468 Retail and Channel Management Blog

Friday, February 13, 2015

SWAROVSKI: shining experience

If I am planning to buy jewelry to my friends, the first place that comes into my mind will be SWAROVSKI. Lots of stores also offer jewelry for purchase but SWAROVSKI is pretty special in them. The value of product, store layout, customer service, location and atmosphere in the store really makes the purchase a good experience.

SWAROVSKI is a family-owned company founded by Daniel Swarovski in 1895. Today, the company has a global reach with more than 25,000 employees, a presence in over 120 countries and a turnover in 2012 of 2.38 billion Euros. SWAROVSKI crystals hav become an essential ingredient of international design. Since 1965 the company has also catered to the fine jewelry industry with precision-cut genuine gemstones and created stones. Showing the creativity that lies at the heart of the company, SWAROVSKI's own brand lines of accessories, jewelry and home decor items are sold through more than 2,350 retail outlets worldwide.

SWAROVSKI usually locates in mall (such as west Edmonton mall and south gate) and on the side of cross which has great flow of people. Also the design of the store is friendly and shining. Inside the store, the stainless steel prism exterior elements can catch light and reflections from outside the store. The combination of horizontal and vertical showcases featuring LED lighting from various directions make the whole store brighter. Meanwhile, the play of light on different materials also enhance the sparkle of its products. Besides, they usually provide Chinese service due to the Chinese love of crystal. For this reason, they can communicate with Chinese customers better and create the awareness, shape positive beliefs and attitudes for their products.

From the perspective of shoppers satisfaction, customers are generally satisfied with product quality and price. SWAROVSKI Crystals are the finest cut crystals available no matter for their color, cut, and clarity, the finer SWAROVSKI Crystals can even command prices that are equal to the price of diamonds.This makes the value of SWAROVSKI's products higher than its competitors. On the other hand, the price of its products is also not too expensive compared with the competitors too. After purchase, customers can get a membership scorecard for free which customers can get a three years free fix and even some extra discount for the product. All of the these factors make give consumers great purchasing experience.


Outlet Value: A quick buck at what cost?

Outlet stores give us the brand name items for low prices, but at what cost? Lower quality and lower prices is what. The origin of the factory outlet store was an attempt to display the manufacturing process. This was also a place to obtain slightly defective or overstocked items for a lower price. A way to eliminate the middle man and buy directly from the manufacturer. Nowadays, there is a whole new idea for these types of stores. Luxury and affordable are words that come to mind. There are even outlet malls that work together to capture the price sensitive consumer.

“The industry says it’s responding to customer demand for merchandise that’s similar to what’s sold in the regular retail stores, but at a lower price point.” - Colleen Tressler, Consumer Education Specialist

Outlets are growing at a fast pace in the US. Customers value style and fashion but are more conscious of price points ever since the economic recession. Nowadays in the US, 86% of merchandise is specifically produced for outlet stores. This even includes brand luxury goods like Coach, traditionally known as a high value and style brand. But ever since their outlets were added, Coach's sales per square foot have fallen 27% from 2012 to 2014.
A luxury brand outlet store.

Even online shopping is is starting to cater to the price sensitive customer. Some websites like American Eagle Outfitters have a direct link to their factory line of products. These products on their site are priced lower than their in-store counterparts. Stores are deliberately confusing consumers and their intrinsic value judgments, and they exploit the ambiguous nature of differences in actual value, the perceived value, and production costs.

Some legal issues have risen with the items for sale. There seems to be an attempt at manipulation of MSRP to give a higher perceived value for items in outlet stores. Lying to the customer and claiming its product origin has gotten lawsuits filed against GAP, Banana Republic and Saks Fifth Avenue LLC for “false advertising, unfair competition and violation of state consumer laws”. This claim is due to the items being previously sold at normal retail stores, but with no indication that the stores had ever carried the item before being transferred into place.

Is the selling of this excess inventory worth the cost of damaging the brand? In my opinion, no. Outlet malls are focused too much on price. They fall shy of any entertainment value as would be seen in traditional malls. This puts their value lower as it doesn't have proper engagement. In the short term, like an economic recession, getting goods to fly off shelves in necessary to make sales, even with lower margins in order to preserve market share. But in the long run, the brand image is seen as cheap and unreliable. So now we have lower quality, rebranded, look alike goods. Sounds familiar doesn’t it? It is almost like buying a counterfeit knock off of your favorite brand, at your favorite store.


Uniqlo – Two Reasons Why Success is Inevitable in the Canadian Market

It has been a hectic and disheartening month for retailers in Canada the past month. With retail giants such as Target, Sony, and other stores such as Mexx announcing their withdrawal from the Canadian market, one can take this as a warning and make assume that Canada has become a fruitless, no-go zone for retailers.

One store however, Japanese clothing giant Uniqlo has set their ambitious eyes on the Canadian market. They have recently just announced their plans to expand into Canada and plans of two flagship stores being opened in Toronto’s Eaton Centre and Yorkdale Centre. For Uniqlo, expansion into Canada should be a no-brainer as there are many convincing reasons why they would succeed in the Canadian market.    

Reason no.1 – Favorable consumer demographics

Uniqlo has had an explosion of growth in the past decade, quickly reaching the number one spot as the biggest clothing retailer in Asia. This is complimentary when looking at consumer demographics in Canada, as one out of every five people in Canada are foreign born. As well looking at immigration from 2006-2011, 59.6% of new immigrants came from Asia. These statistics can have huge implications for Uniqlo, as this means that they already have a huge number of consumers already familiar with the brand and have had contact with the brand. This is a rare competitive advantage that not many retailers have the luxury of being given when expanding into a new country.

Considering that Canada is one of the most multicultural countries in the world, and that spending by immigrants from Chinese and South Asian Canadians totaled 104.4$ billion in 2013, this is a huge opportunity for Uniqlo to capture.

Personally, I have visited Uniqlo when visiting relatives in China and love their colorful extensive products. With so many immigrants from Asia in Canada, shopping at Uniqlo would be a nostalgic and pleasing experience, an advantage handed to Uniqlo before they even set foot in Canada.

Uniqlo Store in Nanjing, China

Reason no.2 – Learning from Failure

Uniqlo has in the past expanded into countries outside of Asia. They currently have stores operating in the UK and US. Uniqlos’ expansion into the United States was generally quite successful; their expansion into the UK was a different story. Uniqlo had opened 21 stores in the UK in 2006, and by 2011 only eight remained. The reason the stores failed is because Uniqlo had expanded too quickly, and set for itself big hairy audacious goals, which were tantalizing to giant retailers such as Target.  In the end, the goals were not met as Uniqlo did not have a major brand identity in the UK. 
In Canada, rather than setting big hairy audacious goals, they have decided to expand progressively, starting with Toronto, then onto the mother major Canadian cities such as Vancouver, Montreal, Calgary and so on. This strategy, accompanied by the fact that Uniqlo already has a brand presence and identity here in Canada thanks in part to the consumer demographics, will inevitably help lead them to their success.

Uniqlo CEO Tadashi Yanai (2nd from right) at a store opening in Ginza, Tokyo



Workhall Studio: Artistry is Key


Crisp and clean minimalism emanates from all corners of the store; from the simple, airy fabrics to the white, open spaces and basic decor. The moment I step foot into Workhall Studio’s Whyte Avenue location, a calm tranquility washes over me.  I could call this my "happy place". I am quite the shopaholic, so for a retail store to be able to provide me with such a powerful reaction upon experience, Workhall is absolutely doing something right.

Workhall is the definition of a small and unique retailer. There exist two Edmonton locations; one in the heart of our city in downtown Edmonton and the other at the center of our arts and entertainment district –Whyte Avenue.


As mentioned above, Workhall’s style is sleek and minimalistic. This is reflected in both the merchandise as well as the stores’ layouts.They sell high quality staple pieces consisting of neutral colours but interesting silhouettes. As well, accessories are simple and timeless. These are pieces that will remain a part of the shopper’s wardrobe forever. Customization also works to Workhall’s advantage. It is unlikely that a customer will come across someone else wearing the same item; that special dress is exclusively theirs.
Within the store, there is no clutter to be seen as thin silver racks outline the edges of the floor; customers have plenty of room to peruse. This setup also gives the individuals maximized visibility. The sales associates are have mastered the balance of welcoming but not suffocating. They offer warm greetings and guide me as i enter, but allow me to make my own purchasing discussions. Workhall has perfected the ideal shopping environment.

While doing further exploration into this retailer, I fell in love with not only their product and beautiful displays, but also their company culture and brand management methods. Workhall’s mission within the community is founded upon 3 principles; Artistry over commercialism, tailors over factories and longevity over trends. Workhall specializes in celebrating everything local. The boutique carries brands designed by in-house artists and small Edmonton businesses. The clothing designs stems predominantly from the genius mind of Workhall founder Nicole Campre, while jewelry is created by Bang Bang Bijoux - a conglomerate of Edmonton jewellers. 4 This idea of celebrating local art is extremely refreshing, especially with the rise of fast fashion in a world of commercialism.

With 2 locations in just a few short years, Workhall could be changing the face of fashion retailing in both Edmonton and beyond.


Netlfix- Tearing down the traditional retail model

Over the past decade, the movie industry has changed dramatically. It wasn’t too long ago that we were all flocking to our local Blockbuster in order to rent a movie. However, that has all changed in recent years. Netflix has emerged as the dominant form of watching movies and has lead to the demise of massive movie rental stores such as Blockbuster and Rogers. But how has Netflix managed to do this? How have they become so popular that they can drive a multi billion dollar company into the ground? The simple answer is convenience. Like any great idea, Netflix has successfully managed to make our lives easier. Before Netflix, the only way people could watch movies without buying them was to rent them from a brick and mortar store such as Blockbuster. While it was a better option than buying a movie from HMV, it was still a rather large hastle. You had to leave your house, go to a store, rent a movie, and then return it on time or face additional late charges. I know that’s not the most difficult process ever, but with the emergence of the internet, people were wondering why there wasn’t an easier way. Enter Netflix. Netflix has thousands of movies stored in a large database that people can access in a matter of seconds. With a monthly subscription of less than $10, people could now had access to thousands of different movies at their fingertips. Not only do people get more selection but they get it at a much cheaper price as well. Blockbuster went under because this was a clear case of a company not seeing the technological trends that overhauled its industry. In fact in 2005, Blockbuster had a chance to buy Netflix for a measly (relative to massive corporations of course) $50 million. Blockbuster thought that Netflix wouldn’t catch on and they were already committed to their DVD by mail program where people would get movies mailed to them rather than having to go to the actual stores. As we all know, the mailing service never really caught on and allowed Netflix to run away from Blockbuster causing a dramatic shift in power from Blockbuster to Netflix. People love Netflix because it offers choice. It doesn't even have to be undiluted good choice. Half the pleasure of Netflix is surfing through the sea of oddball videos you otherwise would have never crossed paths with. Netflix focused on offering a service first and content second and it’s paid major dividends for them. Originally Netflix had older, less known movies and TV shows. But their convenience has lead to them increasing in popularity which has given them the ability to access newer and better movies as well as make their own movies and shows such as House of Cards which is widely believed as one of the better TV shows around. Netflix has used subscriptions to tear down the traditional retail model and run rental stores out of business.

Michael Kors: Satisfying our Desire for the High Life through “Affordable Luxury”

Michael Kors is a designer brand established in 1981 that sells fashionable accessories and clothing. I find the retailer’s main focus is psychographic and demographic segmentation based on factors such as income, lifestyle, personality and life stage.  The strategic pricing of products is usually in the range of a few hundred dollars which places it closely to brands such as Coach and Kate Spade but much lower than brands such as Prada, Louis Vuitton and Burberry which can range in the thousands.

 What is notable through advertising is that there hasn't been a real attempt made to reach out to a more diverse clientele.  The advertising campaigns focus on a narrow demographic of people enjoying the luxury of a contemporary lifestyle that includes travelling by yacht and private jet.

Fall 2014
Spring 2015

Michael Kors satisfies the hedonic needs of its customers as fashion gives people an outlet to satisfy their emotional and identity needs as it’s a signal for status and class.
Like many who aren’t in Bill Gates’ circle but enjoy certain types of brand names and products, I belong to the target demographic of those enjoy “affordable luxury.” When I hear the words “Michael Kors” spoken, I can’t help but hear and feel a sense of class, sophistication, poise and elegance. Of course I love the product selection and quality but as a marketing student, it’s the brand equity Michael Kors delivers that I find so deliciously enticing.

Over the recent Christmas break I took a trip down to Vegas and frequented a few of their hotel stores in search of a purse that would satisfy my standards of the type of purse a woman pursuing a business career would carry. On a whim I used a different strategy with the sales people to gauge who exactly they perceived as their target demographic and just how helpful they were willing to be.
“I recently got hired as the new marketing executive at my firm,” I lied, “and would like a new purse for work that would be more appropriate for the position.” To my surprise the young lady offers me water and retrieves a perfectly chilled mini plastic water bottle with the Michael Kors label on it. I didn’t even know they had such a thing! Several girls hurried to the backroom to scout the shelves of any sign of the color/style combination I was looking for.

 I can honestly say it was the best customer service experience I’ve ever received in Michael Kors and the entertaining experience confirmed to me who the staff was willing to cater to as opposed to if I admitted I was just a university student. Overall I think Michael Kors has continued to do an excellent job placing itself as a mid-high end brand as women are still flocking to its stores to buy their sought after handbags to add to their collections.


Leg it Over to Bootlegger

About a month ago, the overwhelming excitement of a new semester was striking.  Of course, being the wonderful procrastinators we are, the majority of students (including myself) were frantically running around the last weekend before the “crunch time” began, trying to purchase the last minute essentials to survive another enduring learning experience.  With this said, every student knows that new outfits fall under the category of back to school “necessities.” 

Living in an ideal world where we don’t always plan ahead and are in fact left to face our under the wire battles, consumers tend to focus their attention on retailers priding themselves in convenience.  Bootlegger shines as a popular retailer specializing in jeans and urban wear who, while constantly introducing new fashion lines, never sacrifices the convenience they offer to their customers. 

While battling amongst its countless competitors for customer preference, Bootlegger differentiates itself in catering to their customers by providing superior employee service and establishing strong customer relations within their brick and mortar walls, as well as efficient and user-friendly systems in their electronic retailing.  Staff is trained to enhance the customer experience through engagement, by utilizing assertive but non-aggressive skills, such as friendly welcomings, selection assistance, and even the establishment of a first name basis.  Consumers are encouraged to trial products from the selections offered and while employees may offer feedback, there is no pressure exerted towards purchases by the non-commissioned staff.

While this is all wonderful for customers looking to browse in a store environment and select off the shelf merchandise, those like myself who are already knowledgeable of the particular item they require, can visit their website at bootlegger.com and simply place an item on order that will be delivered to the closest Bootlegger outlet.  Additionally, individuals who are perhaps curious of the selection currently being offered may find further convenience in this form of shopping.  Conveniently this order-and-delivery is a complimentary service offered to online consumers who will receive email notification when items are ready for pickup.  This method of shopping also tends to emphasize the usage of online promotions available where a customer can simply input a code to receive greater discounts.

Customer loyalty and appreciation is depicted in Bootlegger’s loyalty membership cards where a onetime fee of $10 entitles you to a 10% discount towards all merchandise for an entire year.  Additionally, consumers are encouraged to enter their contact information for sale notifications and promotions that will also provide them with further discounts upon the initial signup.  I’ve found this, among others, to be a very useful application of the beyond satisfying retailer that has complimented my budgeted student funds substantially, which is the key to what consumers are attracted to; quality for low price and convenience.