Situation analysis
Customer Insight - “.. Building in the voice of the customer, seeking customer insights, and getting the right market information before Development proceeds are vital requirements. ” Robert G. Cooper, Winning at New Products Topshop is a fashion forward brand with its flagship store based on London Oxford Street. Topshop have cleverly used social media to get a better customer insight. This is done by using Facebook to like and share posts of what they like. By doing this Topshop can not only get a Customer insight but are able to widen their target audience.
During London Fashion Week, Topshop offered an exciting new experience where customers could customize clothing as it was being modelled on the runway and purchase straight away. They also offered the chance to purchase the music being used on the runway shows. By doing this, Topshop can keep ahead of the game. As explained by the chief Marketing Officer Justin Cooke "We'll get so much insight from people say, actually, everybody wants yellow and it came down the runway in white.
There's a data-capture element that the business can rely on. " By challenging customers to customize what they want and need Topshop are able to target a very specific need to each individual customer, This boosts sales and adds to brand loyalty as each customer will only see products that are write for them. SWOT Analysis (Porter 1971) Porters Five Forces include Bargaining Power of Suppliers > Bargaining Power of Customers > Threats of New Entry > Threats of Substitute Products = Competitive rivalry between an industry.
When beginning to do a SWOT analysis these are the main points to examine in order to understand where a company is currently at. Strengths - Topshop can offer a range of On-trend products at high street prices. With over 500 stores and an online presence, Topshop is able to reach a wide audience with its varied range of products expanding the potential and current shoppers. By working with charities such as Age UK, TRAID and Starlight, Topshop is able to add to its established Brand by adding a feeling of trust amongst Stakeholders.
This also adds to the brand image for Topshop. Due to collaborations with celebrity designers, Models and Media culture Topshop is able to add an exciting new range of products weekly along with adding to its high street recognition. Not only is Topshop available via its online website, it also has other means of social networking including Facebook, Twitter, Tumblr, Blogs and a YouTube account. This allows ability to target a wide range of audiences and increase sales by offering insights to the latest products and events on offer.
In store Topshop offer services including a Style Advisor, Topshop Card, Gift Cards, Sprees and Student discount. This offers a personal feeling to each individual customer Weaknesses - Topshop on the high street is normally a very large store. This means that it is hard for the company to keep track of all staff and products supplied. In order to do this a huge management cost must be applied. This also means that a personal experience cannot be given to all customers on like those who shop in small boutiques.
As Topshop focus on quality of products, prices can be very high priced for a “high street retailer” this can put customers off shopping. Opportunities - Topshop targets younger, fashion conscious customers who will regularly spend money of fashion products, this alone is a main reason why TopShop as a brand will survive recessions etc. Working with celebrities allows the company to create fame and attraction to the company. By doing this Topshop are able to expand by opening hair salons, beauty bars and reach more target audiences like they have done by opening TopMan and targeting a male audience.
An increase in popularity and worldwide recognition by using models like Kate Moss who are highly recognisable allow Topshop to expand worldwide to create more profit and expand revenue. As it stands Topshop are in a good stage to start to introduce collections by famous designers and celebrities more. The recession could affect customer spending habits. The 5 C’s – Company – Topshop is one of the most fashionable and highly credited high street brands. Collaborators – Topshop have many alliances from Kurt Gagar Shoes, Ragged Priest clothing brands, Unique Brands and office shoe brand in store.
Customers – Topshop customers purchase a lot of products online. However, many like to come into store in order to try products on for size and to enjoy the high street experience. Customers find a lot of information about Topshop through personalised emails sent directly to their inbox. Topshop are able to cater for their customers’ needs as they have a wide range of produce available. Competitors – Topshop can realise their competitors by looking at their product positioning, market share and strengths and weaknesses. Context – Political and economical Impact, Technological Impact is the new way in which Topshop satisfies their customers’ needs. This includes the interactive runway.
Threats - Topshops Competitive Rivalary can be influenced by several Factors, This includes - Slow market growth, High fixed costs High storage costs or highly perishable products, Low switching costs. (Hooley et al. , 2004) Current Rivalry between market competitors “Competition can take place on a price or non-price basis” (Campbell et al. , 2004) Topshop are faced with threats from competitors like H&M who currently work with top designers and fashion icons to create and add new lines therefore increasing sales.
When it comes for Topshop to expand more globally they will also be in direct competition with companies like ZARA who already have a huge worldwide presence. On the high street Topshop are in direct competition with other fashion brands like River Island, H&M, All Saints, ZARA. These companies offer similar products, prices and target very similar audiences. Celebrity face reputations could also alter TopShop’s target audience for example; Kate Moss who currently has a collection for Topshop has been known to have a drug problem.
This could put potential customers off shopping here. Others threats towards Topshop can be easily identified by using the TEMPLES method. Technological – Topshop need to be on top of the game when it comes to online shopping and the use of mobile browsers. Economical – Topshop thrive to be Economical in the costs of production. However with the current financial climate and inflation Topshop need to keep ahead with pricing to make sure sales continue to grow instead of fail. Market – Topshop need to make sure that their market is always growing.
By doing this Topshop are eliminating the possibility of being overtaken by other high street retailers. Political - Foregin Trade regulations and new political decisions are something that Topshop need to keep a close eye on. With new regulations beings put in place Topshop could see some of their policies becoming void therefore causing a problem for the company. Legal – for Topshop online Goods must be delivered within 30 days unless agreed otherwise. Customers can cancel orders up to 7 days after purchase with the right to a full refund.
All goods do not have to be returned in original packaging. Environmental – Topshop need to continue working towards recycling and green productions to keep up with competitor H&M who are seen to be one of the greenest and environmentally friendly companies. Socio- Cultural – Topshop need to keep on top of population demographics in order to make sure all products are targeted at the right audience and stores are located in the correct places. Brand Perceptions - “You want your customers to believe in your brand, trust it and perceive it as embodying positive qualities.
You also want the customer to see the brand as completely superior and just as important, have an emotional connection to it” Essential Guide to Marketing Planning- Marian Burk Wood’s - Chapter 6 Planning for products and brands (P129) Topshop is able to keep up Brand perceptions as although being a high-street brand, Topshop’s brave approach to clothes and fashion had made it appeal to fashion- conscious shoppers as TopShop is known for appearing at London Fashion Week and being the biggest supporter of upcoming talent in the UK with over ten years sponsoring the New Generation Scheme.
This gives Customers a feeling of trust and attraction to the brand as they feel safe in knowing they are keeping up to date with trends. TopShop also have a makeup and accessory collection which appeals to its target audience as they have already built up a trust with the shop so therefore see it as superior in all areas. With the use of the personal shopper service in TopShop stores they are able to again have an emotional connection with customers as customers can use the personal shopper service to decide on new looks.
TopShop also cleverly use Celebrity endorsements to make customers feel like a star and build trust with decisions made Objectives All objectives must be SMART – Specific, Measureable, Attainable, Relevant/Realistic and Targeted/ Time orientated. If objectives are not SMART they are not specific enough to be used by the company. (Fill 2005) Specific - Whatever the variable, it must be clearly defined and must enable precise outcomes to be determined . Measureable - Set a measure of activity against which performance can be assessed.
Attainable - Objectives need to be achievable; otherwise those responsible for achieving the objectives will lack motivation and desire to succeed. Relevant – Objectives must be realistic for the company. Targeted – are all objectives targeted to the correct person? Sales Increase - “There is no such thing as an average TopMan or Wallis customer; when we look across all of our different brands our customers’ needs are even more diverse. But in Peerius we’ve found a technology that can engage every individual with unique recommendations. ”
Simon Pritchard (Arcadia’s Group E-commerce Director) In an attempt to boost sales TopShop has as part of the Arcadia group has now started to use new technology on its website – SMART-recs. This technology allows TopShop to target customers as an individual by examining unique behaviour on their website; by assessing the behaviour of each customer individually it allows TopShop to decide where to place information on the website such as recommendations. By using this technology an order value increase by 67% has been seen across all Arcadia websites.
Add Value to TopShop - As TopShop is part of the Arcadia group all financial information is posted as a whole. On the Arcadia website it is stated that a “continued strong cash generation of ? 330. 4m against last year’s ? 297. 4m has been achieved. The Total Group operating profit for Arcadia Group (before goodwill) is ? 225. 4m up ? 35m from 190. 4m the previous year. In order to achieve this result Arcadia has and continues to focus on efficiency of stock management and delivering new products results in improved markdown and margin growth.
E-commerce sales have also added to the profit with a growth of 20% and the ability to now serve 112 countries worldwide. By creating this revenue TopShop are able to extend as a brand and target a wider audience around the world. By opening a new 13,000sqft TopShop/TopMan in Melbourne with expected sales of ? 15m in the first year TopShop are able to target a huge audience and boost sales therefore allowing for further extensions of the brand.
Brand Extension - In 2012 TopShop Arcadia Group completed a sale of 25% equity interest in TopShop/TopMan Limited to Leonard Green and Partners. (The transaction valued TopShop at Two Billion Pounds. ) With the completion of the sale TopShop and Arcadia Group are now completely debt free and are in positive cash. By completing this sale TopShop are able to continue with their global expansion plan. “Our plan is to step up our international investment programme as relevant locations present themselves in the USE and around the world.
This is a very exciting time for the Arcadia Group, with a clear strategy now in place for TopShop/TopMan to become major global players”” Building a relationship with customers- TopShop have established relationships with many Charities including the Teenage Cancer Trust, CALM (Campaign against living miserably), supporting young designers at London Fashion Week, Fashion Targets Breast Cancer and Age UK, By doing this TopShop is able to get close to communities and raise money by selling items of clothing, Mirrors and Accessories.
This allows TopShop to target a range of customers who it would not normally target. Topshop’s aim (within the next year) includes raising a total of 1million for charity across all areas, sponsoring staff with their own fundraising activities and continuing to develop with designers within the New Generation at London Fashions Week. Save costs - Ethnical Trading, Develop TopShop’s living wage project – Work with Impactt to continually improve the performance of supplier Factories.
Environmental Factors - extend Clothes recycling across the full Arcadia Brand. TopShop are aiming to extend their “Reclaim to Wear” brand this year in an attempt to cut back on environmental factors such as pollution In turn this will save TopShop money as they do not have to deal with waste management. Strategy Segmentation and Targeting - TopShop’s customers are typically young people who are willing to spend money to keep up with the latest fashion trends, with the typical age group being 17-30 years old.
TopShop is seen a more high end retailer with most products over ? 25, this shows that customers of TopShop/TopMan are those who can afford to spend a huge amount of money on clothes. TopShop does not target one segmentation as it has a range of products from casual wear to formal wear like dresses and office clothes. TopShop are able to target both male and female audiences with Top Man becoming one of the top men’s high street fashion retailers.
Although TopShop is aimed at young professionals a range of services allow TopShop to target a wider audience. With a valid student card all students get 10% off all year round. This allows TopShop to target students who would not normally shop in TopShop without this discount. Gift cards also allow TopShop to reach new customers and to encourage spending both in store and online.
