Technology and its Technology and its impact in the on-line impact in the on-line

fashion industryfashion industryGroup 3Group 3

Katie ReimerKatie ReimerLinda JacobsenLinda Jacobsen

Bill MessickBill MessickJimmy AsipJimmy Asip

Branding a Lifestyle and an Branding a Lifestyle and an ImageImage

Internet advertising is impacting the way Internet advertising is impacting the way fashion retailers market and differentiate their fashion retailers market and differentiate their brands by further developing their corporate brands by further developing their corporate

images and accompanying messaging in images and accompanying messaging in accordance with their business strategies. accordance with their business strategies.

Causing this trend in high-end Causing this trend in high-end retailersretailers

► Retailers must align e-market place with Retailers must align e-market place with their business strategiestheir business strategies Business Strategies may prohibit online sales, Business Strategies may prohibit online sales,

promote ‘online-catalogs’ or encourage lifestyle promote ‘online-catalogs’ or encourage lifestyle marketingmarketing

► Retailers with durable brands and corporate Retailers with durable brands and corporate images find customers find them regardlessimages find customers find them regardless

►Many of these products not sold online Many of these products not sold online Need to feel, wear, see product before purchaseNeed to feel, wear, see product before purchase

Advertising focusing on an Advertising focusing on an imageimage

Big Picture SnapshotBig Picture Snapshot► Department of Commerce Department of Commerce

eCommerce sales $86.3 eCommerce sales $86.3 billion for 2005. Forrester billion for 2005. Forrester Research reports $12.5b Research reports $12.5b spent on apparel. spent on apparel.

► Latent Buying, shop and buy Latent Buying, shop and buy later. later. Browsing, compare, buying Browsing, compare, buying

phase. phase. ► 44thth quarter most important quarter most important

draws population to draws population to eCommerce more than any eCommerce more than any otherother

► Jupiter Research: more than Jupiter Research: more than 80% of shoppers browse 80% of shoppers browse online before in-storeonline before in-store

► comScore 63% of online comScore 63% of online browsers purchases offbrowsers purchases off

US Advertising SpendingUS Advertising Spending

Website EvolutionWebsite Evolution

Electronic Brochure Site Electronic Brochure Site ModelModel

► Created a visual internet Created a visual internet presence for a companypresence for a company

► Described its goods, Described its goods, services and sometimes services and sometimes corporate philosophy corporate philosophy

► Labor-intensive and time-Labor-intensive and time-consuming to modifyconsuming to modify

► Minimal cohesive visual Minimal cohesive visual consistency and user consistency and user interface design. interface design.

► No site differentiation or No site differentiation or personalized contentpersonalized content

E-Commerce Site ModelE-Commerce Site Model

►Main purpose was to Main purpose was to sell merchandise sell merchandise

► Product catalogue Product catalogue and pricing and pricing informationinformation

►More complex than More complex than brochure site. brochure site. Addition of: Addition of: Style sheets Style sheets Forms Forms Shopping cart Shopping cart

functionsfunctions

Business Application Site Business Application Site ModelModel

► Site differentiation is Site differentiation is achieved by providing:achieved by providing: Value-added information Value-added information

(reviews, suggestions, (reviews, suggestions, advice etc. ) advice etc. )

Interactivity Interactivity Frequent, useful content Frequent, useful content

updates updates Information personalized Information personalized

for specific users or user for specific users or user groupsgroups

► Converts users from Converts users from passive viewers into passive viewers into active participants. active participants.

Technologies that Support the Technologies that Support the Business Application Site ModelBusiness Application Site Model► BroadbandBroadband► Flash-wareFlash-ware► Secure transactionsSecure transactions

Authentication (name and password)Authentication (name and password) Digital signaturesDigital signatures EncryptionEncryption Secure serversSecure servers

Website Evolution ExampleWebsite Evolution Example

► Brochure Site ModelBrochure Site Model Reebok 1996Reebok 1996

► E-Commerce Site ModelE-Commerce Site Model Reebok Store 2002Reebok Store 2002

► Business Application ModelBusiness Application Model Reebok 2006Reebok 2006

Website Evolution Website Evolution

►http://shop.org/video/mov-sm.asphttp://shop.org/video/mov-sm.asp

History of ShoppingHistory of Shopping

► Local seamstresses and tailors made clothing to orderLocal seamstresses and tailors made clothing to order Mostly domestic, usually not much “stock” on handMostly domestic, usually not much “stock” on hand Sometimes sold at town shopsSometimes sold at town shops

► Exporting - 1831, George Opdyke, later Mayor of New Exporting - 1831, George Opdyke, later Mayor of New York, began the manufacture of clothing on Hudson York, began the manufacture of clothing on Hudson Street, which he sold largely through a store in New Street, which he sold largely through a store in New Orleans. Orleans. Increased Southern Trade Market Increased Southern Trade Market

► Mass Production – 1851 – Singer sewing machine was Mass Production – 1851 – Singer sewing machine was inventedinvented Strong enough to sew leather – shoemakers used quicklyStrong enough to sew leather – shoemakers used quickly Larger scale production of clothing products was made Larger scale production of clothing products was made

possiblepossible Cheaper labor costs because machine saved timeCheaper labor costs because machine saved time

► More Choices More Choices 1856 – first synthetic dye invented – more color options1856 – first synthetic dye invented – more color options

History of ShoppingHistory of Shopping

► Catalogs introduced in 1872 by Montgomery Catalogs introduced in 1872 by Montgomery WardWard Sears introduced their catalog in 1888Sears introduced their catalog in 1888

►Department Stores – Bloomingdale’s was Department Stores – Bloomingdale’s was founded in 1872founded in 1872 Choices led to the growth of specialized clothing Choices led to the growth of specialized clothing

stores & more chain/department storesstores & more chain/department stores►Malls – the first mall was built in 1922 in Malls – the first mall was built in 1922 in

Edina, Minnesota Edina, Minnesota Another outlet for purchasing the latest fashionsAnother outlet for purchasing the latest fashions

► Internet stores began around 1995Internet stores began around 1995 Sales from Brick and Mortars impacted greatly Sales from Brick and Mortars impacted greatly

Catalogs TodayCatalogs Today

► Sales over the internet have increased three-and-a-Sales over the internet have increased three-and-a-half times in the past four years, while turnover half times in the past four years, while turnover from catalogues has declined from catalogues has declined What such surveys do not fully take into account is the What such surveys do not fully take into account is the

impact that catalogues have on online sales. impact that catalogues have on online sales.

► Retailers that still carry and distribute catalogs are Retailers that still carry and distribute catalogs are making them thinner and are still investing in them making them thinner and are still investing in them to spark customer interest and direct them to to spark customer interest and direct them to purchasing and browsing online.purchasing and browsing online.

► Limited size and color selections in stores force Limited size and color selections in stores force people to order online or use catalogs, especially people to order online or use catalogs, especially for plus sizes and petites.for plus sizes and petites.

Applying Technology to branded Applying Technology to branded lifestyleslifestyles

► In the beginning, consumers didn’t In the beginning, consumers didn’t have a choice between many products have a choice between many products and therefore companies didn’t focus and therefore companies didn’t focus on their target market.on their target market.

►On-line Technology matches “lifestyle” On-line Technology matches “lifestyle” image to corporate valuesimage to corporate values FlashFlash Graphic/video selectionGraphic/video selection Proprietary TechnologiesProprietary Technologies

Survey ComponentsSurvey Components

►Used the 2 types of fashion web sites:Used the 2 types of fashion web sites: Solely for Brand Marketing:Solely for Brand Marketing:

►Diesel Diesel ►Prada Prada

Markets Brand but is Sales Oriented:Markets Brand but is Sales Oriented:►PumaPuma►Old NavyOld Navy

Survey QuestionsSurvey Questions

1.1. How appealing is the web site?How appealing is the web site?

2.2. How user friendly is the web site? How user friendly is the web site?

3.3. How strong is your initial reaction to the How strong is your initial reaction to the web site?web site?

4.4. How effective was the web site in How effective was the web site in marketing the brand?marketing the brand?

5.5. Did your perception of the brand change Did your perception of the brand change after viewing their web site?after viewing their web site?

Diesel Diesel

DieselDiesel

1.1. 70% 70% 4 or 5 4 or 5

2.2. 45% 45% 2 2

3.3. 55% 55% 4 4

4.4. 40% 40% 4 4

5.5. 70% 70% No No

1. Overall appeal of the site2. User friendliness3. Strength of initial reaction4. Effectiveness in marketing the brand5. Did your perception change

DieselDiesel

► Clothing company which produces Clothing company which produces “premium” apparel for men and “premium” apparel for men and women between 18 and 35 years old. women between 18 and 35 years old.

► Privately Owned.Privately Owned.► Sales: $1,227.6 MillionSales: $1,227.6 Million► 1 Year Sales Growth: 61.5%1 Year Sales Growth: 61.5%

PradaPrada

1.1. 46.7% 46.7% 2 2

2.2. 73.3% 73.3% 1 1

3.3. 46.7% 46.7% 2 2

4.4. 80% 80% Tie between 1 and 3 Tie between 1 and 3

5.5. 80% 80% No No1. Overall appeal of the site2. User friendliness3. Strength of initial reaction4. Effectiveness in marketing the brand5. Did your perception change

PradaPrada

►““Prada sells upscale apparel, shoes, Prada sells upscale apparel, shoes, fragrance, and accessories for men fragrance, and accessories for men and women, as well as its less-pricey and women, as well as its less-pricey Miu Miu apparel line.“Miu Miu apparel line.“

►Privately ownedPrivately owned

►Sales: $1,991.4 MillionSales: $1,991.4 Million►1 Year Sales Growth: 16.7%1 Year Sales Growth: 16.7%

PumaPuma

1.1. 68.8% 68.8% 4 4

2.2. 56.2% 56.2% 4 4

3.3. 90.3% 90.3% 3 or 4 3 or 4

4.4. 43.8% 43.8% 4 4

5.5. 81.2% 81.2% No No1. Overall appeal of the site2. User friendliness3. Strength of initial reaction4. Effectiveness in marketing the brand5. Did your perception change

PumaPuma► ““PUMA has the long-term mission of becoming the most PUMA has the long-term mission of becoming the most

desirable Sportlifestyle company.”desirable Sportlifestyle company.” focusing on bringing distinctive designs and a global outlook to focusing on bringing distinctive designs and a global outlook to

each product range by blending influences of sport, lifestyle and each product range by blending influences of sport, lifestyle and fashion. In order to achieve these goals, our brand template fashion. In order to achieve these goals, our brand template emphasises PUMA’s distinctiveness, individualism, spontaneity, emphasises PUMA’s distinctiveness, individualism, spontaneity, internationalism and sporting heritage. An important part of our internationalism and sporting heritage. An important part of our brand strategy is maintaining vigilant watch over our distribution brand strategy is maintaining vigilant watch over our distribution channels, ensuring that we maintain the high level of desirability channels, ensuring that we maintain the high level of desirability necessary for sustainable growth. necessary for sustainable growth.

PUMA focuses on creating a differentiating yet unmistakably clear PUMA focuses on creating a differentiating yet unmistakably clear brand message that resonates with our consumers brand message that resonates with our consumers

Above all, PUMA’s marketing will always strive to surprise, Above all, PUMA’s marketing will always strive to surprise, stimulate, entertain and engage. By constantly delivering the stimulate, entertain and engage. By constantly delivering the unexpected and challenging perceptions, PUMA aims to continue unexpected and challenging perceptions, PUMA aims to continue to be a defining voice in the world of Sportlifestyle to be a defining voice in the world of Sportlifestyle

► Markets brand but is also sales oriented.Markets brand but is also sales oriented.

► Sales: $2105.1 MillionSales: $2105.1 Million► 1 Year Sales Growth: 0.9%1 Year Sales Growth: 0.9%

Old Navy Old Navy

1.1. 87.4% 87.4% 2, 3, or 4 2, 3, or 4

2.2. 50% 50% 5 5

3.3. 62.4% 62.4% 3 or 4 3 or 4

4.4. 68.7% 68.7% 4 or 5 4 or 5

5.5. 100% 100% No No1. Overall appeal of the site2. User friendliness3. Strength of initial reaction4. Effectiveness in marketing the brand5. Did your perception change

Old NavyOld Navy► ““Old Navy's mission is to offer affordable, Old Navy's mission is to offer affordable,

fashionable clothing and accessories for the fashionable clothing and accessories for the whole family.”whole family.”

Sales oriented: Recently added features to make Sales oriented: Recently added features to make online shopping easier and fasteronline shopping easier and faster►Pop ups to view clothing and add to cart and not leave Pop ups to view clothing and add to cart and not leave

the homepage so you can continue to browse.the homepage so you can continue to browse.►Quick confirmations of added apparelQuick confirmations of added apparel

► Sales: $6,856 MillionSales: $6,856 Million► 1 Year Sales Growth: 1.6%1 Year Sales Growth: 1.6%

““Lifestyle” ConclusionsLifestyle” Conclusions

►Old Navy has the most sales but less Old Navy has the most sales but less annual growth.annual growth.

►Diesel had the highest annual growth Diesel had the highest annual growth which seems to suggest that their which seems to suggest that their marketing efforts have begun to be marketing efforts have begun to be accepted and will continue to be accepted and will continue to be successful.successful.

►Prada has a high growth rate as well.Prada has a high growth rate as well.►Puma needs to enhance their efforts to Puma needs to enhance their efforts to

gain more market share.gain more market share.

Survey ConclusionsSurvey Conclusions

►Technology does not always improve a Technology does not always improve a web siteweb site

►The user reaction to a site largely The user reaction to a site largely depends on the purpose of the web-site depends on the purpose of the web-site

►The degree of a persons initial reaction The degree of a persons initial reaction in our 4 surveys always represents how in our 4 surveys always represents how appealing and how effective they find appealing and how effective they find the web sitethe web site

Survey ConclusionsSurvey Conclusions

► After analyzing the survey data, we After analyzing the survey data, we determined that based on our criteria determined that based on our criteria that our sample rated the sites as that our sample rated the sites as follows:follows:

1.1. Old NavyOld Navy

2.2. PumaPuma

3.3. DieselDiesel

4.4. PradaPrada

ConclusionConclusion

► Technology has greatly impacted the way Technology has greatly impacted the way that companies advertise and market their that companies advertise and market their brand onlinebrand online

► As more people continue to use the internet, As more people continue to use the internet, it will continue to grow in value as an it will continue to grow in value as an advertising mediumadvertising medium

► Promoting lifestyles around a brand image is Promoting lifestyles around a brand image is the current trend in many fashion the current trend in many fashion companies and is likely to continue to grow companies and is likely to continue to grow as more companies work to expand their as more companies work to expand their web presenceweb presence

Future TrendsFuture Trends

►The applications and interfaces users The applications and interfaces users navigate on-line will become more navigate on-line will become more advanced as technology develops.advanced as technology develops.

►Number of users on-line shopping will Number of users on-line shopping will continue to grow as well as on-line continue to grow as well as on-line revenues.revenues.

►3D web technologies are being 3D web technologies are being developed and more users will shop in developed and more users will shop in the metaworld.the metaworld.