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Retail Landscape

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. Demographics. Projected resident population Females

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Retail Landscape

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  1. 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

  2. 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 Source – National Census Office

  3. 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

  4. 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

  5. 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.

  6. 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

  7. Situational analysisPrice deflation

  8. 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

  9. 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)

  10. 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

  11. Store visits - Asda

  12. 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.

  13. Store visits - Asda

  14. Store visits - Asda

  15. Store visits – WoolworthsMain findings • Barbie products sell very well • Barbie quality is strong but perceived to be over priced (‘adult prices for children’s 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)

  16. Store visits - Woolworths

  17. Store visits - Woolworths

  18. Store visits - Woolworths

  19. 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

  20. Store visits – Barratts

  21. 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.

  22. 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

  23. 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

  24. 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

  25. 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

  26. 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

  27. 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

  28. 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

  29. 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)

  30. 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

  31. 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

  32. 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

  33. 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

  34. 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

  35. 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

  36. 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

  37. 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.

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