Fashion Futures and Innovations Report

Futures and Innovations Holly Freer FRE13392825 (BA) Fashion Marketing 3rd Year 2462 words

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CONTENTS

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3. Executive summary 4. Brand summary 6. Situational analysis 9. Brand moodboard 9. Proposal rationale 11. Consumer insight 14. Pen portrait 15. Objectives 16. Strategy 18. Conceptual moodboard 20. Tactics 24. Action 25. Control 26. Bibliography 29. Appendix

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EXECUTIVE SUMMARY As a globally recognised brand, Zara dominates the high street as the flagship of Inditex (Forbes, 2016). This report will explore the existing methods and models used by the brand, through the use of the SOSTAC model (Smith, 1990), and develop an innovative shopping experience.

Through the use of secondary research, this report will analyse the current market in which they trade in and further primary research will then evaluate the brands strengths and define an area of opportunity to expand into.

Strong trends within the market highlight the idea of personalisation; a concept initially introduced by the luxury market. The gap between online and brick and mortar is becoming smaller and the functionality of physical stores is evolving with the idea of using them to ‘create a brand experience that customers couldn’t possibly get online’ (Carter, 2013). Consumer’s are constantly wanting more of a relationship with brands, and establishing a personal connection curates a loyal consumer.

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‘Zara Recommends’ is a concept that introduces personalisation to the brand’s in store experience and allows the consumer to tailor product selection and communication methods. Extending the existing app develops the brand’s present assets and establishes the current customer relationship.

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BRAND SUMMARY Focusing on Zara’s existing consumer market with established products allows market penetration within the Ansoff Matrix Model (Ansoff, 1965). The combination of both results in a low risk marketing strategy for the brand and a focal point for a personalised service.

Other key brands on the high street are competing for consumer’s attention. As an internationally recognised brand, Zara’s main competitors are those also competing in global markets; with brands such as Stradavarius and Mango expanding globally. Zara’s main competitive advantage lies within their product and are renowned for their ability to develop and stock a product in 2 weeks (Forbes, 2016). With a focus on product, Zara can use these strengths to build promotional material that define them from their competitors and provide them with a competitive edge (see appendix fig. 2 for brand positioning maps).

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“Zara is always striving to meet the needs of its customers at the same time as helping to inform their ideas, trends and tastes. The idea is to share responsible passion for fashion across a broad spectrum of people, cultures and ages.� (inditex.com, 2016)

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SITUATIONAL ANALYISIS As an area to develop, weaknesses become opportunities (See appendix fig. 5 for full SWOT table) and research shows that Zara’s in store experience is considered to be a quantity over quality experience (see appendix fig. 9 for Competitive Shop). Vertical growth within the brand allows Zara to focus on developing and progressing internally. Combined with their ability to develop and stock an item at such a fast pace, the brand’s strengths are a focal point to embrace. With stock rotation moving at such a high pace, keeping on top of the retail environment can be difficult. Developing a strategy that would relieve pressure from sales persons would allow the brand to focus on it’s strengths and engage more with it’s consumer.

As an established company, there is always the element of threat from emerging brands. Considered to have a fresh approach to the market, these brands bring innovation and advanced technologies with them and it is key for brands such as Zara to stay relevant. Introducing an element of technology to the shop floor would allow the brand to enhance its existing customer base and brand reputation.

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SITUATIONAL ANALYISIS Applying three elements of the marketing mix allows a penetrated analysis of the brands tactics and operations; focusing on product, people and promotion (See appendix fig. 6 for full marketing mix).

With such in depth product information available online for the consumer, Zara justifies confidence in the brand. Products are photographed in several situations; from various angles and also, on and off of the model. ‘Zara Recommends’ takes this information and presents it to the consumer whilst on the shop floor, at the click of a button.

Being able to interact with staff in store forms an emotional connection with the brand, as staff can be considered as a personification of the brand. Even with technology progressing at such a fast rate, human interaction is still a necessity as one of the aspects customers value most. Interaction on social media creates a conversation with loyal consumers, using social media functions such as ‘retweets’ and reposting images on Instagram. With Zara posting only promotional material on social media pages, the brand creates a passive consumer and misses out on an opportunity for engagement.

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PROPOSAL RATIONALE ‘Zara Recommends’ is a concept that brings personalization and engagement to the brand’s customers. Inspired by a concept that is already promoted in the luxury market, it brings a sense of personalised service to the high street. Channelled through the app, the brand uses consumers purchasing and browsing history to tailor recommendations and notifications when in store. Being able to track the customer through out the store not only allows the brand to extend its services but also use the data to evaluate merchandising and its efficiency.

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“The customer is at the heart of our unique business model, which includes design, production, distribution and sales through our extensive retail network.� (zara.com, 2016)

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CONSUMER INSIGHT Research into the current markets allows brands to identify opportunities around consumer’s spending habits and how to tailor in store experiences to create a higher revenue. Describing a store as more than a sales channel, Carter discusses the idea of ‘[a store] is the physical manifestation of a brand’ (Carter, 2013) and how brands must use this opportunity to engage with it’s consumers to create a memorable experience.

With technology advancing, brands are adopting a consumer focused attitude; in the sense that ‘Speed is key, which is something that on-the-go mobile commerce is able to tap into more effectively’ (McGregor, 2016). Embracing the fact that consumers are so intelligent with mobile phone technology means that brands can channel their interest and create revenue from engagement.

Consumer’s are not only expecting to use the technology available to them whilst shopping, but for it to create a seamless experience. With key focus on mobile commerce, WGSN (2016) explores the idea that technology is expected to tailor product selection to consumer’s wants and needs and align with their preferences. There needs to be a sense of functionality within the use of technology; an element that solves a problem for the consumer.

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CONSUMER INSIGHT Brick and mortar stores play a key role within the purchase experience, even with technology and online purchasing taking a strong lead in the market.

Carter (2013) discusses the idea that a customer’s visit a brand’s store delivers an atmosphere that online shopping just can’t provide. Brands must use this opportunity to create memorable experiences, that give them a reason to return either online or in store. He also refers to the idea that ‘retailers must give customers a reason to visit their high street stores’ (Carter, 2013) with e-commerce offering such high discounts that stores cannot match; therefor there has to be an element of the in store shopping experience that the customer returns for.

When identifying Zara’s target consumer, it is key to focus on the individual’s psychographics and the way in which their lifestyle affects their purchasing behaviour.

Referring to the AIO Model (See appendix fig. 12 for AIO model ), it is clear to see that Zara’s consumer is fashion conscious and trend focused; with an array of ages and cultures. The key consumer appreciates fast fashion and the constant evolution of stock, which creates a loyal consumer constantly returning to the brand for the latest products.

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CONSUMER INSIGHT Primary research allows an insight into consumer’s attitudes* and the way in which they choose to shop online and in store (see appendix fig.

12 for survey results).

How to prefer to shop; in store, online or both?

Key issues surrounding available product selection and physically seeing the product were highlighted; with consumers wanting to be able to try and engage with the product and then ordering online for the benefits e-commerce has to offer.

Have you come into contact with technology whikst shopping n store?

The convenience of using brand’s apps on a smartphone allow the consumer to be able to save items to purchase at a more convenient time and are a lot easier for the customer to navigate. These concepts create a quicker and more efficient purchasing experience from the comfort of their own home. Consumers also found that purchasing online, over in store, offered higher discounts; often sent to them via emailing lists.

When addressing direct marketing, there was a clear divide with opinions. Those who are opposed to direct marketing found that over marketing can be annoying; receiving several emails a day from certain brands. The consumer can be put off by the fact that they are aware of the market strategy and why the brand is engaging with them by name.

On the other hand, participants also found it flattering, preferring quality over quantity. They have an open mind to the idea when executed well, considering what the consumer is interested in rather than bombarding them with unnecessary products.

*A high proportion of candidates lie within the age catagory of 18-25, due to the fact that the survey was circulated using social media. This would have lowered the chances of participants of older age catagories and distributing the survey with other methods may have given a wider age range.

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OBJECTIVES The main objective is to merge the gap between online and brick and mortar stores; to create a seamless shopping experience and reduce abandoned browsing. Through the use of RFID technology, the aim is to generate a 30% increase in revenue, both online and in store.

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STRATEGY The use of the app in store allows the consumer access to a tailored service, with the brand making recommendations based on previous purchasing behaviour. Notifications titled ‘Have you seen this item near by?’ and ‘Why not check out that top you were looking at online?’ takes the focus from the staff in store and allows items that the consumer may have previous favourite in store or online easy to locate when possibly moved when merchandising. Using data already stored by the customer, the app will address the consumer by first name, nickname or full name; decisions that the customer can choose when setting up ‘Zara recommends’.

Recognising the customer as an individual creates a new way of marketing for a brand who doesn’t spend a large amount on marketing already; pushing product rather than a brand concept.

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STRATEGY The concept is an extension of the existing app, meaning that existing consumers will not have to delete or download a different app. Allowing ‘push notifications’ means that the brand can engage with the consumer when unexpected. All product tags will be installed with RFID chips that will activate the app when a consumer walks past it. Only products that are relevant or that have been browsed previously online will activate. The selection process of which products will have been undergone before the consumer will have entered the store and done using algorithms through technology. This way, the brand can generate reports as to the consumer’s behaviour behind certain products and can use this information when merchandising in store.

RFID chips are a form of technology that have already been developed within the fashion industry. There are current technical issues with their compatibility with iPhones, as they currently only work with android phones. This is an issue that is currently being advanced and will work within the foreseeable future.

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TACTICS Integrating the marketing campaign across the existing website and social media platforms allows the brand consistency through out all marketing assets; targeting those who are a loyal following to the brand.

Introducing ‘Zara Recommends’ to the consumer browsing on the website targets a consumer that may not necessary be use to purchasing through the app itself; combining two different consumers and encouraging them to engage in store.

To be able to track the customer’s browsing and interests on the website, they will be encouraged to create an account online.

These account log in details will then be used with the app. All of this information will be used to create profiles for each consumer; therefor the brand will get to know and understand each individual and their needs.

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TACTICS Marketing the concept allows the brand to explore a multi-sensory experience in store; creating an emotive response to promote a brand relationship. Engaging with 3 key senses (touch, smell and sight) will encourage the consumer to interact more with the product and creates an element of relaxation in store.

Zara’s key fragrance will be exposed on the shop floor; giving the brand the opportunity to change from one to another and promote on a rotation every week or month. As a company, Zara have begun to expand the use of technology in store; installing ‘tablet-style screens’ (Hendriksz, 2016) to allow a self service experience in store. To encourage the consumer to interact in store, these screens will be used to display multi sensory and tactile visuals to inspire the consumers to touch not only the screens, but the products in store too. Extending on the idea that ‘physically holding products can create a sense of psychological ownership, driving must-have purchase decision’ (Williams, 2011), the concept Presenting the title ‘Zara Recommends’, the LCD screens will have hand print sized decals to state their purpose as consumers may take a little prompting to touch.

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TACTICS

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ACTION (zara.com, 2016)

The use of a gantt chart allows planning accuracy when implementing the campaign online and in store. Staggering the online campaign leading up to the in store installation allows the brand to create awareness and excitement with the consumers.

Launching the concept in store in September gives the opportunity for the brand to build wish lists and curate data that can be used around Christmas for gift recommendations. This gives the brand the opportunity to extend the concept further around seasonal holidays.

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CONTROL The application of ‘Zara Recommends’ will increase the number of Zara app users by 35% in the first three months.

The concept will also bring a 15% increase of online and offline sales within the first month.

The first six montha will also see a 25% increase in visits to the Zara website, as consumers will browse on the website to then initiate recommendations.

With the app curating consumer spending behaviour, it allows Zara to analyse and monitor the efficiency of app extension. Comparing the rate of recommendations made to the purchase rate from the app allows Zara to establish it’s success rate and also promote those products or departments that may need a little more promotion.

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