If retailers do not define their market, they can satisfy none.
Market Research - actual and potential customers
Rethinking the market mix!
MERCHANDISING POLICIES
OPERATIONAL POLICIES
Differentiating from Competitors
• Direct Competition - between 2 retailers using same business format
• Indirect Competition - between retailers using different formats to sell the same type of merchandise
• Vertical Competition - between business at different levels of the supply chain
• Lifestyle Competition - business that compete for consumer dollars,
but have a totally different product, like restaurants or movie
theaters.
DIFFERENTIATORS - Those factors that distinguish a business from its' competitors.
Merchandise - unique merchandise, targeted products
Value - best merchandise for least money
Convenience - extended hours, one stop shopping, accessible location
Services - personal attention, lay away, bridal registries
Store Atmosphere - pleasant, clean, cool, fun, upscale
Others - meeting changing consumer needs
Presenting an Image
A retailer's image is how the public perceives the company.
It's like a personality, and can be very influential in attracting and
satisfying customers.
Merchandise fashion level - (high end offer items earlier in their fashion cycle, discounters later)
Services
Physical environment - Ambiance
Employees - appearance and attitude
Products are goods and services. The Product Mix is the entire selection of goods and services.
Merchandise Selection:
Assortment breadth - the number of different catagories of merchandise
Assortment depth - the quantity of items offered.
• broad and shallow
• narrow and deep
• moderate breadth and depth
Service Selection
What are services?
Price Strategy
A retailer's pricing policy must be in tune with their image.
The right price brings about the sale, generates a profit, satisfies customer expectations and meets competitive situations.
Price/Quality Relationship
Quality and price usually, but not always, correlate.
•Prestige
pricing - setting a high price for consumes that want quality or the
status of owning expensive and exclusive merchandise
• Price promoting - advertising price reductions to bring in shoppers. Can be "loss leaders," but increase traffic
Specific Pricing Approaches
Most retailers seek high markups on low volume, or low markups on high volumes
• Value pricing - pricing below price suggested by vendors
• Everyday Low Pricing (EDLP) - few promotions, low price guarantee. Security over excitement as the draw for the consumer
Place Strategy
Site Location
Should reach target market, be convenient and accessible
Store Clusters
• Central Business Districts - traditional,
town-center type of areas. Appeal to city consumers, workers on break,
tourists and business visitors.
• Neighborhood Shopping Centers - 5-15 businesses in a building cluster. Strip malls are a variety.
•
Community Shopping Centers - 5-50 stores, usually anchored by a primary
store (department store or supermarket) Designed for convenience.
• Regional Shopping Centers - Malls
• Super-Regional Centers - really big malls, that attract customers from up to 25 miles away
Market Coverage in Site Selection
• Intensive
• Selective
• Exclusive
Facilities Design
The visual identity of a store should support its' image.
• Exterior
• Interior
Promotion Strategy
FOR WEDNESDAY: Bring your paragraph about your store. You may bring your laptop if you like.
You have done a SWOT analysis of a store. You've identified the competion (threats).
Now come up with your own store that is going to be a competitor of the store that you used for your SWOT.
Come up with a name for your store, and in one paragraph talk about:
What you will sell What your price point will be Where your store is located What the atmosphere in your store is like How you will compete with the store you used for the SWOT. What will you do better? What will you do differently? What will set you apart?
performing multiple steps on the channel of distribution
Supply Chain Management (SCM)
The Textile Industry
• pre-industrial
• industrial
• post industrial
In post industrial countries manufacturing shifts from local to global
Fast Fashion or Quick Response (QR) Models
The 4 r's - reliability, resilience, responsiveness and relationships - are essential for managing the supply chain.
An effective supply chain strategy should be market driven and customer focused with strong links between the buying and product development processes.
Key Points to review -
• cost
• speed to market
• reliability
• flexability
• responsiveness
(JIT) Just in Time - pioneered by the Japanese - it is the delivery of finished good in time to meet market needs with no excess
Global Sourcing
Drivers for Change
1. reduced labor costs 2. advances in technology 3. elimination of quotas
Cheaper imports open new markets and create high demand and new opportunities.
CHINA: Originally famous for silk, cashmere, fine tailoring and hand embellished goods
The ending of MFA (quotas) has opened this market and provides access to enormous skilled labor force. Often called "The factory of the world."
INDIA: The second fastest growing economy. Large scale textile production, esp. cotton and silk. Large labor force that speaks English
SRI LANKA: Now a world class manufacturer of fashion clothing.
TURKEY: Manufactures many European brands. esp. swimwear and nightwear - a fast fashion hub
MEXICO AND CENTRAL AMERICA: Manufacturing for American Brands, lower duties and import rates
ITALY: World class Textile and Leather
UK: Small, specialized. Knitwear
USA: Automated and labor efficient - based in 3 states, Georgi, California and North Carolina
Ethics in the supply Chain
Demand for Ethical goods
Ethical fashion strives to make the world a better place; it is:
Social Responsibility
Ethical fashion means providing workers with fair hours, wages, and
rights, as well as a healthy work environment. Further it refers to
practices that take into consideration all associated with apparel
supply chains including management, designers, production workers, sales
and even we the consumers. This includes, but is not limited to:
• Fair and living wages for workers
• Safe, clean working conditions
• Worker’s rights (For example, those outlined in the ILO conventions)
• Workers’ freedom of association and voice in the workplace
• Promote traditional skills
• Promote rural development
• Locally made
Environmental Responsibility
Ethical fashion ensures that the process of getting the product from
raw materials to the consumer has as little negative impact on the
environment as possible. This can be done in a number of ways, depending
on the impacts identified and the design strategies applied:
• Use of environmentally responsible materials (organic fibers avoid
chemical use in growing fiber, polyester fibers can be made of
recycled materials and require less energy in washing and drying, for
example)
• Minimizing negative environmental impact by employing sustainable best practices (shipping, office waste, etc.)
• Reusing, reassembling, and maintaining clothes in use for longer
(vintage/used clothing stores, repair services, taking apart old clothes
and sewing new finished products with them)
• Designing for disassembly and repurposing clothes so they have a
second life (disassembling clothes and using the material to create new
finished products)
• Employing energy and water efficient processes for dyes and finishes and using non-toxic substances.
• Does not use pesticides or harmful chemicals
• Use innovative textiles that minimize harm on the environment and
follow the precautionary principle with new technologies (produced from
recycled or newly engineered materials)
• Minimize load on landfills by using Biodegradable products (e.g., ones
that could easily be broken down by the environment at the end of
their life cycle. Embodies cradle to cradle concept that materials
should protect the ecosystem and be free of waste.)
• Minimal waste in the production process
Innovative new businesses that are not based on the make, use waste principle, but are based on principles of cycles
• Animal products are ethically sourced and vegetable tanned
Has an Impact
Ethical fashion means working to impact the greatest number of people
in as positive a way as possible. You as an individual can make a
huge difference, small companies can make a big difference, and even
the world’s largest companies can be motivated to shift toward more
ethical practices.
Conventional Companies with a Social Mission
Using a percentage of sales and re-directing it to non-profit
programs and projects around the world. While not always socially or
environmentally responsible, these programs bring new values into
commerce and make the world a better place.
Why “Ethical Fashion”…?
“Ethical Fashion” encompasses “Sustainable Fashion”, “Eco Fashion”,
“Fair Trade Apparel”, animal rights, and cultural concerns. It goes a
step beyond to include all fashion that is socially and
environmentally conscious.
