Fashion and Buying - Dissertation Example

Executive Summary The world has become an ever changing intellectual playground, where the choices to consumers seem endless. Now in 2006 our teamhas assembled to make technological suggestions to improve, to take them into the next millennium. Gap seems to be lagging in many IT ways, and could seriously benefit from implementing IT solutions. To start, all of Grey 's stores are independently operated, and have no knowledge as to the sales and inventory of other stores. This translates into inefficiency, when one store isn't carrying an item a customer wants. The customer is then forced to play a game of cat-and-mouse, calling other stores to locate their desired purchase (not to mention a separate sale transaction needs to take place). Also grey's corporate headquarters has a lag time on inventory count, and sales purchases. Customer Service and Employee Satisfaction In today's retail world there are thousands of competitors, and millions of items being pushed at a customer to buy. Because of this, it is highly likely that a customer will be able to buy an item similar to yours from a competitor. So how do you keep customers loyal It boils down to making shopping an individualized experience for each customer. Having top customer service, as well as tailoring each shopping experience to each individual shopper will ensure that customers remain loyal for years to come. What exactly is customer service It is something different for everyone, however we can simply define customer service as putting the customer first, and making shopping as easy and enjoyable for the customer as is possible. Using IT makes it easy to achieve this goal. These are just some ways to improve customer service and individualize the shopping experience online. There are things We can do in its stores as well. Since the goal is to make the customer as happy as possible, the more information you have on a customer, the better. One way to do this is to keep a log in the store's computer of each item the customer has purchased. This way, sales associates can make suggestions for the customer's future purchases based on items they already know he or she likes. This will give the customer a feeling that the sales associates really value them, and will increase customer loyalty as well as store revenue. In addition,We could also use these customer logs to send out notices of upcoming sales to customers. Excellent customer service and shopping convenience is not the only way to increase a company's overall revenue. Employee satisfaction plays a big part in a store's success. Studies have shown that happy employees are productive employees. Simple things, such as creating a regular work schedule as opposed to having rotating shifts, can decrease turnover by 50%, thus helping to cultivate more long-term relationships between sales associates and their customers (Smith, 2003). Employees are also happy when they feel they are good at their jobs. An excellent way for Gap to determine whether or not their employees are excelling at their jobs would be to keep track of each item the employee sells. If an employee is assigned to the women's department, however they continuously are making sales of men's clothing, the store manager will see this and can move them to the men's department, where they could potentially be more useful and happier. Not only do happy employees stay with a company longer and are more productive, they also make customers happier (Glanz, 2003). When employees are happy, they create an atmosphere of friendliness and dedication. Shopping in such an atmosphere makes customers happy and relaxed. Only good things can come from this. The new market place is all about customization and personalization. Knowing what each individual customer wants, and knowing how he or she wants it. No longer will product sell to entire segments of the market. With so many competing forces the masses demand personal touches. Automobile companies have 20 different lines of cars and trucks, computers offer 18 different hard drive choices, and clothing offers so many personal accessories it is hard to keep track. Gap can gain a competitive advantage and higher market share, if they learn to listen to their customers. Now on the small scale it is easily to explain to employees how to speak, and what to say in order to sell an item. But it would be impossible to ask them to remember each purchase of each customer, and remember their preferences and budgets. Notwithstanding, with the wonderful world of computers, all this information can be at employee's fingertips. Larger luxury clothing lines have already integrated these personalized touches into their stores, but the first mainstream apparel company to get on board will certainly attract new buyers. The ability to keep all receipts stored in a network so that a customer can make a return without the slip. Being able to welcome everyone to your store by name and then make suggestion based on his or her preferences can be accomplished. By networking all computers to a centralized hub, and linking all store computers with PDA's can give all your employee retailers a leading edge. Introduction Grey Plc is an international retailer with 12 stores. The group sells clothing, footwear, gifts, home furnishings and foods Approximately half of the group's overseas stores are franchised to local partners. The company was always considered to have a great management support that helped in its growth. But the last years, Grey's managers seem to fail on their strategic decisions, leading the group to lower and lower sales and profits. The share price is also dropping and shareholders feel insecure for the future . UK Retail division The grey Retail division, , is itself sub-divided into seven business units, each representing a defined area of merchandise: Womenswear, Menswear, Lingerie, Childrenswear, Beauty, Home and Foods. . What is GREY about Over 50% of the UK adult population shop with - Of our clothing customers we have 22% of their total spend on clothing - Most trusted retailer in the UK For those of you who may not be familiar with the UK High Street, I'd like to explain firstly some of the factors which give GREY a unique competitive advantage in its market....Within clothing, our largest division, we have market shares in lingerie of 26%, womenswear 11.5%, menswear 10% and childrenswear 5%. Business Situation The business was growing quickly, but it required better and faster intelligence. Much like the company's stores, this information had to be simple, affordable, and 'elegant' We understood that price was an important yet risky way to grow their market. "We do single price points,". "No other competitor in the market takes this single price point approach. This was by design." In addition, the stock moves in seasonal cycles. In the fashion business, when a product sells out it will never be restocked because the market is fickle and always on the lookout for something new. We sell a third of all purchases of both bras and womens' knickers in the UK. we estimate that 1 in 3 men in the UK own an company name suit OUR BUSINESS MODEL we have a very specific business model which supports this scale We are 100% own brand, with close supplier partnerships, the best locations and we have a low cost, close to self-service approach which allows us to re-invest back constantly into the quality and value of our products. Agenda In the last 3 years, we have regained the confidence of our customers after a difficult period, but focusing largely on re-establishing the traditional strengths of the business. What I'd like to do now, is to spend a little more time talking about our vision of what we want to be for our customers in the future, that builds on that heritage, and then to talk to the concrete plans that we are pursuing now to realise the growth potential. Our mission The essence of our business is making aspirational quality accessible to all. Traditionally, this has been associated with the technical and functional performance of our products. In the future we want, in addition, to create greater emotional value for our customers. HOW DO WE WANT OUR CUSTOMERS TO FEEL ABOUT US We want our customer to feel about us as you might feel about a close friend. The long-term trust is still there from our heritage, but we want to add greater warmth and fun. THE CUSTOMER VISION We want to help our customers to secure the quality of life to which they aspire. It will still be a lot about product, but we want to connect, for example, with the pleasure of an al fresco evening relaxing with friends and we'll provide the inspiration and solutions from garden furniture to food, wine and the clothes. With all the pressures in life, we want to help our customers look and feel fantastic. No one could argue that Alessandra here does not need much help, but we'll be there for the rest of us ! And this will require us to shift in all elements of how we sell and communicate with our customers. Stores But it is not just about engaging emotions. We need to segment our stores and our product more strongly in a way which will reflect how customers want to shop and identify with their own style. Future consumer vision Segment by shopping mission So, stores will be segmented by shopping mission, whether that be for less frequent destination purchases, regular browsing visits or daily convenience purchases. The majority of our stores are in the middle group, but we are rolling out convenience stores and are developing a new concept destination Lifestore. Future consumer vision our customer vision is to help our customers to secure the quality of life they aspire to - adding warmth and fun to the trust we currently enjoy. And helping them live life in their own style and ensuring we have retail formats and ways of selling which match different moods and purchase occasions. Our strategic priorities - Our immediate strategic priorities are threefold. - Firstly, GROWING OUR CUSTOMERS, this is about cherishing both our existing customer base and building relevance with new customers. - Secondly, continuing to DEVELOP TALENTED AND CAPABLE PEOPLE - And thirdly BEING SIMPLY MORE EFFICIENT - this is about making our organisation lean and responsive. It will involve driving savings through the business, as well as investing in an efficient future. Starting with growing our customers, I'll talk you through some of our plans for clothing, foods, financial services and home. Opportunity to increase spend of more occasional customer - Beginning with clothing, this chart ranks our womenswear customers from the most loyal on the left to the more occasional shopper on the right. - 80% of our womenswear sales are derived from 40% of our customers; very loyal, we have between 25% and 40% of their total annual spend on womenswear. The other 60% of our customers tend to shop the High Street, where we have between 5% and 15% of their purse - We want to increase our share of spend of this more occasional group with us. They tend to be skewed younger, to 30-45 years old, and show a bias towards casualwear. - We see real opportunity to increase this occasional spend by becoming more relevant to them. What do our customers want from it - In addition to satisfying our targets under these criteria, throughout the trial of the card in South Wales, we have listened to customer feedback to ensure that what we offer our customers really makes a difference to them. - And they have told us, that what really motivates them is loyalty in the form of GREY vouchers, with which they can buy themselves a treat "for free". - So, our customers will earn 1% loyalty on their spend inside GREY and 1/2 % on their spend outside. - At the same time we will learn more about their spending habits, helping us to ensure that we are offering them a range of products they desire. BUYING EXCELLENCE -As well as developing our store training programme, we have also begun this year a modular training course for our buying teams, called Buying Excellence. -We have already rolled out phase 1 of the training to some 400 staff. -This Autumn we will continue with the next phase, where modules will include leveraging currency, exploiting margin opportunities and Direct buying. -This is again the most significant training programme for our buying teams in some years. BE SIMPLE MORE EFFICIENT Being more efficient is about making our business more lean so that we can adapt and respond to changing customer needs. Flexibility to change will then become a core business strength. And we have yet to really leverage our scale and fully exploit the potential of our reconfigured supply chain which you can see above. -Aim to deliver better, faster, lower cost -Opportunities in -factory efficiency -looking at where we source, by product -logistics -utilising our scale in fabric and component buying -Will deliver 1% point to the clothing bought-in margin in each of the next 3 years -On top of this, we are also allowing some contingency for reinvestment into product, price, or both Focusing our Retail operation on customer needs to share with you some of the reasons why we believe there is real opportunity to make our stores more efficient at the same time as improving our service to customers HORIZONS we view these plans as under-pinning our drive for a series of horizons for new growth moving beyond recovery to drive further gains in clothing and in food, then exploiting the potential of financial services and finally developing a much more significant Home business. It is an agenda which is deliberately about growth and securing the potential of our unique brand. Autumn collection for women department Three years ago, we used a campaign called "Perfect" to regain our core customers confidence that we had perfect, simple items like roll-neck jumpers, white shirts or lingerie that could be part of any woman's wardrobe. The campaign worked well, but now we need to move it on. In the most recent lingerie campaign, we still have great product, but we connected with the moods of women, sometimes flirty, sometimes sporty, sometimes comfy, and it got a great response. It connected with womens' emotions and made them feel we recognise them as an individual. SEGMENTED BY STYLE we will segment more by style - here from up to the minute fashion, through contemporary style to classic elegance - to enable our customers to match their own style. CLOTHING PER UNA One of the 1st important steps was the launch of per una. It has developed into a 200m business within 18 months. Per Una offers our customer our most fashion- orientated product, with latest catwalk contemporary looks translated into wearable wardrobe pieces. CLOTHING LIMITED EDITIONS And more recently, we launched the Ltd Collection, which we are extending to 75 stores for the Autumn. This provides a smart casual look to complement the predominantly casual per una for today's modern woman. - The range has a brand new fit, sleeker and sharper, cut to fit the contours of a woman's body. It's about attitude, offering the customer a versatile wardrobe of looks in tune with contemporary fashion. And in lingerie, a real heartland area, we will shortly be launching a brand new range for both men and women targeted at the under 35 year old customer. By next month, the range will be in 200 stores. - The signature of this range is that it will be modern, simple and sexy product. It will include both underwear and nightwear. LEVERGING OUR SCALES With these opportunities to exploit the scale of our buying power, we can deliver both additional margin and reinvest in fantastic values for our customers. -For example, in womens' formal trousers, where our market share is some 20%, this Autumn we are offering our customers fantastic value with price points down from 32 last year to 29 in a range of shapes to suit differing customer needs from kickflare to straight leg to bootleg. How grey is perceived by German customers Value-for-money clothing for young women and children _ Cheerful and colourful children's clothing _ Excellent lingerie range _ Fashionable and practical ladies' wear _ The store is clean, well arranged and it is easy to find things Berlin _ 1,800 square metres in the centre of Kurfrstendamm _ One of our largest stores _ Retail clothing is doing well _ Customers are satisfied Development areas - Germany Operations _ Improved profitability _ Increased focus on traffic Stores and product range _ 15-20 new stores within three years _ Expansion in Nordrhein-Westfalen and southwards and in the Berlin region _ Larger and more efficient stores, more big-city stores, differentiation within the framework of the Lindex concept _ Own brand names even stronger OUR VISION: TO CREATE THE FIRST FASHION AND Range Plan The objective is to adapt product supply, costs and investment to the new market prerequisites _ The surplus inventory of the autumn and winter collection has been cleared _ Long-term adaptation of product supplies has been implemented. Full impact during the fourth quarter _ Cost adaptations generate a trendbreak for expenses and increased efficiency in the stores _ Slower investment rate provides criteria for consolidation Recommendations . 1) These are just some ways to improve customer service and individualize the shopping experience online. There are things GREY can do in its stores as well. Since the goal is to make the customer as happy as possible, the more information you have on a customer, the better. One way to do this is to keep a log in the store's computer of each item the customer has purchased. This way, sales associates can make suggestions for the customer's future purchases based on items they already know he or she likes. This will give the customer a feeling that the sales associates really value them, and will increase customer loyalty as well as store revenue. In addition, GREY could also use these customer logs to send out notices of upcoming sales to customers. Are they just crazy about a particular pair of wool trousers Invite them to check out the rest of the fall line as soon as it comes in. 2) In order for GREY Inc. to appeal to each different culture Gap has begun to tailor their marketing campaigns to specific shopping habits of the groups. Gone are the general ads of "Everyone in Leather" instead, the company now preaches more about individuality than conformity. By using this tactic GREY hopes to attract a large world market share, while distributing the same clothes from everywhere in the world. In addition to marketing a similar line throughout the world market place, Gap must also deal with saturation within the market place, and how to make there well known brand fresh and desirable. Although each store has individual marketing departments they are sure to communicate with each other so that the campaigns are not too similar, and the campaigns will not undermine on of the other chains campaigns. Therefore, we recommend that GREY Inc continue its marketing strategies, but that through the use of new information technology better build its network. Through the use of the technology, GREY Inc marketers will be able to communicate with the other marketing divisions all over the world. This is important because if a certain campaign is working in a certain location, the word will be able to spread before the fad or trend is out of style. Thus, this new technology will help GREY Inc better communicate and use different marketing techniques that are geared toward the individual.. To succeed in the retail clothing industry, you must enjoy meeting people, have selling and fashion savvy, adapt well to change and work long hours. Before starting your own store, gain experience and expertise in the industry and take related training and courses. The industry is very competitive -- 80% of retail clothing businesses fail within the first five years. This is often due to poor management, tough competition from department and discount stores, and poor evaluation of fashion trends Q 1 : The company provides to advanced functionality to grade and re-grade stores on a wide variety of dynamics. Grading can be set at any level of the product hierarchy in order to accurately reflect the differing performance of products in stores. it will accommodate up to four levels of grading, although most retailers adopt 2 levels only. Grading can be calculated on any variable that has been configured into the system, for example Full Price Sales Value, the Sales Units, Linear Footage or Store Demographics. It is typical to set a best practice for the business and encourage each area to adopt the same approach in the first few seasons to simplify the adoption of the system. However, the users can experiment with grading on a variety of different variables and can easily analyse the results. The auto grading process accommodates a variety of approaches including establishing a percent variance to accept within each grade, as well as targeting a specific number of grades. It is recognised that clients may wish to plan stores individually without the need to grade, which would obviate the need for this step in the process. Option Width Planning This is one of the most significant stages in the entire planning process as it is here the user converts the financial, unit and space plan into a target number of options that each store or store/grade requires. The methods by which the ideal option width and depth is calculated varies from retailer to retailer, but they tend to fall into two categories: n Space based calculations - the user enters density factors that convert the footage into a number of options required to support the space assigned to a typical store ineach grade, and/or n Sales based calculations - the user enters a variety of cover, rate of sale, average sales quantities and other factors to determine the width of range required to support the sales targets. Justification of stores We have choosed a location for our store,. Because it is the right place where our market lives and shops. There are few stores that can lead to profits and easy in building customer loyalty. So it is easy to Create a distinct image for our store. And most importantly people can see our store from many angles and that they can reach you by public transportation or park nearby. Range Plan The objective is to achieve great range plan for the fashion store product supply, costs and investment to the new market prerequisites _ The surplus inventory of the autumn and winter collection has been cleared _ Long-term adaptation of product supplies has been implemented. Full impact during the fourth quarter _ Cost adaptations generate a trendbreak for expenses and increased efficiency in the stores _ Slower investment rate provides criteria for consolidation Q: Discuss how you would involve the garment technologist in selecting these lines and how the merchandiser would allocate these lines throughout the stores. Activities of garment technologist will be involved in the transfer of products from the hands of the designers and manufacturers to the hands of the consumers. He will in making sure that the visual appearance of a fashion retailer looks its best in order to attract customers In coordination with Integrate chain level Merchandiser and Location planner the garment technologist will be able to process weekly Plan Sales at Full price & Non-Full Price, Inventory, Receipts and Margins at multiple levels of Product, Location and Time Hierarchies n Consider monthly variation in consumer demand n Breakdown merchandise plans into collection of product based on delivery Develop plans for multi-channels Build targeted assortments based on customer focused location groups Plan assortments using placeholders and defined items Generate recommendation of items needed to meet plans or fit constraints Group locations based on attributes such as volume, space and climate to tailor assortments to different customers Size and pack the buy based on location specifc size profiles and logistic constraints Q: Discuss the sourcing, supply chain management and distribution in relation to your selected line choices Elements of supply chain were argued to play major roles in supporting cyclicality in the Finnish sawmill industry . The following lines will make the reader more familiar with supply chain related schemas. Consequently, the discussion enters more deeply into structures, relationships and behavioural management components of supply chain management (SCM) as problems underpinning industry specific cyclicality There may be at least partial opportunities to change the structures and behavioural patterns behind the surface of cyclicality identified above. The suggestions for the fundamental problems are crystallised as follows: Structures Distribution structure; long marketing channel with many intermediaries The extensive capacity to stock in the current supply chain Relationships Non-transparency of the supply chain and insufficient communication Relationships to raw material suppliers; the cycles of raw material and sawn goods are not concurrent Investments in pulses and management thinking Works Cited Retailers. http://www.informationweek.com/showArticle.jhtmlarticleID=6500156 Haffenreffer, D. 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