COURSEWORK2 DISTRIBUTION REPORT (INDIVIDUAL 30%) CHRISTINA THORDAL ANDREASEN BA (hons) FASHION MARKETING & COMMUNICATION LEVEL 5, 2017-2018 5FAMK004C MARKETING TECHNIQUES & STRATEGY 2 CWK2 RETAIL MANAGEMENT & DISTRIBUTION SYSTEM ANDREA ROMERO & ABEL DIAZ WORDS 2.125
TABLE OF CONTENT INTRODUCTION & METHODOLOGY...............................................................p.4 1. RESEARCH .......................................................................................................p.5 2. STORE MANAGEMENT PLAN........................................................................p.7 2.1 PROPOSAL........................................................................................................p.8 OBJECTIVES.............................................................................................................................p.8 PROPOSAL.................................................................................................................................p.8 SPACE MANAGEMENT..............................................................................................................p.8 CATEGORY MANAGEMENT ....................................................................................................p.10 VISUAL MERCHANDISING ...................................................................................................... p.11 PROMOTIONS AND SALES STRATEGIES...........................................................................p.13 HUMAN RESOURCES............................................................................................................p.13
3. FINANCIAL PLAN & CONCLUSION.............................................................p.14 ROI CALCULATION...................................................................................................................p.15 MONITORING AND EVALUATING MAIN STORE PERFORMANCE KPIâ€™S.............................p.16
BIBLIOGRPHY.....................................................................................................p.17 ANNEX..................................................................................................................p.25 1.1.INTERNAL ANALYSIS..........................................................................................................p.26 TIMELINE................................................................................................................................p.26 TARGET....................................................................................................................................p.26 SEGMENTATION......................................................................................................................p.27 PERSONA.................................................................................................................................p.32 BUSINESSMODEL...................................................................................................................p.32 MARKETING MIX....................................................................................................................p.33 COMPETITORS........................................................................................................................p.45 SWOT (STRENGHTS & WEAKNESSES).................................................................................p.48
1.2 EXTERNAL ANALYSIS...................................................................................p.49 EXPANSION STRATEGIES......................................................................................................p.49 COMMERCIAL AREAS IN BARCELONA & RETAIL RENTAL RATES....................................p.52 COMMERCIAL MIX OF MAIN STREETS IN BARCELONA.....................................................p.59 SWOT (OPPORTUNITIES & THREATS).................................................................................p.61
INTRODUCTION & METHODOLOGY With reference to previous report, debating the
Online buying is increasingly gaining a level of consumption normality, and the current state of retail is shifting dramatically, as businesses gradually embrace options for omni-channel distribu-tion. This change has left the British-founded online fast-fashion retailer, ASOSâ€™ method of pure online operations with shortcomings, as the 2018 Initially, the paper offers a thorough research, e-commerce landscape requires a level of phys-ical analyzing internal and external brand and market interaction and touch points with the consumers structures for respectively ASOS and the Catalo- (Popomaronis, T., 2017). This concept of social-fasnian Capital, Barcelona, based upon an extensive hion, causes distribution methods as ASOSâ€™, to gathering of qualitative and quantitative materials. extend or convert the business model and behaviAdditionally, the research includes a descrip-tion our to omni-channel or O2O2O model premises, the chosen location and format selected to open bridging online and offline buying experiences in the store. Secondly, the research is accustomed to order to meet current consumer shifts and global proposing ASOS with a retail strategy to open and economic, technological and industry changes run a brick-and-mortar fashion retail space in Barcelona. Finally, the proposal viability is analyzed by calculation of Return of Investment (ROI) and evalua-tion of the main retail KPIâ€™s to assess the profitability of the proposed initiative. current and future state of e-commerce as a distribution method, this paper identifies a retail strategy in order to meet previously acknowledged market trends and to maintain the success of formats as e-commerce.
1 RESEARCH BASED UPON INTERNAL & EXTERNAL ANALYSIS IN ANNEX.
Based upon an extensive gathering of qualitative
and quantitative material in analysing internal and external brand and market structures of ASOS, the research has found significant opportuni-ties for ASOS to explore millennial-driven markets such as Barcelona, during popular seasons with high pedestrian flows in main commercial areas. Therefore, this proposal suggests an opening of a brick & mortar space in Barcelona, as the market of interest (Annex, Exhibit 1.2.4, SWOT, Opportunities & Threats). The format of retail store selected for ASOS top open in Barcelona, exists in a pop-up concept, despite, leaders of ASOSâ€™ strong standing against offline distribution (Annex, Exhibit 1.1.6 Marketing Mix, Distribution). This concept offers a market-orientated business model of a temporary merging of online and offline distribution, in order to meet the current consumer shifts and revolutionised state of consumption1.
1 See previous report on the distribution method e-commerce p.10-12.
This retail format, moreover allows ASOS to extend customer- and brand reach along with increased brand awareness in southern European markets in consonance with the brand expansion strategies that focus in core markets (UK, EU, US) (Annex, Exhibit 1.2.1, Expansion Strategies). Research has furthermore found a significant market presence of the millennial target audience in the market of interest, accounting for 22,9% of the total local population and 20% of the total tourist flows (Annex, Exhibit 1.1.3, Segmentation). Thorough analysis and evaluation of internal and external factors have additionally stressed a conformity between brand and target behaviour both locally and globally. This common denominator for both parties gives emphasis to a fast pace lifestyle- and market-orientation along with a high level of customer-centric metrics (Annex, Exhibit 1.1.3 Segmentation, 1.1.4 Persona, 1.1.5 Business model, 1.1.6 Marketing Mix & 1.2.1 Expansion strategies).
The retail format will be located at the centre of Barcelonaâ€™s commercial area, Placa Catalunya, with reference to the Samsung pop-up store (Figure (1). The placa functions as a meeting point for both locals and tourists as it connects both ends of the city and has a high and constant pedestrian flow, especially approaching from the mass-market and high-end walk of preference, Passeig de Gracia. The traffic is mainly due to the placa as a point of collision for the main commercial streets and as the placa houses various types of transportation, food & beverage and retailers. (Annex, Exhibit 1.2.2, Data analysis of main commercial areas in Barcelona & retail rental rates). These factors make the placa one of the busiest areas of Barcelona and for the same reason, Placa Catalunya is one of the first points of arrival or departure for many tourists as it is directly connected to airport routes.
The retail format is located directly among several competitors, already established at Placa Cata-lunya or at adjacent commercial streets. Yet the ASOS pop-up concept holds a competitive ad-vantage of providing customers with an element of surprise and newness. Rental rates at given location are ranked among the five most expensive retail spaces in Barcelona, yet as a large size corporation, ASOS has the financial flexibility to rent the proposed retail space. Further financial explanation and reporting will be clarified in the third chapter of financial planning. Figure 2: Weekly pedestrian flow at Placa Catalunya. (Authors of TC-Group Solutions, 2017, Tc-street.com)
Figure 1: Moodboard on the proposed retail format at Placa Catalunya.
STORE MANAGEMENT PLAN ASOS POP-UP STORE PROPOSAL
Following proposal is based on three main objec-
For the space management, a square layout has been chosen for the store with reference to following model, Figure 3. This layout creates a gathered environment in which all products and services are visi-bly displayed and cross-merchandised to push for a further lifestyle-orientated approach. The space moreover functions as a showroom-concept, from where customers place an order and receive the products at the location of preference. Therefore, product categories will be mixed and displayed through shelving, hanging, folding and stacking in order to intrigue impulse purchases, while mainly pushing for brand visibility. The floor plan is for the same reason mixed, yet with straight preferences in order to maintain clean lines and easy store overview. This type of mixed floor plan helps to draw attention to special-focus areas such as the Music Wall in collaboration with Spotify. With overweight of straight structures, the layout guides the consumer through the entire store, creating a majority of hot-zones with a high level of circulation and interaction. The layout strate-gy moreover includes small floor fixtures located around the store where customers can get help with their online purchases.
tives seeking to push brand awareness, increased customer use of m-commerce and general customer engagement with ASOS in southern regions of Europe. The proposal, therefore, gives attention to generating brand visibility rather than di-rectly increasing revenues.
Proposal With regard to the three main objectives, this paper proposes an opening of an ASOS pop-up store in Barcelona with a duration period of four months in the summer season. The operating months include June, July, August, and September, as they represent a high visitation rate and footfall, due to Barcelona as a highly popular vacation destination in Europe. The millennial target audience is additionally increasingly present during this period. The pop-up store will have no offline POS, as purchases will be made digitally and through the ASOS app. Customers do therefore nei-ther leave with the products in hand, yet purchases will be sent to them as regular online purchases from ASOS.com.
Figure 3: Space layout and management
FITTING ROOMS RACKS
NE QU IN S
’CASHIER’ & SERVICE STATION
RACK & SHELFS
Figure 4: Initial investment for proposal
RACK & SHELFS
’CASHIER’ & SERVICE STATION
As the pop-up store exists on in relatively limited space, visitors will have to line up outside the store in order to regulate the people flow in store and create the proper retail experience for each consumer visiting the pop-up store. This will assumingly drive a level of exclusivity and excitement to the store, as consumers are attracted by other consumers. Limitations might exist in consumers’ unwillingness to wait in line and desire for speed, yet these struggles are often easily com-pensated for by rewarding the consumer during the visit. Therefore, this proposal suggests offering customers a free cold water with fresh herbs, citrus or berries with the ASOS logo, at the Refreshment Table (Figure 3). This water can only be ‘purchased’ for free by the customer by scanning the QR code on the stand with the ASOS app. Following figure (Figure 4), shows the total investment required for the retail space.
In order to improve weaknesses and threats for ASOS as a pure online commerce (lack of ability to try on products before purchasing), fitting rooms will be at disposal in order for the customers to try the garment before purchasing through the app. High-profit-margin items will be located in high traffic areas, while the trendy category, tea dresses, will be placed in low traffic areas in order to give ‘heat’ and purpose to all zones. Complementary products such as jewellery, sunglasses and other accessories will be used in cross-merchandising throughout the store layout and closely located among specific carry-over products to push impulse purchases. The inspiration for this layout has partly been obtained from AdHoc research visiting the Sam-sung’s experience Samsung pay Land pop-up store at Placa Catalunya (Figure 1) for its launch of Samsung Pay during Mobile World Congress of 2018 (Authors of Samsung Newsroom, 2018).
Figure 6: Weight (%) of importance of product categories and marketing.
of ASOS market position and product Product categories structures has proven opportunities for the company to continue expansion of ASOS private-labels at lower price points (Annex, Exhibit 1.2.4, SWOT, Opportunities and Threats). Therefore, the proposal suggests the pop-up store features a product portfolio of ASOS private-labels exclusively in order to push brand awareness and customer engagement with ASOS as a mono-brand. The product offering will include six different ranges of consumer-centric categories such as, ASOS, ASOS Curve, ASOS Edition, ASOS Petite, ASOS Tall and ASOS White in order to create the broadest reach possible within the millennial audience (Figure 5). As research found the millennial target highly price sensitive, the average price setting for the pro- Marketing orientation duct offering will be â‚Ź43 (for further explanation, see the third chapter on Financial Planning). Figure 6 shows the weight of each category in term of product offering and marketing and is divided into percentages according to importance for the millennial target as found through research (Annex, Exhibit 1.1.6 Marketing Mix: Product and 1.1.3, Segmentation). Figure 5: Average prices for selected product categories for Pop-Up Store proposal) (Editors of ASOS, 2017, The Hotlist. ASOS.com)
Figure 8: Exterior environment Exterior environment
As Figure 5 and Figur 6 portrays, the store will fe-
Outside fancy and summery flower-theme that works in coherence with the market trend: Tea Dresses, also featured on the ASOS website under the name “The hotlist”(Editors of ASOS, 2018. ASOS.com). Multi-coloured store front of flowers. ASOS logo will be visible at all sides of the store. Lightning will mostly be natural lightning during the day, while the store will be highly lighted by spotlights and in the night. The flowers decorating the store font and outside, will in the night be self-luminous.
ature a high level of cross-merchandising in order Colour to meet the current lifestyle and trend-orientation Signage Lighting existing within the market. The visual merchandising seeks to offer a fun and feminine look and a feeling of excitement to ASOS as an of-fline experience. The proposal suggests mentioned look in Figure 9: Music Wall. © Image by Killian Loddo. reference to the target limitation that excludes the (Authors of Storefront. 2017.Storefront.com) male part of the millennial audience. For that reason, efforts are concentrated in further feminine attributes in accordance with the product offering as the outer appearance often is the first point of connection from many consumers with the brand. The visual merchandising additionally assists in meeting the proposal objectives of pushing brand awareness, increase customer use of m-commerce and general customer engagement with ASOS. Following figures (Figure 7 & 8) gives emphasis to the interior- and exterior environments of the store. Figure 7: Interior environment Interior environment Music
Temperature Colour Tech
Props and fixtures
Sound is kept on a low level, yet the style of music is optimistic and happy, matching the weather and feeling of Barcelona. The music will include new records in order to directly connect with the target. Studies have shown that consumers shop for longer and increases their UPT when exposed to the right music (Authors of Storefront. 2017. Storefront.com.). In order to push for a lifestyle-orientation, the store features music wall where customers can listen to records selected by the ASOS influencers in collaboration with Spotify (Annex, Exhibit 1.1.6 Marketing Mix) and cocreate the perfect summer playlists (Figure 9) Light perfumed flower scent, most importantly not too strong. The roof of the store will have major skylights in order to minimize the lightning costs during the day, and moreover create a natural brandsetting. Cooling temperature, as the pop-up is located in a highly trafficked area in the four warmest months in the summer period. Light and calm colours inside the store. In order to meet the objectives for pushing m-commerce, augmented reality is implemented on the ASOS app, guiding customers to the product of desire within the pop-up store, from where orders additionally will be made. As the tech implemented within the store pushes increased customer use of m-commerce, this moreover allows ASOS to gain further subscriptions to the online loyalty scheme, ASOS A-list, from which customers obtain vouchers and advantages when shopping (Annex, Exhibit 1.1.6, Marketing Mix, Promotion). Fitting rooms will additionally be featuring interactive mirrors from which customers can log into their ASOS app and order directly from there. Racks, shelves and tables will be gold. There will be small islands around the store where customers can get help with their online purchases. Fitting rooms will be at disposal in order for the customers to try the garment before purchase. The gold store fixtures will be complemented by small flourishing trees in accordance with the outside layout. POS will be exclusively online through the ASOS app. This will be signalled outside and inside the store and will additionally be explained to all customers waiting in line to get in the pop-up. The products in-store will carry a specific QR code in order for the customer to scan this through the app and directly purchase it there. 3-5 mannequins will be used for the window displays
Figure 10: Exterior store look. © Flora by Kris Knight x Gucci Pop-Up Shop (Authors of The D’ Vine. (N/A). The-dive.com. )
Figure 11: Interior store look, Moodboard.
Promotions and sales strategies
Due to the duration period of four months, the
As the proposal exists as a temporary concept for ASOS, less investment is spent on staff. The staff recruiting include operational criteria such as retail experience, brand knowledge and every day in-store operational skills. It is moreover required of the staff members to have professional cultural skills as being bilingual in minimum Spanish and English, solid knowledge on the cultural environment of Barcelona and finally a close-to-target selling approach. The staff will be shortly educated and introduced to the digital mindset of the store in order to master the tech-implementation of augmented reality and merging of offline space and digital POS. Staff performance will be measured by regular performance reviews and short-term employee award programs in order to push for a constantly improved retail experience.
Figure 12: Selection of marketing actions.
Figure 13: Staff expenses
proposal does not suggest any discounts or sales of the product portfolio. If the sell-through is considered low after four months of opening, a short sales period will be launched in order to eliminate the extensive stock level. The clothes included in the product portfolio are available exclusively to purchase through the ASOS mobile app in the pop-up store, in order to push ASOS customers to increase use of m-commerce further than what already accounts for 69% of all traffic generated. The store will furthermore be open on Sundayâ€™s the whole duration period providing ASOS with a competitive advantage of intensifying the visibility and engagement on days, where many great competitors are closing for the weekend. These marketing and communication actions account for 3,4% (â‚Ź180K) of the total Gross Sales â‚Ź4.179.588,92 as for 2017 (Figure 17). Figure 13, gives emphasis to the staff expenses Following Figure 12, lists a selection of the most coming from the four months running of the popimportant marketing actions for the launch of the up store. Salaries are kept within the average inretail space. come level for each position needed as no high professional criteria are required. Figure 14, examplifies a possible staff calendar.
Marketing and communication actions
Spotify ads Amplify brand reach on social media Product portfolio public to see one week before launch Hype creation before the event
Paid advertising in Spotify temporarily running a month before launch. Create #hashtag for the opening
The collection is available to see online a week before store opening in order to generate a high level of social conversation rates.
Before the event, the proposal suggests a creation of several social media sites for the events to build anticipation and hype before the opening. A growing social audience is a key factor in creating a successful launch and sustainable foot traffic throughout the duration period. o Sites considered useful for this: Facebook, Instagram and Twitter These sites will feature previews and short teasers of the limited product offering, pop-up store and event using the #hashtag to establish a community space around the events and following opening. Stay up to date with social audiences by updates, reminders, countdowns and exiting content. Might be considerable to partner with a mobile brand such as Samsung due to the great mobile and m-commerce focus. The event will include activities for playsumers (Authors of TrendWatching.com. 2016. TrendWatching.com.), from where invited consumers has the opportunity win some of the products available during the pop-up opening. Efforts put into in social channels o During the even contents will be running on Instagram and Twitter encouraging participants to engage with ASOS by sharing snap shots of their favourite product, the store or a selfie wearing the products under the #hashtag. o Influencer marketing will additionally take up investment, both in terms of payment and by providing them with the products of interest. Music co-creation activity by Spotify Refreshing drinks will be given to the visitors on the opening day.
Post opening event
Continue for extensive use of social channels: o Comment individually on customers shared images from the event
The digital POS through m-commerce is chosen for this proposal in order to keep a digital mindset connected to ASOS.
Figure 14: Staff calendar.
3 FINANCIAL PLAN & CONCLUSION ASOS POP-UP STORE PROPOSAL
Figure 17: Operative expenses
Through the financial analysis of the proposal viability, calculations of KPIâ€™s found a ROI (Return Of Investment) of 4%. Considering the proposal objectives with emphasis given to building brand visibility, brand awareness and increased customer engagement, the ROI is substantial for ASOS to open the pop-up store at Placa Catalunya in Barcelona. For revenue purposes the ROI would have been required as a minimum of 15-20% in order to be profitable for ASOS. Following figures illustrates gathered investments, expensses and sales forecast considered in order to calculate the return of investment (ROI). Figure 18: Stock buying Figure 15: Sales forecast
Figure 16: Expenses Figure 19: ROI
Monitoring and evaluating main store performance KPIâ€™s. The proposal performance will be measured through quantitative and qualitative indicators. Quantitative performance indicators will exist in tracking of conversion rates, as ASOS creates outreach to existing or new target customers living in or visiting Barcelona. As a pure online dis-tributor, ASOS bridges the touch-feel gap with a new customer for the first time, who assumingly will have improved confidence in purchasing from ASOS in the future. Qualitative indicators will measure the conversation rate on social channels in terms of increased brand awareness and brand engagement and how the adopted technology and partnerships ef-fected this. Tracking of these KPIâ€™s will allow ASOS to gain information on online sharing, capture user-generated content such as photos or reviews, analyse word sentiment around the brand, col-lect demographic analysis and finally to identify potential influencers. This gathering of data will provide ASOS with solid marketing data to influence future customer outreach. Through the merging of online and offline retail strategy and innovative technologies, ASOS is able to create consistent data sets for benchmarking purposes and performance measurements, educating the company in consumer-centric metrics, explaining what encourages a consumer to convert into a paying customer (Gonzales, M. 2014).
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Popomaronis, T., 2017. E-Commerce In 2018: Here’s What The Experts Are Predicting. Forbes.com. [Online] Available at: https://www.forbes.com/sites/tompopomaronis/2017/12/15/e-commerce-in-2018-heres-what- he-experts-are-predicting/#dd71c396debb [Accessed 18th April 2018]. Ratcliff, C., 2014, What is ASOS doing so right on Pinterest?. Econsultancy.com. [Online].Available at: https:// econsultancy.com/blog/65826-what-is-asos-doing-so-right-on-pinterest [Accessed 18th April 2018]. Rigby, C. 2017, Asos: planning to reach £4bn turnover. Internet Retailing. [Online pdf] Available at: http://internetretailing.net/2017/10/asos-planning-reach-4bn-turnover/ [Accessed 19th April 2018]. Rodda, M. 2016, Capital Views – High Street Renaissance in Europe. Cushman & Wakefield. [Online pdf] Available at: http://www.cushmanwakefield.es/en-gb/research-and-insight/2016/capital-views-high-street-renaissance-in-europe [Accessed 19th April 2018]. Rodda, M., 2016, European Cities Experiencing High Street Renaissance. Cushman & Wakefield. Cushmanwakefield.com [Online].Available at: http://www.cushmanwakefield.es/en-gb/research-and-insight/2016/capital-views-high-street-renaissance-in-europe [Accessed 19th April 2018]. Smith, K., 2017, ASOS’s seemingly invincible assault on fast fashion. Edited. [Online].Available at: https://edited.com/blog/2017/10/asos-fast-fashion/ [Accessed 19th April 2018]. Smith, K., 2017. Six things you need to know about the ASOS strategy. Edited. [Online] Available at: https:// edited.com/blog/2017/07/asos-strategy/ [Accessed 19th April 2018]. Stanton, T., 2017, Asos wins the hearts and wallets of millennials online, Slice Intelligence. The Brief Blog. [Online pdf].Available at: http://intelligence.slice.com/blog/2017/asos-wins-hearts-wallets-millennials-online [Accessed 19th April 2018]. Spenner, P. 2014. Inside the Millennial Mind: The Do’s & Don’ts of Marketing to this Powerful Generation. Forbes.com. [Online] Available at: https://www.forbes.com/sites/patrickspenner/2014/04/16/inside-the-millennial-mind-the-dos-donts-of-marketing-to-this-powerful-generation-3/#e24945e2c87a [Accessed 18th April 2018]. Travers, R., 2017, Barcelona. Cushman & Wakefield, Retail Guide. cwglobalretailguide.com [Online pdf]. Available at: http://cwglobalretailguide.com/barcelona/ [Accessed 19th April 2018]. Williams, J., (N/A), ASOS choose ACS………..again!. Allport Cargo Services. [Online pdf].Available at:https://allportcargoservices.com/asos-choose-acs-again/ [Accessed 19th April 2018]. Yates, D. 2016. The World’s Main Streets Analysed. Cushman & Wakefield. [Online].Available at: http:// www.cushmanwakefield.com/en/research-and-insight/2016/main-streets-across-the-world-2016-2017/
[Accessed 18th April 2018].
Brand target statement
Main target for ASOS popup: Secondary target for ASOS pop-up
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1.1 INTERNAL ANALYSIS
1.1.1 Brand history
Brand history in timeline (Kollewe, J., 2014)
“Our aim is to build an increasingly desirable, defendable and differentiated business model, with a customer experience to match. From fashion advice, stories and inspiration, to more than 85,000 products available to buy across any device, ASOS, with its unbeatable service, is a true home for young fashion lovers. Our mission remains unchanged: to be the world’s no.1 fashion destination for 20-somethings. (Authors of ASOS plc, ASOS plc.)” A range of female millennials from tourist to locals mainly woman
Women outside the target range that has been enlighten by press, media or as pass-by’s.
1.1.3 Segmentation Demographics
1. Millennials in Barcelona
2. Millennial tourists in Barcelona
3. Millennials in general
ASOS target around 15-30 years old (millennials) + tourists (millennials) As the millennial definition goes beyond demographics metrics as it is rather measured by a combination of their values, life experiences and buying behaviors (Leung, 2003). For that reason, the target that might fall out of the specified age range will be included as a secondary audience. Main target for ASOS pop-up: a range of millennials from tourist to locals mainly woman Secondary target for ASOS pop-up: women outside the target range that has been enlighten by press, media or as pass-byâ€™s. The millennial target in Barcelona accounts for: - 368.972 thousand (22,9% of the total population) men and women in the age between 15-34 years old according to official population figures by Ajuntament de Barcelona (Authors of Ajuntament de Barcelona. 2017, Ajuntament de Barcelona) (Figure 1) The target is therefore present for ASOS in Barcelona. According to the Catalan newspaper El Periodico, 'millennials' are changing the classic model of consumption. It states that, young people between 18 and 35 years old prefer to spend money on technology, healthy food, sports and leisure. The main difficulty of the companies when addressing this social group is the low purchasing power as the salary in Barcelona has an average of â‚Ź1.350 (Martija, p. 2018). As the capital of the Catalonia region in Spain and one of the most popular city-vacation destinations in Europe for international tourism tourist must be taken into account for the segmentation. - In 2016 overnight tourists in Barcelona reached over 9 million. - Spending of international overnight visitors to Barcelona reach a total of approximately 8.9 billion U.S dollars and makes Barcelona one of the leading European cities in terms of international visitor expenditure (Authors of Statista, 2017. Statista.com.). (Figure 2) - According to the Ajuntament Barcelona, Barcelona had 34.009.543 over-night tourists in 2017. Of them 6.801.908,6 (20%) where in the millennial age (Authors of Ajuntament de Barcelona. 2017. Ajuntament de Barcelona). Official age statement of millennials: 19-36 by Forbes (Spenner, P. 2014): - Born between 1980 and 2000, Largest population by size (Authors of Goldman Sachs Global Investment Research, (N/A). GoldmanSachs.com)
Behavioural 1. General
According to Goldman Sachs: In the US: 92 million millennials has been registered in 2015 and outgrows previous generations of Generation x (61 million) and Baby boomers (77 million) additionally measured by 2015. (Authors of Goldman Sachs Global Investment Research, (N/A). GoldmanSachs.com) (Figure 3) The extend of the ASOS target largely consist of millennials, yet according to the official age statement by Forbes ASOS’s target goes beyond millennials as in includes the demographic cohort after millennials, Generation Z.
According to the brand statement, the segmentation seeks to address 20-something men and women. As a result of this statement the product portfolio and service offering was additionally centralized around this audience. Millennials tend to live at home with their parents (Authors of Goldman Sachs Global Investment Research, (N/A). GoldmanSachs.com) (Figure 4) Brand statement: - “Geographically, we're currently focusing pricing and capital investment in three target markets: the UK, continental Europe and the US.” (Authors of ASOS plc. 2018. ASOS plc) Online and therefore broad reach with head quarter in UK. Tailor the mix of own-label, global and local brands sold through each of our eight local language websites: UK, US, France, Germany, Spain, Italy, Australia and Russia (Authors of ASOS plc, 2018, ASOS plc). Delivers to almost every country in the world (Authors of ASOS plc, 2018, ASOS plc). - Unique sense of self à call often for customization and brand/ product personalization - Untraditional approach to life - Optimistic worldview/outlook despite of the global economic challenges the future carries. - Inward-focused (happiness, passion, diversity, sharing, discovery) values plays an increasingly important role of millennial consumers rather than collective-focused preferences (justice, integrity, family, practicality, duty) that highly influenced the Baby Boomers generation.
Millennials are in general more likely to make purchase in a physical store if the point of search has taken place both online and offline (Kestenbaum, R., 2017). - Discounts are often of higher values to this target audience than other values such as authenticity, local sourcing, ethical production and shopping experience (Kestenbaum, R., 2017). o this moreover causes a high disloyalty-rate: according to Forbes 33% of millennials will switch brand if they are offered a discount of 30% or more. - Their behavior and the changes that have occurred in society over the past 30 years and force companies to rethink the relationship with these consumers. The communication must additionally change accordingly. - This transformation is due to several factors. The two most important ones have been that millennials have lived in a time when the technological explosion is constant, and the global financial crisis, which highly has affected and increased consumer expectations. Millennials is the group in which this has influenced the most (Martija, p. 2018.) Price sensitive - 80% are influenced by price (Kestenbaum, R., 2017) - The majority of millennials follow brands on more than one social media platform, and often follows the brands in order to gain discounts (Kestenbaum, R., 2017). Millennials is the segment that accounts for the highest share of online apparel revenue (Stanton, T., 2017) - their spending power is set to surpass $1 trillion by 2020 (Donnelly, C., Scaff, R., (N/A)) (Figure 5) Makes most purchases online (Kestenbaum, R., 2017). - Learning to buy through the mobile â€œwant it all, want it nowâ€?- concept - low price points and excellent benefits, rapid development and expansion, work/life balance, alternative careers, while contributing to society (Ng, Schweitzer, & Lyons, 2010).
Price sensitive - 80% are influenced by price (Kestenbaum, R., 2017). Invests in experiences such as travels, music festivals, eating events more than material goods.
4. ASOS official statement on 20-something consumer behaviour.
Desire to be part of first-hand experiences. The younger part of the target is more likely to purchase in a physical store than the target (15-30) as a whole. (Authors of ASOS plc, 2017. ASOS plc.) - Fast pace living - Focused on hard work, social life and health - More digitally connected than any other generation (Gray, C.M., 2015) - The majority of individuals within this target segment are facing life milestones such as graduation, entering workforce, settling into long-term relationships or buying first house or apartment. - Redefining the global economy and consumer expectations towards established social behaviors and circumstances such as online and offline consumption, adultery, career opportunities. Moreover, this highly influences previous and post-millennial generations (Authors of Goldman Sachs Global Investment Research, (N/A), GoldmanSachs.com). - Interest in contemporary hobbies. - Open-minded world view, yet strong opinions towards current and sensitive subjects. - Peer-orientated generation (Authors of Green Buzz Agency, 2017, GreenBuzzAgency.com)
Figure 1: Official population figures (Authors of Ajuntament de Barcelona. 2017. Ajuntament de Barcelona.)
Figure 4: : SNUG IN THE NEST...A growing number of Millennials are choosing to live at home with their parents. (Authors of Goldman Sachs Global Investment Research, (N/A). GoldmanSachs.com)
Figure 5: The Millennial generation spending on online apparel compared to Gen x, Boomers and Silents. (Stanton, T., 2017) Figure 2: International visitor spending in Barcelona from 2012 to 2017 (in billion U.S. dollars) (Authors of Statista, 2017. Statista.com.).
Figure 3: A larger cohort. The Millennial generation is the biggest in US historyâ€”even bigger than the Baby Boom. (Authors of Goldman Sachs Global Investment Research, (N/A). GoldmanSachs.com)
THE FASHION LOVER NEEDS
OUTLINE 21 years old Studying visual communication in the second semester and working as sales assistants in popular and specialized concept store. Born in Madrid, but moved to Barcelona for studies. Highly interested in fashion, which is reflected in her social media accounts. Her Instagram profile has gained enough follow, so she has established a blog as well. Spend a lot of time on digital media in her daily life and routine Grew up in middle- to highclass income family, who provided her with a world full of opportunities.
Fast, convenient and relatively cheap products and services to match her fast-paced lifestyle. Moreover, she finds socializing outside from work and university with family and friends a need in her daily life to get away from the stress and daily routine. her health and wellbeing is additionally an important factor along with the ability to express herself creatively and feel passionate about a certain subject.
She is a supporter of the current social trends concerning world peace, empowerment of gender fluidity, diversity, homosexuality, gender roles and cultural differences. She would happily join protests, yet she would be background supporter and not as an extreme activist. She highly values good and well done online content that appeal to her interests and lifestyle.
In a relationship with her boyfriend
Slow internet and digital devices make her jump off the media and quickly or turn to an alternative. She is often challenged by the limitless possibilities that constantly are offered in terms of just about everything, which makes it difficult to decide on her future career and life choices.
She is very concerned about monetary issues as her budget is limited by living away from her parents. for that reason she highly values discounts, but also want’s her products to last beyond a single season. She is concerned about the balance between followers and following (how many she follow herself) as is creates an exclusivity around her profile.
She highly operates according to openness, politeness and hard work as it gets you the furthest in today’s society. She loves getting recommendations and information from friends if it is not personalized from brands. Online she typically browses through online platforms by use of sales categories or a selected price range in order to manage her limited budget. She is mainly interested in womenswear, but her relationship causes an increasing interest in menswear in terms of gift giving and shopping for the partner. Online, she follows brands she likes that is both within her reach in terms of price and style, yet she also follows aspirational brands (luxury). She also follows the brands to gain promotional offers and discounts. She often turns to sites like ASOS as it independent of time, day and hour provide same service, product, and experience, but she has no problem with changing brand if other offers are better.
She hopes for a more socially concerned world structure. Moreover she hopes to figure out if her career choice is the one fitting her the best and in the future to have more finanical flexibility to loose some of her daily concerns and to be able to travel more.
1.1.5 Business model
ASOS is a unique, multi-platform experience that truly resonates with the people who use it, because it’s built by them. It’s a place to develop your own style and be inspired… and, of course, to shop. The business model of ASOS gives emphasis to online commerce with short lead times and customer centric values focused in a differentiated experience and content generating economy. The mission of ASOS is clear – to be the world’s no.1 fashion destination for 20somethings. (Authors of ASOS plc, 2018, Our Strategy. ASOS plc.). Quick-response (fast-fashion model) - Short lead times - 6 weeks from sketch to site Retail format - pure e-commerce distribution Customer centric metrics - Free delivery and return policy - Premier - ASOS magazine - ASOS A-list - High level of customer service on social media
1.1.6 Marketing Mix
Product categories Notes on each category Product metrics: (ASOS.com, - more than 85,000 products available to buy across any 2018) device - 300.000 dresses sold each week Consumer addressed The categories that has been created for the consumer allows for categories: (ASOS.com, shopping experience with lifestyle orientation that highly connects with the millennial consumer. The fact, that ASOS has 2018) implemented a ‘shop through your favorite ASOS influencer’concept creates both aspirational but also a direct and personalized shopping experience and products. The influencers on the website represent a highly diverse gathering of millennials by culture and origin, body type and style, breaking with the traditional-body type-influencer and way of approaching influencer marketing. It allows for a more direct customer connection and creation of brand relationship that goes further that the online platform. 1. Shop by product Shop through 12 different product categories. - Sale - New in - Clothing - Shoes - Accessories - Activewear - Face + Body - Gifts - Brands - Outlet - Marketplace - Inspiration 2. Shop by range - ASOS Curve & Plus Size - Maternity - Tall - Petite 3. Shop by occasion: - Wedding - Bridesmaid - Workwear - Holiday - Going-out-out - Festival 4. Shop by editorials – - The hot list mostly trend & - Just landed (e.g. MAC) market-orientated - New season
5. Shop by activity
6. Shop by brand 7. Shop by price 8. shop by product regulations
Brand categories: (ASOS.com, 2018)
Trend: color blocking Inspiration Style feed Shop the story ASOS insider o Shop through favorite ASOS influencer o 25 ASOS Insiders are represented across all markets o 1,127,223 people follow the ASOS Insiders (Authors of ASOS plc., 2018, ASOS plc). o 17,880,228 is the total amount of engagements that Insiders add to ASOS (Authors of ASOS plc., 2018, ASOS plc). - Marketplace o Shop from other independent and vintage brands/boutiques - Gym & training - Outdoor - Running - ski & snowboarding - swim - yoga & studio - 1000+ brands - outlet - sort - size - product type - range - style - brand - colour - price range The brand categories span several factors that together provide a lifestyle-orientated portfolio rather than product-orientated. Most recently ASOS has adopted one of the worldâ€™s leading cosmetics brands, the Canadian founded MAC cosmetics, that highly matches the values of the millennial target of diversity and acceptance of gender fluidity, as MAC is known for the iconic red lipstick. Moreover, an adoption of these types of brand to product portfolio allows ASOS to provide products for customers in line with the existing social media trends of make-up tutorials. One of ASOSâ€™s real competitive advantages lies in the scale of its own-brand assortment as ASOS as it help extending its consumer reach resulting in 60% of products sold on ASOS is exclusive to the brand itself.
1. Men 2. women 3. new in 4. Clothing 5. Shoes 6. Accessories 7. Activewear 8. Face + body 9. Gifts 10. Outlet 11. Brands 12. Inspiration Brand portfolio: (ASOS.com, 2018) 1. ASOS private label
2. 1000+ other labels 3. top brands
By following categories, ASOS exists as a market place for the targeted millennials, in which they can find just about anything they need for their type of lifestyle. - 11 sub-categories - 11 sub-categories - 5 sub-categories - 17 sub-categories - 8 sub-categories - 10 sub-categories - 7 sub-categories - 11 sub-categories - 10 sub-categories - 21 sub-categories - 1000+ sub-categories - 3 sub-categories The brand portfolio is based upon both private label and multibrand. - ASOS - ASOS 4505 - ASOS DESIGN - ASOS WHITE - ASOS EDITION - ASOS MADE IN KENYA - ASOS Salon - Adidas - ASOS BRANDS - ASOS 4505 - ASOS WHITE - Boohoo - Chi Chi London - Glamorous - Miss Selfridge - Missguided - Monki - New Look - Noisy may - Office - Reclaimed Vintage - River Island - Weekday
General price setting:
WOMEN A wide range of brands and additionally a wide range of CATEGORY PRICE RANGE
prices allows ASOS to satisfy all budgets, while employing CLOTHING a POS reductions strategy with temporarily discount Coats & jackets €15 - €655 ranges of products - highly connecting with the millennial Dresses €9 - €651 target as they are at different life stages and therefore Hoodies & sweatshirts €12 - €350 Jeanshave different budgets. Moreover, the discounts cater for €13 - €405 Jumpers & cardigans €13- €460 the price sensitivity of same target. Jumpsuits & playsuits €11 - €502 - This strategy of POS reductions is implemented by Lingerie & nightwear €4 - €480 Loungewear ASOS as a beneficial metric to increase site traffic €6 - €95 Multipacks €4 - €62 and push increased purchases (Jackson & Shaw, Shorts €8 - €344 2009). €5 - €309 Skirts Socks & tights €3- €60 Price ranges of product categories: See following Figure 6 Suits & seperates €17 - €518 ASOS & Competitors lowest and Swimwear & beachwear The private-labels mainly hold the low prices, yet €7 - €342 Sports bras €15 - €69 highest price setting for dresses: Tops occasionally the other brands beat the private-label prices €4 - €350 Tops € 10- €147 Trousers & leggings when on sale. €8 - €397 See following Figure 7 FACE & BODY SHOES Bodt care €4 - 62 Average prices for selected product See following Figure 8 Boots €24 - €369 Hair care €3 - €226 Espadrilles €13 - €137 categories for Pop-Up Store Makeup €4 - €150 Flatshoes €11 - €178 proposal. Skin care €3 - €248
Figure 6: Price ranges of product WOMEN CATEGORY
CLOTHING Coats & jackets Dresses Hoodies & sweatshirts Jeans Jumpers & cardigans Jumpsuits & playsuits Lingerie & nightwear Loungewear Multipacks Shorts Skirts Socks & tights Suits & seperates Swimwear & beachwear Tops Trousers & leggings
€15 - €655 €9 - €651 €12 - €350 €13 - €405 €13- €460 €11 - €502 €4 - €480 €6 - €95 €4 - €62 €8 - €344 €5 - €309 €3- €60 €17 - €518 €7 - €342 €4 - €350 €8 - €397
SHOES Boots Espadrilles Flatshoes Heels Sandals Slippers Trainers
€24 - €369 €13 - €137 €11 - €178 €18 - €206 €11 - €205 €14 - €152 €11 - €326
ACCESORIES Bags & purses Belts Hair accessories
€6 - €435 €6 - €138 €4 - €56
Heels Sandals Slippers Trainers categories
€18 - €206 €11 - €205 €14 - €152 €11 - €326
South korean beauty Styling tools Tanning Tools & accessories
€4 - €32 €5 - €226 €4 - €56 €3 - €232
ACCESORIES Bags & purses Belts Hair accessories Hats Jewellery & watches Scarves Sunglasses
€6 - €435 €6 - €138 €4 - €56 €6 - €117 €4 - €615 €7 - €172 €7 - €444
GIFTS Books Cards & gift wrap Gifts for him Home accessories Jewellery & watches Novelty gifts Stationery Tech accessories
€7 - €77 €4 - €21 €4 - €275 €4 - €275 €4 - €615 €4 - €89 €4 - €62 €6 - €206
ACTIVEWEAR Accessories Jackets Leggings & trousers Shoes Shorts
€5 - €111 €23 - €410 €13 - €240 €35 - €244 €13 - €46
FACE & BODY Bodt care Hair care Makeup Skin care South korean beauty Styling tools Tanning Tools & accessories
€4 - 62 €3 - €226 €4 - €150 €3 - €248 €4 - €32 €5 - €226 €4 - €56 €3 - €232
GIFTS Books Cards & gift wrap Gifts for him Home accessories Jewellery & watches Novelty gifts Stationery Tech accessories
€7 - €77 €4 - €21 €4 - €275 €4 - €275 €4 - €615 €4 - €89 €4 - €62 €6 - €206
Sports bras Tops
€15 - €69 € 10- €147
Figure 7: ASOS & Competitors lowest and highest price setting for dresses.
Figure 8: Average prices for selected product categories for Pop-Up Store proposal (Editors of ASOS, 2017, The Hotlist. ASOS.com)
Distribution channels General distribution overview:
Notes on the specific channel Distribute multi-brand and private label products through localized mobile and web experiences, delivering from our fulfilment centers in the UK, US, Europe and China to almost every country in the world. ASOS sources and manufactures from 28 countries, with 500 factories and in 2016 the company redesigned its supply chain and distribution system (Lennane, A., 2016), by highly investing in technology and logistics. Slightly similar to the market leader and Spanish retailer Inditex, ASOS aims to have just as short order times as it reduces logistic costs. This improvement of the distribution goes beyond customer delivery and connects the end-to-end business in its upstream supply chain. For the business model this means short lead times, increased local and mutual manufacturing in UK. Furthermore, this desire made ASOS adopt a new international supply chain management platform, Allport (Allport Cargo Serviced), to increase sales, visibility and cooperation across ASOS international supply chain (Williams, J., (N/A), AllportCargoServices.com). Despite ASOS supply chain opportunity of adapting quickly to seasons and trends, the company enjoys an extended product life cycle as it provides for a large international market. This is highly useful for ASOS as southern markets experience reversed seasons than in the UK. Along with the increasing consumer trend of enjoying winter vacation in tropical surroundings, this allows ASOS to sell swimwear as a carry-over category through the year instead of seasonal (Authors of BusinessCaseStudies.com, (N/A), BusinessCaseStudies.com). 95% of ASOS delivery orders are tracked which benefits both parties â€“ the company and the customer as it provides the customer safe delivery and the company reduced costs of failed or lost deliveries and customer care. Automatization has highly been implemented within the supply chain management and has reduced warehouse operations drastically, while optimizing delivery efficiency (Authors of ASOS plc, 2016, ASOSplc.com). For more numbers on ASOS 2017 retail sales see Figure 9 Eight local language websites UK, US, France, Germany, Spain, Italy, Australia and Russia
M-commerce ASOS app ASOS Marketplace
Occasionally offline collaborations
No brick & mortar stores
Retail sales in 2017 (trading statement for the four months ended 31 December 2017) (Authors of ASOS plc, 2018, ASOSplc.com) - retail sales: +30% - retail margin: +80bps - international retail sales: +35% - active customers: 16,0 million (+19%) - Online traffic: 1,7 million people visited ASOS platforms in 2017. 69% traffic is generated from mobile devices 10m active installs of the ASOS app - 1000+ SKU’s on ASOS marketplace - 1000+ independent and vintage boutiques - 20 boutiques have progressed onto ASOS.com - 49 countries are represented (Authors of ASOS plc, 2018, ASOSplc.com) ASOS outfits ParalympicsGB for 2018 Winter Paralympics - ASOS’s relationship with the ParalympicsGB team stretches back to the Rio Paralympic Games in 2016 when it first partnered with the British Paralympic Association to design and create formal and ceremony wear as part of the brand’s commitment to raising the pro le of young adults with disabilities (Authors of ASOS.com, 2018, ASOSplc.com.). Events - ASOS launched 2017 “ASOS Blank Canvas” tour to Italy, targeting students with a campaign giving emphasis to self-expression, creativity and individuality by offering a customization experience of creating personal tote bags (Authors of Seed Marketing, 2017, Seed Marketing). ASOS founder Nick Robertson, ruled in 2013 that the company would not open a physical store as a complement to its online business. In an interview with BBC journalist Kirsty Wark in 2013, he stated: - "When we ask new starters what percentage of fast fashion they buy online, I get figures of 70 to 80%. Why would I open a store?" as he finds the POS extension “counterintuitive” (Bold, B. 2013). The decision of not having any Brick & Mortar stores seamlessly matches the different inexpensive types of international deliveries (that varies from free delivery of spend more than €25,35/ or standard €4,04 to €12,16), and counterbalance the lack of physical stores by efficiency. (Authors of ASOS.com, 2018, ASOS.com.)
Figure 9: ASOS retail sales by region (Authors of ASOS plc, 2017,ASOSplc.com)
Social Media Channel Google+
Number of followers/likes/subscribers gathered for each platform 2,4 million followers (Editors of ASOS, 2018. Google+.) Note: The Google+ site features a range of unique gifs created by ASOS in order to differentiate the brand content that is uploaded to different social media platforms. Moreover, the site uses a high level of inspirational and “how to” throughout the site (Figure 10). 5,4 million likes / 5,4 million followers (Editors of @ASOS.Spain, 2018. Facebook) Note: The Facebook profiles hold a similar approach to content as Twitter and Google+. On Facebook ASOS has the opportunity to connect further with the older part of the target audience. 20,1 million followers (Editors of @ASOS, 2018. Instagram) Note: The content offered through they different Instagram accounts mainly features similar purposes as the different Twitter, Facebook and YouTube profiles. The official page is rather product orientated and functions as a main platform for ASOS to distribute news. The profile also carries a high level of influencer marketing, yet the influencers used are ‘exclusively ASOS’s’ as they are the same individuals as presented on ASOS.com. The feeling of the official Instagram account is very current at up-to-date as it supports present issues such as gender and racial equality. The page is slightly more feminine than masculine in its appeal despite targeting both genders of the millennial target. (Figure 11)
1,6 million followers (Editors of @ASOS, 2018. Twitter) Note: ASOS has several Twitter accounts, despite their official profile, that in local languages features trend updates, different product categories along with customer services and support. (Figure 11) 80,8 thousand followers (Editors of ASOS, 2018. Youtube) Note: The YouTube account features content such as campaigns, “how to” content, lookbooks & trend guides, makeup tutorials and branded content under the name ASOS Fashion Discovery in collaboration with i-D Magazine. The site has sub-accounts in local languages as the other social media channels. (Figure 11) 700 thousand customers globally receive ASOS Magazine. Note: ASOS Magazine featured the American singer songwriter Taylor Swift on their cover and added €19.3 million in PR value (Figure 12). The content throughout the magazine mainly exist in inspirational and fashion edits. Moreover, the magazine offers content that nurture and champion aspiring talents and ideas. The magazine is available in ASOS key zones – UK, US, France and Germany (Authors of ASOS plc, 2018, ASOSplc.com). 606.5 thousand followers (Editors of ASOS, 2018. Pinterest) Note: ASOS has a high success-rate on Pinterest measured by how my shares and pins they generate per week. In 2014 content from the ASOS Pinterest site generated an average of 7,202 pins a week and was at that time close to five times more than generated at Amazon (Ratcliff, C., 2014). The profile
features content from this season’s fashion silhouettes to beauty, nail art and Bridal inspiration. 85% of active UK customers are enrolled in ASOS A-LIST. 3.9 million customers are collecting points with the initiative. 1% fall-out rate from customers how have opted out of the programme (Authors of ASOS plc, 2018, ASOSplc.com). Today millions of UK customers are ASOS ALIST’ers and more than half a million vouchers have already been issued. Note: In 2014 ASOS trailed its first Loyalty program online as a “earn while you shop”- concept functioning under the name “ASOS Alist”. ASOS had previously launched a similar concept called ASOS Rewards giving emphasis to a small number of UK shoppers (Authors of ASOS plc, 2016, ASOSplc.com). The content is highly customer engaging and offers customers a much richer experience of ASOS it moreover allows ASOS to further establish a customer-to-brand relationship bridging for improved loyalty in a highly disloyal target mindset.
Online Loyalty Scheme “ASOS A-list”
Figure 10: How to inspirational content on Google+(Editors of ASOS, 2018. Google+.)
Figure 11: Twitter, Instagram, Youtube
Figure 12: ASOS Magazine
As for competitors ASOS mainly competes against fast fashion retailers such as Boohoo, forever 21, H&M, ZARA, Urban Outfitters, Misguided, River Island and Topshop as established in the Price sections of the marketing mix. Even though these competitors follow fast fashion and quick response business models, the strategies of the retailers are far from similar. Below Figure 13, shows how ASOS may have the largest assortment even close to three times more than the nearest competitor, Boohoo, Nevertheless, the numbers in the figure additionally shows that ASOS of all the retailers has the least growth since 2015 (Smith, K., 2017). These retailers are tied to each other as global competitors in terms of speed, price points and unique (fashionable) products. What moreover, tie these retailer to the same market is how quickly and how they are responding to the current and in-moment consumer behavior. It has come down to depend on content and convenience, while still keeping with an updated assortment, a fast distribution and a price conscious approach.
Brands considered direct competitors in Barcelona
Following brands are considered direct competitors for ASOS to open a pop-up store in Barcelona. They mainly consist of fast fashion retailers such as Inditex and the H&M Group, supplemented by the URBN Group and brands such as Mango and Brandy Melville. The direct competitors, moreover generally targets a similar audience of millennials and is largely located in the commercial areas Figure (14). - Urban Outfitters - & other stories - H&M - ZARA - Mango - Brandy Melville - Cos - Uniqlo - Bershka - Pull&Bear - Stradivarius
- Gap Brands considered Department stores: indirect competitors in - El Corte Ingles o As the most important department store in Barcelona, Barcelona which offers several international fashion brands and (multi-brand stores services like beauty lounge and pharmacy. established or located - La maquinista in Barcelona.) - Fnac Lâ€™llla - Les Glories - Maremagnum - Diagonal Mar Concept and multi brand stores - The outpost - Santa Eulalia - KR Store - boo - Grey street - Lurdes Bergada - Coquette - Aleluya store Barcelona - Conti 24 Kilates - Sneakers & streetwear - Colillo de morsa - Notenom Global competitors - Topshop o As it stocks multi-brand along with private-label just as See Figure 15. ASOS - Forever21 - Urban outfitters - Zalando - Boohoo - H&M Group - Inditex - Amazon â€“ cheap clothing - New Look retailers - Miss Selfridge - River Island - Missguided
Figure 13: Scale of fast fashion (Smith, K., 2017)
Figure 14: Map over Placa Catlaunya and surronding retail competitors
Figure 15: Brand positioning Map illustrating ASOS’ global competitors Brand Positioning Map showing ASOS’s positioning within the global mainplayers in Fast-fashion (emphasis is given to online commcerce).
STRONG DIGITAL IDENTITY
WEAK DIGITAL IDENTITY
Seamlessly adapts to the requirements of the millennial audience in targeting the individual through local language sites, personalised service, product regulations and shopping through favourite ASOS influencer. The cautious price setting fits the price sensitive target audience and is highly advantagous in competing with the surronding competitors.
Try-before-you-buy allows ASOS as a pure digital commerce to let consumers experience products pre-purchase and
Target (range of mainly millennial women from tourists to locals) is present in Barcelona for ASOS to open a offline store.
Lack of offline stores --> weakened possibility to meet target 1 requirements of omni-channel consumption Broad range of competitors, yet many of these are already stocked and sold at asos despite the big groups such as Inditex, H&M Group and URBN.
Discounts are of high value to the millennial target often causing a high disloyalty-rate
Interactive and innovative shopping possibilities such as A-list, Marketplace and influencer based shopping
80% of millennials are influenced by price. ASOS is not the cheapest of all competitors.
The broad assortment cater for a shopping experience with lifestyleorientation that highly connects with the millennial consumer. It allows for a more direct customer connection and creation of brand relationship that goes further that the online platform.
â€?Want it all want it nowâ€? concept - Increasing consumer expectations for fastness, flawness, convenience and low price points. No paid advertising in publications that appeal to its target market.
1. See previous report on the distribution method e-commerce p.6-7
1.2 EXTERNAL ANALYSIS 1.2.1 Expansion strategies Key success factors for ASOSâ€™ foregoing expansion 1. General
2. Warehousing and logistics
3. Existing and new markets
4. Product and service
In 2017 Nick Beighton, founder and CEO of ASOS credited the growth in terms of both scale, reach and sales to the substantial investments made for improving website with visual search tools, Europe deliveries and distribution centers. ASOS on took a gradual approach to international expansion and made shipments and deliveries internationally available from its UK website in 2006 and allowed ASOS to identify the potential markets. ASOS has moreover been leading its expansion and growth strategies on customer insights from online traffic and following data streams outside the core market (UK). These measurements of already existing customer engagement were in 2010 used to open up new markets and pinpoint the following launch of local language ASOS websites in respectively French, German and American as the previous timeline indicates. This expansion came along the opening of two international offices in Sydney, Australia in 2012 and in Rochester, New York in 2013 to provide the company with an in-house understanding of the different local retail landscapes. 2013 broad along an adoption of a Chinese distribution centre and a Shanghai office, yet three years of critically adapting to Chinese market specifics and local regulations outweighed the opportunities as they significantly affected the business performance and caused ASOS to pull the plug on its Chinese operations (Alibhai, S. 2016). Despite from expansion to new international markets ASOS expanded its product portfolio and offering by including specialist sizes for menswear (Tall, Plus size) along with the possibility to shop by occasion (Wedding, Workwear, Holiday, Going out-out, Festival, Spring) modified each season as offered in the womenâ€™s sections. Both sections have moreover adopted beauty and grooming additions.
Key success factors for future expansion 1. Boosting capacity through core and new markets
Another point of expansion ASOS has experienced is its adoption of mobile solutions for purchase and payment since it introduced the mobile and tablet app in 2011. -
2. Boosting capacity through warehousing and logistics
A highly relevant success factor in ASOS’ expansion strategy is the company’s announcement to focus its strength in its core markets, UK, EU and US without stepping away from its international operations, but has recognised where continued push will come from. Despite ASOS recognising that the future momentum will remain in their core markets, previously research (See previous report on the distribution method e-commerce p.6-7) has shown a global economic growth shift from West towards Eastern and Southern domination causing ASOS to retrieve attention to Asian or Southern markets. The attention might not be directed towards China as the 2016 settlement presented a sales increase with 30% since the exit from the Chinese market (Authors of ASOS plc, 2016, ASOSplc.com). The success of the core markets does not insure additional success in new markets, nevertheless these might be profitable to test for further international expansion. During 2018 ASOS plan to close to double the number of local language websites to thirteen, which will provide ASOS with coverage over the 200 markets to which it currently ships (Armstrong, A., 2017). ASOS invest in the UK market being an important test bed for the company strategy, but will account for a much smaller piece of business as ASOS prepare for becoming a truly global business (Armstrong, A., 2017). ASOS invested heavily in international pricing lowering prices for overseas customers as by 2017 sales overseas accounted for €1.3 billions (Armstrong, A., 2017). As a part of ASOS major investment in its international expansion the company is expected by Autumn 2018 to invest more than €34.3 million in new warehouse facilities in Atlanta, Georgia, US and marks what they state as a “significant progression” on its plans for growth in the US. These actions come in line with the US delivering sales growth of 39% in the first financial year of 2017 and demonstrates the opportunities that lies ahead for further expansion within this core market (Dean, S. 2017).
3. Boosting capacity through technology
4. Boosting through product and service
ASOS states that 69% of its online traffic is generated from mobile devices, why they have a possibility to further solidify and incorporate convenient mobile solutions into their business model. ASOS moreover aims to strengthen its power through technology and with its new agile technology platform it carries the ability to provide ASOS customers with microservice architecture paired with a native mobile experience. This will help ASOS to improved and enhanced transaction volume and fastness (Rigby, C. 2017). ASOS will continue growing the business at a fast pace in order to take advantage of the global opportunity the market carries. In line with the consumer desire for a bridging of online and offline commerce (See previous report on the distribution method e-commerce p.6-7 & 1011) ASOS will benefit from the increasing interest towards online retail as the online fashion retail is said to grow with more than twice the rate of the overall apparel market (Rigby, C. 2017). The further development of ASOSâ€™ private label additionally will not stall, as it in 2017 accounted for 41% of all retail sales (Rigby, C. 2017). ASOS ended 2017 with results of a 24% rise in customers (15.4 million customers) and website traffic.
1.2.2 Data analysis of main commercial areas in Barcelona & qualitative, quantitative pedestrian flows & retail rental rates
Data analysis of main commercial areas in Barcelona & retail rental rates General traffic:
Main commercial areas: 1. General
2. Main commercial streets and areas in Barcelona (commercial mix is partly commented in the street description and following figures)*
Inter-annual percentage variation of the daily average of pedestrian traffic in commercial streets and shopping centers, compared to the same month previous year tracking by February 2018 of Barcelona by The Traffic Index. Tracked by TC-street sensors, Barcelona faces a 3.67% decrease since last year (Authors of TC Group Solutions, 2017,Tc-street.com). Figure (16): The traffic Index (ITPC) Studies in profitability of main commercial streets has shown an importance of the visitor for the commercial axes of Barcelona as some of the most valuable in Europe. These areas or streets are closely linked to shopping and tourism and especially shopping streets such as Portal de l’Angel and Paseo de Gracia are undeniably among the most influential areas for retailers, yet the majority of brands and retailers is separated from the actual candidates when considering rental rates (Authors of OI Realtor, 2017, Oirealtor.com). As mentioned in the segmentation the tourist flows are an undeniable important factor to the economy of retail sales in Barcelona. These supposes between 60% and 80% of the sales in the commercial areas in Barcelona and has highly compensated for the slow recover in domestic consumption (Authors of OI Realtor, 2017, Oirealtor.com). Portal de l’Angel - Mass market, High Tourism Activity - Portal de l’Angel is one of Barcelona’s most visited streets with highest pedestrian flow as it targets mass market and therefore drive a high level of tourists to the area. The popular street is located next to the city center, Placa Catalunya, and functions as a part of the downtown commercial area. As for rental rates, the street is additionally to its pedestrian flow one of Barcelona’s most expensive retail spaces. Retailers located at this street is placed closely to each other and include major retailers such as: o El Corte Inglés, Zara, Massimo Dutti, Pull & Bear, Cortefiel, Stradivarius, Oysho, Tezenis,
Bershka, H&M, Benetton, Shana, Calzedonia, Yamamay, Parfois. - New entrants: o Macson, Parfois, Brandy & Melville - (Yates, D. 2016.) - Figure 17: shops at Portal de l’Angel Passeig de Gracia - Mass market, High End, Luxury, High Tourism Activity - According to the latest market report of Cushman & Wakefield, Passeig de Gracia is among the top three most expensive shopping streets in Spain and the first in the premium sector. The street is moreover one of the important drivers in any tourist route through Barcelona, as the street combines architecture, business and shopping. The street stretches from north of Barcelona, Gracia, to the center at Place Catalunya and directs a complete walking route for both locals and tourists passing everything from fast-fashion flagship stores to high end luxury retailers, Apple and the two Gaudi buildings (La Pedrera & Casa Batlló). - Despite the fact of Passeig de Gracia increasingly attract mass market, the street is currently the only established location for premium/luxury retailers. - Major retailers present: o Apple, Prada, Puma, Mango, Stella McCartney, Bottega Veneta, Zadig & Voltaire, Guess, Michael Kors, Liu Jo Zara, H&M, Desigual, Adidas, Nike, Camper, Nespresso, Replay, Emporio Armani, Chanel, Gucci, Louis Vuitton, Burberry, Ferrari, Bvlgari, Montblanc, Dolce & Gabbana, Dior, Versace, Macson, Rolex, La Perla, Maje, Wolford - New entrants: o Sueños Negros, Adolfo Domínguez, Sandro, Kiabi, IKKS, Kenzo, Seat - (Rodda, M., 2016). - Figure 18: shops at Passeig de Gracia Avenida Diagonal - Mass market, Mid End - Avenida Diagonal is located across Barcelona and divides the city in two, diagonally from west to east. The street is a highly viable and commercially
profitable axis, however the street is placed away from the walk of preference directed towards the centre (Passeig de Gracia – Placa Catalunya) - Nevertheless, Avenida Diagonal recorded a healthy increase in rental growth in 2015 by 33,3% (Rodda, M., 2016). - According to the latest market report of Cushman & Wakefield the most trafficked part of diagonal is situated between Francesc Macià and Passeig de Gracia, in which the street is considered a suitable location for brand/store extension as second point of sale. - Major retailers present: o Benetton, Comptoir des Cotonniers, Sandro, Hugo Boss, Mango, Cotélac, Zara, Massimo Dutti, Uterqüe, Zara Home, Kuoni, Gerard Darel, Asics, Costa Coffee, Nice & Crazy, Cachito - New entrants: o Movistar, Rituals, Puerto Chico - (Rodda, M., 2016). - Figure 19: shops at Avenida Diagonal Rambla Catalunya - Mass Market/Mid End - Rambla Catalunya is located parallel to Passeig de Gracia, but holds a more traditional and local feeling compared to its high-end opponent. The retail offering varies between medium to high-level brands. - Major retailers present: o Zara, Intimissimi, Women's Secret, Camper, Catimini, Imaginarium, Yamamay, Zara Home, Boboli, Tuc Tuc, Gant, IKKS, Cortefiel, Maje, Mango Touch, El Ganso, Vodafone, Fosco, Orchestra, Carpisa - New entrants o M.A.C.. Merlkal Calzados,Soloio, Benetton, Thomas Sabo, Pangea, La Bela Mafia, Pikolinos - (Travers, R., 2017). - Figure 20: Shops at Rambla Catalunya Las Ramblas - Las Ramblas is located in lengthening of the commercial areas at Placa Catalunya and directs pedestrians towards the Barcelona harbour. The
streets popularity is moreover owing to the flower shops, artisans, human statues, theatres and museums. Additionally, several retailers such as Desigual, H&M, Mango, Nike, Springfield, Starbucks and Burger King have found their way to occupy major spaces throughout the boulevard. - (Travers, R., 2017). - Figure 21: Shops at La Rambla. Placa Catalunya - The centre of Barcelona’s commercial area that connects the majority of commercial streets. One of the most important department stores is located on Placa Catalunya, by the name El Corte Ingles. The placa functions as a meeting point for both locals and tourists as it connects the Eixample district with the old town district and has a high and constant pedestrians flow. This is mainly due to the collision of the main commercial streets and as the placa houses various types of transportation across the city with certain focus towards the airport. - (Travers, R., 2017). - Figure 22: Shops at Placa Catalunya. Carrer de Pelai - Mass market - The street Pelai, is situated as a byway from Placa Catalunya to Placa Universidad and has less of a traditional tourist approach compared to Passeig de Gracia. For that reason, the street is more frequently visited by locals. Nevertheless, the commercial offering includes retail domination by Inditex, Mango and C&A. - Major retailers present: o C&A, Zara, Sephora, Mango, Celio*, Desigual, Camper, Fosco, Pull & Bear, Stradivarius - New entrants: o Parfois, Bershka, Natura, Multiópticas, Hema, l’Oréal - (Travers, R., 2017). - Figure 23: Shops at Pelai. Portaferrissa - Mass market, Trendy - Portaferrissa is located on the left side of Las Ramblas in the Gothic Quarter and runs between Portal de l’Angel and Las Ramblas.
Pedestrians flow for these areas* * average numbers per day as for May (2017) Figure (Authors of TC Group Solutions, 2017, Tc-street.com) Rental rates for these areas* * Average Prices in 2017* (in euros per square meter per year) according to Statista (Authors of statista, 2017,Statista.com). Figure (25)
Major retailers present: o H&M, New Yorker, Quicksilver, VANS, The Body Shop, Mango, Bershka, Springfield, Kiko, Jules, Misako, Intimissimi, Vans, Cup New entrants: o Primor, Aragaza, Aïta, JD Sport (Travers, R., 2017). Figure 24: Shops at Portaferrissa. Portal de l’Angel Passeig de Gracia Avenida Diagonal Rambla Catalunya o 54.389 pedestrians Las Ramblas Placa Catalunya o 16.184 pedestrians Carrer de Pelai Portaferrissa Portal de l’Angel o €3.360/m2/year Passeig de Gracia o €3.060/m2/year Avenida Diagonal o €840/m2/year Rambla Catalunya o €1.260/m2/year Las Ramblas o €1.260/m2/year Placa Catalunya o €1.260/m2/year Carrer de Pelai o €2.100/m2/year Portaferrissa o €1.980/m2/year
Figure 16: Traffic Index (Authors of TC-Group Solutions, 2017, Tc-street.com)
Figure 17: Shops at Portal de lâ€™Angel (17 retailers) + (6 services)
Figure 18: Shops at Passeig de Gracia (18 retailers) + (22 services) + (3 transport)
Figure 19: shops at Avenida Diagonal (18 retailers) + (2 transport) + (22 services)
Figure 20: shops at Rambla Catalunya (14 retailers) + (15 services)
Figure 21: shops at Las Ramblas (9 retailers) + (28 services) + (2 transport)
Figure 22: shops at Placa Catalunya (14 retailers) + (11 services) + (15 transport)
Figure 23: shops at carrer de Pelai (17 retailers) + (1 transport) + (6 services)
Figure 24: shops at Portaferrissa (19 retailers) + (3 services)
Figure 26: Rental prices in 2017* (in euros per square meter per year) according to Statista (Authors of sta-tista, 2017, Statista.com.). “This statistic presents a ranking of prime retail street locations in Spain based on the cost of rent as of June 2017. Of the locations in Barcelona, Portal de L’Angel has the highest rental rate at 3,360 euros per square meter per year.”
Figure 27: Map over these areas & pedestrian flows (Travers, R., 2017) and (Authors of TCGroup Solutions, 2017, Tc-street.com)
1.2.3 mix of main retailers and services (commercial mix)
Commercial mix of Barcelona main commercial streets General:
Main retailers and services: 1. Retailers
Notes: General overweight of retailers and restaurant and cafés. Mass-market domination, here included a high level of fast-fashion retailers and millennial-orientated services. The Barcelona Meeting Point (BMP) stated that 2018 will focus on millennials and internationalisation of the commercial areas and real estate in Barcelona. This is already launched, as the opening of the concept café, ImaginCafe, is expected to be the new place for millennials in Barcelona (Authors of Plantastic, 2018, Plantastic, blog.ticketea.com). The city is generally well connected in terms of transportation and walking possibilities, which all collide at Placa Catalunya as the city’s epicentre. This moreover pushes a high level of pedestrian flow at the centre and makes the placa one of the busiest areas of Barcelona. For the same reason, the placa is moreover one of the first points of arrival or departure for many tourists. General division of commercial mix in % See Figure (28) - The numbers are found through a circa (specific numbers N/A online) calculation of different retailers and services in the following eight main commercial streets: Portal de l’Angel, Passeig de Gracia, Avenida Diagonal, Rambla Catalunya, Las Ramblas, Placa Catalunya, Pelai, Portaferrissa. -
2. Restaurant & Cafes
Main domination of fast-fashion retailers such as the Inditex and H&M Group, while luxury retailers exclusively are located on Passeig de Gracia. Shopping centres and department stores moreover hold a strong commercial position in Barcelona. Of highest importance is, El Corte Inglés, located ten different places in the city. Cafés and restaurants are mostly mixed with retail stores in the commercial streets, yet Figure (29), gives emphasis to key areas for Food & Beverage in Barcelona along with a description of the consumer profile connected to the given area (Travers, R., 2017). Underground Busses (incl. Aerobus commuting between Placa Catalunya and the Airport) Bicycles (Rent of bicycles and Bicing) Taxi
Figure 28: General weight of the commercial mix categories in Barcelona.
Figure 29: market overview on Food & Beverage in Barcelona (Travers, R., 2017)
Economic uncertainty, yet this can be turned into a possibility by offering free shipping, returns and lower product price points.
In line with ASOS focusing its expansion strategies in core markets (UK, US and EU), the company has a possibility to explore millennial-driven markets such as Barcelona, during popular seasons with high pedestrian flows. Improve market visibility and awareness among competitors through advertising in publications or blogs that appeal to the target audience or by investing in further sponsor- and offline events and collaborations.
Gradual adoption of omni-channel or model O2O2O1 approach to distribution, in order to meet the existing consumer trends.
Continuous expansion of ASOS private-label featured at lower price point
Boosting capacity through further adoption of disruptive tech-solutions such as artificial intelligence or augmented reality to its app.
Due to increasing competition from a high level of pure e-commerce platforms entering the market, ASOS must continue to differentiate their products and services on ASOS.com
Increase customer use of m-commerce solutions to push ASOS as more convenient and by-hand of all times. This might be done through a customer reward-orientated sales strategy (ASOS A-LIST) in order to drive further customer conversions.
Competition threat from additional large retailers existing in both digital and physical form as they gain costumers through both channels. For the same reason, ASOS lack a high level of impulse purchase possibilities.
Lack of in-store experience
1. See previous report on the distribution method e-commerce p.10-12