GET CONNECTED Amber Martin N0690134 Word Count: 7994
This submission is the result of my own work. All help and advice other than that received from tutors has been acknowledged and primary and secondary sources of information have been properly attributed. Should this statement prove to be untrue I recognise the right and duty of the board of examiners to recommend what action should be taken in line with the Universityâ€™s regulations on assessment contained in its handbook. Print Name: Amber Martin Date: 20/04/19 Signed:
01 INTRODUCTION Introduction 6-9 Project Aims & Objectives 10-11
tHE bUSINESS OPPORTUNITY The Opportunity 12-19 The Business Overview 20-23 Methodology 24-33 Further Research 34-37
mARKET ANALYSIS Market Drivers 40-43 Market Analysis 44-47 Market Trends 48-51 Competitor Analysis 52-65 Porterâ€™s 5 Forces Model 66-67 SWOT Model 68-71 Pestle Analysis 72-73 Ansoff Matrix Model 74-75
Business Aims & Objectives 78-79 The Business Overview 80-87 Service Offering 88-95 The Business Model 96-97 Brand Strategy 98-103 Brand Personality 104-105 Brand Values 106-107 Brand Voice 108-109 Brand USP 110-111 Meet the Team 112-113 Brand Identity 114-117
05 STRATEGIC DIRECTION Our Clients 120-125 CRM Strategy 126-127 The Targeted Consumer 128-135
06 MARKETING & COMMUNICATIONS STRATEGY Marketing Aim & Objectives 138-139 Marketing Mix 140-143 SOSTAC Model 144-145 Strategy Overview 146-147 Communications Plan 148-163 AIDA & DRIP Model 164-165 Year 2 & 3 Strategy 166-173
08 07 CONCLUSION BUSINESS MANAGEMEnt Financial Objectives 176-177 Raising Capital 178 Start-up Costs 179-185 Sales & Forecast 186-189 Profit & Loss Accounts 190-193 Cash Flow Forecast 194-195 Sensitivity Analysis 196-197 Measures of Success 198-201 Risk Assessment 202-205 Growth and Future Plan 206-211
Objectives Review 214-215 Conclusion 216-217
â€œThe very concept of what a store is and what it does is going to be rewritten.â€? (Pine and Stephens, 2017)
INTRODUCTIOn The emergence of the digital era has caused considerable disruption within the retailing industry as online retail has soared in recent decades as advancing technologies enable the growth of online digital experiences. “Our brains had become so adapted to online shopping, where one can refine a search, compare items and access loads of well-structured product information, that shopping in a physical store, without the benefits of those tools, had become almost impossible for our brains to manage.” (Pine and Stephens, 2017) Brick-andmortar retail stores have failed to keep up the advancement of technology and their consumers altering expectations for digital experiences and therefore have seen a significant decline in recent years. The outcome of the democratisation and advancement of technologies has been the emergence of the ‘constantly connected consumers’ and their shopping expectations have shifted correspondingly at a rate physical retail has been unable to keep up with. This has demonstrated a clear business opportunity for a brand to prevent the decline of physical retail stores by re-imaging the physical retail space for the connected consumer to meet their needs in the digital era as demand grows for physical retailers to provide digital experiences in-store.
rationale This report will build upon initial findings from Stage 1 to develop a business opportunity that closes the identified gap between online and offline retail experiences and accommodates to the evolving expectations of the new wave of connected consumers in the digital era through developing a feasible, wellconsidered and sustainable business plan.
â€œOur consumer brains have been completely rewired with new expectations. Our online experiences are shaping our expectations of our offline experiences. which is creating even more challenges for retailers.â€? (Pine and Stephens, 2017)
To become highly established as marketplace leaders by 2025, making a difference to physical retailers helping them achieve their potential as digitally forward brands meeting their consumersâ€™ needs in the digital era through proposing a thoroughly considered in-depth business plan.
objectives: OBJECTIVE 1
To utilise the key insights from the stage 1 report to formulate a feasible business opportunity analysing the market and external factors to produce a business plan that will disrupt the retail industry.
To evaluate the competitive environment to establish a competitive advantage and utilise this as the unique selling point to market the brand and differentiate the business.
To endure thorough testing of the brands concept to ensure success. Analysing the feasibility of the business idea by networking with industry experts to gain knowledge and understanding of the market to ensure success launching a start-up brand.
4 To convey the brands identity through consistent visual elements developing an innovative and effective communications strategy that reflects the brand and engages the target audience directly whilst differentiating the brand from competitors.
5 To investigate the financial feasibility of developing the brand concept and considering the potential risks and methods to measure the brandâ€™s performance.
02 the business opportunity
â€œRetailers will need to remain at the forefront of change since customer expectations are driven by digital brands outside of retail, and innovations are likely to be quickly adopted by their competitors.â€? Elix-Irr, 2015)
STAGE 1 INSIGHTS The focus of Stage 1 explored how constant connectivity has altered Generation Z’s retail expectations and examined the future of physical stores against the threat of online retailing. The research established that Generation Z’s shopping expectations had shifted and the constantly connected consumers expectations were no longer being met in-stores. This highlights that brick-and-mortar stores need to adapt and revive their business model to cater to the needs of the digital native consumers in the future.
INSIGHT 1 Generation Z have developed a fear of disconnecting from their digital world and this has led to increased anxiety interacting in physical communication resulting in the consumers preferring to communicate digitally.
INSIGHT 2 The constantly connected consumers expect the same level of personalisation and convenience they receive online to be replicated in-store which they currently don’t feel they are receiving.
INSIGHT 3 As digital natives the demographic also desire more digital experiences in-store to make their experiences more interactive and fun. The consumers feel stores currently lack digital experiences and are not meeting their expectations.
INSIGHT 5 Generation Z are happy to share their personal data in exchange for value which provides brick-and-mortar stores the opportunity to utilise this to add to their consumers experience.
Due to Generation Zâ€™s constant level of connectivity online, this has led them to develop a low-partial attention span meaning retailers need to ensure they offer a high level of engagement to gain their attention.
Connected consumers want to use their mobile devices in-store to benefit their experience and keep them constantly connected.
The digital natives value experiences over products today highlighting the need for physical stores to offer immersive and â€˜Instagrammableâ€™ experiences to compete and succeed in the future against other physical stores and online retail.
INSIGHT 8 The connected consumers desire omni-channel services within stores as it adds to their convenience. Brick-and-mortar stores should work alongside online retail integrating online into the store instead of competing.
the key problems 16
There is a clear gap detected between the experience connected consumers receive online compared to the experience the consumers receive in-store. The research shows a lack of digital experiences within brick-and-mortar stores and there is a growing demand from their consumers for offline experiences to match the level of experience they receive online. Online retail is providing digital experiences for the connected consumers that offers high levels of convenience and personalisation which physical stores are failing to offer to a satisfactory level of the connected consumer. Physical retailers face an increasing problem as connected consumers behaviours shift and requires the retailers to adapt their business model. The problem offline retailers are facing with the failure to meet connected consumers expectations provides a business opportunity to bridge the gap between online and offline experiences, providing retail companies with services that continue to meet their consumers evolving expectations within the digital era.
the business opportunity 18
To solve the problem of Generation Zâ€™s low-partial attention span by creating a digitally interactive and engaging experience that the consumer can co-create and immerse themselves in.
To develop a service in-store that complies with the connected consumers anxiety around approaching retail staff and allows them to communicate digitally as an alternative.
To meet the consumers desire to use their mobile devices in-store and utilise their data to add personalisation and convenience to meet their evolving expectations.
To incorporate advancing technologies such as augmented reality to meet the consumers need for an increasingly digital in-store experience.
THE BUSINESS OVERVIEW 20
Based on the opportunities that emerged from the research, has led to the formation of ConnectX; a creative digital consultancy company for retail brands based on market research. We work to reimagine the physical retail experience for retailers. We have identified retail companies need for digital innovation in-store and we aim to offer a strategy that re-designs the traditional store experience to meet the connect consumersâ€™ needs in the digital era providing a digitally innovative service utilising advancing technologies. We are a research-based company predicting market trends and implementing our research into our services. We predict future trends to ensure our clients are staying digitally innovative and adapting rapidly to consistently meet their consumerâ€™s needs before competitors. Our current service introduces the first ever fully human contact-less digital shopping experience to allow retailers to meet their consumers altering behaviours and desire to communicate digitally and stay constantly connected whilst avoiding the anxieties that physical communication exerts. The experience ConnectX offer also integrates augmented reality features utilising innovative emerging technologies to meet the desires of the digitally native consumer and incorporates added personalisation to allow the retailer to offer a high degree of convenience closing the gap between the experience they receive online and the experience they receive in-store. We provide highly engaging and immersive store experiences. We aim to help retail brands adapt and succeed in the digital era.
weâ€™re Bringing the store to life.
secondary research Online survey Interviews with Generation z interviews with retail staff ethnographic observations focus group E-mails with competitors
research approach 26
This body of research has been conducted through utilising a series of primary and secondary sources used in conjunction to ensure reliability and accuracy in findings. The secondary research consists of a vast range of material including books such as ‘Getting fit for Digital Business’, online video content such as ‘TedTalks’, trend reports, databases and podcasts to provide the necessary data unable to be obtained through primary findings. The approach to the research was to infiltrate a range of mixed methods combining both qualitative and quantitative research to ensure reliability and eliminate limitations that occur through using one method alone. “Mixed method research helps answer questions that cannot be answered by quantitative or qualitative approaches alone. Mixed methods research offers new insights that go beyond separate quantitative and qualitative results. By combining the approaches, researchers gain new knowledge that is more than just the sum of the two parts.” (Creswell and Plano Clark, 2018) Denzin’s Triangulation theory was used to compare different perspectives to achieve the most accurate results and improve credibility. “Triangulation refers to the application and combination of multiple approaches in the same phenomenon (…) seen as a way of helping qualitative researchers become more vigorous.” (Denzin and Lincoln, 2018)
advantages & limitations of research Research Method
1-to-1 Interview with Generation Z Consumers
Purpose of Research
A vast range of secondary sources were used to act as a base of knowledge to grow an understanding of the market and competitor environment. Any identified gaps in secondary research were filled in through primary research.
The data has already been collected therefore saves on costs and time. Assess to extensive range of sources. Secondary sources can be used to fill in gaps in primary research as well as back up primary research findings.
Risk of using biased or subjective sources. Outdated sources no longer relevant disrupting accuracy of results. Restricted access to some online sources. Poor quality sources leading to inaccuracy or incorrect information.
An online survey was conducted with 110 respondents. The purpose of the survey was to find out about Generation Z’s shopping behaviours and shopping journey in-store to prevent gaps appearing in the shopper’s journey when using the app-based service in-store.
Anonymously allow participants to open-up without fear of judgement revealing more accurate and truthful responses. Large-scale results provide credibility over smaller-scale methods helping to identify the generalised view and opinion of Generation Z as a demographic.
Closed answer tick box responses limit ability to elaborate which could lead to missing relevant insights or knowledge. Potential for researcher to ask bias questions with pre-conceived ideas which don’t reveal strong insights or findings. Unhelpful or inappropriate responses from participants with no desire to help with the study.
Qualitative research in the form of indepth 1-1 interviews with 6 Generation Z consumers were carried out to gain feedback on the brands concept and identify consumers shopping behaviours in-store to improve the brand concept.
Interviews allow for expansive discussion allowing researcher to gain in-depth results. Full focus on one respondent allows for researcher to pick up further insights that could have been missed in a group setting. Respondents can openup in a 1-1 interview without fear of judgment.
Participants knowledge of being analysed and observed has potential to unintentionally influence their responses to provide ‘correct’ response they feel researcher is looking for over their true opinion or attitude.
advantages & limitations of research Research Method
Purpose of Research
In-depth interviews were conducted instores that target Generation Z. Interviews with retail staff were used to identify what customers typically ask staff in-store for assistance with to help develop ConnectX’s service. Interviews with staff managers were conducted to gain feedback on the business proposal to ensure business proposal has potential to succeed.
Industry experts are able provide extensive knowledge to improve strength of findings. Industry experts can contribute new perspectives with their background knowledge. Retail staff can share their experiences to increase the researcher’s knowledge and provide vital feedback for business proposal.
As industry professionals, they may feel the need to provide a positive perception of the brand to protect the brand which could lead to missing accurate potential insights and findings. Industry experts may not be inclined to share vital knowledge for privacy reasons and therefore conceal information limiting the researcher’s findings.
To ensure success of the service ConnectX is proposing to implement into stores, a focus group was carried out with 6 respondents (all Generation Z consumers) to find out their opinion of the service and establish their attitudes towards the brand concept to assure success and to diminish possible errors within the brand concept.
Group dynamics of focus groups are known to bring up points not previously thought of by researcher and unveil new insights for the researcher to consider. Focus groups allow for indepth discussion to thoroughly answer questions in detail.
Participants responses become altered due to fear of judgement of group setting. Participants are likely to go along with overall group consensus rather than expressing alternate view therefore vital insights may be missed. Knowledge of response being observed and analysed may unintentionally alter responses.
E-mail Interviews with Competitors
E-mails to competitors were sent out as part of the research strategy to find out more information and expand knowledge on competitor’s business models and implementation strategies to benefit the brand as a start-up company by utilising established competitors experience to reflect on to ensure success for ConnectX.
Interviews with competitors allows for opportunity to gain extensive knowledge into the market and to gain information surrounding costs, marketing strategies and how the competitor’s business works. Experienced competitors can give feedback on business proposal based on experiences and knowledge.
As potential competitors, these companies may not be willing to share private data and information and e-mail methods have a low response rate. E-mail interviews lacks ability for flowing conversation that face to face interviews provide.
1 to-1 Interviews with Retail Staff
advantages & limitations of research Research Method
Purpose of Research
Ethnographic Observation (Consumer shopping journey in-store)
An ethnographic observation was used as qualitative research to observe Generation Z consumers in-store to monitor their shopping journey. Observing the journey to be able to ensure the app-based service being developed is able to cater for every aspect of their shopping journey without a need to speak to retail staff.
Allows the opportunity to watch Generation Z consumers shopping journey without their awareness of being monitored meaning their behaviours do not change or shift providing more accurate and reliable results and also provides a true representation of Generation Z consumers shopping journey.
Potential for bias account from researcher who may have collected preconceived ideas and assumptions to what they will find therefore look for these findings and potentially miss the more accurate findings.
Ethnographic Observation (Observing competitors in-store digital experiences)
An ethnographic observation was conducted to study the rivalry competitors digital experiences instore to gain knowledge of competitors offering and to use the insights gained to better ConnectXâ€™s in-store experience. Brands Nike and JD Sports digital store experiences were both observed.
The ethnographic observation holds the ability for the researcher to form new perspectives as no set questions are pre-constructed. Through observing competitors in-store experiences ConnectX can learn from what they do and adapt their own concept.
Ethnographers typically live within the environment they are observing over a series of years however this is not achievable by the researcher of this project and a much shorter time frame is being used to observe Generation Z which will affect results making them less accurate than spending a longer period of time observing.
Ethnographic Observation (Observing potential clients to target)
An ethnographic observation was conducted across a wide spread of physical stores to help establish the most appropriate clients to target for the brands concept. The observation looked to find the brands with digital potential as well as target digitally native consumers.
Observation provides potential to unveil unexpected factors not previously considered by researcher contributing to further insights.
Observing one store for each brand may not be an accurate representation of the brand as a whole and lead to ConnectX not targeting brands who do have strong potential to be digitally innovative.
It becomes harder when, as an organisation, you have gradually drifted out of shape, no longer in tune with the habits and demands of the modern connected consumer. (Laurens, 2019) 31
research objective 1
To identify and observe Generation Zâ€™s shopping behaviours and journey in-store to ensure the proposed service is able to be fully human contact-less.
research objective 2 To determine Generation Zâ€™s attitudes towards the market and their altering preferences to ensure the service will succeed and be utilised by the consumer.
research objective 3 To gain further information and knowledge of the market to ensure feasibility of brand concept.
research objective 4 To gain feedback of proposed business idea and service offering to ensure business will be successful and generate demand.
RESEARCH OBJECTIVES MATRIX A research objectives matrix was used to ensure all objectives are being met and all research methods have a clear purpose.
Secondary Research Online Survey
1-1 Interviews with Generation Z Consumers
1-1 Interviews with Retail Staff & Managers
E-mail Interviews with Competitors
FURTHER RESEARCH concept testing Further research was conducted to test the brand’s concept to ensure success prior to developing the business further. The concept testing revealed positive feedback from respondents which reinforced and supported initial insights from stage 1. Generation Z respondents stated they would want to use the service being proposed by ConnectX in-store and their feedback highlighted the key strengths of the concept. This feedback has ensured ConnectX can go forward with their brand concept with reassurance of demand and potential for success.
Examples of Positive Feedback: “I feel like it would feel very immersive and very personal to me like I’m in my own bubble whilst shopping I really like it, it’s nice that the whole journey is literally in my hands like I’m in control and don’t need anyone else helping me it’s so different to any other shopping journey I’ve experienced.” (Generation Z Interview, Appendix 2, Participant 3) “I’m sure no other retailer offers the ability for every part of shopping to be completed without staff it sounds really unique and I’m sure this will be the future of how we shop - I think digital experiences will be the way forward which I really like.” (Focus Group, Appendix 3, Question 1)
83% of Generation Z would really benefit or somewhat benefit from not having to speak to retail staff in-store. (Online Survey, APPENDIX 1)
66% of Generation Z would use an app that was able to show them where items they had previously looked at online were located in-store using augmented reality banners. (Online Survey, APPENDIX 1)
Industry Experts Feedback “This is a great concept. As the world becomes more digitally-able I know retail stores need to really push for these augmented reality features and digital experiences and I think this is a strong idea to progress with! (…) I could see the service coming to stores.” (Retail Manager Interview, Appendix 5)
POINTS FOR IMPROVEMENT: “Apps I’ve used in the past, if I find them complicated to navigate I just delete the app straight away - I have no patience.” (Appendix 3)
“I want to be in control of the data I’m sharing like for privacy reasons I’d like to be able to switch on and off the location settings (...) because I am ok sharing data I just like the idea of having control over it!” (Appendix 3)
The concept testing allowed for improvements to be made to the concept which will be considered and alterations will be made to improve these areas to ensure success of the concept. Improvements will include increasing the consumers control of data and ensuring easy navigation of the app features.
FURTHER RESEARCH observing competitors offering An ethnographic observation was conducted to examine competitors (Nike & JD Sport) digital in-store experiences from the perspective of the consumer in order to establish the positive and negative factors of their experience to incorporate and learn from to develop ConnectX’s service. This research will be utilised to ensure ConnectX’s service will succeed through adapting the service, improving factors based on the observation of competitors store experiences. Improvements include ensuring the customer using the app is recognised when entering the store and ensuring to add privacy options into the app.
Privacy - “I was asked whether or not I wanted to enable push notifications as well as enable my location to better my in-store (…) therefore I was in charge of how much data I wanted to share so I felt like I was in control of my privacy which I will apply to my own brands app.” (Appendix 8)
Recognition - “I was expecting to receive acknowledgement of my arrival from the app when entering the store (…) this was the first negative towards the experience (…) I can use this to better the app being developed by my own brand by making sure to include recognition when a customer arrives in-store.” (Appendix 8)
Navigation - “I was pleased with my experience, the tablet was simple and easy to navigate which I will take on board when designing the navigation on the app feature being developed as efficiency and ease are a priority.” (Appendix 8)
Another negative was that not all items were able to be scanned. “I could only scan items with a special Nike tag which was a little frustrating if I wanted to view an items information that didn’t have the tag so from this I would know to make sure every item in store is scannable in-store using ConnectX’s service.” (Appendix 8)
FURTHER RESEARCH Exploring consumers journey in-store
retail staff interview “I always get asked for my opinion and style recommendations.”
Online Survey Question: When do you usually require help from staff whilst shopping in-store? (Appendix 1, Question 2)
When purchasing an item
When asking for an item in your size
When wanting to try something on
When asking if an online item is in stock in-store
When picking up an online order
When making a return
When asking if an item comes in other colours
When asking for an item to be ordered to store
I never require help
When asking about the items material
(Appendix 4, Participant 1)
Further research was conducted to determine Generation Z’s journey in-store in order to establish all their points of contact with retail staff so there were no gaps within the experience that meant a consumer would have to speak to staff and therefore the service wouldn’t be a fully human contact-less experience therefore this research ensures all points of contact are considered.
Ethnographic Observation “Customers had main points of contact with staff when purchasing an item, trying items on in the changing room, when asking for an alternate size or asking whether an item from online was in-store.” (Appendix 6)
MARKET DRIVER THE Advancement of Technology Advancements in technology are growing at an unprecedented rate effecting the retailing industry profoundly and acting as a key driver in the digital retail experience market. â€œCustomer-orientated industries are currently being transformed by digital trends, where the traditional business-customer relationship is disrupted by new technology and business model innovations.â€? (Elix-Irr, 2015) DRIVER OF CHANGE
Accelerating Technology. Customers have superfast internet technology in their pockets and expect to use it in all aspects of their lives.
WHY NOW? Customers are immersed in a culture of constant connectivity. Function of mobile technology has evolved from a practical communications portal to a portal for sharing media, playing games, finding information and shopping.
IMPLICATIONS FOR RETAILERS Respond to a new pace of change. Retailers are used to long technology cycles of 5-10 years but will now need to innovate in real time as consumers develop. The requirement now is to be close to the leading edge of technology and digital trends that do not originate in retail.
Advancing technologies provide the opportunity for brick-and-mortar to digitally transform and build their retail experiences for customers to compete with online retailing integrating aspects of online into the offline space. The development of advancing technologies means retailers are forced to keep up and implement the technologies to meet their consumers expectations and compete with competitors. “Despite this apparent impetus for change, however, most retailers’ digital maturity remains low. Only 1% considered themselves as being where they need to be, digitally, while the majority had not passed the midpoint on their digital transformation journey.” (Consultancy, 2018) This highlights a gap in the market for ConnectX to provide their services to retailers needing to adapt to technology. ConnectX can integrate advancing technologies into their services based on their market predictions integrating the emerging technologies before competitors to gain a competitive advantage and establish themselves as a digitally forward brand. “Go-to retailers of the future will be the new companies that invest in the overwhelming consumer demand for digital in order to transform the customer experience. In this new digital retail world, success will be reliant on continuing to reinvest in new research technology, always seeking to stay an edge ahead of consumer needs.” (Forbes, 2018) “Technology integration is the only way to fulfil promises to the consumer, (…) retailers are not technology companies. They look a lot to partners to help them with the tools and capabilities and technologies that they need. We’re going to see more and more retailers tapping into technology partners who can help them.” (Lila Snyder, See Retail Dive, 2017) This demonstrates how advancing technologies will lead to an increased demand from retailers for ConnectX’s service as a digital consultancy able to provide retailers with digital services that meet their consumer’s needs integrating emerging and advancing technologies before competitors. This indicates ConnectX will experience high levels in the future entering an attractive market set for continual growth.
MARKET DRIVER ‘DNA’ Digitally Native Audience Generation Z prove to be key market drivers contributing to the rising market growth of digital experiences in-store. “Gen Z is the first generation born into a digital world. With their digital prowess, Gen Z expects brands to act digitally native too. As Gen Zers will become increasingly influential, businesses need to be prepared for this next generation of consumers and make them part of their business strategy.” (Euromonitor, 2018) Generation Z’s retail expectations have shifted to expect digitally engaging innovative experiences from retailers, “These consumers are automatically importing expectations nursed and nurtured online into all aspects of their lives, including retail stores, and this influence will only grow.” (Retail Dive, 2017) This demonstrates how online retail experiences have affected the generation to expect more from offline retail. “These findings present a significant challenge for retailers to create a personalized, interactive experience that constantly reflects the latest digital advances. Retailers who don’t provide those experience risk falling behind. Members of Gen Z are going to shop with brands they feel they can interact with.” (Forbes, 2017) This serves as an opportunity for ConnectX to provide retailers with a digital in-store experience that embodies Generation Z’s increasing digital needs which will be the key to success for retailers in the future, therefore ConnectX’s service will be essential for retailers to incorporate into their stores in order to succeed, this indicates the brand will experience high demand in the future.
“Generation Z is arguably the most pivotal generation to the future of retail.” (Business Insider, 2017)
The digital native generation will hold extensive power and influence in the future. “By 2025, digital natives are expected to dominate as customers and (…) assumed, retail decision-makers.” (RetailTouchPoints, 2017) This highlights how influential the demographic will be in the future as a new wave of shoppers emphasising the need for retailers to adjust to the demographic’s modernised expectations for success in the future therefore reinforces their need to integrate ConnectX’s services ensuring ConnectX will experience high demand as they predict the digitally native generations future shopping expectations to allow for retailers to remain current.
“74% of Generation Z consumers in the UK interact with each other digitally more than they do in the real world.” (The Independent, 2017)
Retail IT Outsourcing market “Retailers must innovate to differentiate their offerings and should lean on the expertise of technology vendors to support their innovation agenda.” (Elix-Irr, 2015)
“The use of third-party IT suppliers to deliver hardware, software and services is widespread within the retail sector. However, large transformational outsourcing deals are not as prevalent within retail as in other industries.” (Elix-Irr, 2015) The low level of large transformational outsourcing deals is due to the retailers need to adapt quickly to evolving demands, “Many retailers constantly challenged by uncertain short-term demand have to maintain maximum flexibility.” (Elix-Irr, 2015) This demonstrates the need for ConnectX to promote their brand offering through their communications strategy focusing on ensuring and re-enforcing the level of flexibility the brand offers in their message to increase their demand from retailers highlighting their brand as a company that predicts market changes and adapts rapidly to meet their needs producing new services every two years to keep retailers innovative and current within the market to consistently meet consumer’s needs. “The need for innovation in the age of the internet shopping may drive change in the IT sourcing landscape for retail. (…) The benefits that ITO deals can offer are slowly being recognised by retailers.” (ElixIrr, 2015) This highlights the future opportunities for ConnectX as a digital consultancy providing IT souring for retailers as the demand for IT sourcing will grow rapidly as retailers are beginning to acknowledge the need for IT outsourcing to compete.
“Changing consumer buying habits, the growth of internet only retailers, economic pressures and the availability of new technology services are changing the sourcing landscape for retail information technology.”
“Many traditional retailers currently relying on inhouse IT teams supplemented by contractors may have an inefficient delivery model that is not fit for purpose in the fast-moving world of multichannel.” (Elix-Irr, 2015) This shows an opportunity for ConnectX as the level of competitiveness amongst retailers to provide innovative digital retail solutions increases, retailers will need to outsource IT services as retailers are not digital consultancies and do not specialise in the field therefore the demand for digital consultancy services will rise rapidly to deliver advanced services. This reveals ConnectX to be entering an attractive market with expected growth as the market is going through a transformational period as retail companies acknowledge the need to incorporate IT outsourcing. This indicates there will be a rise in demand for ConnectX’s service offering however the brand need to reinforce their message of providing adaptive services within their communications.
DIGITAL RETAIL EXPERIENCE market Digital experiences within retail stores are set to become crucial for retailers to offer as an incentive for customers in the future as the demand for added value in-store grows. “Due to increased competition for consumers’ attention, retailers need to adapt their business models to focus on being both a service provider and entertainer. (....) The store’s value will increasingly shift towards providing quality of service and experiences.” (Mintel, 2017) This demonstrates that consumers preferences have shifted desiring more experiences in-store therefore showing ConnectX to be entering an increasingly attractive market as digital retail experiences become vital and demand from retailers for experience providers increases.
“By 2020, customer experience will overtake price and product as the key brand differentiator.” (Betts, 2018)
“The global customer experience market size is expected to reach USD 32.49 (GBR 24.76) billion by 2025 progressing at a CAGR of 22.9% during the forecast period. Growing focus of business organizations on retaining their customers by providing consistent and enhanced customer experience across multiple channels is one of the key trends stimulating market growth.” (GrandViewResearch, 2018) The predicted growth shows how the trend is set to continue and therefore indicating predictions of increased competition arising as it becomes an expectation for retailers to offer digital experiences, “Retailers can no longer afford to be laggards in adopting new technologies or in how software applications are implemented. They have to start looking at applications as the game changer for the future by way of creating new services and offerings.” (Accenture, n.d.) This shows ConnectX will have to establish and reiterate their unique selling point of predicting the future market and entering the market early with innovative digital experiences to compete with competitors and differentiate the brand in order for the brand to succeed in the increasingly competitive market. Overall, the market for digital retailing experiences is an attractive growing market for ConnectX and will ensure success for the brand if they are able to establish themselves within the market utilising their USP to grow demand and compete.
MARKET DRIVER MACRO TREND PERSONALISATION “Personalisation has become one of the key buzz words in fashion retail in recent years, but the reality is that most fashion brands and retailers are at the beginning of the journey to offering their customers truly curated experiences.” (Drapers, 2017) Online retailing has advanced in providing customers with added personalisation whilst brick-and-mortar stores have failed to provide the same level of service this distributes an opportunity for ConnectX to implement a service into retail stores that provides the same level of personalisation customers are receiving online to meet their expectations instore.
“Customer expectations for personalised experience are growing extensively expected to rise to 88% of customers in 2020.” (CX Advantage, 2017)
12% of retailers state they are offering personalised content in-store through mobile apps (Drapers and RetailWeek, n.d.) This low percentage shows a clear opportunity and gap in the market for ConnectX to offer personalisation which is currently not being widely offered by physical retailers to meet consumers expectations. Although the macro trend is not a new trend, it is yet to be effectively integrated within retail stores as retailers are failing to successfully implement a high degree of personalisation in-store for customerâ€™s. This presents an opportunity for ConnectX to meet the consumersâ€™ needs effectively and generate demand from retailers looking to meet these consumer needs in-store. As the trend for personalisation in-store is set to grow in the future, ConnectX need to be early to integrate their personalised experience in the market in order to gain market share and compete with competitors whilst remaining innovative integrating the identified need early before competitors. The trend exerts a large opportunity to fulfil the gap in the market and meet the connect consumerâ€™s needs which will ensure the service is a success.
The merger of mobile and online technology with physical space means that retailers can offer incentives, help with choices and advice on product provenance in-store. (Mintel, 2017)
MARKET DRIVER Micro TREND augmented reality Augmented reality is slowly beginning to be utilised by brands and retailers to engage with digitally native consumers and enhance their in-store experiences. The market is forecasted to grow at 151.93% CAGR (compound annual growth rate) from 2019-2024 with a high level of growth predicted within the AR/VR applications for commerce which is expected to grow 78% between 2020-2025. (Mordor Intelligence, 2019) As augmented reality can be identified as an emerging trend for the future, it will soon become an expectation from consumers therefore competition to provide the trend within retail environments will increase. This indicates early adoption of the advancing technology to be vital for retailers to establish themselves as â€˜digitally forwardâ€™ brands meeting their consumers expectations. This demonstrates an opportunity for ConnectX to provide augmented reality experiences for retailers in-stores whilst the market is not yet highly saturated, to meet the connected consumers need for digital experiences. ConnectX need to establish themselves as early adopters of the trend and integrate emerging technologies based on their predictions of the market to create innovative unique services in-store adapting to the consumersâ€™ needs and exerting their flexible and innovative perception. Integrating the trend into the market before competitors will also give ConnectX a competitive advantage and allow them to remain digitally forward.
â€œNearly 75% of consumers expect retailers to develop and implement AR experiences into their businesses.â€? (StartUs Insights, 2018.)
Competitor analysis 52
Extensive research was conducted to establish a vigorous understanding of the market and key competitors were divided into two market segments; retailers providing digital instore experiences and digital technology consultancies. Research was used to gain insight into the market and establish how ConnectX can differentiate themselves and gain a competitive advantage.
Digital Consultancy Competitors 54
COMPETITOR Vivid Digital Retail Solutions (Primary Competitor) Threat Level: 9
service “The go-to retail technology partner for the latest in-store digital solutions.” (VIVID Digital Retail Solutions, n.d.)
Digital Creative Agency for Brand Solutions
(Primary Competitor) Threat Level: 8
VIVID Digital Retail Consultancy is one of ConnectX’s key competitors with a similar offering to ConnectX through creating and installing tailormade solutions to fit their client’s requirements. The team work on a broad spectrum from visual, sound, interactive fields in retail, online, mobile and other related sectors therefore have a broad offering. VIVD work on fashion events, brand launches and brand experience centres.
Although a retail focused digital consultancy, the brand differs from ConnectX as ConnectX have a clear focus of bridging the gap between online and offline experience by focusing on the offline retail experience sector. Vivid work on a range of sectors within retail including online and fashion events therefore the two brands differ on their focus. ConnectX also have a unique innovative service offering to give them a competitive advantage over companies such as Vivid and their focus is predicting market trends and reacting early giving ConnectX a differentiation and unique selling point.
Engine Creative is a UK based digital creative innovations agency working with brands to develop engaging experiences for customers. Previously worked with fashion brands such as Lacoste, New Look and Next. Engine Creative work on campaigns, augmented reality experiences, VR and 360˚ experiences, producing mobile apps and content creation.
Personalised tailor-made offering Utilise a range of technologies; digital signage, interactive systems & mobile technology. Similar to ConnectX; create install and maintain service for client.
Developing Engaging Experiences Creating Shareable Moments Creative Digital Experiences Established Brand Experts in Field
Engine Creative work on a range of offerings such as website development, content creation and campaigns whereas ConnectX are providing a digital service for in-store retailers therefore the brands have different offerings and Engine Creative also work with a range of industries and brands such as Tesco and BBC therefore lack a retail focus therefore ConnectX can use this to their competitive advantage and market themselves as experts within retail digital innovations.
Threat Level: 1= Low / 10 = High
DIGITAL CONSULTANCY COMPETITORS COMPETITOR Intellect Soft (Secondary Competitor)
service Digital Consultancy and Software Development Company
Threat Level: 6
Iconeme (Secondary Competitor) Threat Level: 4
Technology Company Providing Retail Solutions
key factors Intellect Soft work within a range of industries including retail to deliver digital solutions specialising in mobile app developments and softwareâ€™s involving gamification, push notifications, geolocation and navigation, augmented reality, geo-fenced messaging, in-store navigation and custom features. Intellect Soft offer a wide range of features and services to their clients.
Iconeme offer a service utilising mannequins in store which are inserted with a VMBeacon to communicate with customers mobile devices using an app. Customer can then find out more about the items on the mannequins and be able to share the looks or purchase directly through website. Iconeme has worked with brands such as Ted Baker and House of Fraser.
Utilise Advancing Technology within Offerings Creative Brand Personalised Bespoke Services Experts in Emerging Technologies
Unique Offering Promotes Mobile Engagement Integrates Online & Offline Retail Platforms Retail Focus
weaknesses Intellect Soft offer solutions for a broad range of industries therefore lack a retail focus and may lack expertise within the retail sector, as they work on a broad range of industries therefore retail companies are more likely to choose a brand that focuses of physical retail experiences and is dedicated to the sector which gives ConnectX the competitive advantage. The brand also have a lack of innovative and unique offerings/services that differentiate themselves giving ConnectX an advantage. The weakness with Iconemeâ€™s service is that their service only allows the customer to view items that are on the mannequin therefore limits what the customer can view. Although the brand provide a unique offering, they also have a limited offering and fail to adapt to emerging new market trends and consistently adapt their offering which gives ConnectX the competitive advantage as they consistently adapt with unique innovative offerings based on their market research and future predictions.
COMPETITORS MARKETING strategies Established primary competitor Engine Creative’s social media communications was observed identifying key strengths to reflect upon and improve ConnectX’s own communications strategy as a start-up B2B company.
Video Content Introducing Team at Engine Creative (BUILDING PERSONAL RELATIONSHIP WITH FOLLOWERS)
STRONG CONSISTENT VISUALS reflecting brand
story telling engaging showcasing work
in-store digital experience Competitors 58
COMPETITOR Rebecca Minkoff
service In-store Instalment
(Primary Competitor) Threat Level: 8
Zara (Primary Competitor) Threat Level: 7
In-store Instalments & Zara AR App
key factors Stores include interactive wall mirrors showing the latest brand content. Customers can interact with the mirrors to browse products and request a fitting room as well as order drinks. Customers can request one-toone sessions with stylists using the wall mirror and receive a text to notify the customer when the changing room is ready. Inside the changing room using the tablet, customers can request more sizes and colours and also check-out items they wish to purchase themselves.
Zara have implemented a ‘digital store concept’ to their flagship store in the UK. The store has a dedicated ‘online pick up’ station using a digital instalment as well as self-service checkouts. The brand also incorporated an interactive mirror equipped with RFID able to detect a garment a customer holds up and give outfit recommendations. US Zara stores have implemented an augmented reality app where customers can point the app camera in designated shop windows to reveal virtual models in Zara clothes.
Reduces Customer Contact with Staff Interactive Experience Added Level of Fun and Engagement Digital Experience throughout Shoppers Journey in-store
Reduces Customer Contact with Staff Digitally Innovative Experience Interactive and Engaging Convenient Fun Experience
weaknesses Rebecca Minkoff is a clear primary competitor of ConnectX offering a similar type of retail experience service; reducing customer contact with staff whilst providing a highly engaging digital experience. ConnectX however, has a competitive advantage and unique selling point through providing a 100% human contact-less shopping experience for the entirety of the shopper’s journey alongside increased personalisation utilising customers data and incorporating advancing technology which gives ConnectX a competitive advantage going above and beyond what has been done before in Rebecca Minkoff stores utilising emerging trends to meet consumers evolving needs. Zara have proven to be key primary competitors of ConnectX due to their stores reducing customers contact with retail staff and becoming established as a digitally innovative brand experimenting with emerging technology. Although providing an engaging and interactive experience, ConnectX have a competitive advantage incorporating both personalisation for customers as well as introducing an innovative 100% human contact-less experience not just for solely parts of the customers journey which gives ConnectX’s service a differentiation and their service continues to adapt to the market at a rapid pace.
service In-store Instalments
Threat Level: 5
Threat Level: 6
zARA Nike (Primary Competitors) Threat Level: 8
In-store Instalments and App
key factors Burberry’s flagship store is fitted items with RFID tags to give customers product information when walking up to a big screen in-store with the item. The screen changes into a smart mirror displaying information about the items or gives recommendations as to how the item can be styled and also shows how it was worn on the catwalk to add to the customers experience in-store.
Tommy Hilfiger stores are known as ‘the stores of the future’ with huge interactive touch screens on walls and tables to allow consumer to complete orders. Flagship stores contain customisation bars and changing rooms containing RFID enabled mirrors. Selected stores also introduced virtual reality headsets in-store used to watch the Tommy Hilfiger Catwalk show to add to the customers experience. Nike have developed an in-store app that allows customers to scan items to view all availability in near-by stores and can also check-out items via the app. Customers can reserve items in personal lockers to try on once they arrive in-store. The store also has RFID technology; placing shoes on a screen platform allows for all the product information to appear for the customer. The store also features a ‘pick up’ station for orders made on the app.
key strengths RFID Technology Based Engaging Experience Convenient Interactive
Targeting Digitally Native Consumers RFID Technology Personalised Recommendations Innovative
Personalised Experience Digitally Innovative RFID Technology Enabled Convenient Omni-channel Service
weaknesses Burberry stores focus on providing product information and styling recommendations however ConnectX’s service offers these factors as well as more innovative factors incorporating all aspects of the shopper’s journey in-store and adding in-store personalisation and advanced technology therefore ConnectX are able to differentiate themselves with a unique service that was designed based on consumer needs and the experience offered continues to be adapted to remain innovative and relevant. The brand are competitors as they target digital natives with digital experiences in-store reducing customers contact with staff however, ConnectX still has a competitive advantage as they take the experience further by reducing 100% of customers contact with staff focusing on the entirety of the customers journey with added personalisation and creating a highly engaging new experiences with advancing technologies therefore have a unique offering to differentiate themselves in the market. Nike are primary competitors of ConnectX creating a similar in-store experience. ConnectX’s unique selling point is their ability to meet their consumers needs based on research therefore creating a fully human contact-less experience with multitude of elements that are predicted trends by ConnectX therefore giving them the competitive advantage as they use market research to predict future trend and behaviours of the digitally native consumers to meet their needs first before competitors.
BRAND POSITIONING MAPS The brand positioning maps and observation of digital in-store experiences revealed gaps in the market for an in-store experience to provide a fully human contact-less experience as there is currently not a brand to create a fully human contact-less service therefore this will be a unique selling point for ConnectX’s service. There is also a gap in the market to create a digital experience for the entirety of the shopper’s journey instead of for a sole part of the journey and to also create a highly personalised experience in-store as there is a lack of retail competitors offering personalisation to the level that online retail delivers personalisation therefore ConnectX can differentiate themselves with their unique service offering that meets the needs of the retailers consumer. There is also a gap in the market to introduce advancing technologies into store experiences early to remain innovative predicting new technology trends instead of reacting to the market.
High Level of Personalisation Incorporated In-store
Reduced Customer Contact with Retail Staff
burberry zara Hointer
Low Level of Personalisation Incorporated In-store
Increased Customer Contact with Retail Staff
Creating an Experience for Entirety of Shoppers Journey In-store CONNECTX Rebecca Minkoff nike zara Tommy Hilfiger
Offering High Level of Engaging Experience for Customers In-store
Offering Low Level of Engaging Experience for Customers In-store
Creating an Experience for Solely Part of Shoppers Journey In-store
BRAND POSITIONING MAPS
Highly Established Brand in the Market (Target Position) CONNECTX
Engine Creative vivid
Focus on Range of Industries
Focus on Retail Industry
Nex Tech AR Solutions
Not Highly Established Brand in the Market
â€œFew retailers have moved as boldly to incorporate technology into the customers experience.â€? (Pine and Stephens, 2017)
The research into the digital consultancy competitors established a gap in the market for ConnectX to differentiate themselves as the majority of digital consultancies lack clear focus as they work within a range of industry sectors. There is an emerging gap in the market for a brand that focuses solely on physical retail solutions therefore ConnectX can differentiate themselves with a clear focus of physical retail solutions as their unique selling point with a purpose of bridging the gap between online and offline retail helping physical retailers to meet their digital potential. This will differentiate the brand from the market and add credibility as retail companies will trust ConnectX to be specialist experts in the market as they have a clear defined focus and will be perceived as experts in the field which will give them a competitive advantage over competitors. Analysing the digital consultancies in the market also identified a strong lack of unique and innovative service offerings that differentiates the digital consultancies. ConnectX has a unique selling point as they are a researchbased consultancy; predicting the emerging trends and consumer behaviours and adapting their service consistently to keep their clients remaining digitally innovative in the market to help them compete. This demonstrates a clear gap in the market for ConnectX to enter the market and differentiate themselves with a clear unique selling point; focusing on physical retail solutions and providing digitally innovative services to market first based on predicting the future market.
Porters 5 Forces Model Competitive Rivalry ConnectX’s existing competitors currently provide a moderate threat as the market is yet to be saturated by competitors there are gaps in the market for ConnectX to enter the market and thrive. The digital consultancy competitors fail to provide innovative unique services therefore giving ConnectX an advantage entering the market with a differentiation offering a unique service. The existing competitors also work on a range of industries with few focusing solely on physical retail solutions therefore are a low threat to ConnectX as ConnectX can establish themselves as specialists in physical retail solutions. The existing competitors however post a threat due to being already established in the market and having experience in the field, this is a threat to ConnectX as a start-up brand yet to be established. ConnectX provide an innovative service based on market research predicting the future trends and developing an innovative service based on findings to allow for their client to be digitally innovative which is ConnectX’s unique selling point giving them an advantage over competitors in the market therefore the existing competitors post a moderate threat to the brand. Threat Level: Moderate
THREAT OF NEW ENTRY The threat of new entry to the market is a high threat level to ConnectX as the market is currently emerging with substantial growth expected in the future. The expected level of growth is due to the retailer’s desire to adapt to the needs of their digital native consumers in-store. As there is a growing demand from retailers for digitally engaging retail experiences for their consumers in-store this means more digital consultancy competitors and similar retail experiences to what ConnectX offer will emerge to meet the demands of the retailers as there is strong potential and demand in the sector. The threat of new entries is also high due to ConnectX having no protection over their key technologies utilised or protection over the unique service they implement to retailers therefore new competitors can easily enter the market offering a similar service to ConnectX which increases the threat of new entries. New entries that attempt to replicate ConnectX’s service offering however, this posts as a low risk due to ConnectX being first to market and quick to adapt to evolve the service to remain innovative. New potential competitors need a creative and innovative service/concept to compete and differentiate themselves which may act as a barrier to new competitors entering the market if they fail to provide this. Threat Level: High
Porter’s 5 forces model has been utilised to analyse the competitive forces in the market that will affect ConnectX. The model analyses the level of competition and threat as well as determines areas of risk for ConnectX to ensure ConnectX can prevent the risks and adapt accordingly.
Threat of Substitution The level of threat for substitution is low as retailers can’t easily replicate ConnectX’s unique specialised service, “Retailers are not technology companies (…) To be able to build, maintain and innovate all those different technologies continuing the margin pressure they’re under is nearly impossible. (…) We’re going to see more and more retailers tapping into technology partners who can help them.” (See, Retail Dive, 2017) As retailers themselves do not have the expertise to build ConnectX’s service alone, this shows their need for ConnectX’s service meaning the level of threat of substitution is low. The retailers could choose to work with another digital consultancy however no digital consultancy currently offers the service ConnectX offer therefore there is little reasoning for retailers to look for alternatives which strengthens ConnectX’s power. Threat Level: Low
BUYING POWER ConnectX’s buyers are retail companies who want to implement ConnectX’s service into-stores. An increasing number of brick-andmortar retailers have been in financial difficulties in recent years due to the surge in online retail. This means ConnectX’s buyers are going to be conscious over spending posting a threat to ConnectX. To combat the threat, ConnectX offer several options of service to meet their buyers’ financial needs. ConnectX offer for their service to be integrated in either a concession store, pop-up, small store or large store all of which vary in price to meet a range of needs and the retailer has control over how many stores or pop-ups they would like to implement the service into. This gives the buyers a level of power and controlled choice within fixed costs. There is also no competitor currently offering ConnectX’s unique service therefore buyers aren’t able to easily switch to a competitor therefore the buying power is a low threat as there are no immediate substitutes for the buyers to move to which strengthens ConnectX’s power.
Supplier Power ConnectX has several different suppliers they rely on for their digital kiosks, beacon hardware, RFID tags and software programme. The resources are moderately easy to access as they are not highly unique they are widely available therefore the suppliers threat level is low as they can be easily substituted. However, it is important for ConnectX to maintain a strong relationship with their suppliers as they continue to produce innovative services that may require unique supplies in the future which would result in the supplier having high power. Threat Level: Moderate
Threat Level: Low
- Digitally Innovative & Strategic - Quality Service - Unique service offering - No competitors currently offering the service - Research based / Predicting Trends and Adapting (USP) - Consistently entering market early with innovation - Entering moderately low saturated market - Strong demand from retailers (buyers) wanting to meet their consumer needs of a digital experience. - Choices available (concession store-large store) to meet financial needs of clients. - Entering attractive market
- Opportunity to branch out into the beauty/footwear retail market - Opportunity to branch out into the sportswear retail market - Utilise new technologies as they arise in order to remain relevant and innovative in the future. - Create new services based on predictions from research as consumer expectations/demands evolve in the future to make sure retailers are still meeting consumer expectations. - Hire more staff with expertise to grow business and meet demand. - Expand customer base to work with strictly online retailers to create pop-up stalls with ConnectX’s digital service to grow their offline presence whilst exerting their digital perception.
- High start-up costs – Requires Investment - Low brand awareness to start - Small start-up team – unable to implement service into vast amount of retail stores quickly. - Potentially controversial service (100% human contact-less) - Business yet to be established / gain positive reputation - Yet to build loyalty with clients or gain trust. - Offering requires on-going maintenance - Targeting particular retailers (Retailers who target Digital Natives are have potential to be digitally forward) therefore limits audience to target.
- Existing Competitors - New emerging competitors entering the market - Threat of unique service being copied by competitors - Threat of competitors utilising advancing technologies prior to ConnectX - New government policies that arise - New data protection laws – making it more difficult to obtain and use consumers data - Rise in e-retail will lead to more closures of physical stores. - Economic slowdown - Technical faculties/errors that occur - Buyers (retailers) with financial difficulties unable to afford service
“Providing customers with a smooth integrated experience is increasingly seen as a ‘must have’. Customers now expect to be able to access digital content on demand.” (Elix-Irr, 2015)
STRENGTH - Opportunity Strategies
Opportunity - Weakness Strategies
ConnectX can use their strengths of being a digitally innovative brand with a unique service to apply this to their opportunities of branching out into the beauty/sports fashion markets adjusting the service accordingly still utilising the unique offering.
ConnectX’s weakness of targeting particular retailers (who target digitally native consumers and have potential to be digitally forward) causing a limit to the number of retailers that ConnectX target can be overcome through utilising the opportunity to branch out into the online fashion retail market to expand their offline presence as this opens the brand up to a wider audience.
A key strength for ConnectX is the brands ability to consistently enter the market early with innovation based on market research which can be used to take advantage of their opportunity to produce innovative services that continue to meet their client’s consumers needs in the digital era before competitors to allow the brand to remain digitally forward.
A key weakness for ConnectX is that they currently offer one type of service and show a lack of versatility which can be overcome through their opportunity to create new services and in-store experiences based on making predictions through their market research and adapting to the market to create new services first.
Threat - Strength Strategies
Threat - Weaknesses Strategies
A key strength of ConnectX is that the company is research based therefore to eliminate the threat of new entries to market ConnectX need to continue to research to adapt to changes in the market and advancing technologies or altering consumer expectations to meet the consumers needs before competitors.
A weakness for ConnectX is the initial low brand awareness and not being established within the market upon entering which can be eliminated by a strong marketing and promotional strategy to raise awareness within the market to avoid the pending threat of existing competitors as well as new entries to the market.
Giving the retail clients the options for different service instalments (from concession store-pop-up) and choice of how many stores they wish to integrate ConnectX’s service into eliminates the threat of retailer’s financial difficulties as it provides them with further choice and control.
As ConnectX initially have a small start-up team of employees meaning they are unable to implement the service into a vast amount of retail stores quickly this is a weakness for the brand and can be overcome through hiring more talent as the brand develops to prevent the brand not meeting demand.
SWOT ANALYSIS The SWOT revealed ConnectX is in a strong position entering an attractive market with a digitally innovative service and unique business concept. The brand has strong potential for growth with opportunities for expansion into range of sectors. The key threats and weaknesses for ConnectX are the existing and emerging competitors in the market and initial vulnerability as a new start-up company which can be overcome through continuing to provide innovative services adapting to the market and by establishing themselves as a leading digital consultancy for retailers utilising a strong brand identity and marketing strategy.
pestle analysis 72
(Refer to Pestle Model (Appendix 10, pg 110) The key external factor that will affect ConnectX is the advancement of technology in which ConnectX will need to keep up with and adapt their offering to as advancements emerge in order to remain in high demand and maintain their digitally innovative brand perception; able to consistently meet the needs of the digital native consumer. The other key external factor is changes in society in which ConnectX must adapt their services to and be first to market to provide innovative services based on these changes to compete with competitors and generate demand. Overall the PESTLE analysis shows ConnectX to be at a low risk of external factors being detrimental to the business if they continue to be aware of external changes and adapt accordingly.
ansoff matrix model
â€œA successful product development strategy places the marketing emphasis on research & development and innovation, detailed insights into customer needs (and how they change) and being first to market.â€? (Riley, n.d.)
The Ansoff Matrix model is a business strategy tool utilised to highlight potential risks for ConnectX within particular growth strategies. ConnectX are positioned in the ‘Product Development’ sector implementing a growth strategy providing a new innovative service in an existing market of retail experiences therefore exerts a moderate risk as although it’s a new service it’s in an existing market. The differentiation of the service in the existing market allows for ConnectX to compete against competitors in the market introducing modified services that still appeal to the existing market. Product development allows for ConnectX to focus on the underlying needs and wants of their buyers (retailers) and their consumers, so they can see opportunities for new services allowing for strong levels of growth and innovation.
04 business summary
the staid and static physical stores we visit today will die off to make room for the dynamic and remarkable shopping spaces of the future. Experiences will be the most valuable products of the next century. (Pine and Stephens, 2017)
BUSINESS AIM & OBJECTIVES Aim - To become leaders in the digital retail solutions market re-imagining retail in the digital era to make a difference to retailers; allowing them to become digitally forward and meet the evolving needs of their consumer through providing innovative digital experiences and predicting future market trends.
To become a highly established digital consultancy for retailers, producing a profitable platform within the first year of business.
To raise brand awareness significantly obtaining a minimum of 12 clients and implementing a minimum of 30 installations of ConnectX’s service into stores and pop-ups within the first year.
3 To build and maintain strong customer satisfaction exerting high quality to gain a strong reputation and generate customer loyalty and retention.
4 To communicate ConnectX’s message effectively whilst assembling a visually strong brand identity and exerting ConnectX’s traits of innovation and creativity through visual communications.
Weâ€™re the digital disruption of retail 80
The game changers in retail experiences 83
WHO ARE WE?
weâ€™re the INNOVATIVE thinkers, the digital developers, WE ARE YOUR CREATIVE CONSULTANCY.
What we do 86
We’re the people providing digitally innovative & strategic solutions for retailers. We’re a consumer-focused company utilising market research to predict market trends and develop retail solutions to meet the needs of the digital native consumer in the digital era. We provide a bespoke service tailored to our individual customer. We offer an all systems integrated automated software package with service installation and on-going maintenance. Closing the gap between online and offline retailing and maximising omnichannel opportunity. We’re a B2B company targeting physical retailers who need a helping hand to reach their potential as a ‘digitally forward’ brand. We re-imagine their traditional business model for the digital era.
â€œRetailers that can masterfully create memorable experiences will generate infinitely more revenue than was ever conceivable from replying solely on product sales.â€? (Pine and Stephens, 2017)
What do we offer?
We offer innovative services that we implement into physical stores and popups which provides retailers with an engaging digital experience to meet their consumers shopping needs. Our current service meets todays connected consumers needs through offering a fully digital human contact-less shopping experience to tackle the problem of connected consumers anxiety around communicating physically.
OUR CURRENT SERVICE INCORPORATES:
A FULLY HUMAN CONTACT-LESS IN-STORE shopping EXPERIENCE
How does the service work? 90
THE APP The service works by utilising the retailer’s mobile app in conjunction with digital instalments we implement into the store. The app will use AI to collect the consumer data analysing what they’ve viewed online or placed in their online wish-list.
ENTER STORE When a customer using the app then enters the store, beacon technology will recognise them and offer the customer the option to start their connected experience in-store using the app.
THE VIRTUAL VIEW A key feature within the experience is the ‘Virtual View.’ The virtual view opens up a camera in the app to view the store – a range of augmented reality virtual signage banners will appear across the store above items the customers has previously looked at online or that the app recommends based on their data. The signs point out the items and offers personalised discounts to the customer. The customer therefore does not need to ask a member of staff for assistance.
THE VIRTUAL VIEW 92
service features BARCODE SCANNING The customers can use the app to scan an items tag which reveals the items online product information including the product availability in-store using real time stock updates. Customers are able to request to have the correct size or colour of the item sent to the changing rooms to try on taking away the need to speak to staff. They can also view outfit recommendations for each item on the app.
THE DIGITAL SCREEN KIOSK The customer can also opt to pick the scanned item up from the digital kiosk in the centre of the store. Customers can use the digital kiosk to send back returns or pick up online orders by scanning their app QR code into the digital instalment which prevents communication with staff. The digital kiosks will have portal compartments to place items in or to retrieve items from. Customers can lastly check out on their mobile or using the digital instalment kiosk. This gives the customer an engaging digital experience taking away their anxieties around physical communication and allows them to have a personalised unique experience.
THE DIGITAL KIOSK SCREENS
the business model revenue streams OPERATIONS Services will be installed within client’s retail spaces for a 1-year contract period. The clients are paying for the compartments that enable the service (such as the digital kiosk) and the clients also pay a price for the software programme (this is the added value ConnectX make revenue from). Clients have the option to re-new the service for a following year paying a smaller fee for a renewal of the software programme only. All services are renewable excluding pop-up stores as they are a temporary installation.
Revenue will be produced from direct sales of the service as well as from repeat purchases (of software only) the following year.
key resources Software Programme – ConnectX invest in a new software programme every two years to introduce the next innovative and unique service the company have predicted to allow for ConnectX to remain innovative, expand and continue to meet the evolving needs and behaviours of their client’s consumers.
key partners Suppliers - ConnectX will order from suppliers and keep stock in warehouse to be programmed. (Software Programme Supplier: Soltech) (Digital Kiosks Supplier: Teksmart) (RFID Tags Supplier: AliExpress) (Beacon Hardware Supplier: Accenture) Hired Installation Team Full time Team of Employees (Expanded in Year 2)
activities Researching Developing Installing Maintaining
The start-up year will focus on integrating the service into a small number of clientâ€™s spaces focusing on quality. To grow in Year 2, demand will rise significantly due to increased marketing therefore ConnectX will employing 2 additional software engineers and an additional client and account manager to cope effectively. Repeat purchases from Year 1 will produce an additional revenue stream alongside revenue from new clients within Year 2. Year 3 will focus on service development - ConnectX will launch their new service to grow the brand and adapt to market changes therefore the company will continue to grow and thrive as they adapt their offering.
Creating Innovating Managing Predicting
brand essence retail re-imagined
MISSION STATEMENT To bring a digital layer to the store.
our brand promise
We promise to ignite engagement and excitement in-store for shoppers in the digital era meeting their future needs today. Connecting brands and consumers Connecting the digital and physical 103
OUR BRAND PERSONALITY WE HAVE A BIG PERSONALITY OVER AT CONNECTX to differentiate ourselves and we use our personality traits to reflect our creative offering.
Ambitious. Bold. Fearless.
ADAPTIVE Forward. Flexible. Modifying
INNOVATIVE Original. Creative. Imaginative
OUR BRAND values We really care about what we do here, and we want that to show. We put our heart and soul into our services to re-imagine retail in the digital era
Consistent. Trustworthy. Dependable.
Weâ€™re motivated to make a difference.
Expertise. High Performance. Results. 107
OUR BRAND voice
We specialise in some pretty technical work but we promise not to use any techfilled jargon or specialist terms.
engaging Positive. Enticing
human Real. Honest
what makes us different?
We are one of the only digital consultancies to focus on solely physical retail solutions making us experts in the market. We provide innovative unique services such as our fully human contact-less store experience based on connected consumers needs offering a completely new way to shop. We are a research-based consultancy and differentiate ourselves from our competitors as we carry out extensive research into the market and into the digitally native consumers expectations and behaviours to predict the upcoming future trends and build our services around these insights to provide innovative digital solutions. We predict the future market instead of reacting, to keep our clients consistently meeting their consumers shopping expectations and maintaining a digitally forward perception.
Meet The Team ANDY & WILL OUR Software Developers (A.K.A The tech geniuses behind the company)
AMBER CEO & Founder of ConnectX. Amber is our Project Manager, on-site supervisor & Marketing manager
SOPHIE OUR MARKET RESEARCHER. SOPHIE HAS RECENTLEY GRADUATED AND IS WORKING AS OUR INTERN.
GEORGE OUR Client & Account Sales Manager.
We plan to continue to grow our small but powerful team as our business develops to enable us to continue to meet the increasing demand.
our logo Our logo is highly transferable and usable. The logo design experiments with negative space to further showcase the brands creative aspect and offering. The rectangle shape of the logo was utilised as it suggests ‘trust’ according to logo shape psychology (ImpactBND, n.d.). The joining of the two letters ‘C’ and ‘O’ in the word connect is a metaphor to represent the brand and its ethos of connecting as the two letters are connected into one. The logo design was tested on a range of sizes and on brand content such as the website page to ensure suitability.
Our typeography Our typography is simple and bold (quite like us). We use A consistent font to maintain our strong BRAND identity.
0123456789 ABCEDFGHi JKLMNOPQ RSTUVWYYZ #?!&Â£ 115
Our brand Colours
We identify ourselves through the combination of three colours; neutral white, navy blue and pink. We express ourselves through these colours as we feel we are a company with different sides to exhibit. We used the navy blue to represent our corporate side as the colour conveys intelligence and reliability. We also have a creative and experimental side we have highlighted through the use of the pink which helps to convey a playful and exciting energy. We also use a neutral white tone to compliment the two contrasting colours. Navy - (CMYR) C=84, M=27, Y=20, K=69 Pink - (RGB) R=194, G=118, B=170 White - (CMYR) C=0, M=0, Y=0, K=0
WHO ARE OUR POTENTIAL CLIENTS? 120
Our customers are fashion retail companies who are currently unable to meet the needs of their digital native consumers. The retail companies we target are companies who have the potential to identity as ‘digitally forward’ but are currently failing to meet their consumers needs and would benefit from ConnectX’s services. “The retail industry is at the vanguard of a revolution that focuses more on solutions and services than products. To stay competitive, retail businesses will need to create compelling customer experiences and drive new efficiencies, opportunities and innovations. In short, they must digitally reinvent themselves.” (Glass, 2017) This highlights who ConnectX’s target clients are; retailers with a growing need to adapt to become digital. Further primary research was conducted to test the suitability of potential retail companies for ConnectX to target and work with. Three potential retail companies were studied in-depth to establish their potential; Topshop, Urban Outfitters and River Island which all perceived to be suitable candidates for ConnectX to work with.
observing TOPSHOP as a potential client TOPSHOP MANAGER INTERVIEW “I do think it’s the kind of innovation we need to introduce to really keep customers coming into stores and I think our brand needs to welcome new technology and exciting customer experiences. (...) I know our customers would be really keen to use the service as we target a younger audience I think they’d be interested to use more digital services for sure! We’ve had digital features like the VR headsets in our Oxford street shop window a few years back we do try to be digitally innovative, but I think we could definitely be doing more.” (Appendix 5, Topshop Manager)
Ethnographic Observation “Topshop proved to be a strong candidate to implement the digital store experience due to the store having digital screens as I walked around showing images of models. There was also lots of potential areas to implement the digital instalment. The store appears visually pleasing and staff were using iPads to help customers which shows how they have initially begun to show a digital aspect to the brand which could be built on by incorporating the digital in-store experience my brand is developing.” (Appendix 7, Ethnographic Observation)
The primary research has helped to identify Topshop as a suitable client for ConnectX to target. Topshop’s audience is a young demographic of connected consumers and the brand exhibits strong potential to further transition to become a digitally forward brand with the help of ConnectX to allow them to thrive in the future and meet their consumers demands more effectively.
I would agree customers are sometimes hesitant to ask questions or get help so this this would really help solve this and A real digital experience in-store is something I think we as a brand need to improve on. (appendix 5, topshop manager)
observing river island & uRBAN OUTFITTERS as potential clients
River island MANAGER INTERVIEW “I think it’s a strong idea that our brand could utilise to set us aside as a digitally engaging brand and it would help us a drive towards a really strong customer experience in-store. (…) I think our customers need an interactive app to use in-store. Our customers want new ways to shop and this service could be really effective in achieving this.” (Appendix 5, River Island Manager)
Ethnographic Observation of urban outfitters “Visiting an Urban Outfitters store showed strong potential for the brand to become a ‘digitally forward’ retailer as the brand has already shown signs through incorporating the click and collect system into store, there were large signs in-store for customers to buy online and pick up in store. In the store customers were exposed to more signs such as on mirrors it read ‘snap and share your look with us on Instagram’ this shows Urban Outfitters to have potential to become a digitally forward brand as they are already pushing for customers to integrate their online platform within their offline platform.” (Appendix 7)
ANALYSIS The research revealed River Island and Urban Outfitters to also demonstrate strong potential to become digitally forward and implement a digital experience as the stores appeared to focus on experience and integration of digital aspects therefore ConnectX can help them to grow the digitally forward perception they aim to achieve to further meet the needs of their connected consumers.
CUSTOMER RELATIONSHIP MANAGEMENT ConnectX will utilise an app called ‘Pipeline’ as a CRM strategy to ensure we manage a strong relationship with our customers as it is important to us to build sustainable relationships and gain loyalty and retention. Our customer loyalty directly affects our company’s revenue as our business concept works through customers renewing our service for a following year and also purchasing future services we offer therefore we utilise an effective CRM strategy to focus on building great relationships to grow our brand and increase our profits.
ACTIVITIES & GOALS
WHO ARE THE CONSUMERS? 128
The targeted consumer of ConnectXâ€™s service is the digital native generation whose altering shopping expectations are failing to be met by retail companies within physical stores therefore ConnectX designed their service to meet the digital native consumersâ€™ needs within the digital era in the physical store environment.
ROGERS DIFFUSION OF INNOVATION CURVE The digitally native consumers ConnectX target fit into the category of ‘innovators and early adopters’ within Everett Rogers diffusion of innovation curve as they have grown up within the widespread adoption of technology they have become accustomed to technology and are confident and open to using new emerging technologies therefore will be ideal consumer for ConnectX’s service that integrates advancing technologies that enter the market.
MEET millie the social shopper 130
Millie Documents her life through snapchat and Instagram updating her followers constantly. she speaks to her friends more online more than she does in person and is never without her phone.
InstaGRAM Name: millie_edwards_x Age: 18 drink of choice: Cosmopolitan (Will make sure to post to Instagram before having a sip)
she has a Large instagram following (6,000 followers) and spends all her time on social media.
she looks for interactive and fun shopping experiences she can share with friends and post on snapchat. favourite shops: Topshop & Missguided
millie will always message her friends for their opinion before purchasing an item.
MEET oscar the anxious shopper 132
Age: 21 studies at Sheffield University Drink of Choice: Strongbow Dark Fruits
Wants to get in and out a store without speaking to staff – avoids speaking to them AS HE GETS ANXIOUS. WANTS A WAY TO SHOP IN-STORE WITHOUT having to SPEAKING TO STAFF.
Confident using new technology. Interested in augmented reality (was an avid Pokémon Go player).
Goes online to find the best student deals and personalised discounts when shopping. SHOPS AT ASOS, TOPMAN &URBAN OUTFITTERS. Likes to shop in-store to try clothes on.
MEET rachel the saavy shopper 134
Age: 35 drink of choice: large coffee (2 sugars) independent digitally-savvy busy
She has an interest in digital innovations and Feels as though she is an early adopter of trends and innovation even though she is not a digital native.
Rachel is a work-aholic, she Works overtime most days AND NEEDS EFFICIENCY. she likes to endure a quick visit to the stores on her lunch break and needs it to be a fast pace experience. she Doesnâ€™t have time to find staff in-store and wait for their assistance but wants recommendations and help when shopping.
Rachel Would be lost without her phone and uses it for every aspect of her life.
SHE Looks for exciting ways to shop that involves her phone and technologies to make shopping easier. She Shops at: River Island, Mango and Zara
marketing & communications strategy
MARKETING aims INFORM marketing aim To increase ConnectXâ€™s brand awareness, informing and persuading the targeted audience. Encourage sales utilising an innovative, personalised and targeted approach reflecting the brand and its unique offerings whilst igniting excitement and engagement. Utilise a highly effective and strategic communications plan integrating a combination of online and offline approaches.
ENGAGE EXCITE BUILD LOYALTY PERSUADE GROW AWARENESS
OBJECTIVE 1 To increase ConnectXâ€™s brand awareness extensively growing 30% year-on-year for the first 5 years to consistently increase sales annually to generate an increasing profit.
OBJECTIVE 2 To increase ConnectXâ€™s followers on social media and website views continuously growing at a 20% increase year-on-year after Year 1 to ensure the brand is raising awareness.
OBJECTIVE 3 To become established within the retail industry gaining a positive brand reputation through building a trustworthy and reliant brand perception to gain client loyalty achieving a 70% customer retention rate.
OBJECTIVE 4 To communicate ConnectX as an innovative digital consultancy meeting connected consumers future retail needs today through offering unique, engaging experiences that allow retailers to consistently adapt to the market.
MARKETING MIX MODEL - 8pâ€™s PRODUCT Our product is a bespoke tailored service individualised and personalised to the unique retail company based on their individual brand. Our service is an in-store experience built through a unique software programme to offer retail consumers a fully human contact-less shopping experience. Our service is designed based on indepth research into the retail companies digitally native consumer and their evolving shopping expectations in-store.
PRICE We utilise a premium pricing strategy due to having a unique and innovative offering - our service offers a high level of added value as we develop a fully seamless all systems integrated software package consisting of high start-up costs and we provide on-going maintenance and installation included therefore this level of added value requires a premium pricing strategy in order for ConnectX to profit from. As the service ConnectX provide is innovative and unique with no competitor currently offering what ConnectX provide, we are able to use a premium pricing strategy. We also want our customers to have a high level of trust in our brand and perceive the service to be of high quality through utilising a premium pricing strategy this indicates the service to be of value and allows for our brand to be perceived as reliable and dependable. To ensure our premium pricing strategy does not deter customers away from our service, we offer a flexible service package allowing the customer to have a degree of control allowing them to choose from a range of installation sizes from a concession store to a large store which ranges in price to meet a range of financial situations.
promotion Place Weâ€™re a UK based company best reached through our online website we use as our portal to communicate with our customers. We are also reached through e-mail and telephone communications and our social media platforms. Our customers can use these platforms to book a consultation and arrange a meeting at our office headquarters. Our headquarters is based in London where we also distribute our hardware from our warehouse and deliver it to the retail space to be installed. Our place expands further to as we integrate our service into clients spaces; our place becomes the stores and pop-ups implemented with our service therefore we need to ensure our service is installed and run to a high quality as it will reflect on our brand.
ConnectX have produced an innovative communication strategy to differentiate themselves from competitors and promote the brand communicating effectively as a B2B company. We promote ourselves in the retail industry at relevant events to network and grow our awareness. We utilise advancing technologies within our communication strategy such as introducing augmented reality to reflect our brands offerings and message of being digitally innovative in order to stand out and engage our audience and gain a competitive advantage.
MARKETING MIX MODEL - 8pâ€™s people Our company is made of a skilled group of individuals with a specialist skill set. Our team work hard to make our creative ideas a reality therefore we ensure to treat our employeeâ€™s well providing a comfortable, creative and inspiring environment for them to work from with added perks as we know the happier our employees are the harder they work and the better our company performs. Our team of talented specialists help to set ConnectX apart from competitors with their expertise, specialised skill set and creative offerings.
Process Our customers buying process will usually begin through our website where they can book a consultation with our client and accounts manager at our headquarters to discuss a suitable tailor-made bespoke service package for their company to meet their individual needs and preferences in which our client and account manager will assist with. After ordering the desired service we order in the necessary components and programme the unique software within a quick turnaround time and aim to get the service delivered and implemented into the store/ pop-ups rapidly. We keep our clients informed and updated along the journey till installation day, so they can track the process. Our process continues after the instalment, we remain in consistent contact with our clients and provide on-going maintenance and support fostering a strong relationship with our clients after purchase to gain customer loyalty and retention.
philosophy Our philosophy here at ConnectX is to provide memorable, digitally innovative shopping experiences for the digital native consumer in-store that engage the consumer and add to their convenience meeting their shopping expectations whilst blurring the lines between physical and digital retail. As well as benefiting the consumer, the heart and soul of what we do is based around helping physical retail brands achieve their potential as ‘digitally forward’ brands allowing them to remain and thrive as a business in the digital era. We care about pushing the limits in what’s possible being the first on the market to provide new innovations to excite and engage – staying ahead of the game.
A marketing mix model was conducted to establish the key operations within the business to relay effectively within ConnectX’s communications to their customers to ensure the business remains responsible and lives up to the brands claims. The marketing model is also utilised as a strategy plan maximising the company’s chance of success and ensures ConnectX can differentiate themselves as a brand to compete.
physical evidence As our service is not experienced by the customer prior to delivery we must ensure to persuade our customer they are making the right choice purchasing our intangible service. With no physical attributes the customer relies on our brands physical evidence. We ensure our office facility and physical space exerts a professional appearance and shows our creative and innovative identity throughout with our brand colour palette showcased within our office. Our staff (such as our account and client manager) will come into contact with our customers and their perception of the staff will reflect their perception of the brand and service therefore it is important to us that our staff our highly professional and knowledgeable to communicate effectively. Our delivery of service will also affect how our brand is perceived by the customer therefore ensure a fast implementation plan to fit the service efficiently and to a high quality to ensure customer satisfaction and establish a positive perception of ConnectX.
SOSTAC MODEL 144
S T A C
ConnectX is currently in its introductory phase â€“ the start-up business currently has a low level of awareness.
ConnectX wants to grow its awareness and become more established within the market, growing their demand and website conversion rates. The company also want to increase their engagement and persuade their targeted audience whilst building trust, gaining brand name recognition and informing their audience. ConnectX want to share a consistent brand message, identity and tone of voice to differentiate themselves.
Build a user-friendly website that reflects the brand identity and informs the audience. Create an effective direct marketing strategy sending target audience a brochure package featuring augmented reality features to engage, persuade and inform the audience whilst spreading awareness. Create social media platforms for Twitter and Instagram to further interact and engage the target audience. Reach a wider audience and gain credibility through targeted print advertisement.
Define key words to represent business positioning. Engage audience in social media: Twitter: Tweet brand information / updates (20-25 tweets a week) Instagram: Upload 2-4 Instagram posts a week ensuring to add video content. Send brochure packages out to 50 potential clients of target audience over 10-months. Feature in a half page advertisement in the December issue of design:retail magazine.
Key words: Digital consultancy, digital innovation, retail, augmented reality, experience, customer satisfaction, brick-and-mortar experience, digital experience, customer engagement, personalisation, trends, market research. Add meta tags and content to the website. Set up Google My Business Account Follow targeted audience on Twitter and Instagram and interact with the clients.
Analyse website activity, bounce rates, session duration from Google Analytics Review the level of conversion (site visitors to paying customers) Review the level of conversion from direct marketing campaign and magazine advertisement leading to activity such as increase in online website views /social media following count/ sales/booked consultations. Analyse social media engagement levels.
COMMUNICATIONS STRATEGY OVERVIEW We will utilise a B2B communications strategy to target our potential clients integrating a series of digital and physical communication tools to reach our audience; informing, engaging and persuading retail companies. All communications will utilise a consistent brand message, image and tone to build our brand identity and differentiate the brand whilst utilising communications that align with the brand and our key messages.
SLOW BUILD campaign ConnectX will utilise a slow build campaign strategy initially as we are a small start-up company with a small-scale employee size therefore a slow build campaign strategy prevents our company being faced with high demand building too fast which we will be unable to keep up with.
Direct Marketing Campaign ConnectX do not need to initially reach a wide audience therefore direct marketing is a beneficial strategy for ConnectX to adopt allowing them to reach a manageable number of clients and target them directly which will be more effective for ConnectX. The direct marketing campaign will consist of a branded boxed package including a brochure sent to the potential clients. The box package and brochure will both allow for the receiver to scan particular interactive points using their mobile device to view augmented reality messages and videos in order to reflect ConnectXâ€™s innovative and exciting brand and inform the receiver in an engaging way. The augmented reality campaign helps to reflect ConnectX as a brand; adding a digital layer to the physical world to enhance the experience. The aim of the augmented reality campaign is to differentiate ConnectX from competitors by creating engaging moments to excite the audience. To ensure the brand initiate a slow build campaign and avoid high demand they are unable to manage, 50 brochure packages will be sent out gradually to targeted customers over a series of 10 months.
AUGMENTED REALITY ENABLED
In a world full of smartphones, AR campaigns are a very smart and unique way for brands to create hype and engage with consumers. AR campaigns resonate with consumers in a way that most other ad platforms fall short. (Agrawal, 2013)
Year 1 Strategy behind utilising a direct marketing campaign:
The direct marketing strategy allows ConnectX to directly target their small and specific group of customers which is a more effective approach to reach the right consumers. “The more targeted your campaigns, the more successful they are likely to be.” (NIBusiness, n.d.) Therefore, it is an effective strategy as they are able to grow their awareness targeting the relevant audience.
Due to initially targeting a small group of customers, ConnectX are able to personalise their direct marketing approach to the specific company they are targeting addressing their name and demonstrating why they personally need ConnectX showing how the retail company would use ConnectX’s service which meets the marketing aim of a personalised relevant marketing campaign.
With the direct marketing approach ConnectX is also to offer detailed information to their customers about their service utilsing video content and augmented reality interactions to further persuade them as to why they need ConnectX’s service which will allow them to meet their marketing objective of informing the audience in an engaging method.
The response rate can easily be measured by taking the number of customers who were sent the direct marketing and divide it by the number of customers in which responded to further enquire about the service to reveal the response rate. The success of the direct marketing strategy can also be measured through measuring ConnectX’s website views and social media follower count.
ConnectX is able to have control over their demand by strategically sending out the direct marketing brochures gradually altering the amount distributed depending on the level of demand coming in to allow control over demand to prevent a high demand that ConnectX are unable to meet which would affect their brand reputation.
Allowing clients to experience what their customers will experience in their stores if they work with ConnectX to further persuade the clients.
Augmented Reality enabled brochure 153
DIRECT MARKETING BOX PACKAGE The direct marketing campaign boxes will be branded and include an augmented reality enabled feature on the box to initially engage the audience. The box exterior will be pink inside to reflect the brands creative, exciting identity.
Online Communications strategy The online website will inform and persuade by showcasing ConnectXâ€™s work and the service they provide for potential new customers to view and book a consultation. ConnectX will also send personalised automated e-mails to interact with their existing and new customers to engage with them personally keeping them up to date of new services and updates encouraging engagement whilst keep them informed to build stronger relationships and loyalty to promote customer retention.
SOCIAL MEDIA ConnectX will be present across social media channels to engage and interact with their audience and communicate further utilising Twitter and Instagram primarily. ConnectX will focus heavily on engaging via social media platform Twitter as it is a corporate social media site ConnectX can use to network with other brands and their targeted audience of retail companies as ConnectX are a B2B company. ConnectX can use Instagram to engage visually informing and persuading with video content as their service lacks physical presence they can utilise video content to showcase their service. â€œMarketers who use video grow revenue 49% faster than non-video users.â€? (Impact, 2017)
VIDEO CONTENT UPDATES discussions engage inform interact
Weâ€™ve updated our service! come check out our work and see what our research has revealed! @connectX
Weâ€™re busy this week installing our service into lots of new stores!
Print Advertisement campaign After the slow build direct marketing campaign for the first 10 months, ConnectX can begin to spread their awareness further and reach a wider audience. ConnectX will communicate utilising a print advertising strategy to promote their brand and their service towards the end of year 1 via magazine; design:retail. ConnectX will have a half page feature in the December issue of design:retail featuring the work ConnectX have done within Year 1, showcasing their unique service to inform, engage and persuade the reader utilising their consistent brand identity to increase sales and awareness. Featuring in design:retail ensures ConnectX are reaching their direct audience as 55% of their print magazine readers are involved in the retail industry. (designretailonline, 2019) â€œdesign:retail is the most trusted industry voice for the next generation of brick-and-mortar retail. Encompassing all aspects of design, experience and innovation. (...) 73% of readers take action as a result of seeing advertisements in design:retail.â€? (designretailonline, 2019)
Total Average Distribution Per Issue: 22,200+
Year 1 Strategy behind utilising a print advertisement campaign:
The advertisement will reach a wide audience quickly to grow ConnectX’s awareness and will be targeted to the appropriate audience as the vast majority of readers are involved in the retail industry therefore the advertisement will be effective in reaching a wide range of ConnectX’s specific audience.
Utilising an established and trusted magazine will add credibility to ConnectX and their service as well allowing ConnectX to gain potential clients trust making them more likely to take interest in the brand which will lead to an increase in sales.
ConnectX can measure the success of the print advertisement through measuring the growth in sales generated after distribution of advertisement and tracking the rise in social media followers and website views and also calculating the customer acquisition costs to determine the effectiveness of the campaign.
The campaign is of relevance to ConnectX as the magazine design:retail focuses on retail trends and innovation therefore directly corresponds to ConnectX’s industry and there is a strong link between the publications content and what ConnectX offer therefore ensures they reach the relevant audience to inform and persuade effectively meeting ConnectX’s marketing objectives.
â€œ96% of readers are involved with the visual merchandising, store planning, design or in-store marketing of retail stores.â€? (designretailonline, 2019)
design:retail is where I stay connected to innovation. Whether it is new environments, new technology, someone doing something amazingâ€Ś design:retail is my connector. Amy Myers, Marketing Officer (designretailonline, 2019)
Awareness - ConnectX will make their customers aware of their brand through a targeted direct marketing strategy to ensure their marketing approach reaches the appropriate audience. The brand will also gain awareness through their online platforms; website and social media networks (Twitter and Instagram) which will raise their awareness as they interact with their target audience. Further brand awareness will come from a print advertisement in magazine publication design:retail which will reach a wide audience (over 22,000) regular readers majority of which are ConnectXâ€™s targeted audience therefore ensures strong brand awareness for ConnectX in the initial year.
Desire - Providing augmented reality videos within the brochure campaign showing the targeted audience videos of their consumers speaking about their altering shopping expectations and needs in the digital era will increase the retail brands desire for ConnectXâ€™s service as it will persuade them to want to fulfil the needs of their consumer through working with ConnectX who have designed a service specifically to meet their consumers needs which the retail company is currently failing to meet.
Interest - Relevant and targeted content will ensure the customer is interested and utilising an augmented reality campaign will provide a high level of interaction and engagement with the customer to stimulate interest. Placing an advertisement that is content related to retail experience and innovation in magazine publication design:retail will ensure the readers are interested in ConnectX as the publication is for readers interested in the latest retail innovations so this will ensure they are interested in the brand.
Action - ConnectX provide scannable links within their brochure campaign to allow for easy access to ConnectXâ€™s website to book a further consultation and allow the customer to further enquire about the service and ConnectX as a brand. The advertisement in design:retail publication promotes the reader to find out more by taking action to visit their website and book a consultation. Providing innovative methods to take action that add ease to the targeted audience will ensure they take action is taken.
DRIP MODEL d
Differentiate - ConnectX are providing a unique digitally innovative experience with a fully human contact-less shopping journey. The brand is different as they focus on predicting the future needs of consumers and design innovative services around these needs before competitors therefore their marketing campaign needs to also differentiate itself to reflect the brand and it’s unique offering. This is achieved through creating an augmented reality featured brochure that comes to life connecting the digital with the physical to reflect ConnectX and stand out from competitors introducing the innovative emerging technologies they are utilising to excite and engage their clients and gain a competitive advantage.
Inform - ConnectX will inform retail companies about their brand and the key features of their service through their direct marketing approach. The campaign will include the brand’s story, the service they offer, how they can benefit the retail company and why the company need ConnectX’s service. ConnectX will further inform their audience through their website, social media platforms and within their advertisement in design:retail showcasing what they offer. ConnectX will ensure to include video content utilising Instagram to inform their audience about their service via a visual method to allow the audience to further visualise the service allowing them to be further informed.
Reinforce - ConnectX is a digitally-savvy and creatively thinking brand helping retail brands continue to engage with consumers in the physical retail space. ConnectX meet the connected consumers altering needs and provide innovative services and in-store experiences utilising advancing technologies. This message needs to be reinforced within all marketing and communication strategies ConnectX utilise to remain consistent and build a strong identify reinforcing their message to ensure clarity and define their key message.
Persuade - As ConnectX do not initially have loyalty or a strong brand perception from their targeted customer they will persuade them to take interest in the brand through incorporating an advertisement in a well-established and trusted publication design:retail. ConnectX will persuade the audience that they need ConnectX’s service through utilising their clients consumer in their communications to express how their shopping expectations have shifted and why ConnectX’s service is the solution to meeting their needs in-store.
YEAR 2 & 3 COMMUNICATIONS GROWTH PLAN
Moving into Year 2, ConnectX will be in a strong position and can work to build further awareness and gain customers trust whilst continuing to persuade their audience. ConnectX will add testimonials from their previous clients to their website to deepen new potential clients trust and add to their credibility increasing their sales. It is important for ConnectX to establish trust as a start-up brand with high costs, customers want to be ensured before deciding to purchase.
RETAIL WEEK LIVE LAUNCHPAD ConnectX will attend Retail Week Live in March and participate within their ‘Launchpad Live’ competition that constitutes of start-up brands sharing their innovative business concepts to retailers. ConnectX will also hand out business cards to the audience that can be scanned via their mobile device to direct the audience straight to ConnectX’s website to initiate sales. This will be effective in informing the target audience through engaging and persuading whilst gaining trust within the retail industry. The strategy will reach over 1500 attendees with 60% in the retail industry to raise high levels of awareness providing an innovative engaging pitch to reflect the brand. “Retailers are forever seeking the next innovation that is going to disrupt the industry, so they can gain that competitive advantage. The Launchpad Zone at Retail Week Live will provide retailers with a platform to find that next innovation, while giving start-ups the opportunity to flaunt their wares to a room full of influential decision-makers in retail technology. (…) 20 of the most disruptive retail tech start-ups around showcasing their game-changing solutions to retailers who were looking to find the next big tech trend that could revolutionise retail.” (Retail Week Live, 2019)
BRAND PITCH AT RETAIL WEEK LIVE visual interactive ENGAGING PERSUASIVE CREATIVE
ConnectX will hand out interactive business cards to encourage action.
VISUAL ENGAGEMENT VIDEO CONTENT After establishing a strong sense of trust with their customers and a solid level of brand awareness the purpose of Year 3 will be to further engage, persuade and inform potential new customers and showcase their newest service. As ConnectX expand to develop a new service in Year 3, they will use video content to share the service with their audience. ConnectX will develop their online presence utilising YouTube to create a channel delivering inspiring, engaging and memorable video content to their target audience. The videos will showcase the new service and be able to show how it works and explain why retailers need it in their stores persuading and informing. It is important for ConnectX to be able to showcase their intangible service physically to persuade the audience and help communicate their offering. The videos will be distributed at the beginning of the third year (January-March) to launch the new service. The video content will also be posted on ConnectX’s website as, “The average user spends 88% more time on a website with video.” (WireBuzz, n.d.) The videos will be sent directly via e-mail and placed on the brands website and social media accounts.
Financial aims & Objectives 176
1 Aim - To become a highly profitable business enduring strong financial sustainability and maintain perpetual growth as the business expands to ensure for a strong chance of financial survival.
To increase ConnectXâ€™s sales year-on-year by a minimum of 15% annually to generate and sustain an increase in revenue as well as increase market share.
2 1 To produce a positive net profit figure by the end of Year 1 and continue to increase the net profit year-onyear consistently to endure strong financial growth generating a increasing positive return on investment annually.
3 To ensure ConnectX can sustain their business financially in times of turmoil when sales are less than expected or the company faces unexpected costs by ensuring they have taken appropriate precautions to continue to run the business.
RAISING CAPITAL Total capital to be raised was calculated through adding ConnectX’s total outgoings and costs of goods for the first 6 months of business and subtracting the first 5 months of revenue (may not receive the 6th month payment in time) and dividing the revenue by two as a caution if ConnectX only receive half the sales they predicted coming to a total of £120,000 needed to sufficiently run the business. This approach provides a realistic and rational figure acting as a caution if the best sales outcome is not achieved therefore ensures security if sales are lower than anticipated. ConnectX will raise the £120,000 capital through 3 revenue streams:
£120,000 Angel Investors £80,000
small bank loan £20,000
friends & family £20,000
ConnectX is a highly profitable business and makes a profit early on after beginning trading, this means they can initiate repayments to investors early therefore are an attractive business to invest within.
MARKETING BUDGET YEAR 1
Supplier is ‘Vistaprint.’ (£51 per 25 A5 brochures) 50 brochures = £102. ConnectX’s software engineers will be able to install the augmented reality features.
Use supplier ‘DS Smith’ purchase 50 boxes (£1.32 per box) x50 = £66
Royal Mail 2nd Class (£3 each) x50 = £150. Deliver 50 boxes over 10-month period.
design:retail Magazine Ad
The publication design:retail quote the cost of a half page advertisement will be a total of £3,722 for the December issue and ConnectX will pay 4 months prior.
ConnectX will utilise a CRM software using an app called Pipedrive to manage their customer relationships. The app service costs £12.50 per month from Pipedrive.
Launchpad Live Entry
Entering Retail Week Live and promoting via the Launchpad Live pitch has an entry fee of £2,100 which will be paid in January (Retail Week Live is in March)
ConnectX will continue to use the CRM software costing £12.50 per month.
Video Production Company
Video production company (‘Knuckle’) will be used to create video content. The company quote their prices are 1k-3k per video. ConnectX will have pay for a minimum of 3 videos. (Average of 2k per video x3 = 6k)
ConnectX will continue to use the CRM software costing £12.50 per month.
START-UP COSTS Employees
Development Software Engineers X2
ConnectX need two software engineers as a technology focused company building a unique software programme and be able to update and maintain the service regularly. Both will be paid an average software engineers’ salary of £35, 275. (X2 = £70,514)
Market Researcher (Intern)
ConnectX’s offerings are based on market research as they build new services by predicting changes in the market therefore ConnectX need a market researcher, so they can adapt their service accordingly. ConnectX will use a graduate on an intern scheme to save costs.
Project Manager (Founder)
The founder of ConnectX will be the project manager for ConnectX in charge of ordering supplies, inventory and the on-site manager for installations as well as the manage marketing. As the founder of the company, the project manager will be on an initial low wage to keep costs down.
Account and Client Manager
To generate sales and maintain relationships with customers and build strong levels of customer satisfaction ConnectX will employ an account and client manager to sell to potential clients helping to tailor ConnectX’s service to the client and to increase revenue.
X2 Extra Software Engineers
As demand builds moving into the second year of the business, ConnectX will hire a 2 extra software engineers to help manage the demand. ConnectX will hire a junior software engineers to cut costs who will be managed by the senior software engineers. Salary = £25,000 (X2) = 50k
Extra Account and Client Manager
Build up of demand will also mean ConnectX will need to hire another account and client manager within Year 2 so they can reach as many potential clients as possible and continue to provide strong levels of customer service to existing customers and meet their demands effectively.
ConnectX will need to rent a warehouse to keep stock such as the interactive screen kiosks for the software engineers to programme and this will create an effective ordering process for the clients as the stock will be ready within the warehouse to be delivered and installed.
ConnectX will need to have a place for their team of employees to work from therefore the company will rent an office annually in which the team can work together from. This will be the company’s headquarters (based in London) where meetings with potential clients will take place. (£25 per day) ConnectX will use the office approximately 354 days a year (x25) = £9,100
ConnectX must register at company’s house when they start up before they begin to operate. Online registration fee costs £12.
Telephone & Internet
In order for the business to run telephone and internet costs will need to be accounted for. ConnectX will use internet provider company TalkTalk and pay for the cost of a deal package that includes telephone and internet services for £17 a month (x12 months) = £204
The company will need 5 computers for the initial employee staff team in Year 1 (5 employees) as their work will require computers to work from in the office. Each computer is an average of £1,049 these will be an investment at the start of the business and count as depreciation.
As ConnectX’s work involves installation work they need to be covered by public liability in case someone becomes injured in some way by the business or if the business damages third party property (as installations are taking place in clients stores and pop-ups.) The employee’s liability insurance will cover the business if an employee becomes ill or injured as a result of working for the business. Accidental and moving insurance has been added to protect the company from accidents that occur when moving large machinery. The cost was quoted from ‘Simply Business’ insurance company for an annual cost.
SERVICE COSTS OUTGOING
X2 Installation workers will be hired per day of installing or deinstalling ConnectX’s service within stores or pop-ups. The workers will be paid an average wage £11.65 (8-hour day). (£93.20 each) (£186.40 for both per employees per day)
£186 (per day)
Digital Screen Interactive Kiosk
ConnectX’s service requires a minimum of 1 digital touchscreen kiosk screen per store/pop-up. The touchscreen kiosk is the digital instalment in store where customers can retrieve online orders, send returns, make a payment or pick up items in their size/requested colour. The average price for a digital instalment screen is £1,500 from company ‘Teksmart’.
RFID tags will be placed on the tags of each garment in-store as well as in the items in the stock room. These tags will be taken off after purchase and will be reprogrammed to be re-used. Prices are £140 per 1000 tags. Supplier: (AliExpress)
£140 (per 1000)
Stores or pop-ups implementing ConnectX’s service will need a minimum of 1 beacon hardware implemented into the store/pop-up to be in frequency of the consumers with a mobile device whilst they shop in order for the service to work effectively. The number of beacons needed will depend on size of store/pop-up. Price per beacon = £17 (Supplier = Accent Systems)
A software programme is a vital part of ConnectX’s service and the software programme will be uniquely programmed. ConnectX received a quote from ‘Soltech’ an IT support and services organisation for the custom software programme to cost the company a minimum of £38,000. The software will be renewed every 2 years as the company develops new services.
SERVICE COSTS: CONCESSION STORE (cs1)
SMALL STORE (Ss3)
1000 RFID Tags
2000 RFID Tags
X1 Digital Screen
X1 Beacon Hardware
X2 Digital Screens X3 Beacon Hardware
1 Day Install/1 Day Deinstall
2 Day Install/1 Day Deinstall
1 day install / 1 day de-stall TOTAL:
1 day install / 1 day de-stall TOTAL:
pOP-UP STORE (PS2)
LARGE STORE (LS3)
2000 RFID Tags
5,000 RFID Tags
X1 Digital Screen
X2 Beacon Hardware
X3 Digital Screens X5 Beacon Hardware
3 Day Install/1 Day Deinstall
1 day install / 1 day de-stall TOTAL:
CONCESSION STORE = cs1 pop up store = ps2 small store = ss3 large store = ls3
1 Day Install/1 Day Deinstall
1 day install / 1 day de-stall TOTAL:
TYPES OF SERVICES:
SERVICE revenue/charge CONCESSION STORE (cs1)
SMALL STORE (Ss3)
1000 RFID Tags
2000 RFID Tags
X1 Digital Screen
X1 Beacon Hardware 1 Day Install/1 Day Deinstall
X2 Digital Screens X3 Beacon Hardware 2 Day Install/1 Day Deinstall
1 day install amount: / 1 day de-stall charging
1 day install amount: / 1 day de-stall charging
£3,000 £51 £558 £9,000 £12,889
pOP-UP STORE (PS2)
LARGE STORE (LS3)
2000 RFID Tags
5,000 RFID Tags
X1 Digital Screen
X2 Beacon Hardware 1 Day Install/1 Day Deinstall
X3 Digital Screens X5 Beacon Hardware 3 Day Install/1 Day Deinstall
£4,500 £85 £744
1 day install amount: / 1 day de-stall charging
1 day install amount: / 1 day de-stall charging
SOFTWARE: CS1 = £3,000 PS2 = £6,000 SS3 = £9,000 LS4 = £12,000
repeat purchase cost / charge (software only) Cost
(See Appendix 12 for workings)
SALES FORECAST YEAR 1
1 1 1
APRIL NUMBER OF JOBS
NUMBER OF JOBS
SALES FORECAST YEAR 3
NUMBER OF JOBS
3-year sales growth YEAR 1
NUMBER OF JOBS
EXPLANATION The sales forecast shows a positive increase in sales within the first 3 years. Year 1 will endure slow demand due to the slow build campaign however, as ConnectX approach Year 2 the marketing increases significantly to increase demand in which ConnectX will cope with by employing additional staff. Year 3 will then endure a further increase in sales as they introduce the new service. Sales in Year 3 are the maximum ConnectX can cope with therefore if more demand comes through, ConnectX will have to take future bookings as they also have renewal of services to cope with and on-going maintenance they must take this into account to ensure they can ensure quality. This means for future expansion ConnectX will need to employ further employeeâ€™s in Year 4 to manage effectively.
PROFIT & LOSS ACCOUNTS year 1 Total Revenue
Cost of Goods
Breakeven in November
ConnectX has high initial launch fees as they invest in their software programme to enable their service for the first two years. The depreciation accounts for the software programme, X5 computers and the business registration.
year 2 Revenue 1 (New Sales)
Revenue 2 (Repeat Sales)
Cost of Goods (New Sales)
Cost of Goods (Repeat Sales)
Total Costs of Goods
Breakeven in March
In Year 2, depreciation costs decrease as the software programme purchased in Year 1 is for two years. ConnectX employ 3 additional employees therefore their overheads increase. Due to their increase in demand from their marketing strategy their revenue is significantly higher, they also have an additional revenue stream as repeat purchases and new purchases come in resulting in the brand producing a large increase in net profit and sustaining high levels of success. Depreciation is for 3 additional computers for the new employees.
PROFIT & LOSS ACCOUNTS year 3
Revenue 1 (New Sales)
Revenue 2 (Repeat Sales)
Cost of Goods (New Sales)
Cost of Goods (Repeat Sales)
Total Costs of Goods
Breakeven in March
Year 3 is another investment year as the company purchase a new software programme to provide an updated service meeting the new predicted needs of their client’s consumers making up their depreciation figure.
3-year profit & loss overview YEAR 1
ConnectX prove to be a highly profitable company making a positive net profit at the end of their first year therefore demonstrate the company to have a strong internal financial situation meeting their inital aims and will not need further investment to grow and can begin to pay back their investors after their first year demonstrating the company to be an attractive business to invest within. The profit and loss overview show the business will meet their aim of exerting strong growth to be in a strong financial situation by the end of Year 3 to begin expanding their markets and extend their team to manage their growing demand.
cash flow forecasT The cash flow forecast highlights ConnectX to thrive with the additional cash injection from investors to allow the business to begin trading. The forecast shows the business will be able to maintain a positive closing balance each month ensuring security for the business.
Outgoings Opening Cash
sensitivity analysis year 1 year 1
Cost of sales
Cost of sales
risk assessment The sensitivity analysis assesses the possibility of sale fluctuations by a 20% increase or decrease in order to eliminate risk. The net profit remains positive with a 20% decrease in sales (£13,235) this shows there is a low risk in Year 1 as ConnectX are able to maintain a sufficient profit if sales are 20% less than predicted ensuring success for the company.
year 2 risk assessment The sensitivity analysis within Year 2 continues to show low risk. Net profit in Year 2 is set to increase further to £214,948. The sensory analysis shows a 20% decrease will result in ConnectX still producing a healthy net profit of £171,959 therefore there is a low risk for the business and it shows ConnectX are set to continue to succeed financially in Year 2.
sensitivity analysis year 3 year 3
Cost of sales
risk assessment In Year 3, the net profit will expand again to £306,946 showing the business to be increasingly succeeding in the first 3 years of trading. A 20% decrease on sales shows to have little effect on the business with ConnectX still making £245,557 net profit which is a healthy figure to continue running the business effectively with a low risk. This shows the business to be financially feasible and indicates success in the future as the business grows with appropriate caution taken to ensure success.
measures of success kpi
ConnectX will measure the consumers satisfaction through adding in ratings of the service into the app utilised within the service for the consumers to rate their experience using the service to generate feedback ConnectX can analyse.
It is important for ConnectX to measure the consumers satisfaction to see how long the technology being utilised is relevant for so ConnectX can adapt as consumer satisfaction begins to decrease so they can keep their clients innovative and satisfied.
To measure the customers satisfaction rates and overall loyalty and retention rates ConnectX can calculate the customer churn rate to see how many customers did not repeat a purchase therefore were unsatisfied with ConnectX’s service. This can be calculated from dividing the number of customers lost (those who did not repeat a purchase) by the number of customers at the start of the period to calculate the customer churn rate.
Customer retention and loyalty is particularly important to ConnectX as a B2B company who sell a service designed to be expanded and repeated the following year. ConnectX relies on repeat purchases for success therefore providing strong levels of customers satisfaction to ensure loyalty and retention is vital. Measuring the customer churn rate can help to indicate how well ConnectX are performing and how satisfied their customers are. ConnectX can use this information to adapt, to better their relationship with customers through CRM.
To measure ConnectX’s employee satisfaction the company will send out online surveys for their employee team to fill in to check their overall satisfaction level working for ConnectX. To measure ConnectX’s employees progress, each employee will be set a series of objectives every 4 months which will be reviewed at the end of the target period. Progress towards each objective is scored and then new objectives are set to ensure the employees have a focus/target.
ConnectX’s employees are vital to the running of the company and it is therefore highly important the employees are satisfied as the more satisfied the employees are, the harder they will work for the company. Ensuring ConnectX’s employers are working efficiently and are productive with set goals allows the company to work fast and achieve more sales and implement their service into more retail companies’ spaces boosting the company’s revenue. Giving the employee’s targets allows the employees to have more purpose and boost motivation.
ConnectX can look at the number of new customers they are acquiring compared to their predicted amount to test if the brand has sufficient brand awareness. ConnectX can also measure the number of new customers viewing ConnectX’s website and following the brand on social media which should be tracked to ensure it is rising progressively.
Customers awareness of ConnectX is vital to ensure success of the business as the more awareness means the more potential customers ConnectX have and the more sales. Brand awareness also helps the brand to become more trustworthy therefore ConnectX must ensure their awareness is increasing through tracking to ensure they are succeeding and adapting accordingly if awareness is not increasing.
Employees satisfaction & progress
ConnectX can measure the effectiveness of their marketing strategies through calculating the growth in percent of sales after distributing each communications strategy and also measure the increase in social media followers, interactions, website views and conversion rates. ConnectX can use ‘ROAS’ (return on advertising spend) to evaluate the efficiency of investment in an advertising campaign; (sales from investment – cost of investment)/cost of investment.
Measuring the success of the marketing and communications strategies establishes how successful the strategies were and therefore indicates whether the strategies work for ConnectX and where they are least effective for future reference to ensure their marketing and communications strategy is effective, engaging and reaching their audience. It also ensures their marketing budget is being spent effectively so they can adapt their strategies accordingly to ensure the marketing strategies are effective.
nET PROFIT MARGIN
ConnectX can measure their net profit by calculating if their profits outweigh the loses. This should be used as a benchmark to review their performance over time and they can compare their profitability yearly.
The net profit margin will indicate how well ConnectX are performing and whether they are succeeding by generating a return. ConnectX can compare their net profit margin to their projected net profit margin to see if they are meeting their projected targets to measure success.
Revenue / sales growth rate
Comparison of ConnectX’s actual revenue in comparison to projected revenue should be calculated, evaluating the discrepancies between the two to observe how the company is performing. The company will also measure the percentage of increase in sales over two time periods to help ConnectX to track if sales are increasing and measure the popularity of the service.
Tracking the actual revenue ConnectX receive in comparison to the projected revenue will help to measure their performance to establish if they are underperforming from their targets. Measuring their revenue growth ensures they can implement new strategies to increase their revenue growth if they need to. ConnectX need to track they are performing well and ensure there is an indication of sale growth in order for the business to grow and succeed.
return on investment (ROI)
ConnectX can evaluate the efficiency of their investment to establish how much return they are receiving after their investment costs to see if their investment is paying off and they are generating a profit. To calculate this ConnectX can use ROI (Return on Investment; ROI = (gain from investment – cost of investment)/ cost of investment.
Measuring the return on investment will help ConnectX to establish if they are performing well and generating a profit after their high investment start-up costs and if not, they can implement a strategy to change this to make sure they start seeing a return on their investment in order to succeed as a business therefore it is important for them to measure their return on investment.
measures of success analysis
Key performance indicators were identified utilising ConnectXâ€™s aims and objectives to ensure the business can assess how well they are performing and measure their success. The businesses performance is measured to indicate how effectively they are achieving their goals, so they can track their progress and adjust accordingly if they identify they are underperforming in a particular area which will help to ensure success for the business if they continue to track their progression and make suitable adjustments. The measurements can also be used for ConnectX to compare their performance from previous campaigns or time periods as a comparison to see what works well for the business. ConnectX can also utilise the measures of success to set future goals and aims based on their tracked achievements to continue to succeed.
risk assessment (internal) rISK Small start-up team of employees Threat Level: 4
Potentially controversial service (fully human contact-less experience) Threat Level: 2
Low brand awareness and lack of establishment in market. Threat Level: 4
Limited Target Audience (Fashion Retailers) Threat Level: 2
The small start-up team being unable to handle high levels of demand will mean the service will not be implemented properly if the small start-up team take on more than they are capable of handling and result in dissatisfied customers leading to a lack of loyalty and negative brand reputation.
To prevent the risk of high demand and not enough staff ConnectX will need to control the level of demand they have coming in. ConnectX need to utilise a slow build communications strategy to gradually gain demand. As demand increases, ConnectX need to employ more staff within Year 2 to allow them to better handle their demand and prevent dissatisfied customers that could risk the brands reputation and loyalty with customers.
The service can be viewed as controversial as society worries about humans being taken over by robots and the concerns over a lack of physical contact being unhealthy. The impact of ConnectX having a potentially controversial service offering will be a lack of demand and lack of sales from retail companies ConnectX target which will result in the business not succeeding in the future.
ConnectX need to communicate the benefits of the service and inform the retail companies that their customers are anxious around speaking to retail staff and communicating physically and that they donâ€™t want to disconnect from their mobile devices therefore the service ConnectX offer meets their needs therefore ConnectX can encourage sales and demand.
The risk of ConnectX not being established entering the market with a lack of brand awareness will mean customers will lack trust within the brand and choose to work with a competitor of ConnectX who have established themselves and have a recognised brand name the customer feels they can trust over a new start-up brand.
To prevent this and establish themselves, ConnectX need to exert a strong brand identity and unique offering to differentiate themselves and grow their awareness rapidly through an innovative marketing and communications strategy to ensure companies are willing to work with the brand and trust them. Through this they will be able to gain market share rapidly and prevent the threats that are caused from being a start-up brand entering the market.
The risk of ConnectX being limited to a particular target audience (fashion retailers targeting digital native consumers) is eventually the market may become saturated and ConnectX will not be able to expand as a company and will begin to decline in sales and revenue.
ConnectX can prevent this through predicting trends to build new services therefore their existing customers will consistently purchase new services from ConnectX which means they continue to generate sales. ConnectX can also to enter the beauty or footwear market as well as the sports fashion market and adapt the service offering for these markets to generate a wider audience and boost their awareness and demand.
rISK Predicting Market (May not always succeed) Threat Level: 5
Damage / Accidents caused by ConnectX. Threat Level: 4
Service Function Threat Level: 3
As ConnectX predict the next zeitgeist of the moment and build their services around this, it is unlikely these predictions will always pay off and therefore is a risk for the company as if the consumers are not satisfied with the service and the predictions were not correct it will result in low customer satisfaction and therefore lack of demand and poor brand reputation. There is also multiple client types to cater for (for example sportswear behaviours are different to event wear behaviour) therefore it is unlikely the services based on predictions will produce 100% satisfaction for all.
Although it is likely not every prediction and service integration will pay off this is the exciting and daring aspect of the brand ConnectX therefore ConnectX must ensure they do extensive research and make strategic predictions as well as undergo thorough concept testing to ensure their predictions are likely to do well and generate demand and eliminate risks. However, they will need to take risks as this is part of their business and the company will see some predictions pay off better than others however ConnectX identify themselves as daring risk takers therefore should continue to maintain this.
ConnectX face a risk of damaging third party properties or members of the public due to their work involving installing large machinery and electrical goods. They also risk accidents occurring moving electrical machinery and installing machinery as well as risk of employeeâ€™s becoming ill or injured as a result of working for ConnectX. These risks could result in ConnectX being faced with large fines and potential lawsuits which could jeopardise the business.
To prevent this risk, ConnectX must take out Employeeâ€™s liability insurance cover which will prevent the company being faced with large fines if injury or illness occurred amongst the employees. ConnectX can also prevent the risk of large fines through public liability insurance as well as business accident and moving insurance which will protect ConnectX from the risks of liabilities imposed by lawsuits and similar claims to prevent the business facing financial difficulty if faced with a lawsuit or fine.
As ConnectX are providing an innovative unique service not been previously done, there is a risk of the service not working as predicted or requiring more maintenance then previously predicted which would affect the business functioning.
Inevitably with a unique new service offering factors may not work as planned, however ConnectX will overcome this by adapting their service if errors occur and hiring additional staff if the service proves to requires more maintenance than previously expected.
Threat Level: 1-10 (1= Low / 10 = High)
risk assessment (external) rISK Existing competitors and emerging new competitors Threat Level: 6
ConnectX’s unique and innovative service being copied. Threat Level: 4
Clients experiencing financial difficulties Threat Level: 2
The existing competitors and emerging competitors in the market post a risk to ConnectX as they take a proportion of the market share and take away potential clients from ConnectX as they build relationships and have their own competitive advantages with their offerings. They also post risk to ConnectX as they develop innovative services for retail companies and existing competitors have a higher level of experience, brand awareness and established loyalty with retail brands.
ConnectX can prevent the risk of existing and emerging competitors taking the market share through focusing on their unique selling predicting the market and providing digitally innovative service first to differentiate themselves from competitors to stand out to the potential customers as an innovative and adaptive brand. To compete with the experienced existing competitors, ConnectX need to hire experienced employee’s and grow their brand awareness fast to compete with competitors through a strong and innovative communications strategy.
As ConnectX have no legal protection over their innovative and unique service, competitors could copy the service and offer a similar service themselves therefore ConnectX would no longer be unique and would lose their strong position within the market. Retail brands ConnectX target could also attempt to integrate the unique concept of ConnectX’s service into stores without ConnectX’s help therefore they wouldn’t be needed or make sales and their unique service would have been copied.
It is challenging for ConnectX to prevent their unique service being replicated by competitors or by their potential buyers however ConnectX need to ensure they are first to market with their unique offering from predicting the market. Once competitors begin to copy ConnectX can bring out the next service they have been working on to stay innovative and unique. ConnectX also need to establish strong relationships with their potential buyers and build trust to keep customers choosing their brand and communicate their message of high quality and expertise that they offer.
ConnectX are targeting brick-and-mortar retailers who may be experiencing financial difficulties as the rise of e-retail has negatively affected physical retailers therefore they may not have the finances for ConnectX’s relatively high cost service and therefore ConnectX risk not experiencing high demand or making enough sales.
To prevent ConnectX from not making sales due to their customers financial situation ConnectX are offering different installation costs to meet the needs of their customer. ConnectX offer 4 types of installation which increase in price from a concession store to large store therefore offering a level of flexibility and range in price. The clients also have choice over the number of stores/pop-ups they wish to install the service into to give them some control over the finance and allows the service to meet all financial situations to keep ConnectX experiencing demand and making sales.
rISK Increasing closure of physical stores Threat Level: 3
impact The rise of e-retail continuing to increase may continue to cause closure of physical stores therefore ConnectX risk losing business opportunities as their service is for a physical space and more physical retailers may shift to solely online platforms. As their target audience shrinks and they have less stores to implement their service into, there is a risk of a decrease in sales.
prevention To prevent ConnectX losing physical stores to implement their service within, the brand can expand to target digitally forward online retailers and offer pop-ups that implement their service and allows them to remain digitally innovative with an offline presence, preventing ConnectX from losing sales. ConnectXâ€™s service will also help to prevent store closures as ConnectX aim to help retailers increase footfall by creating a digital experience in-store therefore will prevent store closures and benefit the physical retailers therefore lowers the risk of store closures.
A combination of internal and external potential risks that could render the business have been thoroughly analysed and considered in order to ensure all potential threats can be eliminated and prevented. A method of prevention for each risk has been formulated to increase the businesses chances of success. The majority of risks identified exert a moderately low risk to the business therefore ensures ConnectXâ€™s business is not a high risk and the business can thrive through following the necessary preventions for the risks identified.
Growth timeline 206
Brand Creation Initiate Slow Growth Inform & Persuade
YEAR 2 Build Awareness Establish Brand Gain Customer Trust Grow Team
Introduce New Service Brand Expansion Customer Retention
3-year Growth Plan YEAR 1
Year 1 will be the start-up year for ConnectX consisting of the creation and launch of the brand and will focus on a slow growth strategy acting as a foundation year to build upon. The focus will be to inform and persuade through innovative personalised communications to begin growing awareness and generating sales. Towards the end of the first year ConnectX will be in a strong position to grow their demand further through producing a publication advertisement in design:retail magazine that will reach a wide audience consisting of their target audience to grow demand as they approach Year 2.
Build website traffic Reach 1000 followers on Instagram Reach 3000 followers on Twitter Obtain at minimum of 12 clients Install a minimum of 30 jobs Create a strong base to build upon.
As ConnectX enter Year 2, the company will experience an increase in demand following the advertisement at the end of Year 1. ConnectX will cope with demand after the additional employment of two additional software engineers and an extra client and account manager. Year 2 focuses on building the brands awareness further and establishing the company within the market whilst gaining credibility and trust from customers. ConnectX will be focusing on researching into the market to predict the new zeitgeist of the moment and begin planning their next service to remain innovative. By the end of Year 2, ConnectX will be in a strong position having built up a large level of awareness and having begun to gain customers trust and establish the brand.
Grow brand awareness by 30% Become established within market Gain customer trust Increase website traffic by 20% Grow social media following by 20% Increase number of clients from Year 1 Increase sales and revenue from Year 1
Year 3 will be an investment year for ConnectX as they will purchase a new software programme to begin integrating their new service offering based on their new market predictions in order to remain innovative. The year will constitute of expanding the brand growing the awareness and generating new customers as well as focusing on the retention of existing customers. ConnectX will showcase the new service through editorial video content to inform, engage and persuade their clients through reinforcing their message or innovation and meeting consumer needs. By the end of the third year ConnectX will be in a strong position adapting their offering to remain innovative and maintain client and consumer satisfaction.
Expand and grow brand further Effectively promote the new service Increase brand awareness by 30% Grow social media following by 20% Continue to increase sales and revenue Maintain high levels of customer retention
ConnectX have built their brand and maintained consistent growth over the first 3 years to position themselves in a strong position to move forward with a high level of brand awareness and increasing client base with high customer retention levels and generating an increasing net profit annually. ConnectX can begin to expand into new markets and customer bases to grow further.
our FUTURE EXPANSION Opportunity Expanding into New Markets
Expanding Customer Base
Adapting the service and offerings
JUSTIFICATION As ConnectX prosper to become highly established within the market and grow their awareness and obtain market share meeting their initial aims and objectives, the company can plan to expand and grow for the future with multiple avenues to institute growth for a sustainable future. There is vast opportunity for ConnectX to emerge within new markets such as beauty retail, sports fashionwear or footwear adjusting the services they offer accordingly to grow the brand and gain new customers increasing the brands awareness and growing sales and revenue.
ConnectX can grow their brand through expanding their customer segment which has initially focused on offline retail companies with a physical space. ConnectX can develop to target strictly online retail companies who lack an offline presence however are established as digitally forward and can use ConnectX to grow their digitally forward perception whilst expandind their offline presence. Online retailers can integrate ConnectXâ€™s service into pop-up instalments that can promote their brand as a marketing strategy.
As ConnectX is a research-based company predicting changes in the market, emerging trends and advancements in technology, this means the company has further opportunity in the future to grow their business and be sustainable through adapting their services and producing new innovative offerings to meet the evolving consumers expectations as they change to help their customers continue to stay digitally forward and evolve. As the market will inevitably continue to adapt and evolve ConnectX can continue to build retail solutions for retailers providing extensive opportunities within the future to remain relevant and sustain demand. These opportunities allow for ConnectX to have a highly sustainable and prosperous future re-imaging retail.
â€œThe future will belong only to those capable of exponential rates of innovation.â€? (Pine and Stephens, 2017)
Objectives Review 214
The objective was successfully achieved through establishing an opportunity from stage 1 to bridge the gap between online and offline experiences by predicting the needs of the digitally native consumer to disrupt the retail industry creating new and exciting unique experiences pushing the boundaries within the existing market through predicting the next zeitgeist of the moment, creating daring innovative services – re-imaging retail.
ConnectX were able to establish a unique offering from analysing the competitive market; observing a gap to create unique in-store experiences that consistently meet the needs of the digitally native consumer through predicting the market providing digitally innovative services (such as their human contact-less experience) to effectively differentiate themselves and standout in the growing market.
Extensive primary research was conducted to ensure the concept would succeed and build demand. Industry experts such as retail managers were used to gain vital knowledge and understanding of the realistic feasibility of the brand and it’s offering to successfully achieve the objective. Inability to obtain feedback from competitors in the digital consultancy industry is a weakness within the success of the objective as the knowledge and experience would have been valuable. Reflecting on this, in the future other methods to contact industry experts would be utilised to benefit research.
ConnectX were able to successfully communicate their brand to their targeted audience through direct approaches and establishing themselves within the retail industry gaining credibility and maintaining a consistent brand identity. ConnectX reflected their brand and unique offering within their communication strategies through innovative strategies to showcase ConnectX as a digitally forward and creative brand which differentiated the brand from competitors.
A realistic estimate of the company’s financial plan was developed considering how the company will manage if sales are not as high as anticipated to prepare for a worst-case scenario therefore the financial feasibility was successfully investigated showing the business to have strong potential to be a profitable thriving business. Potential risks and methods to measure performance were thoroughly considered to ensure the project objectives have been met sufficiently and ConnectX will generate success.
(Refer to Objectives, pg 11)
ConnectX have developed an effective, feasible business proposal cultivated from an emerging opportunity utilising key insights used as the driving force to formulate the brand and define their unique selling point; predicting the future market to provide innovative and daring digital in-store experiences meeting the zeitgeist of the moment which differentiates ConnectX in the market. ConnectX will endure success entering an attractive market exerting high demand as consumer experiences become essential within the retailing industry. The business plan meets the initial set objectives demonstrating ConnectX to be on target to become highly established as marketplace leaders within the market by 2025 with extensive potential for a sustainable future with multiple avenues to expand within markets and consumer bases whilst continuing to adapt as consumers behaviours evolve to consistently innovate. ConnectX exhibit strong financial growth year-on-year and are on track to be a highly profitable business. The company have produced a strategic and effective plan to endure steady growth and provide them with a strong prosperous future as an innovative, strategic and daring start-up brand.
WEâ€™RE already PREDICTING THE future market and designing our next innovative experience. stay tuned stay connected