Green Home at
Table of Contents
Mission Sustainability at Belk Size and Scope SWOT Analysis Target Market Analysis Target Market Profiles The Products Assortment Plan Buying Plan Floor Plan Marketing Strategies Competitor Analysis Statement of opportunity Resources
Mission For my capstone project I have developed a new department for Belk, the go-to store for the south, that features fully sustainable and eco-friendly bed and bath products. I decided to develop this department as the result of a growing desire among consumers to choose more eco-friendly and sustainable products. Currently, Belk has proactively taken a several steps toward incorporating sustainable business practices into their stores, but I believe that by creating this department, Belk would be able to not only attract the customer that is interested in eco-friendly products, but also help improve their image as a company that is committed to sustainable efforts. Belk will be one of the first multi-unit department stores in the South to have a department dedicated solely to sustainable products. It is my hope that by incorporating this department into their stores, Belk will be able to further the movement toward a more eco-friendly future. I had the opportunity to share my ideas with Belk’s Campus Recruiting Manager Ripp Kardon at the SCAD Career Fair and he was very excited by the project. I anticipate the possibility of further meetings with Belk to share my finished product.
Sustainability at Belk Belk has taken steps toward incorporating sustainability into their business model. Some of these steps include:
• Installing LED lighting in their jewelry displays and cosmetic counters and a few of their stores • Upgrading heating and cooling equipment to achieve Energy Star certification • Testing solar panels • Leading employees to participate in local ocean and river clean-ups • Recycling most of the packing material from their stores • Partnering with companies like MAC and Origins to recycle used cosmetic containers • Carrying some brands that focus on sustainability • Holding programs to educate associates on waste and recycling • Partner with Catawba Lands Conservancy to promote land conservation • Member of industry organizations that support sustainability in their business practices
Companies aren’t the only ones taking notice of green initiatives. Consumers have also begun to purchase the more eco-friendly alternatives to their favorite products. There also has been a rise in the popularity of sustainable brands such as Swell and Patagonia. This shows the customers eagerness to purchase those goods that both meet their needs and are sustainable.
Size and Scope Green Home at Belk would be rolled out in 6 Belk locations across the South in Spring 2018, and grow as it gains more attention. It would begin in the following locations: • South Park Mall location in Charlotte, NC • Athens, GA, • Charleston, SC • Fort Worth, TX • Bridge St Town Centre location in Huntsville, AL • Destin, FL I chose these locations because they are all cities that are recognized for their acceptance and incorporation of green and sustainable initiatives. They range in size and location, which will give our team a better idea of what type of stores Green Home at Belk works best in. After the department has gained some notoriety and shown that it can be profitable, it will be expanded into more stores in areas that have been proven to respond well to sustainable and eco-friendly initiatives. The goal is that it would eventually be able to be incorporated into every Belk department store.
297 Belk stores in 16 states as of 2016 The department would be about 500 sq. ft. and would contain around 60 different products. Since the department is contained within an already existing Belk, there would be no need to hire new employees for this department. However, existing employees would have to be trained on the characteristics and benefits of this sustainable department.
SWOT Analysis
S
O
• Strong brand identity • Loyal customer base • An eco-friendly department would be one of the first of its kind for department stores • Will attract ecoconscious customers as well as those who are just looking to purchase new products • Introduce new brands that were not previously carried by Belk • Incorporate more sustainable brands into Belk stores • Increase the level of environmentally conscious efforts Belk is making in their stores
W
T
• Southern customers not excepting of sustainable initiatives • Selling reusable products will mean that consumers won’t need to shop as frequently • Smaller profit margin
• Not enough interest in sustainable products • Eco-friendly is more expensive • Uncertain financial climate • Import issues
According to a Nielsen study, there has been a significant increase in consumers who are willing to pay more for a product that is sustainable.
Target Market Analysis
Consumers who will pay more for sustainable brands
2015
2016
30,000 consumers from 60 different countries were polled
The target customers for Belk are women with middle to upper income between the ages of 35 and 55. I am looking to appeal to these women as well as males who are interested in sustainability. The target customers that I am trying to appeal to with this department also include people who are interested in the department because of the eco-friendly products, as well as established Belk customers who will enjoy the fact that their favorite store now carries products that can benefit the environment as well as serve a function in their home. Green Home at Belk will also appeal to shoppers who may not even care about the sustainability aspect; however, they will shop the department because they like the products purely because they are aesthetically appealing.
Marie • Age: 55 • Job: Realtor • City: Athens, GA • Income: $70,000 • Personality: Southern, extroverted, brand conscious, loves Supporting a good cause • Hobbies: Taking vacations with her husband, shopping with friends, trying out new restaurants, • Shops at: Talbot’s, J. Crew, Ann Taylor, Dillard’s, Macy’s • Favorite social media: Facebook
Heather
• Age: 45 • • Job: Event Planner • City: Destin, FL • Education: Communication B.A. from Coastal Carolina University • Income: $54,000 • Personality: Outgoing, eco-conscious, • conservative, loves a good sale •
Hobbies: Playing with her dogs on the beach, going to bookstores with her husband, reusing her old things for DIY projects, meeting friends for brunch, Shopping Shops at: Belk, Dillard’s, Michael Kors, Chico’s Favorite social media: Facebook, LinkedIn
Clara • Age: 35 • Job: Urban Planner • City: Charlotte, NC • Education: M.U.P from Appalachian State University • Income: $45,000 • Personality: Passionate about sustainability, vegan, caring, organized • Hobbies: Leading river clean-up efforts in her community, hiking with friends, recycling, teaching peers about the importance of sustainability • Shops at: Patagonia, Lush, Everlane • Favorite social media: Instagram
Travis
• Age: 32 • Job: Restaurant Owner • City: Fort Worth, TX • Income: $45,000 • Personality: In tune with his southern roots, colorful, interested in sustainability, compassionate • Favorite social media: Twitter, LinkedIn
• Hobbies: Coming up with new menu items for his restaurant, going to bars with friends, figuring out ways to make his business more sustainable, hiking • Shops at: Macy’s, Gap, Patagonia, Vineyard Vines
The Products
The items in Green Home at Belk focus on sustainable and eco-friendly products for bed and bath. - Towels - Bath Mats - Bathrobes - Shower Curtains - Sheets - Pillows - Home Accessories - Baskets
How are they sustainable?
- Organic Cotton - Natural and Low impact, fiber reactive dyes - Recycled fibers - Cruelty free brush hair - Use bamboo, a highly sustainable plant - All-natural oils - Artisan made - Enduring Products that won’t need to be replaced
Product
Price
Nandina Organics- Cotton Bath Towel
Units on Average Stock Hand
$29
50
$1,450
$14.50
50
$725
$7
50
$350
$26
50
$1,300
$29
50
$1,450
$14.50
50
$725
Nandina Organics- Cotton Hand Towel
Nandina Organics- Cotton Washcloth
Nandina Organics- Cotton Bathmat
Nandina Organics- Cotton Bath Towel
Nandina Organics- Cotton Hand Towel
Product Nandina Organics- Cotton Washcloth
Nandina Organics- Cotton Bathmat
Price
Units on Average Stock Hand
$7
50
$350
$26
50
$1,300
$6.25
70
$437.50
$55
55
$3,025
$55
55
$3,025
$18
60
$1,080
Nandina Organics- Soap
Organic Cotton Jersey Striped Robes
Organic Cotton Jersey Striped Robes
Eco Tools Bamboo Brush Bath Set
Product
Price
Organic Cotton Shower Curtain
Units on Average Stock Hand
$50
50
$2,500
$50
50
$2,500
$50
50
$2,500
$24
55
$1,320
$28
55
$1,540
$22
55
$1,210
Organic Cotton Shower Curtain
Organic Cotton Shower Curtain
Chester Eco Cotton Bathmat
Savannah Eco Cotton Bathmat
Solid White Flat Weave Eco Cotton Bathmat
Product Two-Tiered Copper Counter-top Basket
Price
Units on Average Stock Hand
$29
55
$1,595
$5
70
$350
$7
60
$420
$15
60
$900
$10
60
$600
$15
60
$900
Natural Sisal Soap Saver
Natural Handmade FSC Grooved Wooden Soap Dishes
Olive Wood Face Brush
RACER Shave Cream
WHISKEY After-Shave Splash
Product
Price
Gold Circles Throw Pillow
Units on Average Stock Hand
$15
60
$900
$15
60
$900
$15
60
$900
$15
60
$900
$30
50
$1,500
$25
55
$1,375
Gray Squares Throw Pillow
Blue Foulard Throw Pillow
Green Plants Throw Pillow
Chatham Floral Bolster Pillow
Woodland Recycled Large Vase
Product
Price
Amber Himalayan Salt Lamp
Units on Average Stock Hand
$40
50
$2,000
$15
60
$900
$12.95
60
$777
$35
55
$1,925
$40
40
$1,600
$25
55
$1,375
Metal Twig Wall Hooks
50 Ways to Save the Honey Bees and Change the World
Recycled Glass Garden Terrarium 8”
Root Wood Flat Cut Bowl with Handles
Reclaimed Natural Wood Frame 4”x6”
Product
Price
Organic Cotton Sheet Set in White
Twin: $50 Queen: $70 King: $90
Organic Cotton Sheet Set in Creme
Organic Cotton Sheet Set in Gray
Units on Average Stock Hand Twin: 15 Queen: 15 King: 10
$2700
Twin: $50 Queen: $70 King: $90
Twin: 15 Queen: 15 King: 10
$2700
Twin: $50 Queen: $70 King: $90
Twin: 15 Queen: 15 King: 10
$2700
Twin: $50 Queen: $70 King: $90
Twin: 15 Queen: 15 King: 10
$2700
Organic Cotton Sheet Set in Blue
Twin: $50 Queen: $70 King: $90
Twin: 15 Queen: 15 King: 10
$2700
Organic Cotton Sheet Set in Tan
Twin: $50 Queen: $70 King: $90
Twin: 15 Queen: 15 King: 10
$2700
Organic Cotton Sheet Set in Sage
Product
Price
Duvet Cover
Units on Average Stock Hand
$137
40
$5,480
$150
40
$6,000
$135
40
$5,400
$45
50
$2,250
$25
60
$1,500
60
$900
2,461
$84,334
Duvet Cover
Duvet Cover
Tall Woven Hamper
Short Woven Hamper
Woven Waste Basket
$15 Total:
Buying Plan Green Home at Belk will carry 60 different products for its initial launch. The financial plan reflects how the money for the department will be allocated during a 6-month period. The department will carry an average monthly stock of $513,000 and the projected net sales of the department for this 6-month period are $760,000. I have planned an inventory turnover of 1.5 because home goods turn slower than apparel. Reductions are planned for $114,000 in order to give Belk flexibility to correct mistakes, and to allow for markdowns toward the end of the season to make room for new products and colors. The planned initial markup is 55%. This markup will allow Belk to accommodate for any reductions that will be taken during the 6 months. Over the course of a year, Green Home at Belk will generate $1,520,000 worth of sales, which translates to a total gross margin of $668,800.
Green Home at Belk Financial Plan Spring 2018 6 Stores Launch (000's) Net Sales Plan Inventory Turnover Average Stock Reduction $ Reduction % IMU % GM %
760.0 1.5 513.5 114.0 15.00% 55.00% 44.00%
(000's) Net Sales % Spring Stock / Sales Ratio BOM Stock EOM Stock Reductions % Spring Receipts Retail Receipts Cost
February 106.4 14.00% 4.3 457.5 491.0 12.5 11.00% 152.4 68.6
March 129.2 17.00% 3.8 491.0 510.7 14.8 13.00% 163.8 73.7
$ 1520.0 851.2 668.8
% Sales 100% 56% 44%
Financial Plan Year 1 Net Sales Cost of Goods Sold Gross Margin
April 121.6 16.00% 4.2 510.7 529.7 19.4 17.00% 160.0 72.0
Spring 2018 May 129.2 17.00% 4.1 529.7 562.4 22.8 20.00% 184.7 83.1
June 152.0 20.00% 3.7 562.4 522.9 25.1 22.00% 137.6 61.9
July 121.6 16.00% 4.3 522.9 520.0 19.4 17.00% 138.1 62.1
Total 760.0 100.00% 513.5 114.0 100.00% 936.5 421.4
Floor Plan Green Home at Belk will have a very open and light floor plan. All of the shelves will be white and the walls will be painted green. The green of the walls as well as the addition of plants on the tops of displays will help to give the area more of a natural and eco-friendly feel without making it too “in your face.� The products will be grouped around other products that are similar. For instance, towels will be placed near bathmats and shower curtains, while sheets will be near the pillows and home accessories. The lighting will be a combination of overhead spotlights that will line the displays and 2 modern chandeliers. There will also be the typical overhead lighting that is standard in a Belk store
Marketing Strategy Instagram:
Social media posts will include photos of the department being assembled and some sneak previews of the products that will be offered. After the launch, Belk’s social media accounts (Facebook, Instagram) will continue to post about Green Home at Belk once a week. This content will include ways that the department is eco friendly (recycled materials used to make it, lights, other green initiatives Belk is doing outside of the department) and will also feature posts from photo-shoots that are styled with models posing and interacting with the products offered in the store.
Email: Prior to the launch of Green Home at Belk, customers who are subscribed to Belk’s email list will receive notice of the launch. This will help to spark interest and draw existing Belk customers into the store and encourage them to make a purchase. This email blast will allow news of the new department to reach the older customer who may not be as active on social media. During the first weekend that the department is open, Belk will donate 10% of sales to environmentally friendly organizations. This announcement will be included in the email blast.
Pinterest: Posts promoting the products offered in Green Home at Belk will also be uploaded to Belk’s Pinterest page. This will allow a more organic approach to marketing the new department by attracting people who are interested in the specific brands carried. These people will happen to see the post on Pinterest and follow the link back to Belk’s website to purchase the product.
Competitor Analysis Green Home at Belk’s closest indirect competitors would be the other department stores in the vicinity of the proposed store locations. They would be considered the closest competitors because there are no other stores that provide a similar collection of sustainable and ecofriendly products anywhere near the proposed locations. These surrounding stores are considered indirect competition because the biggest threat to eco-friendly products are the cheaper and non-sustainable versions of the products that consumers are historically used to buying.
Similar Department Stores Dillard’s / Macy’s / Nordstrom Stores such as Dillard’s, Macy’s and Nordstrom are top competitors for Green Home at Belk. These stores are competitors because they offer the normal, non-sustainable alternatives to the products that Green Home at Belk offers. In the same way, Belk’s current bed and bath section also could be considered competition. These non-sustainable products are the cheaper option, which is very appealing to consumers.
Other Competitors Anthropologie / Pottery Barn Pottery Barn and Anthropologie both offer a selection of stylish bed and bath products. These products appeal to some of the same target customers that Green Home at Belk does. Pottery Barn also offers a selection of organic sheets, towels, duvet’s and robes. The environmentally conscious Green Home at Belk customer may also shop Pottery Barn’s selection when making a decision.
Statement of Opportunity
My plan poses an opportunity for Belk to branch out and incorporate more measures of sustainability into their company brand. Belk has a very clear view of their consumer and by incorporating Green Home at Belk into their stores they will be able to not only be bringing new products to their loyal customers, but also will attract new ecoconscious customers to the brand.
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