Wildfang Case Study
- 1. Don't let the world tell you what to wear. Andrew Marsha Mulia – AMM657 MGMT 581-30
- 2. Key Issue Analysis Issue Hypotheses Analysis TomBoy market is limited More than just TomBoy, Wildfang brand is feminine independence and strength • Additional research on TomBoy spectrum and defining customer • Adjacent research towards non-consumer regarding brand perception • Compare other “strong” female brands that might use similar keywords raw, savage, wild, bold etc. Best business model for its expansion strategy Private label due to Wildfang’s niche customer segment • Perform Key Issue Analysis, CLTV Analysis and Business Model Canvas (BMC) to identify Pros and Cons of each model • Analyze risks and assumptions under both model Optimize returns on marketing investment Focus marketing efforts on customer segment with highest potential for growth • Identify customer segment with highest potential growth (either in terms of market size or conversion rate) • Create customer lifecycle journey to identify customer shopping experience and potential pain points Maximizing customer lifetime value of its priority customers Focus marketing and sales effort on customer with highest AOV and retention rate • Identify core competency of the Wildfang brand • Create survey and analysis on price sensitivity of Wildfang core consumers to see if there is a more lucrative higher AOV segment • Look for cross selling/ referral programs to increase sales Brand sustainability in the long run Wildfang should expand from fashion retail to lifestyle brand • Identify other branding opportunities in the furniture, decoration and gym/ outdoor experience that supports the Wildfang brand • Identify potential collaboration with artists outside of the nice to further expand brand recognition from TomBoy to Strong Woman
- 3. Business Model Canvas – Private Label B&C Key Partners 1. Textile Suppliers 2. Delivery Services 3. News & Media 4. Online & Social Media Influencers 5. Investors 6. Banks and Payment Processing Companies 7. Transportation Partners Key Activities 1. Designing clothes 2. Selling clothes 3. Maintaining brand 4. Maintaining supply chain and returns Value Propositions 1. Unique Wildfang products that customers will not be able to get anywhere else 2. Brand backing guaranteed quality and material 3. Design innovation is driven by brand rather than by trends Customer Relationships 1. Direct customer relationship 2. In-person experience allows for customer to feel/ see fabric 3. Personal in-store experience for each customer 4. Invested in store design and journey Customer Segments 1. Core Loyalist 2. Fashion-Engaged Walk-in 3. Fashion-Engaged Online 4. Wildfang Exclusives Key Resources 1. Clothing Line Designs 2. In-house Designers 3. Offline Stores 4. Online Store 5. Graphics/ Fashion Photos Channels 1. Offline Stores 2. Online Website Cost Structure 1. Raw Material and Transportation Cost 2. Store Upkeep/ Infrastructure Cost 3. Employee Cost 4. IT Infrastructure Cost 5. Marketing and Advertising Cost Revenue Streams 1. Product Sales
- 4. Business Model Canvas – Multisided Platform Key Partners 1. Affiliated brands 2. Delivery partners 3. Offline News & Media 4. Online News & Social Media Influencers 5. Investors 6. Payment Gateway 7. Suppliers 8. Warehouse and Data Centers Key Activities 1. Product curation 2. Website maintenance 3. Advertising and promotions 4. Partnership expansions 5. Grassroot referral programs Value Propositions 1. Curated items 2. Seamless shopping experience 3. Data tracking creates personal shopping experience (price, discounts, promotions etc.) 4. Delivery allows for contactless shopping experience 5. Price comparison 6. Returns 7. Sharing on social media and online platforms Customer Relationships 1. Customer has more choices of like- products curated by Wildfang 2. Wildfang becomes thematic brand rather than just one thing 3. Online communities with real authentic product reviews Customer Segments 1. Core Loyalist 2. Fashion-Engaged Walk-in 3. Fashion-Engaged Online 4. Wildfang Exclusives Key Resources 1. Website domain name 2. Wildfang brand 3. Blog 4. Design Graphics and Promotion Photos 5. Partnerships Channels 1. Online websites 2. Affiliated websites Cost Structure 1. Server and IT Upkeep Cost 2. Advertising and Marketing Cost 3. Sponsored Celebrities/ Influencer Cost 4. Transportation Cost 5. Raw Material and Employee Cost Revenue Streams 1. Advertising Revenue 2. Sponsorship Revenue 3. Royalty Fee 4. Product Sales
- 5. Initial Customer Value Analysis 4.000 10.000 2.000 0 6.000 8.000 Y4 Y2 Y1 Y3 Y5 Private Label Model Multisided Model Insight #1 • Private label model has higher customer retention from a lower churn rate due to larger core loyalist base • This is further supported by the higher churn rate of the multisided model (49.25%) compared to private label model (41.50%) Insight #2 • Private label model has higher CLV due to a higher NPV and Cumulative Cash Flow. • Private label model will also see a 149% CLV growth. • Higher CLV, NPV and Cumulative Cashflow will provide Wildfang greater financial resources for future expansions and other investments. Insight #3 • Despite the higher AOV for the multisided model, when including the gross margin % and purchase frequency difference, the multisided model only earns 8 cent more per dollar per customers. • This combined with a higher CAC per customer shows that the multisided model is not as financially attractive as it initially appears to be. 995 727 Y5 Y3 1.789 Y2 Y1 Y4 1.194 1.633 2.040 1.485 2.302 1.670 2.474 +149% Private Label Model Multisided Model Private Label Model Multisided Model Blended AOV $146 $191.80 Blended CAC $24.5 $43 Gross Margin $73 $86.31 AOV x Purchase Frequency $545.31 $589.50
- 6. Risks & Assumptions • CLV model assumes average churn rate for both business models are 42-49%, when fashion retail industry in general has a higher 60-70% churn rate. • Current multisided model does not consider additional advertising and sponsored product revenues, which could make it more attractive. • Private label model does not address risks of holding inventory raised by CEO, Emma Mcilroy. This could be worsened with fashion trends and Wildfang hiring its own internal designer. Recommendation Wildfang should go ahead and pitch the Private Label Model expansion strategy to its investors as the model has the higher CLV and better customer retention (lower churn rate and stronger loyal base). Given Wildfang’s limited market and core competency in strong branding a multisided platform has the potential of diluting its brand value in the long run.