Retail Landscape

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Retail Landscape

• Tough trading environment
• PDI and Consumer expenditure increasing
• Growing Supermarket dominance Tesco,
  Asda/Walmart
• Price deflation
• Quality designs sell well
• Level of personal debt increasing in U.K

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Demographics
Projected resident population Females 2002
2006 2011 1-4 1,341,000 1,317,000
1,328,000 5-9 1,819,000 1,795,000 1,703,000 S
ource National Census Office
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PDI and Consumer expenditure

• PDI Consumer expenditure
• bn bn
• 760.7 718.5
• 2004 802.9 755.2
• 2009 1,039.1 971.7
• Source - Mintel

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Value of retail sales of Childrenswearby sector
1999 - 2004

• million 1999 2003 2004
• Girlswear 2,510 2,840 2,897
• Boyswear 2,089 2,200 2,244
• Babywear 1,095 1,310 1,336
• Childrenswear 5,694 6,350 6,477
• Source Euromonitor/Drapers Record

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Situational analysis

• Barbie products are superior in quality
• (Source-Asda/Walmart)
• When merchandised correctly with good POS Barbie
  sells well
• despite intense competition from rivals
• (Source all retailers surveyed)
• Retailers prefer to push own brand because they
  make more margin
• Price deflation- retailers are having to reduce
  prices to drive volume
• (Source - Woolworths)
• Retailers are not keen on paying license fees
• (Source Clarks)
• Pos for Barbie products in store is universally
  poor.

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Situational analysisPrice deflation

• Current economic data reveals a slowdown in
  retail sales as consumer confidence continues to
  be affected by record levels of personal debt and
  slowing house price growth
• These conditions dictate that it may be those
  retailers with a strong value based proposition
  that will ultimately succeed
• Asda/Walmart and Woolworths are ideally placed
  for this situation which inevitably leads to
  price deflation across the sector

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Situational analysisPrice deflation
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Kidswear market shares 2003-2004Top 10

• 2003 2004
• Next 9.9 10.7
• George at Asda 8.6 9.2
• Tesco 4.7 6.2
• M S 5.8 5.5
• Woolworths 5.6 5.5
• Adams 5.0 4.9
• Mothercare 3.5 3.6
• Primark 3.3 3.6
• Debenhams 3.4 3.4
• BHS 3.0 3.0
• Source TNS/Drapers Record

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Swot analysis
Strengths
Weaknesses

• Failed to prevent emergence of Bratz
• Slow to respond to competition
• Poor POS in stores
• Lack of control in maintaining standards of
  merchandising, optimum display in all retail
  outlets

• No 1 Girls licensed brand
• No 1 property for girls 3-8
• Barbie is highly regarded for its quality
• Barbie has heritage and a wholesome appeal
• Still No 1 girls global entertainment property
• Innovation

Opportunities
Threats

• Price deflation trends
• Shrinking market as girls mature earlier
• Reduced royalties
• Economic recession oil price increases which
  impact on consumer spending

• Direct to retail
• Create more theatre in store
• To develop more compelling designs
• Teen range
• Adult range
• Placing product in appropriate outlets
• (Debenhams)

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Primary research

• Retail audits of Asda, Woolworths, Barratts,
  Adams,
• Sports Soccer, Debenhams, BHS, and Mothercare
• Interviews with Mothers, Store Managers, fashion
  department managers
• Interviews with Industry experts in retail
  companies, licensing managers and fashion buyers
  and intermediaries for licensed product

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Store visits - Asda
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Store visits AsdaMain findings

• The kidswear section in store is very popular
• The Barbie products sell very well quality is
  very good and it is perceived as value for money
• The Barbie range flies out when it is placed on
  an end
• No knowledge of future Barbie promotional
  campaigns
• More POS would be beneficial to highlight the
  product which is mixed in with their own brand
  George.
• Fashion manager thinks that the product range
  should be in Debenhams and would have partial
  success in M S. Next own brand too strong.
  Barbie range would sell well in Tesco but she
  hopes it never happens.

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Store visits - Asda
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Store visits - Asda
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Store visits WoolworthsMain findings

• Barbie products sell very well
• Barbie quality is strong but perceived to be over
  priced (adult prices for childrens clothing -
  Departmental Manager)
• Tops and trousers sell very well along with shoes
• Special offer buy one get another half price
  (price deflation)
• 8 year old girls not looking at Barbie range any
  more
• Stronger sales this year compared to last
• Products with less characters, smaller motifs
  would sell better
• Barbie range relies too much on the colour pink,
  which is why it appeals to very young girls- more
  use of seasonal colours needed lemons, blues,
  greens etc.
• Good use of visual merchandising the clothing
  is neatly displayed and is appealing
• To appeal to older girls (7-8) the barbie logo
  needs to be less prominent. The clothing should
  be more funky. (the Gloss range at Woolworths is
  a good range for older girls)

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Store visits - Woolworths
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Store visits - Woolworths
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Store visits - Woolworths
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Store visits BarrattsMain findings

• Prices and quality of Barbie footwear similar to
  the competition
• Barbie products suffering from a downward trend
• Barbie range always marked down in the sale
• Competitors create more stand out in store
  through POS
• Barbie stock located alongside competitors
  Bratz, Groovy Chick, Own Brand
• POS for Barbie lacking in quantity and impact

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Store visits Barratts
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Store visits Sports Soccer

• Location of Barbie products in store is very
  poor- in the corner behind a pillar
• Quality of presentation very poor, cluttered
  and untidy- difficult to shop
• All Barbie footwear was half price (2,49 -4.49)
• All major sports brands stocked in store
• Location of competitors stock along the back
  wall alongside Barbie products.

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Store visits MothercareMain findings

• Perceived as a good quality childrenswear
  retailer where Barbie products sell well
• Quality of presentation very good, easy to shop
• Drawback is the lack of POS material
• Competitors products stocked are Disney, Groovy
  Chick and own brand
• Price range of Barbie products - 5.99 -15.99,
  price range of competitors products - 5-20
• Location of Barbie stock by the High Street
  entrance good position, good visibility
• Store ambience excellent and footfall levels
  high

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Store visits AdamsMain findings

• Store ambience very poor and footfall low.
• Competitors stocked include Adams own brand,
  Cartoon Network, Disney and Groovy Chick
• Perception of Adams is very low.
• Stocking of Barbie products in store would harm
  the Barbie brand
• Adams replicates similar shoe designs to Barbie,
  such as pink boots and sandals
• Price range of competitors stock - 4-15

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Store visits DebenhamsMain findings

• Store ambience very good but footfall low.
• Competitors stocked include Bratz, Cartoon
  Network, Disney, Groovy Chick, J by Jasper and
  John Rocha
• Wide variety of clothing products,shoes and
  accessories
• Products are not universally pink dominated
• Stocking of Barbie products in store would
  enhance the Barbie brand
• Wide variety of colours and styles
• Price range of competitors stock - 5-25

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Internet Analysis

• George at Asda
• Features
• Consumers can browse online but only buy in store
• Consumers can also check availability in their
  local store
• Map provided to get to store
• Limitations
• No ability to buy goods online
• Very few lines on display
• No Barbie prominence
• Static display

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Internet Analysis

• Woolworths
• Features
• Good range of Ladybird products for girls 1-9
• Ability to order and pay online (unlike Asda)
• Store locator
• Limitations
• Delivery charge of 3.95 may put off some
  customers unless ordering in bulk

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Internet Analysis

• Argos
• Features
• Wide range of Barbie products dolls and
  accessories
• Ability to order and pay online
• Lots of price reductions in Bratz, Disney and
  Barbie products
• Barbie 51 product lines 12 reduced
• Bratz - 41 product lines 10 reduced
• Disney 20 product lines 4 reduced
• Although hard line products this is an example of
  current price deflation

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Internet Analysis

• Clarks
• Features
• Easy site to navigate
• Wide range of girls shoes, trainers, seasonal
  products from age 2-4,4-5,5-7
• Able to click on latest T.V. adverts

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Product

• The Barbie product range is perceived to be
  excellent quality
• The range is also perceived to be slightly
  expensive
• The product needs to remain top quality and
  designers need to work harder to make the
  products stand out and be distinctive.
• Barbie is definitely a fashion brand so needs to
  remain at the cutting edge of fashion trends
• Some suggestions from Industry experts that the
  product would benefit from being ranged alongside
  dolls (Source Asda departmental fashion
  manager)

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Price

• Price is an extremely important variable due to
  the Walmart effect and price deflation
• Asda and Tesco are closing in on Next and rank 2
  and 3 for Kidswear market share and likely to
  keep on growing
• Downward pressure on pricing is extreme prices
  cut by 10 at Tesco and 8 at Asda
• Price deflation has caused a realignment in the
  rest of the Kidswear market
• Department stores have bucked the trend on price
  lowering prices by just 1
• Sales of Kidswear product are commonplace
• Premium brands still achieving good sales at high
  prices

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Place

• Barbie has to be sold via supermarket chains
  because of their sheer capacity to sell high
  volumes 24/7 (Tesco worth considering)
• Department store sector is also preferable due to
  their ability to withstand downward price
  pressure (Debenhams would be ideal)
• Woolworths must remain due to size and U.K.
  coverage
• Independent sector would enable Barbie to be sold
  at high end prices but they would have to be
  large Independent chains due to logistics/volume
• Use of internet sites, catalogue companies
  (Argos) worth considering

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Promotion

• The use of POS within stores has been highlighted
  as being universally poor
• There is a need to improve the POS in all retail
  outlets used and monitoring is needed on a
  regular basis
• Advertorials work well in the Barbie magazine
• More use of posters in store to signpost the
  range
• Press coverage needs to be regular and positive
• More theatre needed in store fashion shows,
  dressing up and makeover events

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Branding

• Barbie is a fashion brand and needs to be more
  high profile
• Lots of girls are very conscious of brands at an
  early age
• For some customers the brand is everything
• Brand names count for a lot because customers
  like the exclusivity it offers
• Branding has to be subtle (Barbie needs to have
  smaller motifs on the clothing range)
• Exclusivity is a key issue with brands. They
  should not over distribute and should ensure
  their product has a real point of difference

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Positioning

• Positioning is key. Where should Barbie be
  positioned?
• Barbie is positioned as a fashion brand which is
  slightly more expensive than own labels so care
  must be taken which outlets are used to
  distribute so as not to confuse the consumer
• Woolworths and Asda are great for Barbie volume.
  Tesco would also fit the bill as would Debenhams
• Presence in Harrods and Selfridges will enable
  the brand to be considered as even more exclusive
  
• Selling via the Independent sector would also
  increase the fashionability position

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Strategic recommendations

• Consolidate all existing retailers where volume
  and value is positive
• Work very closely with fashion buyers especially
  on promotional aspects in store, such as POS,
  fashion show events (retail theatre)
• Negotiate new deals with Debenhams, Marks
  Spencer and look at Argos for catalogue/internet
  channel of distribution
• Take a close look at the Independent fashion
  retail sector approaching only the biggest and
  best to drive premium product sales
• Continually support the brand and develop new
  exciting designs which delight young girls 3 -8
  a must have product
• Monitor the competition on a regular basis

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Strategic recommendations

• Phase 2 conduct focus groups with the target
  audience and their mothers to discover what makes
  them buy, what products they like, their
  aspirations, attitudes, opinions
• Continue to talk to industry experts on a regular
  basis fashion buyers, Store personnel,
  intermediaries, to compile market intelligence
• Move the brand upmarket to make it even more
  appealing to young girls and their mothers
• Consider introducing a new range for tweens and
  teens to rival Bratz
• Consider the use of other colours for the range,
  such as lemons, blues, greens to provide more
  choice and variety

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Conclusion

• The kidswear market in the U.K increased 2 in
  value and 7 in volume over the past year so
  there is an upward trend
• Despite possible economic problems caused by the
  rise in the oil price and record levels of
  personal debt consumers will spend money on
  quality branded products that are positioned
  correctly and have distinctive designs
• Barbie sales have suffered in the past 2 years
  due to the emergence of Bratz and the increase in
  the supermarket kidswear market (sales increased
  by 38 over past 3 years to 554m)
• The challenge for Barbie is to position itself as
  a high quality fashion brand which, by virtue of
  its distinctive designs, commands number one
  position in the minds of its target customers
  girls aged 3-8 and their mothers and is sold in a
  variety of retail outlets throughout the U.K.