Fashion Marketing
1.0 Executive Summary
1.1 Problem
The big variety of companies that target similar market segment offer products of uncertain quality. The problem is that customers are not always sure whether one or another brand sells a particular cloth of a high quality. Moreover, there are situations when an enterprise is great at offline sales but do not allow its customers to purchase its products online.
1.2 Solution
Topshop offers a variety of goods of high quality. The fact should be transmitted to the target audience as the main point of Topshop’s existence (Brown). The company should be perceived as the one that meets latest trends without losing in quality aspect. Moreover, Topshop offers convenient online shopping with the ability to take a close look at all its production by the means of the internet.
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1.3 Market
The fashion market is growing fast, and it is a matter of fact that most of the modern successful companies are “old players”, and Topshop meets this criterion as well. However, many organizations compete according to modern rules that involve the application of a variety of marketing methods and actual changes of the products.
1.4 Competition
The main competitors are Zara, H&M, Asos, and River Island. Most of them are competing successfully, each having its advantages and disadvantages in the global market (Brown). Zara is probably the strongest among these companies, and it definitely affects offline sales greatly.
1.5 Financial Highlights
Topshop is a part of Arcadia Group. Therefore, most of the data is presented in complex, but the information can tell about Topshop’s situation as well, as it is the largest Arcadia representative. The annual revenues have fallen dramatically (“Statistics on ‘Clothing Stores in the UK (Kantar Media TGI)’”). In fiscal year 2010/2011, the overall sales have reached 2,6 billion GBP (3,5 billion USD). In fiscal year 2015/2016, the situation was close to 2.7 billion USD (“Statistics on ‘Clothing Stores in the UK (Kantar Media TGI)’”). The internet sales have grown by almost 24%, which can be explained by company’s orientation on the web market as its main competitive area (Schlossberg). However, to succeed financially, it will have to pay closer attention to offline sales.
2.0 Opportunity
2.1 Problem
The main problem that exists in the market segment of Topshop is the fact that the companies that sell clothing for affordable prices often have to decrease quality of the product in order to be able to get the expected revenues. However, more and more people are noticing that even though clothes produced by many brands in the observed market segment are fashionable and meet modern trends, they often use low-quality materials, which makes the outfits look bad after one wears it for a few times (BBC).
2.2 Our Solution
Topshop ought to be aimed at production of high-quality products, even though they are presented in the observed segment for affordable price. Such a goal may be reached in numerous ways, but the main requirement is to reset the budget in a way that more money can be used to purchase the high-quality fabric (Brown). After that, marketing plan should be based on letting people know about company’s policy to let people understand the obvious advantage of wearing Topshop products.
2.3 Roadmap/Future Plans
Future plans should be based on the goals that the company tries to reach and the problems it tries to solve. In this particular case, as Topshop tries to improve quality of the clothes in order to beat the competitors in this aspect, it has to pay particular attention to such things as production and marketing, as both these elements are based on financing (BBC). Thus, first of all, financing has to be reset, as it was already mentioned. Parts of the sum needed may be saved up from the other aspects, which is the best way to avoid the loans. After the money is obtained, it must be used to conduct new quality material policy as well as proper marketing campaign.
3.0 Market Analysis Summary
3.1 Market Segmentation and Targeting
Topshop offers clothes in different price categories, so its pricing is widely-oriented. Nevertheless, it is largely perceived as the affordable brand. It aims at fashion-driven people who are united by their desire to meet latest trends. “Officially our target market is 16-30 year old women, but internally we target every who loves fashion, regardless of age or income” (Topshop). Generally, Topshop has an understanding that they are aimed mostly at people with average income.
3.2 Competitors and Alternatives
Topshop is affiliated to the market segment that offers (mainly) affordable and fashionable clothes that meet the latest fashion trends. Topshop has several production lines that differ in pricing, but the main pricing policy remains the same. The competitors with a similar pricing and target audience are H&M, Mango, Asos, Zara, and River Island (BBC). The rivals use similar methods to promote clothes of similar target audience and pricing policy. However, the quality may differ as well as the basic ways to get to the customers (online shopping priority in Asos case).
3.3 Our Advantages
Changing policy to the quality improvement should not increase the prices largely, only adding a little in case it is necessary to keep profitability. The positive effect should be reached by resetting of the funds that are spent, for example, on marketing, in order to improve the quality and gain the customers. Therefore, the obvious strong advantage is that Topshop offers better quality than the competitors while staying in the same market segment. What is more, Topshop is more convenient, as it has different clothes lines, each differing by price (Brown). The other brands do not usually divide their production in such a way. Topshop has a bright design that is used for promos. It also has a developed and convenient website, which is available for shopping, together with the offline location. Thus, Topshop can grasp larger audience than the brands that mostly use the offline stores. Apart from that, the website does not only allow to shop online, it also features some interesting sections, such as recent Topshop models’ photoshoots and fashion articles.
4.0 Execution
4.1 Marketing Plan
According to the analysts, last several years are not the most successful for Topshop and its owners. “Topshop has lost some of its market share. It’s a very competitive market and this segment has always been very fast paced, with the likes of River Islandand H&M competing strongly”, says Richard Hyman (BBC). Thus, Topshop has to introduce changes in order to keep its positions in the market. Apart from already mentioned strategy of adding to quality and promoting it, there are other facts that should be considered by Topshop in order to compete in a proper way (Rigby). It can reach new clients, penetrate into new markets overseas, as well as involve celebrities into new marketing campaigns. All together, these steps should bring Topshop immediate growth.
4.2 Sales Plan
The overall sales of Topshop are currently on the fall. Therefore, new sales plan should be established. According to the reports, sales have fallen by 2.5% in 2017 as well as during several previous years (“Statistics on ‘Clothing Stores in the UK (Kantar Media TGI)’”). It may not seem a dramatic change, but a negative tendency is kept during last several years, so altogether, such changes lead to huge losses. However, its online sales are on the rise, which means that offline locations need to be enhanced in order to increase their revenues. The website has a database of 120,000 users, and 180,000 unique individuals are visiting the platform per week, spending averagely 44 minutes while shopping (Schlossberg). The plan is to increase offline stores’ sales in an amount that would allow to cover the 2.5% decline and reach the positive amount. Taking it into account, the target is to reach 4% increase every year for at least 4 years in a row to get to the leading market positions.
5.0 Company and Management Summary
5.1 Company History and Ownership
Topshop was founded in 1964 as Peter Robinson’s Top Shop. It was a store for young people. Its flagship store was opened in Oxford Street shop. It was then perceived as fashion for the “young and different generation”. The brand cooperated with such figures as Mary Quant and Gerald McCann (Brown). It acquired a branch in Norwich in 1966 (Brown). Today, Topshop is a part of Arcadia Group, which also features such brands as Dorothy Perkins, Burton, and Miss Selfridges. Today, the company has more than 500 locations, around 300 are located within the UK (BBC). More than 80 stores are opened in the US.
5.2 Organizational Structure
As a part of Arcadia Group, obviously, Topshop depends on its ownership while implementing own policies. Therefore, main decisions come from London, the UK. Nevertheless, Topshop has many positions for each of them to run particular spheres. General manager, visual manager, sales assistant, team leaders, personal shoppers, branding managers, and some other positions form the current personnel structure of Topshop (Brown). Each of them performs the according function.
5.3 Personnel Strategy
Taking into account the fact that the overall direction of the company is changing, every person responsible for Topshop success has to understand the goal that the enterprise is trying to reach. However, only knowing company’s vision and mission is not enough to make an employee motivated to do his or her job in their field. Therefore, a system of bonuses should be developed to award people who make a sustainable contribution to company’s movement towards its goal. It should be presented in a set of milestones designed for each store (or website). Each of the milestone that is accomplished by an individual should bring that person additional 10% to the next salary payment. It is a pleasant bonus, which can be considered by many as an opportunity to put the skills to work and benefit from that.
6.0 Financial Plan
6.1 Revenue/Sales Forecast
It is quite hard to determine the particular financial situation of Topshop, as it is a part of Arcadia Group. However, the successes of the group of companies can tell a lot about Topshop position, as the company is the largest one among the group. The annual revenues have fallen dramatically. In fiscal year 2010/2011, the overall sales have reached 2,6 billion GBP (3,5 billion USD) (“Statistics on ‘Clothing Stores in the UK (Kantar Media TGI)’”). In fiscal year 2015/2016, the situation was close to 2.7 billion USD. According to Statista, sales have been falling during the last year (“Statistics on ‘Clothing Stores in the UK (Kantar Media TGI)’”). However, the internet sales have grown by almost 24%, which can be explained by company’s orientation on the web market as its main competitive area (Schlossberg). However, such great competitors as Zara make fortunes through the offline stores, so winning a greater share in this particular sphere would bring Topshop sales domination.
6.2 Projected Profit and Loss
Looking at the scales at which internet sales have increased, it should be said that the company is definitely accomplishing its online targets. However, offline stores’ sales should be increased, and it can be done by promoting goods through celebrities, increasing the quality of the materials, and evaluating customers’ needs. Growth by the already mentioned 4% annually would bring the company great offline retail positions for several years.
