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Section II Day 5 - Winning with Fashion
Transcript of Section II Day 5 - Winning with Fashion
Winning With Fashion "Mass" not "Couture" Fashion Stores have the latest products just as customers begin to buy them in volume There is an element of fashion in every facet of retail Traditional product/visible production lines/Harrods Brand Defined The "name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers." How do you Account for the "Magic" of Branding? "A powerful emotional element that drives the business with purely rational characteristics" Retailers are "Trend Conductors" Fashion is the great energizer of sales in retailing Fashion refers to a distinctive and often habitual trend in the style with which a person dresses, as well as to prevailing styles in behavior. Furniture, Clothing, Footwear, Makeup Trend: to extend in a general direction, to show a tendency Tremendous volume
Increased store traffic Inherently risky
Trend wrong merchandise
Cyclical The list of "hottest" retailers changes often: Being the "Hot-Est": You have to be "trend right" Just saying you're hot isn't enough Supply Chain needs to built for Speed
Target positioned itself as an upscale discount chain.
It differentiated itself from its competitors by offering trendy merchandise at affordable prices.
Target used attractive marketing promotions to communicate this message to customers.
Focused on women and children living in the suburbs Wal-Mart, Target battle but have more in common than you might think Each has its loyalists — and no wonder. The stores market vastly different versions of American exceptionalism: Wal-Mart champions efficiency, thrift. Target offers style, aspiration. Wal-Mart gives us low prices on everything we need; Target tells us what we want. Yet the companies have much in common. “The remarkable thing,” said Charles Fishman, author of “The Wal-Mart Effect,” “is that 80 percent of the stuff in Target and Wal-Mart is identical.” The prices are often identical, too. The most recent comparison by Bloomberg Businessweek found only a 46-cent difference between the two retailers per $100 of purchases. (You’ll save that 46 cents at Target, although Wal-Mart usually wins independent price comparisons.) For Wal-Mart and Target, success was born of the Southern and Midwestern values championed by their respective founders. Sam Walton couldn’t have known his discounter would one day become the world’s largest private employer. And the brothers Dayton wouldn’t have guessed that Target would democratize design for an entire country Positioning Efficiency/Thrift Style, Aspiration Low prices Everything we need. Tells us what we want They have more in common than you think. Comparison of Positioning Washington Post-Oct 2012 You’ll save that 46 cents at Target, although Wal-Mart usually wins independent price comparisons. 80% of the stuff in Target and Walmart is identical. The prices are identical, too. Bloomberg found only a $.46 difference between the two retailers per $100 of purchases Both were born of the Southern and Midwestern values championed by their respective founders. Pay check cycle "Target takes aim" Target promotes communication and effective teamwork so that projects stay on focus and the brand is continually prioritized. Collaboration Limited Offerings The Retail Stores Make Sense Target is a Trend Merchant
How Target does Different More than just PRICE Core competency came from Daytons
allowed it focus on trends as well as prices. 23-person "trend team"
stay on course when merchants leave
who can deliver "knock off" versions that sell cheaper than originals Being "Hot-Est" is Unusual Not built on same rational points that drive price, assortment and location What is a brand? Price Assortment Location Emotion Today we will discuss..... NOT black and white Style - Quality - Trend Has applied Differentiation Strategy since its inception Sam Walton was cautious in scouting store sites
Used a crop duster to survey small towns in the south
He paid attention to places where nobody else was
"Everyone thought you had to go to urban areas or towns of 50,000. I disagree"-Sam Walton
So Walmart grew in rural areas. Customers immediately responded to Target's friendly and modern atmosphere. Core Mandate: "We are the upscale discounter".
The Dayton family understood the department store model and made investments in customer service. A Tale of 2 Retailers....... circa 1962 They work with multiple outside agencies on their content development-many of which are competitors Despite being a mass retailer
They invite top-tier designers to collaborate on fashion collections that are exclusively available in retail stores.
Most importantly, they collections are limited
Who ever has to worry about Walmart running out of something-Missoni website crash Fun and intuitive shopping experience that considers the customer's needs
Place departments that overlap in similarities near each other
No pallet displays or cheesy corrugate
"Don't surrender to the vendor" Store formats that make sense Collaboration Limited Offerings Target: A Story of Successful Collaboration Staying Relevant in Social Media 1-Keeping messages simple with a clear benefit to the customer-"Give with friends" Facebook app allows friends to pool their resources and give a gift card to anther friend 2-Use Twitter in real time, not just as a high volume coupon dispenser-Interactive fan contests-The Hunger Games 3-Whenever possible-say it with pictures=hands down winner in engagement scores on Facebook. 4-Community engagement - social engagement. "Give with Target"-encourages giving to your favorite school Staying Relevant with Social Media Focus on its groceries, but in a way that still plays on Target's fashion know how Tongue-in-cheek campaign that treats groceries and home products like fashion accessories in a photo shoot. Clever Advertising 2013 Ad Campaign Highlights Food Examples of the "Hot-Est' Chicos
Targets aging baby boomers and the elusive size 6
Uses simple sizing - 1,2,3 Whole Foods
good for you food wrapped in a high dollar supermarket
No one complains about the price - they are taking better care of themselves Hot Topic
A fast follower of pop culture Can "knock-off" originals and sell cheaper. Target-exclusive Product Michael Graves-Architect (1999)
Mossimo, Musoni, Isaac Mizrahi-Apparel
Woolrich and Waverly-Linens
Eddie Bauer-Camping Gear
Virgin-Electronics - Quick recovery is key Sam Walton Wanted to Serve the "Under Served" Cheap Chic-"Tar-Jay" Walmart and Target
Cater to Different Customers Walmart Average Customer
Household income = $30,000 to $60,000 Hammers its low-price message and focuses on basics like tee shirts and underwear. Target Average Customer
Household income =$64,000 Carries discounted designer clothes and home decor under the same roof as detergent and dishwashing liquid On Monday we will... Have the Walmart Debate.
Position Paper due on Monday:
Make sure team members are listed. Wrap UP Being the Hot-Est is unusual-not about price, location, assortment
Retailers are trend conductors
Fashion is the great energizer of retail
Target is positioned as an upscale discount chain
Walmart and Target are both discounters but position themselves differently and go after different customers
Target succeeds by constantly collaborating with its customer base and suppliers "Fashion" Refers to a "Trend" Alice Walton: $21.2 billion, #21 richest in the world Involved in at least 3 car accidents
Struck and killed a 50 year old lady-no charges filed
Hit a gas meter while dui-paid $925
On 62nd birthday arrested for DUI in Texas Helped finance the Crystal Bridges museum in Bentonville Help finance the NWA airport