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G L O B A L R E T A I L C O N S U L T A N T S
J.C. Williams Group Limited 17 Dundonald Street, 3rd Floor, Toronto, Ontario M4Y 1K3. Tel: (416) 921-4181 Fax: (416) 921-4184 [email protected] www.jcwg.com
1230-1010 de la Gauchetière West, Montréal, Quebec H3B 2N2 Tel: (514) 510-0711 Fax: (514) 510-8071 350 West Hubbard Street, Suite 240, Chicago, Illinois 60654 Tel: (312) 673-1254
Member of the EBELTOFT GROUP - International Expertise in Retail Service Business
QuebecApparelRetailingEnsuringSurvivalina
HypercompetitiveMarket
October31,2012
ConferencePresentations
TerryHenderson,J.C.WilliamsGroup
JohnTorella,J.C.WilliamsGroup
MikeDover,J.C.WilliamsGroup
SURVIVAL STRATEGIES FOR QUEBEC APPAREL RETAILERS
Strategic Initiatives Retailers Need to Undertake to Survive and Prosper
Terry Henderson
October 2012
www.jcwg.com
Outline
Introduction
Concept
Process
Case Studies
Best Practices: Check List
2
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 1
Perfect Storm
http://www.youtube.com/watch?v=gVwuy-4TzU8
3
4
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 2
J.C. Williams GroupGlobal Retail Advisors
“Providing clients with actionable strategies to help drive their business successfully whilst meeting their customer’s needs”
5
Who We Are & What We Do Retail advisory firm with over 30 years of
industry experience
Offices in Montreal, Toronto, and Chicago
Clients across North America, Europe, Russia, the Middle East, India, and Asia Pacific
Senior partners have broad retailing, strategic planning, and customer service experience—we’ve spent our entire careers in retail
We work collaboratively with our clients ensuring they are active partners
Founding member of Ebeltoft Group, a consortium of international retail and service consulting firms
6
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
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Member of Ebeltoft Group
Founded in 1991 to bring together International retail expertise
21 members located in 18 countries including Australia, Brazil, Canada, China, Denmark, France, Germany, India, Italy, Malaysia, Portugal, Romania, Singapore, Spain, Switzerland, Turkey, United Kingdom, and the United States
Ebeltoft Group members have collaborated on projects in over 50 countries
7
J.C. Williams Group PublicationsOur publications on retailing
• Re|Think Retail Branding: essential information and insights into the art and science of whole branding
• Getting Retail Right!: ICSC’s book on retailing and new approaches to shopping center revitalization
• Building a Winning Retail Strategy: dynamic marketing and operating strategies to ensure growth and profits
• National Retail Bulletin: monthly report on retail sales activity in Canada
• retaileye blog: retail trends, concepts, and best practices
• The Strategic Compass Model: coming soon!
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Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 4
We Serve the Top Companies of Our Industry 38 of the Top 100 retailers in the
World …
RETAIL
.
.
.
.
.
9
29 of the Top 50 manufacturersworldwide … 15 of the Top 20
9
Clothing and Accessories
10
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 5
Strategy = Know where you are going?
Strategy – Keep It Simple
Source: Harvard Business Review September 2012 12
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 6
The Right Strategic Style for Your Environment
Source: Harvard Business Review September 2012 13
Retailers Like You Use The Adaptive Style
Source: Harvard Business Review September 2012 14
Zara
Internet & Catalogue Retail
Hotels, Restaurants& Leisure
SpecialtyRetail
Textiles, Apparel& Luxury Goods
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 7
Strategy – Direction and Improvisation
“Strategy is a sense of direction around which to improvise”
Peter Drucker
15
What Is Strategy? 3 simple Jobs
16
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 8
Strategy Jobs – Consistency Test is Key
17
External Environment
• Size up the external environment of a firm in its entirety
• External consistency: Does the strategy tap the opportunities and neutralize the threats posed by the outside world in a unique manner?
Internal choices
• Configure all of a firm’s choices to attain a competitive advantage
• Internal consistency: Do the parts of the strategy fit together to form a whole that is greater than the sum of the parts?
Competitive dynamics
• Sustain a firm’s competitive advantage over time
• Dynamic consistency: Does the strategy call on the company to do today what is necessary to succeed tomorrow?
Strategic Planning Roadmap
WhereAre We?
How Do We Get There?
Who Do We Want To Be?
Tracking Progress
18Source: McMillan Doolittle
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
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Summary Steps and What We Do
WhereAre We?
How Do We Get There?
Who Do We Want To Be?
Tracking Progress
• Review prior work• Management interviews• Research review/New
research• Field visits• Desktop/Secondary Research
What We Do
SWOT
• Consumer
• Competition
• Economy
• Internal Competencies
• Industry
Where We Are
• Review prior documents• Understand company history• Workshop
What We Do
• As a Company
• Mission
• Vision
• Values
• Promises
• As a Competitor
• Brand Positioning
• Financially
Defining Ourselves
• Ideation• Priorities Screener• Working Teams
What We Do
• Key Objectives
• Markets
• Formats
• Strategies
• Organizational Need
• HR
• Technology
• Finance
• Logistics
• Timing/Timeline
How We’ll Get There
• Quarterly check-in
What We Do
• 5 Year Plan
• Measure exact objectives
• Measure progress
• Timeline
Tracking Progress
Source: McMillan Doolittle 19
Industry Analysis Influences – 5 forces
20
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
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Five Forces Retail Specialty Apparel
21
Rivalry Among Existing Competitors
Industry positives:• Capacity does not need to
be expanded in large increments – store footprints can expand somewhat incrementally before major jumps in distribution capacity occur
Industry negatives:• Products and services are not
highly differentiated• Switching costs are low• Fixed cots are high and
competition can and does cut prices
• Some products are perishable in nature
• Rivals highly committed
Threat of New Entry
Industry positives:• New entrants with
value propositions can be very successful (e.g., Lululemon)
Industry negatives:• Economies of scale for major
retailers• Hot brands/stores draw
customers from others• Customer switching costs are
low• High capex requirements• Ecommerce and digital media
Threat of Substitutes
Industry positives:• Customers can’t do without
the product forever (except at nudist camps)
• Products provide a well-being that is difficult to substitute
Industry negatives:• Direct sellers – ecommerce• Customers can do without
the product for a period of time
• Customers can make some of the products themselves
Supplier power
Industry positives:• Major suppliers and agents
(e.g. Ly & Fung) are better capitalized and optimize the use of technology
• Willingness to support integration across the supply chain
Industry negatives:• Major suppliers have a lot of
power over smaller retailers (e.g. RE developers, Agents, importers)
• Switching costs related to changing suppliers
• Suppliers can integrate forward into industry
Customer power
Industry positives:• Customers switching costs are
low• Volumes are not concentrated
with relatively few customers• No backward integration threat
from customers
Industry negatives:• Clout and price sensitivity due
to:• Products relatively
standard• Customer switching costs
are low• Some customers are under
pressure to save money
Industry definition: Retail Specialty Apparel
ECONOMY - Take A Contrarian Approach
22
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23
Internal Competencies Wal-Mart
24
M
a
rg
i
n
Primary Activities
SupportActivities
Operations
(e.g. Assembly, Component Fabrication,
Branch Operations)
Marketing & Sales
(e.g. Sales Force, Promotion,
Advertising, Trade Shows, Proposal
Writing)
Inbound Logistics
(e.g. Incoming Material Storage, Data Collection,
Service, Customer Access)
After-Sales Service
(e.g. Installation, Customer Support,
ComplaintResolution, Repair)
Technology Development(e.g. Product Design, Testing, Process Design, Material Research, Market Research)
Human Resource Management(e.g. Recruiting, Training, Compensation System)
Firm Infrastructure(e.g. Financing, Planning, Investor Relations)
Procurement(e.g. Components, Machinery, Advertising, Services)
Outbound Logistics
(e.g. Order Processing,
Warehousing, Report
Preparation
Wal-Mart Stores:Activities as the Locus of Competitive Advantage
Companies are collections of discrete activities, in which competitive advantage resides
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
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Wal-Mart Value Chain
InboundLogistics
Operations Marketing& Sales
After-Sales Service
M
a
rg
i
n
Primary Activities
SupportActivities
FirmInfrastructure
Human ResourceManagement
Technology Development
Procurement
• Big stores in small towns => local monopolies, low rental costs
• Pricing that reflects local monopoly
• Concentric expansion
• Brand-name merchandise
• Private labels
• Little space for inventory
• Suggestion program
• Store within a store
• Traiting: tailoring merchandise to locale
• EDLP
• Low prices
• Store manager latitude on pricing
• Little advertising
• Merchandise meeting
• Frequent replenishment
• Automated DCs, cross docking, pick-to-light
• EDI
• Hub and spoke system
• Easy returns
• POS
• Satellite system
• Associates, not employees• Not unionized• Store manager autonomy
• Frugal culture (sharing hotel rooms, calling collect
• No regional offices
• Lots of management visits
• Store performance tracking
• UPC
• Hard-nosed negotiating
• Centralized buying
• No-frills meeting rooms
• Partnerships with some vendors
• EFT, electronic invoicing
• Planning packets
• Manager compensation tied to store
• Stock ownership plan• Decentralized training in DC
• Real-time market research
• Saturday meetings
• Fun working environment
• Promotion from within• Associate compensation tied
to company• Shrink incentive plan
25
Specialty Apparel Value Chain
26
Frugal culture – no regional offices – family culture – no strategic planning – business planning newly implemented – Private equity investor
Very low marketing
Good quality price ratio
No marketing strategy
Type of Advantage• Low cost structure, good
customer service (e.g. alteration services), good quality price ratio, site proximity
Activities
Inbound logistics
Operations Outbound logistics
Marketing& sales
After-sales service
Procurement
Technology development
Human resources
Firm infrastructure
Scope of Advantage• Customer scope:
– Young girls 15-18– Girls aged 17-24– Young Women 30-35– Women 36-45– Young Men 18-30
• Product scope:– Good quality moderately
priced “low” branded 3rd
party product which are latest commercial styles
– Leisure and sportswear– Casual workwear
• Geographic scope: – Regional and urban
markets• Vertical scope:
– Branded line buy
Centralized buying – improvements required in negotiation skills – buying concentrated with relatively few 3rd party branded suppliers
Limited salary equity – no unions in stores – unionized employees in dc (oct’10) – no formal bonus program – equity limited to senior management – salesperson compensation tied to sales only with complicated formulas, - limited management skills at sr management level – limited store mgr auth
Newly implemented back office system (tier3) – Aging POS – limited DC automation
Use of 3rd party logistics
DC premises is leasing has capacity constraints
No cross docking Frequent inter-store transfers
Varied store brands
Brand name merchandise
Little space for inventory
Increasing rental costs
HO space leased
Easy returns
Alteration services
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 13
Competitive Dynamics
27
28
Competitive Dynamics
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 14
Competitive Dynamics – Know Where You Stand
Strong
Weak
Weak Strong
Strategicposition
Financial position
Industry sensitivity to this downturn
More
Less
Lightenthe load
Full speed ahead
Refocus and retool
Overtake the
timid
Source: Winning in Turbulence 29
Less Industry Sensitivity
Strategicposition
Strong
Weak
Weak Strong
Financial position
Industry sensitivity to this downturn
Less
More
Refill the tank
Extendthe lead
MaydayPass withcaution
More Industry Sensitivity
Competitive Dynamics – Cross-Channel Game
Source: Deloitte Consulting LLP 30
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Competitive Dynamics – Ebeltoft Cross-Channel Study
17 COUNTRIES
DIY Electronics Apparel Non‐food generalist Hyper/Department store
4 SECTORS
31
Competitive Dynamics – Ebeltoft Cross-Channel Study: 144 Retailers
32
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Competitive Dynamics – Ebeltoft Cross-Channel Study: Objectives
• Provide insights on key issues to prioritize the right mix of cross-channel solutions; now and in the future
33
Competitive Dynamics – Ebeltoft Cross-Channel Study: Methodology
34
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
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Competitive Dynamics – Ebeltoft Cross-Channel Study: Sectors and Countries Canada only has two retailers in the Global Top 10, and one of them is American
owned
General Retail DIY Electronics FashionRanking Retailer Country
1 Walmart US
2 Sears US
3 Nordstorm US
4 Debenhams UK
5 Jcp US
6 El Corte Inglés Spain
7 Macy's US
8 Coop Denmark
9 Falabela Chile
10 Auchan France
Ranking Retailer Country
1 Home Depot US
2 B&Q UK
3 Lowes US
4 Homebase UK
5 Flügger Denmark
6 Castorama France
7 Hombach Denmark
8 Leroy Merlin France
9 Lee Valley Canada
10 Hagebau Germany
Ranking Retailer Country
1 Best Buy US
2 Conrad Germany
3 Fnac France
4 Media Markt Germany
5 Comet UK
6 Best Buy Canada
7 Boulanger France
8 Elgiganten Germany
9 Interdiscount Switzerland
10 Domo Romania
Ranking Retailer Country
1 Finish Line US
2 New Look UK
3 J. Crew US
4 Sport Scheck Germany
5 Next UK
6 Mango Spain
7 YouHeShe Denmark
8 Goertz Germany
9 Traceveinny Singapore
10 KissJane Singapore
35
COUNTRIES INCLUDED
Competitive Dynamics – Ebeltoft Cross-Channel Study: Fashion Retailers Included
36
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Competitive Dynamics – Ebeltoft Cross-Channel Study: Fashion Retail Cross-Channel Champions
Ranking Retailer Country
18 MDS Singapore
19 Vakko Turkey
20 Reitmans Canada
21 Zara Switzerland
22 Zilian Portugal
23 Prenatal Italy
24 Zara Spain
25 Abercrombie US
26 Bestseller Denmark
27 Saba Australia
28 Globetrotter Denmark
29 Zara Italy
30 Lululemon Canada
31 Marisa Brazil
32 Zegna Italy
33 Roots Canada
34 Charles Vögele Switzerland
35 Diesel Italy
36 Desigual Spain
Ranking Retailer Country
37 Schild Switzerland
38 Witchery Australia
39 Camaïeu France
40 Sarar Turkey
41 Bianco Denmark
42 Prada Italy
43 Uniqlo China
44 Desa Turkey
45 Samsoe Denmark
46 Beymen Turkey
47 Monnalisa (it) Italy
48 Meters Bonwe China
Ranking Retailer Country
1 Finish line UK
2 New Look UK
3 J.Crew US
4 Sport Scheck Germany
5 Next UK
6 mango Spain
7 YouHeShe Denmark
8 Goertz Germany
9 Traceyeinny) Singapore
10 KissJane Singapore
11 Marks and Spencers UK
12Mountain
Equipment Coop Canada
13 Kiabi France
14 Gap US
15 Jules France
16 Anthropologie US
17 Forever New Australia
37
Competitive Dynamics – Ebeltoft Cross-Channel Study: #1 Finish Line
Channel Agnostic Shopping
38
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Competitive Dynamics – Ebeltoft Cross-Channel Study: #2 New Look
Mobile
39
Competitive Dynamics – Ebeltoft Cross-Channel Study: J.Crew
Size/Product Online Exclusives
40
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CASE STUDIES – COMMON THEME IS THETurnaround Tripod – What Comes 1st ?
Strategy
FinanceOperations
41
42
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McDonald’s: 1997–2002 – A Brand in Decline 2002 - reported its first-ever quarterly loss of $344 million (since
going public in 1965). Comp store sales down in all major regions
Stock price in decline—down to a low of $12 in 2003 from $45 in 1999
Market share was declining, franchisees frustrated, employee morale low and customer satisfaction even lower
Focused on opening new stores, acquiring other concepts but not fixing the core
43
Creating the Plan to Win
New management team was brought in by the board in 2002
Created the Plan to Win to re-focus the business and re-store the brand’s dominance
Shifted focus away from new store growth to growing sales within the existing base
Followed a framework for brand revitalization:
44
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RULE #1 : Refocus the Organization
• Brand Purpose and Goals• Financial Discipline• Operational Excellence• Leadership Marketing
RULE #2 :
Restore Brand Relevance
• Thorough Knowledge of the Market• Needs-Based Market Segmentation• Customer Insight• Brand Promise
RULE #3 :
Reinvent the Brand Experience
• Innovation• Renovation• Marketing• Fair Value• Total Brand Experience
RULE #4 :
Reinforce a Results Culture
• Measurable Milestones• Balanced Brand-Business Scorecard• Recognition and Rewards
RULE #5 :
Rebuild Brand Trust• Internal / External• Commitment and Behavior
RULE #6 :
Realize Global Alignment
• Plan to Win• Eight Ps : Purpose, Promise, People, Product,
Place, Price, Promotion, Performance• Freedom Within a Framework
Endu
ring
Prof
itabl
e G
row
th
Mor
e C
usto
mer
s, M
ore
Ofte
n, M
ore
Prof
itabl
e
45
Plan to Win
McDonald’s Then
46
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McDonald’s Now
47
Plan To Win PayoffHistorical Performance of McDonald’s Corporation
Share P
rice
Source: Yahoo Finance 48
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
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McDonald’s – Key Takeaways
The importance of disciplined and rapid planning, execution and measurement
Built off brand strengths and revitalized what needed to be addressed
Innovation can be simple
49
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J. Crew – Resurrecting an Iconic Brand
J. Crew was founded as a catalog company in 1982
The company became synonymous with the “preppy” look and classic American fashion
In 1997, it was bought by Texas Pacific Group. Quickly following the purchase, the co-founder left and the company lost direction
At the end of FY2003, the company reported sales of $768 million, a net operating loss of $5.6 million and comparable store sales down over 11%
Mickey Drexler was hired as CEO in 2003 and began the company’s turnaround
51
Raise Fashion Levels, Raise Pricing
“I look at companies as price-players or quality-players. The only way to go with J.Crew was quality.”
Mickey Drexler
J. Crew’s is positioned to appeal to consumers who have graduated from Gap and desire something hipper, and less expensive than Ralph Lauren
Classic American style, with a twist became the design direction:• They ditched the old logo and added whimsical “critters”
• Added new linings and trim detail, and emphasized colors and unique fabrics
• They raised pricing and developed a multi-tiered pricing strategy for high-priced designer level goods and lower priced casual items
52
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A Hot Brand Again – From 2005 until ??
It took nearly 18 months to affect the transformation, with FY ’04 also recording negative comp sales
Carefully pursuing brand extensions (Crewcuts) and flanker brands while steadily growing 25-30 new stores a year
Performance improved dramatically starting in 2005
53
$(5,636)
$(30,775)
$37,642
$79,497
$125,614
$172,479
$96,685
$211,261 $213,968
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Income from operations
$768,344 $689,965
$804,216
$953,188
$1,152,100
$1,334,723 $1,427,970
$1,578,042
$1,722,227
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Revenue &
J.Crew Financial Performance
For the fiscal year ended January xx, xxxx 54
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 27
$349 $338
$400
$457
$526
$573
$551
$577
$601
2003 2004 2005 2006 2007 2008 2009 2010 2011
Sales per gross square foot & Comp store sales
J.Crew Financial Performance
-11.2%
-2.5%
16.4%
13.4%13.0%
5.6%
-4.0%
4.1%4.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
2003 2004 2005 2006 2007 2008 2009 2010 2011
For the fiscal year ended January xx, xxxx 55
J. Crew Case – Key Takeways –Weighing Risk/Reward Used brand attributes to resurrect the hotness without losing the
focus on heritage
Proved you can move up in fashion and price points..
Strategy takes time, involves risk and is never final• Needed to liquidate old inventory—losses accelerated in the first full year
• Takes time to develop new looks and get customers back in
• And then you start again ...
56
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Best Practices Checklist
Have a clear and simple strategy
Have a clear and simple process to develop and update your strategy
Use an adaptive style whereby you can quickly update the key elements of your strategy
Test your strategy for external, internal and dynamic consistency
Dynamically understand the forces that affect your industry and your sector within the industry
57
Best Practices Checklist
Understand where you are in the economic cycle
No matter where you are in the cycle keep calm and carry on
Take a contrarian approach to investing and where you invest
Know where you stand within your industry in terms of your strategic and financial position and move accordingly
Ensure you know what activities create value and that as many as possible are integrated
58
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Best Practices Checklist Have a plan regarding cross channel
Use as many of MCD’s rules as possible
Disciplined planning, execution and measurement are important
Innovation can be simple
Build off brand strengths and revitalize what needs to be addressed
Don’t try to be good at everything – select what to dominate on – and really dominate
Strategy takes time, has risks and is never final as advantages go away over time
59
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EVOLUTIONPrivate Label to Private Brand
John Torella
October 2012
www.jcwg.com
2
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© J.C. Williams Group 2012 31
Outline Introduction
Concept
Examples
Best in Class
Low Cost Basics
Process
Bottom Line Benefits
Best Practices: Check List
3
Introduction Private Brands have been outpacing natural Brand
sales growth in North America by 10-15%
7% annual growth rate over the past 10 years
Share has gone from 35% to 65%
Source: Nielsen. Private Brands study. 2009 4
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
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81% of North American Shoppers feel Private Brands provide...
“extremely great value”
Source: Nielsen. Private Brands study. 2009 5
“Product differentiation through a strategy of Private Brands is one of the two/three
keys to retail success in the future”
-Terry LundgrenPresident & CEOMacy’s Inc.
“Product differentiation through a strategy of Private Brands is one of the two/three
keys to retail success in the future”
-Terry LundgrenPresident & CEOMacy’s Inc.
6
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Concept Winning marketers are moving from Private Labels
and store Brands to the concept of Private Brands
Emphasis on “Branding” versus labelling
Totally integrated program of the company’s philosophies, reputation, people and products
7
Private Brands...
That create deep, emotional
connection with end consumer...
That have a distinct
personality that sets them apart...
That lead to loyalty and advocacy...
And customers for life!
8
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“All Private Brands are products, but not all products are Brands”
- Millard “Mickey” DrexlerCEOJ. Crew
“All Private Brands are products, but not all products are Brands”
- Millard “Mickey” DrexlerCEOJ. Crew
9
Examples When customers buy gifts at Disney they are buying
more than gifts and Disney is selling more than products.
10
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Ralph Lauren owns a piece of his customers’ minds in such a powerful way that they go from loyalty to lifetime advocates.
11
Kenneth Cole, Under Armour and Nike have achieved cult-like status and have become icons in their categories.
12
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Best in Class
For more than 150 years Macy’s has been helping new Brands and suppliers establish themselves in the hearts and minds of their customers.
Macy’s portfolio of Private Brands is impressive: Alfani, Charter Club, Club Room, INC International Concepts, Karen Scott, Material London and Style & Co continue to thrive and outperform the marketplace.
In 2011, they introduced three new Private Brands: Tasso Elba, Anna Dello Russo, Greg Norman golf wear.
Private Brands represent about 20% of their total sales.
13
Macy’s “Believe” Video
14
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Low Costs/Basics of Private Brands
Private Brands
Tracking of results; keep
upping the bar
Prominence on company website;
fresh, relevant content/style
Name, logo, symbol that is
unique and consistent with Brand essence
In-store support package that includes staff
product knowledge, POS
material, fixturing, packaging
Community/
social media engagement
15
1. Start with facts: how are you currently perceived: Your Image
2. Where do you want to go in the future:
Your Vision
3. 3 Keys:• What customer segment are you going to focus on?
• How are you going to be different?
• Positioning versus competition
4. Design your Brand of the future; benefits not yet perceived
Private Brands Process:
16
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5. Identify added value: rational/emotional benefits beyond product function
6. Determine the one idea/word you want to own: Brand Essence
7. Dimensionalize the Brand: Brand Personality and Character
8. Establish DNA: Not the “what” or “how” but the “why” of the Brand
17
Brand Pyramid
Source: Whole Being Retail Branding, John Torella 18
Quebec Apparel Retailing Ensuring Survival in a Hypercompetitive Market
© J.C. Williams Group 2012 39
•Loyalty•Advocacy•Trust•Engagement•Customers for Life
•Higher Margins•Lower Selling Price•Profitability•Lower Marketing Costs
19
Best Practices Check ListPLANNING Start with facts: information, research, insights
Top-level support/commitment/team
Strategic plan; 3-5 years
Defined objectives, strategies
Tactical execution plan of action
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CATEGORY/ASSORTMENT PLAN Competitive review
Which category/SKU plan/process in place
Defined pricing strategy
Quality assurance, specs in place, samplings
Evaluation review
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VENDOR MANAGMENT Identify vendors policies, objectives, standards
Selecting vendor options
Product specifications
Partnering opportunities: Marketing
Packaging design specs
Scheduled Review
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IN-STORE SUPPORT Staff product knowledge/selling
Display, merchandise presentation plan
Fixturing, signing, ticketing
Cross merchandising
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MARKETING PLAN Funding strategy; 3-5 years
Budget plan
Advertising: create/media
Website support
Social media
Events
Publicity
ROI24
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Reinventing Your Company in a Customer-Driven Marketplace
Mike Dover
October 2012
www.jcwg.com
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Key concepts
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Data Overload: every 60 seconds…
•4 Million Web searches
• 500k Content Shares
•100k Product Shares
• 40k Links Shortened
• 40k Tweets Shared
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The amount of data created per person
•After 5 years ...10 x
•After 10 years... 100 x
•After 20 years ... 10,000 x
Doubles every 18-24 months
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Person of the Year
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Harnessing Mass Collaboration
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“Something you Own” “Something you Trust” “Something you Want”
“Something you Prefer” “Something you Love”“Something you Participate In”
The Changing Brand: Participation is the New Currency
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“Brand building today is so different than what it was 50 years ago.
50 years ago you could get a few marketing people in a small room and decide, ‘this is what our brand will be’, and then spend a lot of money on TV advertising — and that was your brand.
Today anyone, whether it is an employee or a customer, if they have a good or bad experience with your company they can blog about it or Twitter about it and it can be seen by millions of people. It’s what they say now that is your brand.”
–Tony Hsieh, CEO, Zappos.com
Control of Your Brand Changes
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Six Benefits of Wikibranding
Brand Advocacy (Marketing)
Word of mouth
Referral/recommendation
Badging
Sales/traffic
Reduction in media budgets
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The Emperor's Fanbois
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Six Benefits of Wikibranding
Brand Perception (PR)
Awareness/exposure/SEO
Affinity
Empathy/respect
Lead industry conversation
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Old Spice Social Media
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Customer Review Sites
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Six Benefits of Wikibranding
Brand Content (Media/ Customer Experience)
Co-innovation/solutions
User-generated Creative
User-generated content
Reviews/ratings
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Fan Participation
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Prosumers – Doritos Crash the Super Bowl Contest
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Six Benefits of Wikibranding
Brand Insight (Research and Innovation)
Idea stimulus
Beta-testing
Market research/polling
Industry/competitive
intelligence
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Your Childhood Lego?
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Six Benefits of Wikibranding
Brand Serendipity (The Unexpected)
Stories/Inspiration
Traditional media interest
Requires a good sense of humour
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Six Benefits of Wikibranding
Brand Support (Customer service)
Customer service
Education/ advice
Value-add experience
Lead industry conversation
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Intuit: B2B Community Wikibrand
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Channeling Tom Sawyer
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Culture Change Required
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Retail Store as Showroom
Best Buy declining results due in part to Amazon operating as low-cost alternative. Easy search allows users to try out merchandise in store, then find the lowest price online
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Mobile Social Helps In-Store experience
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Trend: Social Shopping
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Trend: Click and Collect
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Trend: Exclusive Social Offers
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Trend: Gamification in Retail
Users create fantasy wardrobes from real retailers and share them on platforms such as Facebook Rewarded with virtual
prizes (badging) and have the opportunity to win actual items ranging from an expensive handbag to vouchers from real stores
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Trend: Community, not just Commerce
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COMMUNITY MANAGEMENT“who will lead the conversation?”
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#1 - Company culture #2 - Lack of executive/managerial support #3 - Too controlling #4 - Lack of authenticity/genuine engagement #5 - Lack of community leadership #6 - Ineffective measurement #7 - Lack of relevant skills of people involved #8 - No clear purpose #9 - Lack of ongoing strategy/plan #10 - Lack of investment
Source: Agent Wildfire 2010 Community Management Survey
Organization Hurdles
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Top Skills of Wikibrand Leaders 1. Leadership/charisma
2. Diplomacy/Patience
3. Customer/member empathy
4. Persistence
5. Social/Networking
6. Communication Skills
7. Technology Skills
8. Passion for company/brand
9. Change Agent
10. Creativity
11. Leads the lifestyle of the customer 36Source: Agent Wildfire 2010 Community Management Survey
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Key Takeaways
Customer expectations are higher than ever
Active listening and data analysis is crucial in every industry
If you ask for a conversation, you must participate
Measure the applause not the attendance
Harness cognitive surplus
With each trend, ask how can I use this for competitive advantage?
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The Retail Shop.Toronto, Montreal, Chicagowww.jcwg.com(514) 510-0711Terry [email protected]
Thank you and keep in touch.
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