etsy shop will include a touch-screen monitor as well as in-shop iPads. Guests will be able to browse the product of the shop in-store, and also on a touch screen monitor that displays customizing options and a wider product selection available for ordering. Additional payment options will also be accepted that include PayPal and Apple Pay, as well as credit card. The key performance indicators to measure the shop’s success will include sales per square foot, sell through, customer engagement via social media, and the resulting sales conversion from social media. The technology supplier for the touchscreen monitor is Planar, which is a company based in Beaverton, Oregon. The monitor is 50” and will have an application developed by Soltech.. The inshop iPads will be available to customers interested in learning more about the shop, as well as allowing them to see customizable room options with Macy’s/ Etsy products, browsing Macy’s mobile app, and seeing the customizable options available on the touchscreen monitor which will also be developed by Autodesk. Homestyler Interior Design by Autodesk is a home design app that lets the consumer create renderings of potential furniture purchases (Zambelli, 2015). According to homestyler.com you can also see how rugs, paintings, and lighting fixtures look in your space. A walk through view and experience of the space you design is offered in real time in a 3D live view.
T H E N E W S T R AT E G I C I N I T I AT I V E
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MARKET ANALYSIS According to Euromonitor, home furnishings have been on a 4% rise since 2015. This is directly related to the rise in housing sales and market as well as the remodelling market. With more millennials reaching adulthood and approaching the age where they are purchasing and renting homes, home furnishing will continue to flourish. However, if the housing market were to crash, the home furnishing market will also falter (Home Furnishings in the US, 2016). Internet retailers such as Etsy and inspiration driven sites like Pinterest are growing, and we can only expect for the homeware market to continue to expand their product offerings. With HGTV shows heavily advertising and sponsoring home furnishing e-retailers, we can predict that online will become an important role in purchasing home decorating items (Shore, 2016). There are countless online furnishing sites such as Wayfair that have excelled in online retailing prompting key players like Ikea to move forward with incorporating technology into their business model as we hope to do with our initiative. Ikea launched their augmented reality catalog in 2013 for customers to see how each piece of furniture would look inside of their homes. With the use of a catalog, mobile app, and smartphone consumers can measure precisely how the virtual furniture will appear in their living spaces. The app also offers 360 degree view, product information, and videos (Ridden, 2013). Kendra Scott, a jewelry company, has implemented a “Color Bar� into their physical stores as well as on their website that resemble the same customization technology we plan to implement instore. Through the website or their touch screen TV’s in stores, customers are able to customize a particular jewelry type, color, and gemstone to make their own jewelry design that they can take home the same day. Another retailer incorporating technology in their stores is LEGO. They created an engaging experience that merges both the digital world and the real world and introduced the digital box. The screen and webcam of a Digital Box Kiosk gives instructions on how to show the contents of any box assembled in real time. You can rotate the box and the virtual animation would move as the box moves, giving the illusion that the contents are moving over the box (Owyang, 2010).
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PROPOSED TARGET CUSTOMERS With our Etsy shop we want to refocus on one product and through technology reach a younger but more mature demographic. Our ideal target customers would be millennials, both male and female, ages 20 to 35. Most millennials have graduated college and entered the workforce giving them a more established income and more purchasing power than the slightly younger Generation Z demographic (Williams, 2015). Because our product has a luxury price point our target customer would have a midscale to upscale income, ranging from $75,000 annually and up, and likely have at least a 4-year college degree. Our target customer lives in an urban area and likely rents an apartment or has a space of their own. He or she likes to make that space comfortable and reflective of their personality and doesn’t mind investing in a quality product. Just like most millennials our customer is someone who is willing to spend their hardearned money on an experience over a material object. Knowing that, our strategic initiative needs to focus on offering our customer that something extra, in our case offering an experience through the use of technology.
frequenting Bloomingdale’s or Barneys New York most often, but with Macy’s effort to reposition their brand image for the future our target customer is intrigued by the prospect of collaboration with new brands and stylish products. He or she lives an active lifestyle, whether that means fitting in a spinning class before work or hiking on the weekends. They understand the importance of social responsibility and environmental awareness and because of that they have a strong value for handcrafted, artisan products and high quality, sustainable materials. This customer is an early adopter and relies on technology for daily life; our customer will appreciate being able to use technology while in our shop (Solomon, 2014). This customer also likes to stay connected and is present on all the main social media platforms like Instagram, Twitter and Facebook along with some niche platforms like Tumblr and Pinterest. Nearly 84 percent of millennials don’t trust traditional advertising (DeMers, 2016), meaning incorporating some kind of social media campaign into our marketing mix will be vital for reaching this target demographic.
Our target customer has a professional career and has the available income to purchase our product. They don’t normally shop at Macy’s,
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INARA LANG Inara Lang is a 34 year old senior fashion editor for New York Magazine. Bringing in around $125,000 annually, she is tech-savvy with a sizeable following on social media and lives in a fashionable apartment right down the street from the Museum of Modern Art in Midtown Manhattan. She enjoys eating at beautifully decorated restaurants when she’s not trying out a new vegan recipe at home. She also enjoys staying at unique boutique hotels, gaining inspiration for her own home, when she travels for work. Staying active and eating healthy is important to Inara and even on busy days she finds time for an hour of yoga on the rooftop to relax. As a socially conscious shopper she stays away from fast fashion and enjoys discovering up-and-coming sustainable brands. Like a true millennial, Inara likes to surround herself with products that are just as unique as her personality, which means customization is something she values greatly when making a decision to purchase.
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LAUNCH OVERVIEW Before the actual launch, announcements of the collaboration will be made on behalf of Etsy, Macy’s and Ohhio to maximize the amount of customers that can be reached. At the time of launch, the artist would be in-store to demonstrate the knitting. This would provide something for customers to talk about on social media like Instagram and Snapchat. Due to a previous popular video shared on Facebook exposing Ohhio as a brand, it was proven that this sort of exposure would create the kind of positive buzz we need to appeal to our market. Having the artist physically be at the store at the launch would emphasis the fact that the products are made by hand. Throughout the collaboration, the interactive display will work as a tool to encourage more interaction between the store and the customer.
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P I N K | B L U E | L I G H T G R E Y | D A R K G R E Y | O L I V E | TA S S E L S & C H A R M S
ASSORTMENT Ohhio is known for their merino wool products, but in November 2016 they launched a Kickstarter campaign for Ohhio Braid. It is a yarn made of cotton tubing filled with microfiber, and is vegan, hypoallergenic, and washable. The price point is lower than the traditional merino wool at $498 for a 60”x80” blanket. Inside the Ohhio shop in Macy’s, the Braid blankets will be available in the standard Pink, Blue, Light Grey, and Dark Gray– as well as a Macy’s exclusive Olive. The customizable options available only through the Ohhio in-shop app include customizable color options for blankets that are made-to-order and shipped to the buyer. Letter “charms” and tassels will be available in drawers underneath the touch screen for instant customization options available through the app. Each charm/tassel will start out $10 and provide customers with a unique blanket of their own.
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The Ohhio shop in Macy’s Herald Square flagship store is located on the eighth floor in the housewares department. Current Etsy products are sold in the One Below shop, but by placing Ohhio into a department with similar seleciton and interactive technology, more customers can enjoy the products and be enticed to buy.
LAUNCH
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COMMUNICATION & PROMOTIONAL PLAN WHOLESALE MARKETING Wholesale marketing tools include retail staff training and sales goal initiatives. By holding training clinics, sales associates can utilize unique selling propositions and educate customers on details including brand story, material information, cost justification, and value. A sales incentive to encourage sales associates to interact with customers includes a contest for the top two sellers each month where each will win a $100 American Express gift card.
EVENTS Two major events will support the awareness of the Ohhio x Macy’s collaboration. The first event is a launch event would feature arm knitters from Ohhio that would be able to complete custom orders during the event, as well as refreshments and meet-and-greet with Anna Mo, the founder of Ohhio, along with members of her team. The first 100 people to make purchases will earn bonus points on their Macy’s card as well as ten percent off a customization purchase. The second event will be with Sofia Amoruso. She will host an event in Macy’s Herald Square flagship on a bigger scale than the first event. Sofas will be set up with Ohhio blankets and pillows for guests to cuddle up with while Sofia speaks and answers questions. A contract will be drawn up for her to post on social media (before, during, and after) and to participate at the Macy’s event. She will receive an appearance fee of $20,000 total, high and low quality images of the event, press release, a free Ohhio blanket of her choice.
ADVERTISING Advertisements will consist of social, print, and digital media. Social media will be predominantly Snapchat and Instagram. Content packs will be provided for Macy’s social media outlets, and Ohhio and Etsy can also advertise the partnership on their outlets. Print advertisements will be published in newspapers, and magazines like Details, Wallpaper*, and V Magazine. Digital media will supplement the print advertisements and be featured on websites mentioned. Window displays and co-branded advertisements will help drive traffic to Macy’s and increase sales. Photographers will be hired for the events to not only capture images, but also video footage. A good relationship with buyers will maintained to monitor the sales in the shop. To monitor marketing efforts, several key performance indicators will be utilized. KPIs include monitoring the number of followers on the social media accounts of Macy’s, Ohhio, and Etsy, monitoring the awareness of the shop based on sell through during the time of each promotion, and attendance turnouts for events.
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C O N T E N T PAC K A folder of images will be provided for Macy’s and Etsy to use on various social media accounts, magazine advertisements, and digital marketing assests to fit each brand (as shown above) for all promotions.
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OPERATIONS – TIME & ACTION In order to implement our strategic initiative, we first had to do research to find a company to develop and supply a touch screen for our interactive Yarn Lab, along with an app developer who would be able to build an interactive application that would allow customers to customize their Ohhio blankets with options including different colors, charms, and tassels. The 50” touchscreen monitor will be supplied by Planar Systems and the interactive application will be developed by Autodesk. Inshop iPads will also need to be ordered and formatted with the Homestyler Interior Design application developed by Autodesk. For the implementation, Macy’s design team will install all shelving and the touchscreen monitor in collaboration with Planar Systems. All furniture, décor, and merchandise will be on location and set up prior to the launch date, October 20, 2017. In regards to maintenance and upkeep, Macy’s technology team would service any repairs needed in-house. The technology team would also consistently update the iPad Homestyler application with new Macy’s home products.
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FINANCIAL PLAN The majority of our budget will be devoted to the development of our two interactive applications that will be available for customers to use while they are in our shop. App development prices depend on the size (number of screens) and complexity of the design; since both of our apps will have more than 40 screens each, we estimate we will be spending at least $1.5 million per application. The 50-inch Planar touchscreen monitor will cost about S4,000 in addition to the two iPad Pro’s for customer use that cost about $800 each. We would also like to incorporate digital screens (iPad Pro) into the shelves that will display additional information about the products and the brand; we estimate another $2,400 for three. In order to build the shelves and drawers to hold and display the product we have allotted $15,000 towards any construction to the space, including labor. We will also need furniture for our customers to relax on while browsing the iPads provided, so we have allotted an $5,000 towards a sofa, a rug, and two end tables. Miscellaneous costs might include maintenance for any technical issues along with updating the apps, logistics to ship our inventory from Kiev to New York City along with getting it to the store, and human resource training for employees to become familiar with the brand and their products. We have also allotted an additional $2,500 for miscellaneous labor which might include, for example, cleaning costs. We will have two major promotional events; our launch event will take place on the day our shop opens, October 20, 2017, and will feature a meet-and-greet with Anna Mo, the founder of Ohhio, along with members of her team arm-knitting blankets for customers in-store all day. We will cover all airfare and accommodations along with an appearance fee for each individual. Our second event will be on a larger scale and will feature a Q&A with Sofia Amoruso, held on November 11, 2017 from 7 PM to 9 PM. Sofas will be set up with Ohhio blankets for guests to cozy up with while enjoying the guest speaker and refreshments. We will also cover all transportation and accommodations along with a $20,000 appearance fee. Security will cost around $500 for the 2-hour event. We have also allotted $1,600 for professional photography for both events combined. Our marketing plan can be divided into three segments: print, digital, and social. In order to connect to our millennial target customer, we have focused our attention on social media channels including Facebook, Twitter, and Instagram. We have allotted $240,100 to advertising on social media, $140,000 to print advertising, and $22,000 for digital channels beyond social media networks including Google Ads and mass email blasts.
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CONCLUSION After careful research and critical thinking, we believe this new strategic initiative for Macy’s and Etsy will fulfil each objective we have set forth. By partnering with a new store on Etsy selling a trending product, millennial customers are given an incentive to enter the Macy’s Herald Square Flagship store through the use of interactive technology, strategic promotional activity, and unique products. The events are planned with current and new Macy’s and Etsy customers in mind with the hope to increase brand value and loyalty after Macy’s stagnant sales. With successful visual merchandising and product selection, customers will be more interested in spending time in Macy’s and in our shop. Through our choice of technology we are offering a fun and customizable shopping experience customers will be able to spend hours in the store utilizing if they choose. By meeting the needs of a younger demographic, Macy’s can reposition itself in the market, which will in turn generate more sales. This initiative is mutually beneficial for all parties involved; Ohhio benefits by gaining even more recognition, gaining market share, and ultimately gaining sales while Etsy gains access to a larger platform that will help with further growth.
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WORKS CITED Alba, D. (2016, June 6). Etsy Must Grow to Survive. But Can It Stay True to Itself? Retrieved November 13, 2016, from https://www.wired.com/2016/06/etsys-fight-stay-true-even-though-must-grow/
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