Selfridges Report Final - Vandell Stretton

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SELFRIDGES REPORT

Manchester Metropolitan University Vandell Stretton

14039377 Business Communications 10th of December, 2014

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Page Number Content

3-7 1. Introduction

3 1.1Executive Summary

4 1.2 Selfridges in the Clothing Sector

5 1.3 Selfridges in the department store sector

6 1.4 Selfridges Shoe Lounge and Menswear

7 1.5 Selfridges Online Performance

8-16 2. Main Body

9 2.1 Comparison of Harvey Nichols Against Selfridges

9 2.2 Selfridges and the Luxury Consumer

10-11 2.3 Category Analysis

12-16 2.4 Product Analysis

17-19 3. Conclusion

17 3.1 SWOT Analysis

18 3.2 Conclusion and Recommendations

19 3.3 References

19 3.4 Bibliography

1.1 Executive Summary This report analyses the department store Selfridges against the clothing sector and the department store sector whilst analysing the luxury consumer and their buying habits and how Selfridges caters to their needs. Luxury consumers need for a wide selection, superior quality and exclusivity is key in defining their reasoning for spending (Okonkwo, 2007) and Selfridges target all three of these points with their vast range of exclusive brands.

Directly comparing Selfridges against its strongest competitor Harvey Nichols due to the similar demographic of their main user share, Selfridges appears stronger in that they have a wider selection of products and a better value for money when considering fabric type, construction and country of origin, also the size range offering is wider for Selfridges.

To continue to show growth over the Autumn Winter 2014 period Selfridges needs to improve it’s online store by offering free postage and packaging, and including viewing elements such as 3D models of the clothes and supplying more information on products (Mintel, 2014). Creating a selection of exclusive own brand clothing for the Autumn Winter 2014 would prove profitable for Selfridges due to it’s already strong brand heritage and synonymous canary yellow branding.

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1. Introduction

1.2 Selfridges in the Clothing Sector

Selfridges is an upmarket department store that caters for the higher end of the mass market with a broad range of brands which stretches to luxury brands, these brands are not as prominent as other high-end UK department stores such as Harvey Nichols and Harrods (Mintel, 2014.) Selfridges stock clothing for men, women and children, accessories including footwear, homeware and food (selfridges.com, 2014.)

Selfridges have 4 stores throughout the UK the long established store on Oxford Road, London and three other provincial stores in Birmingham and two in Manchester. (Mintel, 2014) Consumer spending in the clothing retail sector is estimated to have increased in 2014 by 4.6% to £52.9 billion with Selfridges taking a share of £511 million equating to 0.96% of the clothing market. Consumer spending in the clothing retail sector has rose 6% in 2013 with Selfridges rising inline with this at 6.1% (Mintel, 2014.)

Department stores as a whole hold the second biggest share of the clothing market after specialist clothing

stores. (Mintel, 2014) With a strong growth in the clothing sector and no sign of decline Selfridges will

inevitably have a successful autumn/winter 2014.

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http://selfridges.com

1.3 Selfridges in the Department Store Sector

High-end department stores such as Selfridges and Harrods have seen an increase in their market share of

the department store retail channel in 2013, with Selfridges seeing an increase of 0.1% to 7.2% and Harrods

an increase of 0.4% to 9.6%. (Mintel, 2014) Considering this growth trends through to 2014 Selfridges will

eventually begin to outpace other department stores such as House of Fraser, this growth indicates

Selfridges will have a successful Autumn/Winter 2014.

These high-end department stores have constantly increased their market share year by year, much more

than mid market department stores have. This is due to the migration of international consumers who are

wealthy, also with the support of tourism in the UK’s capital and department stores such as Selfridges and

Harrods being seen as tourist attractions. (Mintel, 2014)

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1.4 Selfridges Shoe Lounge and Menswear

The introduction of the Shoe Lounge has allowed Selfridges to outpace it’s sector competitors in the

footwear department “apart from Selfridges all department stores appear to have become less popular for

footwear.” (Mintel, 2014) This will help Selfridges increase it’s main user share of the male demographic for

Autumn/Winter 2014 with “increasingly fashion conscious men splash out on the latest shoe styles” (Mintel,

2014). Sales in the menswear sector have grown 4.8% in the last year, Selfridges will benefit from this as their

“customer base peaks among men aged under-35 who are the most fashion conscious” (Mintel, 2014)

although the “Menswear – UK, March 2014 report shows that men have become less interested in

brands” (Mintel, 2014) this suggests that Selfridges have the opportunity to create a strong own-brand

offering.

With less outlets and store space compared to other department stores Selfridges have a higher annual

sales per square metre with £8,577 million per square meter; driving down overheads by utilising space helps

improve their overall profits. In comparison to other department stores Selfridges show strength in that they

are profiting from less stores, this presents itself as lower risk where particular regions may be causing a loss for

the company due to region specific issues such as poor weather conditions, or in the case of autumn winter

2014 religious reasons, where Christmas may not be widely celebrated by the immediate demographic of

the region, Christmas is often considered the most important and profitable time in retail.

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Mintel, 2014 Department Store Retailing - 2014

1.5 Selfridges Online Performance

Selfridges have only recently launched it’s transactional online store in 2010, which is evident in it ’s lack of

sales through it’s website in comparison to other stores in the department store sector. The Selfridges website

has a poor conversion rate with only a third of visitors making a purchase, this will hinder Selfridges

performance during Autumn Winter 2014, as opposed to the fashion sector where “Mintel estimates that

online sales of clothing and footwear will increase by 14.5% to reach £10.7 billion in 2014.” (Mintel, 2014)

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2.1 Comparison of Selfridges against Harvey Nichols

Harvey Nichols is the direct competitor of Selfridges within the UK with a similar offering in terms of product

and brands and also locations throughout the UK competing for the same demographic in some regions of

the UK, although Selfridges holds a larger percent of the department store retailing market share at 4.1%

and Harvey Nichols at 1.4% in 2013. If the lead of market share over it ’s main competitor maintains its trend

throughout Autumn Winter 2014 Selfridges will stand strong and remain profitable without Harvey Nichols

becoming a direct threat. Selfridges and Harvey Nichols have very similar user share this also makes them a

strong competitors.

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Mintel, 2014 Department Store Retailing - 2014

2. Main BODY

2.2 Selfridges and the Luxury Consumer

A luxury brand is described by a (Mintel, 2014) survey claims that 63% of adults deem luxury being defined

as superior craftsmanship and quality, 59% believe that exclusivity sets a luxury brands standard and 46%

feel that limited availability defines a luxury brand. Selfridges as a store cannot control the quality of the

clothing it’s brands sells but what it can control is the brands it sells and therefore the level of exclusivity it

offers recently launching “a new exclusive Eleven Paris collection featuring Kate Moss from March 2014 and

a capsule collection of T-shirts by well-known photographer David Bailey.” (Mintel, 2014) These kind of

exclusive collaborations is what will prepare Selfridges for a successful autumn/winter 2014.

With a broad range of luxury brands available in a single outlet the Luxury Consumer is being catered to in

that “the luxury consumer has evolved beyond the ‘head-to-toe designer clad single-brand loyalist’ to a

smart and savvy discerning consumer.” (Okonkwo, 2007) catering to the luxury consumer in this sense with the

hundreds of brands Selfridges offers Selfridges will be prepared for a profitable Autumn Winter 2014.

Although the online offering for Selfridges leaves a lot to be desired “The major of luxury consumers prefer to

shop in the physical stores in order to benefit from a complete product selection and also enjoy the luxury

retail atmosphere. However, other shoppings channels such as the internet and mobile shopping are gaining

influence in the luxury arena” (Okonkwo, 2007) this sort of evidence explains that the poor offering through

the Selfridges website shouldn’t greatly effect the retail performance during Autumn Winter 2014.

Luxury goods are bought as a treat/indulgence more so by women than men as stated through Mintel and

“Luxury consumers do not buy luxury fashion goods when they are required because the desire for luxury

goods is not fuelled by basic needs. Luxury products are ‘cravings’ and sometimes ‘wishes’, than than

functional needs, therefore there is a continuous yearning to possess them. Luxury goods are objects of

desire and desires exist on a container basis’. (Okonkwo, 2007) with Christmas being a time of self-

indulgence Selfridges are in the position to create a huge profit over the Autumn Winter 2014 period.

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Luxury consumers feel that “In addition to the store layout, the colour scheme that a brand adopts in its store

design is essential to its image and positioning” (Okonkwo,2007) with Selfridges having clear, instantly

recognisable branding through the use of canary yellow in store and on bags it appeases to the luxury

customers needs, also “… yellow is believed to be the colour of intellectual and mental

stimulation.” (Oknonkwo, 2007) this idea being conveyed to luxury consumers is important in that they are

now a “…smart and savvy discerning consumer” (Okonkwo, 2007) this use of a clear colour scheme will

allow Selfridges to outpace it’s competitors during Autumn Winter 2014 who lack a strong visual brand

identity.

2.3 Category Analysis Selfridges:

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Harvey Nichols:

Creating a product and category analysis of Selfridges and Harvey Nichols allows us to compare which

brand has the better product and category range, better being described as the brand that caters to the

luxury demographic more. In the above hierarchy and charts it shows that Selfridges has a broader

category range with 7 different main categories opposed to the 4 within Harvey Nichols who don’t stock

kids or homeware. Specifically analysing luxury jumpsuits sold by both brands Selfridges has 20 options

available whilst Harvey Nichols only has 14 and at a lower average price. Selfridges also stocks on

average a larger size range, and also caters for size 18 women, with a better size range being important for

women (Mintel, 2014) Selfridges is more desirable than Harvey Nichols for the Luxury consumer in that they

are attracted to a brand having a broad selection of products. This will create a strong grounding for

Selfridges during the Autumn Winter 2014 against it ’s main competitor.

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Brands Price Range

Average Price

Size Range Average Size Range

Colours

Harvey Nichols

16 £415-£1,300 £642 4-16 8-12 7

Selfridges 20 £410-£2,595 £770 4-18 8-14 6

2.4 Product Analysis

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Retailer Harvey Nichols Selfridges

Product Name Metallic Zigzag Knit Jumpsuit Zadie Lace Jumpsuit

Photo

Promotional Feature M Missoni multicoloured fine knit viscose blend jumpsuit

Cut to a flared silhouette with a v-neck and concealed side pockets, this design is complete with two concealed side pockets

Size 6-14 4-16

Retail Price £695 £860

Country of Origin Unknown Unknown

Designer M Missoni Diane von Furstenberg

Construction Fastenings Pulls on Concealed zip fastening at side

Design Features Signature metallic zigzag weave, twisted neck, pointelle panelling, banded open back, ribbed trims, partially lined.

V-neck, spaghetti straps, all-over crochet with jewel embellishment, two slip pockets at side, straight trousers, fully lined

Fabric Fabric1: 51% viscose, 39%polyamide, 7% polyester, 3% metallised fibre; fabric2: 76% viscose, 15% polyamide, 8% elastane, 1% metallised fibre; lining: 100% polyester

84% nylon, 16% elastane; 68% triacetate, 32% polyester; lining 97% polyester, 3% elastane

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Product Name Slate drape crepe jumpsuit Zadie Lace Jumpsuit

Photo

Promotional Feature Jenny Packham slate crepe jumpsuit Pretty knot detailing and a chic silk panel embellish the front while a fitted waistband makes it a flattering choice for the most sophisticated of females.

Size 8-12 8-12


Country of Origin Unknown Italy

Designer Jenny Packham Ellie saab

Construction Fastenings Concealed zip and hook fastenings at

fronExposed zip fastening at back

Design Features Detachable crystal embellished waist belt, wrap effect front, satin trimmed sleeves, crystal embellished button fastening cuffs, two side slant pockets, pleats at trousers, ankle length, partially lined.

Round neck, cap sleeves, knot detailing at front neckline, keyhole at front, silk panel at front, fitted waistband, two slip pockets at sides, partially lined

Fabric 75% acetate, 25% viscose; lining: 100% polyester

63% viscose, 34% acetate, 3% elastane; 100% silk; lining 57% viscose, 43% polyester

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Product Name Creme Wool Jumpsuit Tuxedo Wool Jumpsuit

Photo

Promotional Feature Emilia Wickstead cream wool jumpsuit Cropped above the ankle with a tapered leg and turn-up cuffs, this impeccably tailored design is given a polished finish with satin detailing at the notch lapels and side panels.

Size 8-12 6-14



Designer Emilia Wickstead Alexander McQueen

Construction Fastenings Concealed zip fastening at back Exposed button fastening and zip

fastening

Design Features High neck, cut-out back Satin notch lapels, long sleeves, buttoned cuffs, welt pocket at chest, waistband with belt loops, slip pockets at side, satin panel at side of trousers, tapered, pressed crease at centre, welt pocket with button at back

Fabric 100% wool; lining: 100% silk 100% wool; 100% silk; 100% cupro

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Product Name Caroline embellished crepe jumpsuit Caroline embellished crepe jumpsuit

Photo

Promotional Feature Diane von Furstenberg black crepe jumpsuit

Employ fashion's most sophisticated all-in-one with the Caroline crepe jumpsuit from Diane von Furstenberg. An alluring choice for your next after-dark event, the slim-fit trousers are balanced with a wrap-style bodice while sequin and jewel embellishments provide a glamorous finish.

Size 6-14 4-16



Designer Diane von Furstenberg Diane von Furstenberg

Construction Fastenings Concealed zip fastening at side Concealed hook-and-eye and zip

fastening at side

Design Features Crystal embellishments, satin and lace trim, wrap effect front.

V-neck, spaghetti straps, overlay detail at front, sequinned panels at front and waistband, two slip pockets at side, slim-fit trousers

Fabric 73% triacetate, 27% polyester; fabric2: 93% silk, 7% spandex; lining: 82% polyester, 18% spandex.

73% triacetate, 27% polyester; 93% silk, 7% elastane; lining 82% polyester, 18% elastane

Analysing a cross section of similar jumpsuits sold by Harvey Nichols and Selfridges creates an insight of

which brand has the ‘better ’ product offering, better being defined for the luxury consumer as value for

money and range in offering. In this case Selfridges has the better offering in terms of value for money with

exact garments being sold for less i.e. the DVF caroline embellished crepe jumpsuit being £10 cheaper.

Fabrics, country of origin and design features which are visually apparent to consumers will help convert

shoppers, having them feel they are receiving good value for money with a superior quality product which is

an important factor for Luxury consumers. This analysis defines Selfridges as having a stronger product

offering in comparison to Harvey Nichols it ’s main competitor, this will help Selfridges have a strong Autumn/

Winter 2014.

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Product Name Black and white printed jumpsuit Discovery star-print jumpsuit

Photo

Promotional Feature Issa black and white jumpsuit Detailed with an all-over star print, this softly tapered jumpsuit from Vivienne Westwood’s Anglomania collection offers a striking trans-seasonal staple. Cut with a round V-neck opening, the capped sleeves and elasticated waistband cater to a stylishly comfortable fit.

Size 10-14 6-14


Country of Origin Unknown Italy

Designer ISSA Anglomania

Construction Fastenings Concealed zip fastening at side Exposed button fastening at front

Design Features Printed, scalloped trim, gathered front, elasticated waist, wrap waist ties, draped back.

Round neck with v-opening, cap sleeves, elasticated waistband, belt at waist, all-over star print, two slip pockets at front, tapered trousers

Fabric 100% viscose 60% viscose, 40% silk

3.1 SWOT Analysis

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Strengths Weaknesses

• Larger price range to cater for different level of consumers from £36 to £2,595 in jumpsuit category.

• Exclusive Selfridges only brands • Less locations across the UK, creating higher

profits. • Strong heritage and history, even having it’s own

TV show. • Clear recognisable branding synonymous with the

canary yellow colour as opposed to other high end department stores in this sector.

• Brands cater to sizes 14-18 in online store. • Good size range in stock online • One of few high-end department stores in the UK

• No own brand clothing, which has large profitability

• UK only stores. • Only regionally accessible to few UK Cities • Poor eCommerce offering

Opportunities Threats

• Stock exclusive brands first • Stock graduate fashion week first • Sponsor graduate fashion week • Stock more upcoming street brands such as 10

Deep and Black Scale to cater to the young male demographic

• Better visual merchandising in provincial UK stores • Better online offering • Create own brand clothing • Create flagship stores in New York, Dubai, Paris

and Hong Kong • Stock new contemporary designs

• Competitors stocking exclusive brands first • Competitors offering better promotions and

discounts • Competitors offering better online services • Brands pulling out of Selfridges due to better and

exclusive contracts with other stores • Unfavourable press • Fenwicks offering online service

3. CONCLUSION

3.2 Conclusion and Recommendations

To conclude Selfridges have a strong standing against it ’s competitors in the fight for customer share over

the Autumn/Winter 2014 due to it’s understanding of the luxury consumer and their need for variety and a

broad selection of brands to choose from. This enables the luxury consumer to feel that their product

selection is an intelligent choice, which is paramount in the luxury clothing sector (Okonkwo, 2007.) With a

strong heritage and branding Selfridges are also able to retain and attract new customers.

Selfridges online offering is suffering in comparison to other department store retailers, this could be

addressed for Autumn Winter 2014 by offering free postage and returns on items, this is key for consumers

who shop online (Mintel, 2014) even with this Selfridges could still face competition from Fenwicks if it were to

relaunch their online store for Autumn Winter 2014. With exclusivity being a key factor for luxury consumers

(Okonkwo, 2007) Selfridges should attain exclusive contracts with upcoming designers meaning they will be

the go to brand for consumers for that particular brand.

With such a longstanding heritage and synonymous canary yellow branding Selfridges should consider

launching stores in upcoming or traditionally ‘fashionable’ cities such as New York, Dubai, Paris and Hong

Kong, not only will this create revenue for the brand but will also create an even more recognisable brand

for tourists visiting the UK. With this clear brand identity Selfridges can create a very successful own brand

line of clothing, this brand should be mid-market in value as to not directly compete with it ’s more luxury

labels it stocks. With Selfridges buyers having a wealth of knowledge of different brand production and

factories they will be able to quickly strike up great contracts and relationships with factories and begin the

production process quickly and efficiently.

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3.3 References Adamepolo, J. (2014). 20 Dope Streetwear Brands You Should Know About in 2014. [online] 7 Days Theory. Available at: http://7daystheory.com/20-dope-streetwear-brands-know-2014/ [Accessed 10 Dec. 2014]. Clifford, E. (2011). Consumer Attitudes Towards Luxury Brands - UK - November 2011. [online] Academic.mintel.com.ezproxy.mmu.ac.uk. Available at: http://academic.mintel.com.ezproxy.mmu.ac.uk/display/545468/ [Accessed 7 Dec. 2014]. Limited, S. (2014). Designer Fashion, Accessories & More - Shop Online at Selfridges. [online] Selfridges.com. Available at: http://Selfridges.com [Accessed 1 Dec. 2014]. Mercer, J. (2014). E-Commerce - UK - July 2014. [online] Academic.mintel.com.ezproxy.mmu.ac.uk. Available at: http://academic.mintel.com.ezproxy.mmu.ac.uk/display/679707/ [Accessed 12 Dec. 2014]. Okonkwo, U. (2007). Luxury fashion branding. Basingstoke: Palgrave Macmillan. S e n d e r, T. ( 2 0 1 4 ) . D e p a r t m e n t S t o r e Re t a i l i n g - U K - A p r i l 2 0 1 4 . [ o n l i n e ] Academic.mintel.com.ezproxy.mmu.ac.uk. Available at: http://academic.mintel.com.ezproxy.mmu.ac.uk/display/679627/ [Accessed 11 Dec. 2014]. Sender, T. (2014). Womenswear - UK - May 2014. [online] Academic.mintel.com.ezproxy.mmu.ac.uk. Available at: http://academic.mintel.com.ezproxy.mmu.ac.uk/display/679833/ [Accessed 11 Dec. 2014]. Service-verdictretail-com.ezproxy.mmu.ac.uk, (2014). Selfridges. [online] Available at: https://service-verdictretail-com.ezproxy.mmu.ac.uk/verdict/companies/department-stores/selfr idges/summar y/article31735.ece [Accessed 15 Dec. 2014]. The Independent, (2014). Selfridges on The Independent. [online] Available at: http://www.independent.co.uk/topic/Selfridges [Accessed 8 Dec. 2014].

3.4 Bibliography

Goworek, H. (2007). Fashion buying. Oxford: Blackwell Pub. Jackson, T. and Shaw, D. (2001). Mastering fashion buying and merchandising management. Basingstoke: Macmillan. Levy, M., Weitz, B. and Grewal, D. (n.d.). Retailing management.

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Selfridges Report Final - Vandell Stretton

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