Global Fashion Trends and Local Markets

1.0: Business Description

1.1: Business Concept

Fashion is among the most influential social indulgence around the world and is adopted at different levels and styles by different people. However it is almost correct to argue that clothing represent the most recognized fashion item around the world and is pursued by not just celebrities and influential figures but also the general population all of who not only seek to associate themselves with a successful brand in a bid to emphasize their own status and reputation but also to generally look good and appreciate themselves more. However the sense of fashion inspires pride and as such fashion items are considered ostentatious goods which are pretty valuable in the market depending on the brand that produces it. Given the advancements of technology and the rise of globalization, geographical differences and distances are no longer a challenge in the access of Products and services across the globe. However the cost of access of these products especially authentic fashion items is quite expensive given the additional costs of transportation, taxes and customs for importation. This highlights a business opportunity and concept which looks to commercialize top brands from the US and Australia in the UK and target young women as their main customers. Given the lack of such unique brands within the UK and the tedious process as well as the inconveniences that comes with singular importation of a product, the business is likely to gain traction within the market in a short period and significantly expand to success.

1.2: Business Objectives

1.2.1: Main Objectives

To successfully initiate and launch BKN a multi-brand fashion clothing store in the UK

To enable the accessibility of foreign top brand clothing’s from the US and Australia in the UK

To secure a significant market share within the first 12 months

1.2.2: Business Objectives

1.3: Reasons and Motivations

1.4: About BKN

BKN is a Multi-brand store located in London, UK, offering celebrity approved contemporary labels in clothing other fashion items. These include IAM, GIA, Nakedwolfe and Prixworkshop. The store offers unique and exclusive cloths for women which can mostly be found only online as most of the brands are foreign from the United States and Australia. The business allows different customers to be able to interact with the items they want to buy through touching and feeling their texture to establish authenticity and even fitting to ensure sizes before they can purchase. One of the major advantages of the business is that it helps and enables the customers to avoid tax and custom payment as they would have had to pay if they were singularly and directly ordering online. In addition the store accepts easy returns of clothing through exchanges with other products or vouchers that can be utilized at any time for other products of the customers’ desire. The businesses Vision and Mission is to empower women through enabling accessibility to unique and authentic fashion clothing that not only ensure they look presentable and appropriately dressed for different occasions but also enhances their feeling of sexiness and empowerment despite of their diversity. This enables the development of self worth respect and reputation that positively impacts their lives.

2.0: Business Environment Analysis

2.1: Macro Environment PESTLE Analysis

2.2: Trends in the Fashion Clothing Retail Industry in UK

2.2.1: Consumer Trends

With the crumble of the economy in 2008 and Brexit, consumers in the UK are more cautious with regards to the products that they buy and when they buy them. Deloite (2019) highlight that, with uncertainties due to Brexit ongoing negotiations, a global economic slowdown has been experienced and consumers are generally more cautious with their spending. Lundberg (2018) further highlights that in the current Era, Fashion lovers are keen to be brand advocates and as such are likely to show loyalty to different specific brands. Up to 13% internet users are fashonistas who have a strong interest in fashion and as such use the internet to explore fashion products. As such development of efficient information of different brands and affording it to the consumers is likely to impact the business. In the current global environment information is instantly spread to different locations across the globe and consumers need products to reach them as fast as possible so they can be part of the fashion trends highlighting the need to keep up with foreign superior brands.

2.2.2: Lifestyle Trends

Social media is increasingly becoming a lifestyle for a wide range of individuals who turn to it for whatever they are in need of. Lundberg (2018) points out that Fashionistas are 49% more likely to use social media to research or discover products to buy, are nearly twice as likely to follow brands they’re thinking of buying from and that 16-34 fashionistas are 1.7 times more likely to be driven to purchase by ‘buy’ buttons on social media. Fashion lovers are additionally influenced by fashion celebrities and influencers in the entertainment industry including movie start and celebrities. They are as such more likely to buy fashion items that their influencers wear. Fashion lovers are also known to engage in impulse buying, which entails buying their products on the go. According to Deloitte (2019), fashionistas are 50% more likely to use their mobile to make a purchase than their PC or laptop. This highlights a desire to do their shopping on the go.

2.2.3: Retail Trends

Online shopping is among the major retail trend that is spreading all across the retail industry due to its convenience to the consumer enabling them to shop from the comfort of their homes. Another retail trend is the development of Multi-brand stores that enables the sales of different favorite consumer brands within one store allowing a wide range of diversity for the consumers needs.

2.3: Gap Justification

The consideration of the UK fashion and clothing market as well as the available products in the global market identified a gap in the market for high quality unique and exotic fashion wear from the US and Australian Brands which are likely to be of preference and in demand in UK. The dynamic and frequent changes in fashion and clothing as well as the ability to access these changes instantly from any location via the internet creates an international market for the different products and as such the access presents a gap in the UK economy and fashion industry. While singular order and importation of these fashion products such as cloths is an option to the UK market, it is laden with a wide range of challenges including the inability to fit sizes or feel material and authenticity before purchase as well as additional costs such as customs duty, taxes and transportation costs. Development of the multi-brand stores supplying these foreign brands from the US and Australia capitalizes in economies of scale to minimize the relevant costs and provide consumers the ability to touch and fit their cloths before purchase which in turn contributes to consumer satisfaction and contributes to the viability of the business gap. In addition given the lack of these foreign brands in the UK as well as the lack of companies to provide them in comparison to the huge demand presented by the UK population the gap was sufficiently big enough to warrant an investment that would yield returns.

2.5: Micro Analysis

Clothing Industry in the UK (Market Analysis)

According to the Global Data UK (2018) the UK clothing market was forecasted to reach 46.3 Billion Euros by the end of 2018, contributing up to 7% of the national GDP. The growth of the industry is further projected to be at an average rate of 10.3% between 2018 and 2023 highlighting a significant bright future in the industry. The fashion industry as a whole remains a leading UK employer with up to 555,000 jobs in the fashion industry. A majority of jobs within and associated with the fashion industry as highlighted by Fashion United (2019) are within the retail sale of clothing with up to 414,000 people. Also the retail sale of footwear and leather goods provides a fair amount of jobs in fashion, about 11 percent, 59,000, employers work within this sector. Another 8 percent, 43,000 employers, work in the wholesale of clothing and footwear. Sleigh (2018) points out that the current revenue generated by the industry is 42.5 billion Euros annually with an annual growth rate of 1.6 percent forecasted for the period between 2014 and 2019. The consumer expenditure on clothing within the UK according to Fashion United (2019) makes up 5% of the GDP with up to 56 Billion Euros.

Chart 1 and 2: Consumer Expenditure

According to Statista (2019) Women’s Outware make up the highest sales of fashion products in the UK, not only in 2013 but also in 2017 having grown from 17.4 Billion to hit 21.3 Billion in 2017. This points out an effective growth of the industry and market and therefore the viability of startups within the market.

Chart 1: Value of Clothing and Accessory Market in the UK in 2013 and 2017

While trading in the local product is mostly encouraged within the UK economy, the external trading also highlights a potential for growth and viability with clothing exports amounting to $9.2 billion while imports racking up a $34.4 Billion in total (Fashion United, 2019). This highlights that importation of clothing products is highly exploited within the industry and therefore setting up the business to import clothing from Australian and US brands should not present much challenges. Among the imports, women wear make up the bigger percentage due to the wide variety of women wear being imported into the UK including: Women’s Suit, Not Knit, Women’s suits, Women’s Overcoat, Women’s Underwear making up a combined total of 23%.

2.6: Macro Analysis

2.6.1: Porters Five Forces Model

Throughout the analysis of the Porters 5 model on the fashion industry the threats and risks available within the industry will be identified and analyzed.

2.7: Evaluation of Strategic Fit (SWOT Analysis)

Strengths

Global Distribution- with the development of the multi-brand store in the UK, BKN will be able to distribute globally recognized fashion brands from the US and Australia enabling the global distribution of clothing products to fit the fashion demand for the global designs

The brands that will be imported and sold by BKN include brands from the US and Australia that have not been exploited by the local suppliers thereby providing authentic fashion clothing from recognized brands that are authentic and unique to the UK market.

Given the economies of scale due to large scale importation of the products as well as an agreement with the brands to be official distributors of their products, the company will be able to offer affordable pricing for UK the UK market

Weaknesses

Startup companies usually take longer to establish a market share regardless of how unique the products are this presents a potential weakness for the company

Government policies increasing taxes in imported clothing to promote consumption of locally produced clothing provide a challenge to the business concept and model of BKN

Opportunities

Powell (2019) highlights that 15.3 million women in the UK aged 16 and over were employed in October, 2018. Out of these 9.0 million are working full time while 6.3 are working on a part time basis, this highlights a high purchasing power among the women in UK and therefore their capability to purchase the brand clothing

There are limited physical stores providing multi-branded women clothing from foreign brands in London, most of the pones available however offer luxury items which can be found in other concessions in London as well. This presents a business gap that is filled with the supply of exotic brands. BKN will mostly offer Australian and US brands that are not easy and even impossible in other instances to find in other stores within London and the whole of UK.

The most important Market in the UK after Food is the fashion retail market and BKN has a potential for big success in the business.

Social media platforms such as Facebook and Instagram provide effective tools and opportunities for advertisement of the business and subsequent attaining of customers which can impact the company’s success.

Threats

The government as well as legal policies concerning trading on imported products and services, especially due to the economic uncertainties presented by brexit highlights a key threat to the business.

Already developed clothing retailers and brands also have the capability of tapping into the international market to import unique product and brand designs thereby create competition for the business.

3.0: Marketing Plan

3.1: Marketing Objectives

Aim

To launch a multi-brand store in London selling women fashion cloths and called BKN by the end of summer

To attract and retain a significant market share of the women population within the UK

Objectives within the first 6 months

Raise awareness by successfully advertising the shop using online platforms such as instagram and Twitter

Ensure the shop is known by more than 5000 fashion individuals and icons

Hit a 10,000 limit followership on Instagram and all other media platforms

Successfully develop and maintain a database of the new customers as well as the potential ones to be approached.

To deliver excellent customer care services as well as offer strong relationships with the customers that enhances a positive feedback

Monitor the progress of the business as well as its performance and ensuring adherence to the business plan for maximum benefits.

3.2: Market Segmentation

The primary target for the business when it comes to the sales of the cloths includes women between the ages of 16 and 40 years old. According to Statista (2019) women fashion wear are much more on demand in the UK market compared to their male counter parts. In a bid to specialization, the business chose to focus on the women market and adequately exploit all its strengths. The market of women was further chosen given the higher affinity for women to shop for branded cloths and associate with brands as compared to their male counterparts and as such, the unique brands to be imported are highly likely to attract customers in a short span. Powell (2019) highlight that up to 15.3 million women of age 16 and above are employed either on a part time or full time basis which makes their purchasing power and thus the potential to spend on exotic designer clothes pretty high. The market is further segmented into 2 different categories based on age differences that significantly and consequently impact consumer behaviors as well as taste and preferences. Most women under 30s can be considered to fall within the millennial generation who as a result of the technological revolution, have a different taste and preferences as well as a different fashion sense for dressing compared to women over 30 years who are more mature and subscribe to more mature and rather traditionally decent sense of dressing. Both the segment will include three different types of clothing including: official wear, casual wear and sporty or smart casual wear of different sizes, color and design variety which are capable of satisfying the consumer needs in the UK. The clothing will also be of varied quality and material as well as applicable for different weather conditions, occupations and purposes.

3.3: Targeting

While a wide range of fashion clothing retailers exist within London UK, especially being a metropolitan area with high populations of both Men, Women and Children, the business however will be targeting women within this market and with the specific bias to those within the ages of 16 to 40 years. This highlights a highly youthful generation of women who among other things are highly fashionable and cautious of how they dress and how they look, specifically the image they portray in Public. Often dressing in branded designer clothing impacts the rise of status of individuals and is among the key reasons why these cloths are worn by different celebrities and social influencers. In addition statistics highlight that a wide range of women within this age gap in the UK are either working part time or full time and therefore have the capacity to afford and actually buy the clothing in question.

3.4: Targeting Strategies

The Business will take up a wide variety of techniques and strategy to target and reach the intended consumers and the market. Key among these strategies involves the use of social media advertising and promotion. The target audience involves mostly the youthful generation who are likely to be technologically equipped and enhanced and therefore do not have any problems accessing as well as using technological devices and social media sites to identify any required products for purchase. Among the major social media sites to be used in the targeting and marketing strategies include, Instagram, Facebook, the company’s website as well as other open e-Commerce websites which facilitate retail sales. In addition, the business will employ the use of direct marketing through Newspapers, fashion magazines, promotional as well as competitive give away, television advertising through commercials, and directly approaching any potential target customers on their direct social media accounts and handles. These strategies will be applicable for both of the two market segments.

3.5: Market Positioning

Without a doubt the London and general UK economy is already flooded with a wide range of fashion and clothing retailers selling both local and exotic fashion products within the capital, as such positioning the business to be able to satisfy a specific gap in the economy is crucial to the success of the business. A penetrating strategy which encompasses price and market penetration was adopted in position the business within the market for maximum revenue. Through bulky buying and importation systems the business is able to capitalize on the economies of scale and as such capable of offering the fashion products at an affordable lower price compared to the rivals within London. In addition most of the fashion and clothing stores in London are brand boutiques which represent the brands and thus sell products at original prices which may be quite high for the market. The business in addition is located within London where there generally is a lack of multi brand stores offering variety of brands for the convenience of the customer. The brands provided are unique within London given they are imported from brands in US and Australia that are less visible in the London and UK market. This exploits a whole new market right in the middle of the city where most of the population work and as such positioning the business adequately for maximum revenue and profits.

3.6: Brand Identity

3.6.1: Brand Name

For the maximum exploitation of the fashion and generally any industry in business, development of a brand identity which the customer can relate to and refer to, highlight a key consideration and endeavor. Regardless of the fact that the store will be selling multiple brands from different Australian and United States Brands, the business will also establish itself as a brand under the multi-brand retail of clothing and fashion products. This will be under the brand name BKN. Most of the fashion brands in the UK and across the whole world rarely have any images of any kind in their logos other than the name of the brand which subsequently emphasizes on it and ensures its publicity.

3.6.2: Labeling and Packaging

The business has developed its own carrier bags and packaging pouches that are complete with the brand name in the required design as well as different color pigments designed and assigned for each bag. The different market segments are both represented by different color pigments, yellow which is bright and an attractive color which has the potential to easily change women’s moods and attitudes is adopted for the youthful market segment aged between 16 and 30 years. While orange which has a similar impact is used for the more mature adult market segment consisting women between 30 and 40 years.

3.6.3: Brand DNA Pyramid

The Brand Pyramid used in the development of the brand highlights factors such as: features and attributes including unique and quality imports from top fashion brands in the USA and Australia, Functional benefits such as the cut down of product prices and shopping experience through delivering the foreign unique designs for individuals in the UK and saving them additional costs of customs, transport and taxes. Emotional benefits include inspiring a sense of pride and satisfaction from the quality and designs of the cloths which consequently increases self esteem. Brand persona that related the store and the brand to women fashion needs and requirements within London, UK and the Brand Idea which is unique in the development and presentation of the multi-brand fashion clothing and products from the US and Australian Brands.

3.7: Marketing Mix

3.7.1: Product

The product includes a wide brand mix from different brands in the US and Australia this is a key advantage especially considering the location of the business within London and the lack of multi-brand stores selling top fashion brand products; local and foreign within the city. The product will also include a wide variety in the type of clothing including; official wear, casual wear, sporty wear, underwear, coats and over wear, the cloths will be in different designs, styles, materials, and quality all of which ensure a wide variety for choice for the customer. In addition the product is further segmented to also suit the different market segments divided by age groups to include 16-30 and 30-40 year ranges.

3.7.2: Pricing

Given the business design of selling multiple brands within one store a wide range of clothing products are bought from different designers and brands within the US and Australia, this impulse buying affords the business discounts and cost cuts due to economies of scale. In addition due to the brands being new within UK and therefore quite unique to the market, the business negotiates the brand to lower their prices in order to be able to attract and capture effective market for the product. Due to these advantages the business is able to offer unique products within the market at a significantly lower and affordable price to the target market which in turn impacts the efficiency of sales and revenue collection for the business. In addition, given the products are going to be sold directly to the customers by the business and the fact that the business accesses the products directly from the respective brands in US and Australia the intermediaries such as wholesalers are removed from the pricing equation and this significantly impacts lower and affordable prices for the business.

3.7.3: Place

The location for the business set up is one of the major advantages of the idea and that makes the business plan highly viable. The city of London has a limited number of multi-brand stores. In fact According to Finnigan (2018) most of the fashion boutiques within London sell singular brands of fashion products which highly range from men, women and children products. She highlights that most of the multi-brand fashion stores available within the UK are within the Outskirts of London. As such locating the business in the city of London establishes an upper hand in being able to attract and retain customers due to the variety of multi brands that are unique and of quality offered. In addition research highlights that more and more people are shifting to online shopping highlighting that social media and its use in business decision making is in fact becoming a lifestyle choice. Lundberg (2018) points out that Fashionistas are 49% more likely to use social media to research or discover products to buy, are nearly twice as likely to follow brands they’re thinking of buying from and that 16-34 fashionistas are 1.7 times more likely to be driven to purchase by ‘buy’ buttons on social media. Through electronic Word of Mouth in addition, the customers are capable of interacting with each other and influencing one another on fashion choices and decisions cumulating towards the purchase of a product (Wolney and Mueller, 2013). As such the business will also set up an e-commerce website to facilitate online interaction and purchasing.

3.7.4: Promotion

Being a unique and new business within London the company is lined to use a wide range of promotional techniques for advertising the business as well attracting customers and retaining them. Some of these promotional techniques to be adopted in the marketing of the BKN Multi-brand store include: direct marketing through Newspapers, fashion magazines, promotional as well as competitive give aways, television advertising through commercials, and directly approaching any potential target customers on their direct social media accounts and handles. Further BKN multi-brand store will inform the use of social media sites such as Instagram and Facebook to market the business and reach out to prospective and potential customers. The company will also partner with influential individuals on these social media platforms to associate themselves with the brand and as such reach out to their followers and increase the brands popularity and visibility within the social media domain. In addition the business will exploit the latest development of the fourth industrial revolution: Machine learning and artificial intelligence to analyze the prospective markets and outline their tastes and preferences as well as their behavior so as to enable consumer satisfaction and loyalty.

4.0: Operations Planning

4.1: Business Location

The business will be located within London city in the UK. In addition to being a unique design in terms of offering multiple brands of women fashion clothing from foreign countries and Brands, his type of business is not available within this location and as such highlights the viability of the location, especially with consideration to competition. Major operations will include scheduling and organizing the importation of the fashion cloths and products, transporting them to the store, organizing and planning the inventory, updating the online inventory and carrying out sales transactions. In situations where the product is delivered to the customer, delivery of the program is included in the major operations activities. The main objective and goal is to ensure unique, quality, authentic and affordable foreign fashion clothing brands are available within the contemporary youthful women generations of London within the UK. As such the daily operational activities as well as quality management and control activities include:

5.0: Management

5.1: Management Duties

Given that only one store is scheduled to be opened, the running of the business should not present much troubles due to the simple management structure which will include five individuals: the founder of the company, a partner or intern, designer, Assistant and an Accountant. The table summarizes some of their key managerial functions in ensuring the operation and success of the business.

5.2: Corporate Objectives

Among the corporate objectives that are visualized for implementation are highlighted in the table:

5.3: Legal Structure

The business is designed to be a sole proprietorship with a non functional partner to help with the operations and trading activities, as such the any Legal party within the business will be the CEOs legal advisor and laws pertaining to startup and operations of sole proprietor businesses will apply.

6.0: Financial Plan

6.1: Financial Objectives

To secure significant market share within the first 12 months and therefore Break Even by the end of the first year

Double the sales in year two and double year 2 sales in the third year as such a growth rate of 50% is targeted.

Regardless of the extensive economic turmoil hitting Britain currently as a result of the uncertainties raised by Brexit, a majority of women within London UK have sufficient jobs that impact their purchasing power. In addition, the designs and clothing intended for sales are unique and originate from fashion line brands in the US and Australia that have not been exploited by any other competitor in the market. This enhances the company’s chances to succeed due to the provision of affordable and unique products to the UK market. It also baselines the 50% annual growth rate of the business as forecasted in the financial objectives.

6.2: Growth Strategy

Through intensive advertisement on various promotion channels online as well as physically, BKN should be able to significantly grow its market share within the first one year and achieve the top spot in multi-brand fashion retail clothing industry. Increased promotion and advertising as well as continuous introduction of new products in the market with every subsequent importation, the company should be able to steadily and significantly grow within the first 3 years and level of at the top of the industry.

6.3: Capital Requirements

The capital requirement for the development of the business included a total sum of $10,000. Up to half of the capital was generated through Crowd funding on the Funbable.com websites and are scheduled to be compensated in terms of product for the crowd funders who are important to note were all fashion enthusiasts. The additional half of the capital was gained through personal savings and family investments that will also be paid back in form of imported products for the business.

6.4: .Break Even Analysis

The anticipated prices of the clothing materials are within the average prices of $130 to $150. Using the lower price of $130, the company will need to sell 77 pieces of fashion clothing to break even. Given the unique nature of the clothing as well as the affordable prices taking into account the projected sales rate of 50% with sales of 5 items in the first month the company should be able to break even within a period of 6 months.

6.5: Sales Revenue

Total Sales revenue for the first Year

6.6: Balance Sheet

Balance Sheet (Year 1)

6.7: Income Statement

7.0: Risks

7.1: Currency Fluctuations

Given the uncertainties of the economical conditions within the UK and in London as a result of the Britain Exit from the European Union, currency fluctuations are more rampant and unpredictable. Given the business is wholly dependent on importation of products from the US and Australia the currency fluctuations are likely to highly impact the business and its profitability.

7.2: Brexit Uncertainty

Halliday (2018) points out that due to Brexit the fashion industry is among the industry that is forecasted to receive the most hit. She highlights that while 39 such companies have been flagged to be grossly impacted, 33% of these companies are already experiencing loses.

7.3: Oil Prices

Oil prices represent another risk factors given their fluctuations as well as the need to import products which are most efficiently carried out through shipping. Fuel fluctuations might impact transportation and customs as well as taxes thereby greatly impact the business.

References

Wolny, J. and Mueller, C. (2013). Analysis of fashion consumers’ motives to engage in electronic word-of-mouth communication through social media platforms. Journal of Marketing Management, 29(5-6), pp.562-583.