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Online Promotionality – Team 2
CHALLENGE:
How can Theory maximize full price online
sales across all channels?
Industry
Trends and
Challenges
Company
analysis
Strategic
Imperative
Recommended
Solutions
2
INDUSTRY TRENDS
BUY NOW, WEAR NOW“But what about simply offering clothes that
people want to buy at the time they actually need them?”
INTEGRATED RETAIL“Firms that fail to adopt an omni-channel
marketing strategy risk losing their customer relationships.”
Source: Business of Fashion, May 18 2016
INDUSTRY TRENDS
4
Source: National Retail Federation, 2016
SELLING THE EXPERIENCE“While distinctive product and correct pricing may
help a brand reach a certain level of success, crafting a unique experience could catapult it.”
KEY INDUSTRY CHALLENGES
“Early” deliveries
hurting full price
sales
Instant gratification
Decreasing perception
of newness –
fast fashion
Information
transparency through
technology -
overexposure
KEY INDUSTRY CHALLENGES
4Source: CFDA and BCG , May 18 2016
BUY NOW,
WEAR NOW
INTEGRATED RETAIL
“Supply and accessibility of product has outgrown the
demand”
-Andrew Rosen
Source: Business of Fashion, Feb 3 2016
% of Total June Sales by Delivery Month
How are these trends affecting Theory?
WOMENS MENS
5
Buy Now, Wear Now
Source: Global Merchandising Monthly Report
Key Insight: Customer’s summer purchases are being driven from product delivery at the beginning of the year
How are these trends affecting Theory?
6
Integrated Retail
Source: Trendalytics Dashboard
7/21/16
Key Insight: More distributors means less control
“You need to be visible,
but the distribution
should be high quality”
-Claudia D’Arpizio,
Bain & Co.
Source: Business of Fashion, August 10 2015
STRATEGIC IMPERATIVE
STRATEGIC IMPERATIVE:
Drive full price sales across all channels
through control and differentiation.
10
CONTROL DIFFERENTIATION
Source: Forbes, July 9 2015
Customization
NikeID: Personal
Customization of DTC gear
Brings more profit directly to
the brand (better margins)
Unique offering only available
on Nike site
Source: Kelly Pedersen
Segmentation
Different offerings for different
accounts depending on
customer demographics
80% of DTC product is
exclusive
Amazon agreement to restrict
3rd party sellers
STRATEGIC IMPERATIVE:
Drive full price sales across all channels
through control and differentiation.
11
CONTROL DIFFERENTIATION
More sustainable over time Larger return on investment Builds brand equity and loyalty in
both DTC and wholesale channels
RECOMMENDATIONS
Objective:Maximize online full price sales by providing
an engaging, exclusive and informativeexperience to Theory customers.
DIFFERENTIATION
1. Introduction of online membership program
2. Increase DTC exclusives through collaborations/capsules
3. Site enhancements that improve path to purchase
13
Theory Unwrapped, Theory BCD [behind
closed doors]
Goal: create a membership program that creates a feeling of exclusivity
to drive full-price online purchasing
Rewarded behavior: full-price online buying
Tiered system benefits: Increases customer engagement
Exclusivity makes customer feel valued
Works best to promote high-commitment
“Experiential rewards” > monetary rewards
Measures of effectiveness: Customer retention rate
Negative churn
Basic idea: 1 “point” for every $1 spent on full-price product online Special point events (double point days)
Opportunity to spend points on 3rd party benefits/rewards “experiencing the Theory
lifestyle”
1. ENGAGE: MEMBERSHIP PROGRAM
12
*Opportunity for
wholesale: potential for
members to earn points
on 3rd party websites by
entering member number
at checkout
Program BlueprintAccess to exclusive VIP events
Entered in raffle for Theory runway tickets
Exclusive exclusives
Seasonal fabric swatch book
Seasonal pre-views
Specialty accessory
Personalized double-point days
Free two-day shipping
Early access to Theory/Helmut Lang sample sales
Complimentary tailoring
Free gift wrapping
Complimentary tote
Bronze Silver Gold Platinum
1. ENGAGE: MEMBERSHIP PROGRAM
All access Top 50% of
customers
Top 25% of
customers
Top 10% of
customers
13
Theory coffee table book with touch and feel exclusive Brand Education/Awareness
Relationships with Mills
is what makes Theory unique
Blogger/Artist/Model Collabs/Campaigns
Influencers
Product ambassadors
Curated Collections and Online Exclusives Color/fabric programs
Limited Edition
Wholesale: increase amount of account exclusives to
promote curated, segmented assortments (less overlap)
2. EXCLUSIVE: DIRECT OFFERINGS
Specialization
Source: Business of Fashion, July 3 2016
Customer Education
“Buy Now, Wear Now”: Promote product stories to
highlight different styling options for the current
season offering. Curated homepage campaigns relevant to today
“Shop the Look”
Wholesale: Theory lookbooks advertised on account
homepages
#inTheory: Transform the tab as the information
guide to all things Theory Videos about sourcing background
Peer-to-peer sharing (uploadable photo gallery)
Monthly store “Spotlight”
Integrated Retail: Make path-to-purchase online
more similar to that of an in-store
experience Personalized services
Streamlined information from
store to site
3. INFORM: SITE ENHANCEMENTS
15
RECOMMENDED TIMELINE
Initiative Level of Investment
EstimatedTime
DeptsInvolved
1.
2.
Initiative Level of
Investment
Estimated
Time
Departments
Involved
1. Theory
Membership
Program
Medium 1 – 2 years Ecommerce, Marketing, IT, Retail
2. DTC
Exclusives
High (Long-termStrategy)
2 – 3 years Ecommerce, Design,Production, Merchandising, Retail, Marketing
3. Site
Enhancement
s
Low (Quick Win) 6 months – 1 year Ecommerce, IT, Marketing
16
QUESTIONS?
APPENDIX
Current Actions
Suggestions Legal Agreement
Restrict Online retailers from selling
to 3rd parties
Give consistent guidance of online
marked down styles by account
Improve promotional calendar
-Promotional Events
-Promo codes
Restrict off-price accounts from
selling product on online platforms
Source: Trendalytics Dashboard
7/21/16
Wholesale DTC
Understand who the online customer
is!
Consumer Analytics
Average Order Value
Source/Medium
Bounce Rate
Email Marketing
In house Social Media Campaigns
Linking our site to SM platforms
Objective:Maximize online full price sales by taking initiatives with our accounts
CONTROL
22
Curated offerings per account
“Online Exclusives” labeled
Styles
Colorways
“Countdown” labels
Re-evaluate business with yoox.comCurrent Off-price Distributors
Shopbop.com