By: Tanner Lunetta LXFM 745
Table of Contents: Company Overview:
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Core Mission:
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History:
3
Brand Positioning:
3
Size of business:
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Number of stores/online presence:
4
Company’s pricing strategy:
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Target Customer:
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Mood Board:
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Competitive Advantage:
8
Fashion Trends:
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International Expansion: Competition
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International Market for Expansion:
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Target Market Alignment:
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Pricing Strategies Alignment:
13
Customer preferences and laws:
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Market Entry:
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Entry Mode
14
Financial Situation
17
Integrated Marketing Plan
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Company Overview: Maxfield LA is a high end boutique located in Los Angeles, California. It specializes in mixing traditional luxury brands with emerging streetwear brands, all at high end price points. The company is owned by Tommy Perse. The company generates an annual revenue of 6.2 million, while currently located only within the vicinity of Los Angeles.
Core Mission: “An independent US retailer of International renown, it has converted sunny California to darker aesthetics with an ocean of black�.
Maxfield, LA.
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History: Maxfield was established in 1969 by Tommy Perse who is still the current creative director. The first store was opened in the early 1970’s in West Hollywood. The concept boutique is known for being the first California retailer to embrace the color black. Tommy Perse is renowned for his avant-garde and chic aesthetic and this is displayed in the very selective merchandise in his boutique. He is also the father of successful ready to wear designer, James Perse. Perse is single handedly responsible for Maxfield’s success as a concept boutique verging on gallery due to his impeccable eye, influential reputation, and friends in the right places. Due to Perse’s contacts with old European families, he has access to the pre-owned luxury goods found throughout the stores such as vintage luggage, old Hermes desk sets, and Cartier baubles that all scream old money. For this reason, Maxfield is known as a hub for the coolest and the wealthiest with regulars such as the Olsen twins, Gigi Hadid, and Kendall Jenner. People go to Maxfield to experience the most refined and sophisticated aesthetic, even if they can’t afford it.
Tommy Perse.
Brand Positioning: Maxfield sets themselves apart from other concept boutiques with their ability to give customers access to exclusive designer collaborations, unique merchandising mix (appealing to the refined customer and the edgy customer), while giving the customer their world renowned vibe for moody, LA coolness. Maxfield also gives customers a mix 3
between high fashion designers such as Christian Dior, Gucci, and Saint Laurent and streetwear designers such as Amiri, Fear of God, and Adaptation. Their competitors would be other exclusive boutiques such as Dover Street Market, Jeffrey’s, Colette (before they closed), Merci, Spree, and The Webster.
Local Authority, Maxfield LA, Malibu.
Size of business: The business employs 45 people and generates an estimated revenue of $6,207,720 million dollars a year. This is on target with competitors such as Jeffrey New York, but far from on target with another competitor of theirs, Dover Street Market, that generates 220 million in revenue per year. Their revenue accounts for less 0.1% of the total luxury market revenue. They have 3 locations that are all within the vicinity of Los Angeles. Number of stores/online presence: Maxfield has a total of three bricks and mortar stores located in California in West Hollywood, Melrose Avenue, and Malibu. The company has a Gallery store that is dedicated to selling vintage furniture and hosting occasional pop-up stores for high-end urban designers, such as Fear of God, Virgil Abloh's Off-White, Vêtements, Maison Margiela, Enfants Riches Déprimés, and Mike Amiri. This space is unique because they give the featured designer creative control over the space and how their collections are presented. Maxfield does not use their online website as a space means for customers to purchase products. They instead allow the customer to see the selection that they have inside the store, but give them the option to purchase by allowing them to email the 4
store about their inquiry. The website also does not feature prices for any of their items, adding to the exclusivity and allure of the store. The store heavily emphasizes their Instagram account content to lure in potential customers. They frequently post exclusive items and collaborations they have to attract a wide consumer base to their store, whether it is in person or over email.
Maxfield LA, West Hollywood.
Maxfield LA, Malibu.
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Maxfield LA, Melrose Avenue.
Company’s pricing strategy: Maxfield uses a premium pricing strategy selling to only the wealthiest and most exclusive consumers. Maxfield was rated at the 5th most expensive store in the U.S in 2013, with the average shopping trip coming out to approximately $2,258. They cater only to the absolute luxury segment.
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Target Customer: ● Number of Potential Customers: ○ LA■ Ages: 18-35: 1,246,164 of this relatively 60% are employed in Los Angeles. In that population of employed people 250,000 of men and women ages 18-35 live in poverty. ■ 1,246,164 * .60 = 747,699 are employed. Out of the 747,699 that are employed, roughly 250,000 are living in poverty, despite having an income. ■ 747,699-250,000= 497,699 are left to potentially shop at Maxfield, whether regularly or for a one-time purchase. ● Demographic: ○ Upper Class; Celebrity status ○ College educated ○ Urban lifestyle ○ 18-35 years old men and women ● Psychographic: 7
○ Values exclusivity. ○ Quality over quantity. ○ Appreciates culture and art. ○ Cares about public image. ○ Social. ○ Travel often. ● Behavioristic: ○ Purchases regularly. ○ Strong to absolute loyalty rate. ○ Seeking out something different; rarity. ○ Wants to possess something of significance for others to appreciate. ● Geographic: ○ Wealthiest areas of southern California. ○ Global renown. ○ Metropolitan cities worldwide.
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Mood Board:
Competitive Advantage: Maxfield’s competitive advantage consists of giving a consumer an experience that they otherwise would not be able to experience at typical luxury stores. They give the variety and exclusivity of top tier brands, in a relaxed and creative environment that appeals to the trendy and expensive consumer. Maxfield has also encapsulated a grungy california-cool vibe in a way that makes it uniquely its own amongst the international circle of recognized high end boutiques.
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Macro Trends: ● Customers want to have experiences more than material items. ● Emphasis on health, wellness, and spirituality ● E-commerce and M-commerce ● Sustainability ● Emerging Asian markets ● Transparency ● Inclusivity/ representation ● Rise of UHNWIs
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Fashion Trends: ● ● ● ● ● ●
Personalization becomes key Bricks and mortar is becoming non-existent/ very different Experience of the customer is most important in retail Casual wear/ athleisure Gender neutrality Quality over quantity; absolute is largest market segment; logo fatigue
International Expansion: Competition ● Merci ○ Overview: A boutique meets used bookstore meets cafe, Merci was founded in 2009 in the historic district of Haut Marais in Paris. Merci has a little bit of everything including womens and mens apparel, skincare, homegoods, stationery, and art. The shop is famous for their rotating themes every month and being highly Instagrammable. ○ SWOT Analysis: ■ Strengths● Perfect placement in the heart of a historic district in Paris. ● Many spots for customers to Instagram. ● Provides customers with an experience. ● Uses Amazon Pay and has strong e-commerce platform. ■ Weaknesses● Not as well known as other internationally recognized boutiques. ● Doesn’t seem to have as strong of a celebrity following. ● Not able to be seen from street as it is located in a courtyard. ■ Opportunities● Employing bloggers or social media influencers to generate more brand awareness. ● Finding a way to gain more foot-traffic by making their presence more visible from the street. ■ Threats11
● Lack of m-commerce platform. ● New concept shops opening in Paris. ○ Market Share: ■ No market share; private shareholders.
● Dover Street Market ○ Overview: Dover Street Market is a concept shop founded in 2004 in Mayfield, London by Rei Kawakubo and her husband Adrian Joffe, the president of COMME des GARÇONS. They are known for their installation like spaces and changing the interior bi-annually to represent the season change which is inspired by tachiagari (“season change” in Japanese). Famous for introducing an industrial, anti-luxury feel to the fashion retail world and carrying an interesting mix of high-end and low-end brands. Dover Street Market has expanded to 5 locations including the original in 12
London, and then their expansions to Tokyo, Beijing, Singapore, and New York. ○ SWOT Analysis: ■ Strengths● Possesses a very high level of brand awareness and international fame. ● Strong social media presence and following. ● Has an e-commerce platform. ■ Weaknesses● Website is very overwhelming and confusing. ● More advertising for current artist collaborations and installations than actual merchandise. ■ Opportunities● Streamlining social media pages to reinforce brand instead of having different pages for each store location. ● Developing an m-commerce platform. ■ Threats● New concept shops opening in London. ● The eventual management change and what this will do to the brand. ● Brand dilution by over expansion. ○ Market Share: ■ No market share; privately owned.
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● Spree ○ Overview: A Parisian concept store established in 2011 by fashion designer Roberta Operandi and visual artist Bruno Hadjadj. Spree’s curation of merchandise consists of hand-selected fashion designer garments and accessories, designer furniture from the 1950’s and 1980’s, and art by selected international visual artists. Described as a “gallery-boutique”, Spree is a reflection of the founders’ passions, and travels, and is part of the international circle of recognized fashion stores. ○ SWOT Analysis: ■ Strengths● Trendy location in Montmartre within the 9th & 18th Arrondissement. ● Has established e-commerce platform. A lot of other concept stores do not. ● Run directly by founders. ■ Weaknesses● Not as well known as other members of international circle of recognized fashion stores. ● No membership (for email newsletters etc.) prompt on website. ■ Opportunities14
● Expanding into other social media platforms (currently only on Instagram, Facebook, and Tumblr). ● Evolving into m-commerce with an app that functions similarly to the website. ■ Threats● Not developing and changing to match current trends and meet consumers expectations. ● Not as clearly positioned as comparable fashion boutiques. ○ Market Share: ■ No market share; privately owned.
International Market for Expansion: ● Market: ○ Paris, France: ■ PEST Analysis: ● Political○ Highly centralized government that maintains tight administrative control. ○ Terrorism in recent years has caused a sense of instability, negatively impacting the economy. ○ Brexit in 2016 caused political turmoil. 15
● Economic○ Population of 63.5 million. ○ VAT (Value Added Tax) of 20%. ○ GDP is 1.9%. ○ Currency is the euro; €1= $1.18. ● Social○ Population growth rate is expected to be 0.79% in 2018. ○ Average age of population is 39.5; younger than the average for the rest of France. ○ Food and social life are big part of culture. ○ Biking is a very popular form of transportation. ● Technology○ Leader in nuclear power technology export. ○ Large health technology research programs for young scientists. ○ Global Retail Development Index: ■ France did not make the 2017 index. ○ Target Market Alignment: ■ Paris possesses a high number of individuals who are of our target market as well being a destination where members frequent. There are many locations that would generate plenty of foot-traffic from tourism as well as local Parisians. As Paris is a mecca for all forms of art, there would be plenty of locations with similar gallery type businesses that would generate traffic within the target market. ■ Pricing Strategies Alignment: ● Parisians prefer to purchase luxury apparel and accessories from local boutiques. ● Possess a higher level of art and vintage goods. ● Paris has a high level of young, UHNWIs. ● Attracts a high level of UHNWI tourism.
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■ Customer preferences and laws: ● Considerations should be made about differing schedules for Parisian employees including longer lunch breaks and more vacation time. ● Local management team to best understand the Parisian customer as well as limit any language barriers. ● The French Labour Code is very specific and regulated and needs to be followed closely. ● France functions on a 35 hour work week.
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Market Entry: ● Entry Mode ○ Initial entry■ Pop-up shop in historic district of Paris, Le Marais. The pop-up will consist of Maxfield’s iconic merchandise mix of streetwear and vintage goods including brands Fear of God, Off-White, and Vêtements. Amongst the streetwear will be vintage designer goods like accessories and luggage that will be available for purchase. The pop-up will function as a mix between a high-end boutique and an art gallery- two things Le Marais is famous for. ○ Launch timing and project calendar■ Maxfield’s grand opening will be on November 1st, 2019. This is ideal timing as people are beginning their Christmas shopping and holiday travels. ■ Project Calendar: 2018 January
2019
2020
(1/5) 1st email blast about pop-up shop 18
in Le Marais. February
March
Begin preparations for launch.
(2/1) Billboard announcing Maxfield pop-up shop in March. (3/1-3/8) Pop-up shop in Le Marais.
April May June July August
(8/1) Email blast about grand opening.
September
(9/1) Email blast about grand opening.
October
(10/1) -Billboard announcing grand opening of boutique. -Email blast about grand opening.
November
(11/1)Grand opening of Maxfield’s Paris location. -Email blast about grand opening.
1 year anniversary of grand opening.
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December â—‹ Area analysis and store location: â– Le Marais is a historic district in Paris that is known for its art galleries and boutique shopping. This location was selected as it already caters to and generates customers that fall within our target market.
â—‹ Store design plan:
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■ This store design plans fits the brand’s minimalistic aesthetic with lots of space installations contrasted against blank spaces. The large front windows will allow plenty of space for window displays. The ceilings will be high and vaulted to reinforce the spacious gallery feel. ○ Human Capital: ■ A few marketing individuals will be hired to work with the current marketing team remotely from Paris to assure that Maxfield’s marketing attempts are hitting French trends on time and there are no issues with cultural or language differences. ■ A local Paris management team will be hired to navigate the language barrier and differing laws during the launch and actual expansion. ■ Sales representatives will be hired to work the pop-up shop as well as within the boutique after the launch. They should be fluent in both French and English and be a good representation of the brand regarding style. They will be hired once the boutique’s interior is finished to be trained and assist with merchandising. 21
● Financial Situation ○ Budget, Inventory, and Assortment Plan:
● Sales Projections and Income Statement:
■ Inventory Turnover calculation: ● 420,000/810= 519 ● Integrated Marketing Plan ○ Omni-channel launch plan for global expansion: ■ Objectives● Generate awareness and discussion about Maxfield’s expansion to Paris to those who are current customers as well as generate new customers. ● Make local Parisians as well as travelers aware that Maxfield is expanding to their area. ● Make people that follow Maxfield on social media aware that they are expanding to Paris. ■ Prepare a budget22
Billboards announcing pop-up shop and launch.
$15,000
February 1st-March 1st, October 1st-November 1st
Email Blasts
$10,000
1 email per month from January, August to November
Pop-Up Shop
$150,000
March 1st- March 8th
Total:
$175,000
Allotted Budget:
$180,000
■ Select merchandise● Women’s and men’s apparel, accessories, shoes, handbags, watches, jewelry, furniture, and books. ■ Message● To raise awareness about Maxfield’s expansion to Paris. ● Accurately represent brand to differentiate this concept shop from others already in area.
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Works Cited
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● http://www.nortonrosefulbright.com/knowledge/publications/147348/ten-thing s-to-know-about-labour-and-employment-law-in-france ●
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