Technology and its impact in the on-line fashion industry

1
Technology and its impact in the on-line fashion
industry

• Group 3
• Katie Reimer
• Linda Jacobsen
• Bill Messick
• Jimmy Asip

2
Branding a Lifestyle and an Image

• Internet advertising is impacting the way
  fashion retailers market and differentiate their
  brands by further developing their corporate
  images and accompanying messaging in accordance
  with their business strategies.

3
Causing this trend in high-end retailers

• Retailers must align e-market place with their
  business strategies
• Business Strategies may prohibit online sales,
  promote online-catalogs or encourage lifestyle
  marketing
• Retailers with durable brands and corporate
  images find customers find them regardless
• Many of these products not sold online
• Need to feel, wear, see product before purchase

4
Advertising focusing on an image

5
Big Picture Snapshot

• Department of Commerce eCommerce sales 86.3
  billion for 2005. Forrester Research reports
  12.5b spent on apparel.
• Latent Buying, shop and buy later.
• Browsing, compare, buying phase.
• 4th quarter most important draws population to
  eCommerce more than any other
• Jupiter Research more than 80 of shoppers
  browse online before in-store
• comScore 63 of online browsers purchases off

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US Advertising Spending
7
Website Evolution
8
Electronic Brochure Site Model

• Created a visual internet presence for a company
• Described its goods, services and sometimes
  corporate philosophy
• Labor-intensive and time-consuming to modify
• Minimal cohesive visual consistency and user
  interface design.
• No site differentiation or personalized content

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E-Commerce Site Model

• Main purpose was to sell merchandise
• Product catalogue and pricing information
• More complex than brochure site. Addition of
• Style sheets
• Forms
• Shopping cart functions

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Business Application Site Model

• Site differentiation is achieved by providing
• Value-added information (reviews, suggestions,
  advice etc. )
• Interactivity
• Frequent, useful content updates
• Information personalized for specific users or
  user groups
• Converts users from passive viewers into active
  participants.

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Technologies that Support the Business
Application Site Model

• Broadband
• Flash-ware
• Secure transactions
• Authentication (name and password)
• Digital signatures
• Encryption
• Secure servers

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Website Evolution Example

• Brochure Site Model
• Reebok 1996
• E-Commerce Site Model
• Reebok Store 2002
• Business Application Model
• Reebok 2006

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Website Evolution

• http//shop.org/video/mov-sm.asp

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History of Shopping

• Local seamstresses and tailors made clothing to
  order
• Mostly domestic, usually not much stock on hand
• Sometimes sold at town shops
• Exporting - 1831, George Opdyke, later Mayor of
  New York, began the manufacture of clothing on
  Hudson Street, which he sold largely through a
  store in New Orleans.
• Increased Southern Trade Market
• Mass Production 1851 Singer sewing machine
  was invented
• Strong enough to sew leather shoemakers used
  quickly
• Larger scale production of clothing products was
  made possible
• Cheaper labor costs because machine saved time
• More Choices
• 1856 first synthetic dye invented more color
  options

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History of Shopping

• Catalogs introduced in 1872 by Montgomery Ward
• Sears introduced their catalog in 1888
• Department Stores Bloomingdales was founded in
  1872
• Choices led to the growth of specialized clothing
  stores more chain/department stores
• Malls the first mall was built in 1922 in
  Edina, Minnesota
• Another outlet for purchasing the latest fashions
• Internet stores began around 1995
• Sales from Brick and Mortars impacted greatly

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Catalogs Today

• Sales over the internet have increased
  three-and-a-half times in the past four years,
  while turnover from catalogues has declined
• What such surveys do not fully take into account
  is the impact that catalogues have on online
  sales.
• Retailers that still carry and distribute
  catalogs are making them thinner and are still
  investing in them to spark customer interest and
  direct them to purchasing and browsing online.
• Limited size and color selections in stores force
  people to order online or use catalogs,
  especially for plus sizes and petites.

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Applying Technology to branded lifestyles

• In the beginning, consumers didnt have a choice
  between many products and therefore companies
  didnt focus on their target market.
• On-line Technology matches lifestyle image to
  corporate values
• Flash
• Graphic/video selection
• Proprietary Technologies

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Survey Components

• Used the 2 types of fashion web sites
• Solely for Brand Marketing
• Diesel
• Prada
• Markets Brand but is Sales Oriented
• Puma
• Old Navy

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Survey Questions

• How appealing is the web site?
• How user friendly is the web site?
• How strong is your initial reaction to the web
  site?
• How effective was the web site in marketing the
  brand?
• Did your perception of the brand change after
  viewing their web site?

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Diesel
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Diesel

• 70 ? 4 or 5
• 45 ? 2
• 55 ? 4
• 40 ? 4
• 70 ? No

• Overall appeal of the site
• User friendliness
• Strength of initial reaction
• Effectiveness in marketing the brand
• Did your perception change

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Diesel

• Clothing company which produces premium apparel
  for men and women between 18 and 35 years old.
• Privately Owned.
• Sales 1,227.6 Million
• 1 Year Sales Growth 61.5

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Prada
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• 46.7 ? 2
• 73.3 ? 1
• 46.7 ? 2
• 80 ? Tie between 1 and 3
• 80 ? No

• Overall appeal of the site
• User friendliness
• Strength of initial reaction
• Effectiveness in marketing the brand
• Did your perception change

25
Prada

• Prada sells upscale apparel, shoes, fragrance,
  and accessories for men and women, as well as its
  less-pricey Miu Miu apparel line.
• Privately owned
• Sales 1,991.4 Million
• 1 Year Sales Growth 16.7

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Puma
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• 68.8 ? 4
• 56.2 ? 4
• 90.3 ? 3 or 4
• 43.8 ? 4
• 81.2 ? No

• Overall appeal of the site
• User friendliness
• Strength of initial reaction
• Effectiveness in marketing the brand
• Did your perception change

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Puma

• PUMA has the long-term mission of becoming the
  most desirable Sportlifestyle company.
• focusing on bringing distinctive designs and a
  global outlook to each product range by blending
  influences of sport, lifestyle and fashion. In
  order to achieve these goals, our brand template
  emphasises PUMAs distinctiveness, individualism,
  spontaneity, internationalism and sporting
  heritage. An important part of our brand strategy
  is maintaining vigilant watch over our
  distribution channels, ensuring that we maintain
  the high level of desirability necessary for
  sustainable growth.
• PUMA focuses on creating a differentiating yet
  unmistakably clear brand message that resonates
  with our consumers
• Above all, PUMAs marketing will always strive to
  surprise, stimulate, entertain and engage. By
  constantly delivering the unexpected and
  challenging perceptions, PUMA aims to continue to
  be a defining voice in the world of
  Sportlifestyle
• Markets brand but is also sales oriented.
• Sales 2105.1 Million
• 1 Year Sales Growth 0.9

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Old Navy
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• 87.4 ? 2, 3, or 4
• 50 ? 5
• 62.4 ? 3 or 4
• 68.7 ? 4 or 5
• 100 ? No

• Overall appeal of the site
• User friendliness
• Strength of initial reaction
• Effectiveness in marketing the brand
• Did your perception change

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Old Navy

• Old Navy's mission is to offer affordable,
  fashionable clothing and accessories for the
  whole family.
• Sales oriented Recently added features to make
  online shopping easier and faster
• Pop ups to view clothing and add to cart and not
  leave the homepage so you can continue to browse.
• Quick confirmations of added apparel
• Sales 6,856 Million
• 1 Year Sales Growth 1.6

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Lifestyle Conclusions

• Old Navy has the most sales but less annual
  growth.
• Diesel had the highest annual growth which seems
  to suggest that their marketing efforts have
  begun to be accepted and will continue to be
  successful.
• Prada has a high growth rate as well.
• Puma needs to enhance their efforts to gain more
  market share.

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Survey Conclusions

• Technology does not always improve a web site
• The user reaction to a site largely depends on
  the purpose of the web-site
• The degree of a persons initial reaction in our 4
  surveys always represents how appealing and how
  effective they find the web site

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Survey Conclusions

• After analyzing the survey data, we determined
  that based on our criteria that our sample rated
  the sites as follows
• Old Navy
• Puma
• Diesel
• Prada

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Conclusion

• Technology has greatly impacted the way that
  companies advertise and market their brand online
• As more people continue to use the internet, it
  will continue to grow in value as an advertising
  medium
• Promoting lifestyles around a brand image is the
  current trend in many fashion companies and is
  likely to continue to grow as more companies work
  to expand their web presence

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Future Trends

• The applications and interfaces users navigate
  on-line will become more advanced as technology
  develops.
• Number of users on-line shopping will continue to
  grow as well as on-line revenues.
• 3D web technologies are being developed and more
  users will shop in the metaworld.