Denim Jeans Market in the UK - Essay Example

Sector Overview Popularity of jeans and strong fashion influences have cause a rampant growth in the jeans market in UK. Radical retail initiatives have shaken up the denim jeans market in the UK. The sales of jeans was 54% higher in 2004 as compared to 2000. While jeans are a casual wear in the United States, it is considered high society fashion wear in Russia and Spain (Vrontis & Vronti 2004). According to Mintel report (2005), 15-24 age band is the highest spending age group in the jeans market. Jeans are now even worn to work. Broader assortment of jeans is now available to suit different occasions. Consumers can now find jeans at £3 in many outlets including Tesco and Matalan. The supermarkets however, have shifted away from selling the discounted brands and concentrate on building their own labels. Prices in the mass market have fallen due to cheaper imports especially from China, and because other retail brands like Marks & Spencer, Next, and Burtons have reduced their prices. The premium brand jeans are struggling to justify their price tags against the own-label brands at £20-40. Jeans in the UK market are trying to differentiate themselves with cult connotations, lifestyle images, and distinctive details (Mintel 2005). At the same time, below-cost pricing methods by the super markets and their increasing presence in the convenience store sector have prompted government intervention (BBC 2006). Factors relating to the sector In the clothing industry and in the jeans industry in particular, several factors like innovation and new products have to be introduced frequently. Recently, when there was a shift from bootleg jeans to narrow skinny styles, sales went up remarkably high. This has caused the denim market to reach sales of $15.26 billion (£8.79 billion) in 2005, an increase of 9.3 percent from the year before (FashionUnited 2006). .At the same time, research suggests that brands continue to play an important role for the purchase of jeans (Jeans1 2006). Standard clothing seems to the major market, with fashion wear taking only about 15% of all sales (Keynote n.d.). Standard women’s wear has the largest share and national players dominate these sectors while fashion clothing also have strong but regional chains. The growth in the recent years has been in the discount clothing market. Jeans are ageless and not outrageously youthful in design, which effectively means that men, women and children of all ages use it. Consumers expect low prices, and increasing incomes are the key to increased economic activity. According to Jones and Hayes (2002), clothing and fashion purchase decisions are based on want rather than need (cited by Priest 2005). It depends upon how the consumer wants to be perceived. Competition is fierce and the market is characterized by excessive discounting. Black jeans are in great demand and one of the techniques that are used for sale promotions is to get the up market boutiques to stock them and use celebrities like actor Sienna Miller for the advertising campaigns (Jeans1). Employing the talents of a known designer for a season or two is equally important to penetrate the market. Fashions trends are influenced by music, TV & film celebrities (Thread 2006). Jeans brands carry a global style and what differs is the marketing strategy. Significance of trading during Christmas Trading during the Christmas period is very significant for the apparel and the jeans sector. As Maitland (2005) says, forecasting the right quantity of a product and getting it to the right place at the right time is a challenge. As far as toys and games are concerned, people may not be brand conscious but when it comes to jeans, people prefer to stick to their favored brand. Insana (2004) of CNN says broader assortment of denim jeans are gaining popularity for Christmas shopping than in the past. People prefer lighter wash of jeans. The week after Christmas is an important part of holiday spending as people redeem gift vouchers and avail of discounts. Five main criteria sought by the customers when shopping for jeans are quality of the fabric (34%), traditional/classic styling (23%), Boot cut styles (21%) and latest fashions (18%) (Mintel). According to the February Consumer Barometer from Lloyds TSB Financial Markets, more than 8% consumers expect a price rise in 2006, which is in contrast to what the financial markets predict. Consumers focus on utility bills and energy costs while assessing the price rise. The fear is also attributable towards the gloom over the employment prospects in UK. Thus, price plays a very important factor. The store layout and comfort in shopping experience is important to a consumer. In the men’s wear, brand and image matter the most to 15-24s while price is important to 35-44s. Even top socio-economic groups are price-savvy (Global Info 2005). Gift-giving during Christmas is emotionally based and the pattern has not changed over the years. Consumers need to connect in meaningful and emotional ways. They would rather give apparel than something to keep away in the cupboard (Danziger 2003). People do not go for high-fashion purchases during Christmas and are on the look out for sales (Adegeest 2003). In fact, most even wait for the post Christmas sales to get good bargains. Apart from this, spending is high in the months leading up to Christmas, as shoppers take advantage of advance buying and credit payment schemes (Green 2006). People take short-term loans to derive benefit of the pre-Christmas purchases. Ignoring the hot weather, Christmas shopping is expected to start early in 2006 (Scotsman 2006). Consumers want new products every Christmas and two months in advance the retailers must show case their inventories. They look for something unique, something different (CNN). Compare and contrast The two sets of criteria implies that we should concentrate on a different strategy for different segments. Product line must be displayed much ahead of Christmas. We have to be price-conscious for the 35-44s and stock branded products for 15-24s. People also look for sales bargains. Apparels are considered better Christmas gifts and consumers always seek new and different products every Christmas. Quality of the fabric is important and so is the shopping experience. The target market for the sector of jeans is the same throughout the world but market positioning and the elements of marketing mix have to be adjusted according to the micro and macro environmental factors of the region. To determine the target market a variety of factors have to be considered. While jeans are generally aimed at the youth between 16-20 years, whichever is the country, yet differences exist in the positioning of the appeal. As people opt for trendier and less expensive clothes, the need is to redesign which has an appeal with the teenagers and the young adults. The cost has to be kept in mind. Our organization can think of something about £35-40 for a pair which would be comparable to the reputed brands in the market today. Climatic conditions are very important and we should think of standard jeans for Europe but if we want to target the global market we would have to take into account the local culture and the material for jeans. We would have to manufacture jeans of thinner denim for hotter regions. Fit, design and style of jeans would have to match the local requirements as some countries want tighter jeans while some prefer baggy jeans. Meet the needs of the target market via its retail mix The environment for the retailers is challenging. Consultancy firm Deloitte warns retailers of gloomy Christmas, as spending power is perceived to be reduced (Consumer 2006). Decreased consumer spending has a negative impact on the retailers. Besides, cost of retail space has gone up and rents have risen. According to a research by This is Money, people shop at both the top and bottom ends of the market, picking up high fashion when it suits them and bargains when they spot them (Shop1 2004). Shopping habits have changed and brand loyalty does not exist anymore. There are infinite amount of goods on offer in the jeans industry and the consumer is in control. The British Retail Consortium states that the success of the small retailer lies in being able to offer consumers something different, something better and something targeted very precisely at a particular portion of the market (BBC 2006). The retail market is competitive and the consumer is the regulator. The downward price trend is likely to continue. There is a growth in the youth market and we have to introduce incentive shopping. Offers have to be enticing along with frequent change in fashion. As per the Mintel Report (2005), price war will continue and the youth market will dominate the retail scene. While men’s jeans will continue to dominate sales, women’s jeans sector will be the fastest growing. In view of the above, consumer positioning has to be re-examined. An out-of-town discount store would give us a competitive edge to offer quality products at affordable prices. Discount clothing market has taken away consumers from the standard clothing segment but discounting is not the only way to attract consumers and we should find innovative and creative ways to attract them. We could offer discount coupons which could be redeemed immediately after Christmas. Consumer wants more value at a reasonable price. We have to offer discounted products for the 35-44s and branded ones for the 15-24s who are image conscious. Since celebrities have a great impact on this age group, we could use them for the advertising campaigns particularly for the teenagers and the youth. A cluttered store environment and wide range of products leaves the consumer confused. It is advisable to introduce new products at frequent intervals. Selective range can offer real choice to consumers. Customers value innovation, exclusive designs, and enjoyable shopping experience. Smaller product-life cycle makes customers feel important that their designs are exclusive. In-store communications is very important, so the sales people on the floor would have to be trained much ahead of the season. The employees have to believe in the store and products to be able to convince the consumers. We could include in-store events and promotions to make the shopping experience pleasant. Every consumer must leave with a positive experience because one satisfied customer brings in several more. If we are able to create database of our customers, we could send them personal invitation for various promotions as well as greetings on their birthday. With this strategy, we should be able to meet the needs of our target market. References: Adegeest, D. 2003, Its A Consumers Holiday! Fashion United, 17 Aug 2006 BBC 2006, UK corner shops risk dying out, 17 Aug 2006 Consumer 2006, Fashion United, 17 Aug 2006 Danziger, P. 2003, Christmas Gifting Season to be Strongest in Years, The CEO Refresher, 17 Aug 2006 FashionUnited 2006, Skinny Jeans boost Sales, 17 Aug 2006 Green, R. 2006, A merry Christmas for UK consumers highlights new consumer trends, 17 Aug 2006 Global Info 2005, Mens Outerwear - UK - January 2005, 17 Aug 2006 Insana, R. 2004, Whats in Store for Retail, Money, 17 Aug 2006 Jeans1 2006, Fashion United, 17 Aug 2006 Keynote n.d., Clothing Retailers-Exeecutive Summary, 17 Aug 2006 Maitland, A. 2005, Make sure you have Christmas Stock in, Financial Times, FT.com Mintel 2005, Jeans-UK, 16 Aug 2006 Mintel Report 2005, Jeans - UK - April 2005, http://reports.mintel.com/sinatra/reports/index/&letter=10/display/id=11463 8&anchor=a114638> 17 Aug 2006 Priest, A. International Journal of Clothing, Science and Technology, Vol. 17, No. 3/4. 2005 pp. 253-263 Vrontis, D. & Vronti, P. Levi Strauss: an international marketing investigation, Journal of Fashion Marketing and Management, Vol. 8 No. 4, 2004 pp. 389-398 Shop1 2004, Fashion United, 17 Aug 2006 Thread 2000, Lee Cooper Jeans talk about key trends in denim fashion, 17 Aug 2006 Critical analysis of the presentation The presentation plan gives an overview of the denim market and the factors relating to the sector. It also analyses the shopping trends in the Christmas period, at the same time highlighting the customer preferences in shopping. These have led us to segment the market and fix targets. Current research analysis has helped to segment the market and concentrate on the youth and teenage market apart from the 35-44s. The fabric preferences, the design preferences, and the pricing strategy have also been considered. Competitors and their strategies, standard, discount and high fashion clothing segments have been analyzed. Customer demands have been studied to the extent of their demands within the store and the shopping experience. The presentation plan is good because step-by-step analysis has been made before reaching a conclusion. Latest data from websites and newspapers, including interviews with important people in the industry have been collected and assessed. Wide research has been conducted of the latest statistics and figures in the denim industry. Fashion United, has conducted lot of reviews and research, which has been thoroughly read, and facts have been used for the presentation. A few journals have also been used but websites and newspaper articles offer more updated facts and trends. Study has also been made of the discounting methods that is having a negative impact on the market, which has called for government intervention. After research of the different ways to attract consumers, the plan suggests to use means other than discounts. Research suggests discount coupons are popular as people use it for post-Christmas purchases. This itself suggests that thorough research has been conducted. At every point, it was possible to relate to the retailing and marketing theories. A study of the annual reports of Marks & Spencer and an academic paper on Levi Strauss helped to a great extent. The mistakes made by Marks & Spencer have been eye-openers and helped us to formulate the right strategy in lines with the principles of retail marketing. Retail marketing requires selling of goods and services to the consumers. Retail marketing mix includes store location, pricing, merchandise variety and assortment, promotion and layout, and customer service and personal selling. Out-of-town location has been suggested in the presentation as retail place in cities have prohibitive rentals. All the elements of retail mix have been adequately covered in the presentation. In the case of denim jeans, we would be selling not just a pair of jeans but our services, which ensures repeat sales. With this in mind, the presentation has been designed. The strategy has to be with a long-term vision. Discounting is a temporary phase, in which a lot of compromises have to be made. To be able to service the clients better, sustainable profits are necessary. Retail marketing serves as a silent salesman. In-store displays play a significant role in attracting and educating consumers. With reduced staffing level and the demand for more information, store layouts serve the purpose. Store layout can also stimulate impulse purchases. Store layout has been discussed in the presentation. Marketing theory requires to follow the 4 Ps – product, price, place, and promotion. The presentation plan includes an analysis of each of these factors. Market positioning of the denim jeans is very strong and discount pricing would not be adopted after analysis. Creating a successful marketing mix to get the maximum benefits requires market research, which has been precisely what the presentation highlights. In the jeans industry, people buy more out of want than need, which implies that they have to be trendy. The presentation plan includes research on the latest trends in jeans fabrics and styles. Besides, it also highlights different seasonal requirements. A marketing mix should meet the nature and needs of the specific target market, which the presentation plan includes. This is what makes the plan good and effective. The presentation plan also discusses the promotional strategies like using celebrities for advertising campaigns and offering gift coupons instead of discount on purchases. A successful marketing plan would not focus on selling a product but focus on the customers and their wants and total satisfaction. In-store events are a great means to promote the brand and retain customers. Such events may not translate into immediate sales but customers come back for purchase. To stay ahead of competition strategies have to be different. Denims will be denims and jeans will be jeans but what can differ is the marketing process. Styles can change, offers can change, prices should not be too low, – and all these have been discussed in the presentation. A distinguishing feature is important to have sustainable competitive advantage, which the presentation highlights. Retail marketing also includes online shopping but this has not been discussed in the presentation as denim jeans are something, which one would usually want to try it out before purchasing. Certain reports by reputed research organizations require a subscription or enrolment, hence only certain data could be obtained from the abstract of the reports. Nevertheless, for this presentation, these figures are considered adequate. Not much of material was available for the shopping trends for the Christmas period and the facts have been ascertained by reading through a lot of newspaper articles, people’s opinions, and general discussions, as is evident from the references cited within the presentation. Presentation does not include how information technology could be incorporated to enhance the services and the shopping experience of the consumers. Website is considered an important part of the consumer interaction with the retailer. Website also helps to keep the regular customers informed of latest trends and arrivals at the stores, apart from creating the same image as the store does but that too has not been discussed in the presentation. Despite constraints and limitations, the presentation plan has been made taking into consideration all the elements of retail and marketing mix. Thus, it is evident that in making the presentation, thorough research has been undertaken. Retailers use a combination of factors to satisfy customers and all of these have been discussed in the presentation. Read More