Case Study: Topshop [NYU]
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The document provides a comprehensive overview of Topshop's business strategy, including its background, performance, and goals in the U.S. market, where it aims to expand from its two existing stores. Key insights include a SWOT analysis highlighting strengths like high-quality products and a competitive price range, as well as challenges posed by strong competition. The action plans focus on increasing online revenue and store traffic through enhanced digital marketing and technology initiatives over the next year.
![Case Study: Topshop [NYU]](https://image.slidesharecdn.com/topshopfinalprojectnyu-130226142917-phpapp01/85/Case-Study-Topshop-NYU-1-320.jpg)
![FINANCIAL ROI
!"!#$%&'!()$**+,-(
Mobile Web Commerce ROI (a)
= [ (Monthly Page Visits *12 Months * Conversion Rate * Average Purchase * Profit Margin) - Total Cost Mobile Web Site]/ Total Cost of Mobile Website
= [ (22,500 *12 * 5% * $40 * 20%) – 70,000]/ 70,000
= 54%
SMS Campaign ROI
= [ (Text Impressions * Conversion Rate * Value of Action ) - Total Cost of SMS Campaign]/ Total Cost of SMS Campaign
Text impressions = 12 months * 120,000 = 1,440,000
Value of action = Average purchase $40 * (margin 20% - 10% off) = $4,00 (value of action here does not include downloads)
= [ (1,440,000 * 4% * 4 ) – 40,000]/ 40,000
= 476%
Mobile Application (focused on Loyalty)
= [Downloads * Activation Rate* Value of User - Total Cost Mobile App]/ Total Cost of Mobile App
Downloads = 4% of 1,440,000 = 57,600 (according to the SMS ROI) + 50,000 (Assumption of viral effect) + 50,000 (other marketing channels)
= [157,600 * 70%* $5,00 – 200,000]/ 200,000
= 176%
(a)! Monthly visits on us.topshop.com = 225,000. Assumption: mobile visits = 10% of the website visits. Mobile visits = 22,500/month.
Source: http://domainsoutlook.com/u/site/us.topshop.com.html](https://image.slidesharecdn.com/topshopfinalprojectnyu-130226142917-phpapp01/85/Case-Study-Topshop-NYU-21-320.jpg)
Case Study: Topshop [NYU]
- 2. AGENDA !"!#$%&'!()$**+,-( 1.! Background and Key Facts 2.! SWOT Analysis 3.! Strategy & Goals 4.! Action Plan 5.! Project Time-Line
- 3. KEY FACTS !"!#$%&'!()$**+,-( •! Topshop is a retailer of women’s fashion and clothing, with the extra store Topman that sells cloths for men. •! With 300 stores in Britain and 100 international outlets (all franchises) in Asia, Europe and Latin America. •! The chain made around $200M profit (before tax) in 2008 on revenues of $1.14 billion. •! The United States is becoming a target market based on its attractive population size, affluence, and increasing interest in European high fashion.
- 4. THE U.S. MARKET !"!#$%&'!()$**+,-( •! In 2007, Topshop launched the “Kate Moss Topshop” collection in 19 Barneys stores to better understand the US market. •! In 2009, Topshop launched its first North American retail location in New York (Soho). •! Today, Topshop has two stores in US (NYC & Chicago), with the objective to open 13 additional stores. •! First year gross sales forecast for their NYC store: $30M to $40M.
- 5. BRAND POSITIONING !"!#$%&'!()$**+,-( •! The Company Mgt decided to stop competing just on (a) price in the 90’s. •! The decision was made to create a fashion authority. •! Now the attributes associated with Topshop fit adequately with the “affordable luxury” category as well as “competitive price". (a) Source: Topshop Final Report
- 6. PRODUCTS !"!#$%&'!()$**+,-( •! Topshop offers large varieties of products and services in order to accommodate the very diverse audience they draw and provide “basics to cutting edge” trends, keeping Topshop (and its customers) “ahead of the style game”. - Topshop lines : “Mainline”, “Premium”, “Boutique” and “Unique”. - Topshop services: “Style Advisor,” “Topshop To Go” and “Topshop Express”.
- 7. PRICING !"!#$%&'!()$**+,-( •! Prices vary from line to line to accommodate all aspects of the spectrum: -! “Mainline”, one of their most popular lines, is geared toward affordability offering classic styles at reasonable price. - Topshops “Premium” line is focused on shoppers of quality products who are looking for apparel made with superior materials, intricate detail and sturdy craftsmanship, but are on a higher price point scale.
- 8. AUDIENCE !"!#$%&'!()$**+,-( Demographics (a) •! Target customers are women aged btw 18 - 35 years. •! Income range from $10,000 to $50,000 per year. •! Target audience is young fashion-conscious people on a budget. (a) Source: Topshop Final Report – Survey (150 people)
- 9. AUDIENCE !"!#$%&'!()$**+,-( Psychographics: •! According to VALS II (a), there are 8 segments: innovators, thinkers, achievers, experiencers, believers, strivers, makers and survivors. •! Topshop targets two of these segments: achievers & experiencers (b). (a) Source: http://www.strategicbusinessinsights.com/vals.shtml (b) Source: Topshop Final Report
- 10. AUDIENCE !"!#$%&'!()$**+,-( Psychographics(a) •! Achievers have goal oriented lifestyles and a deep commitment to career and family. Image is important to Achievers; they favor established, prestige products and services that demonstrate success to their peers. •! Experiencers are motivated by self expression. They are young, enthusiastic, and impulsive consumers. Their purchases reflect the emphasis they place on looking good and having "cool" stuff. (a) Source: http://www.strategicbusinessinsights.com/vals.shtml
- 11. COMPETITION !"!#$%&'!()$**+,-( •! Main Topshop Competitors are: H&M, Zara, French Connection and GAP. (a) (a) Source: Topshop Final Report - Qualitative survey conducted in Boston with a sample of 150 people
- 12. DIGITAL INSIGHT !"!#$%&'!()$**+,-( •! NY Direct Searches - Website Comparison: Topshop Vs Competition. (a) Us.topshop.com (b) Topshop.com (b) •! Monthly visitors: 225,000 •! Monthly visitors: 2,700,000 •! Backlinks: 437 VS •! Backlinks: 169,000 •! Google Page Rank: 5 •! Google Page Rank: 7 (a)! Source: Google Insight (b)! Source: http://domainsoutlook.com/u/site/us.topshop.com.html and http://bizinformation.com.my/www.topshop.com
- 13. DIGITAL INSIGHT !"!#$%&'!()$**+,-( Us.topshop.com (b) ispionage.com (a) Alexa (c) Google Trends
- 14. SWOT ANALYSIS !"!#$%&'!()$**+,-( STRENGTHS WEAKNESSES •! High quality and competitive price. •! Line mostly limited to women. •! Innovation and creativity. •! Overwhelming range of line for •! International brand and huge media traditional consumers. support. OPPORTUNITIES THREATS •! Mobile devices and Internet mobile •! Strong established competition. usage are growing at a rapid pace. •! New competition coming from Asia •! Target group is open to new brands (e.g. Uniqlo). and fashion according to studies. •! Economic downturn.
- 15. GOALS !"!#$%&'!()$**+,-( Goals period starts from April 2012 and end in March 2013 in current US market. 1.! Increase online revenue by 30% over the 12 months period. Assumptions: total US revenue = $65M ($40M NYC + $25M Chicago) (a) Assumptions: average online sales = 4.5% of the total revenue (b) 4.5% of $65M = 3M -> 3M * 30% = 900K of increase. 2.! Increase store traffic by 30% and encourage repeat purchases of the 18-35 years segment over the 12 months period. 3.! Increase brand awareness by 10% and loyalty of the 18-35 years segment by providing targeted content through the Internet. Assumptions: current brand awareness in NYC is 65% / Chicago 55% (c) (a)! Assumptions based on the numbers given at the page 3. Goals do not include new store openings. But the means to achieve the goals above-mentioned can be used for other store openings. (b) Only 9% of clothing is sold on internet. In comparison 50% of computers and 40% of books are sold online. Apparel E-sales: 4.5% on average. (c) In the Topshop Final Report conducted in Boston, average brand awareness was of 50%.
- 16. STARTEGY !"!#$%&'!()$**+,-( ACTIONS RESULTS Develop an optimized website on IOS and Increase and support our growing mobile Android OS purchases (a) Develop a mobile application (TOPLOOKS) Increase online and offline purchases as allowing users to get special offers, buy well as engage the Topshop community exclusivities and win prizes on a regular basis Execute SMS text campaign Acquire downloads and usage of the application as well increase sales thanks to mobile promotions. Utilize current marketing channels to Create possible synergies btw this strategy promote mobile techniques and ongoing marketing actions (a)! Topshop ./0(0112(345671(0/710(894:(;4(<=>(%4;/7(3?@43319@1(0>/710(/91(;.4A8.;(;4(51(/2(/B19/81(4C(D?E=(4C(;4;/7(1?@43319@1(0/710F( ()4A9@1G(http://www.powerretail.com.au/multichannel/topshop-mobile-sales-growth
- 17. MOBILE WEBSITE !"!#$%&'!()$**+,-( •! Build a mobile optimized website for TOPSHOP USA. •! Showcase TOPSHOP products and exclusive offers on mobile. •! Feature the mobile store locator by using Google Maps API (a). No development required •! Implement social plugins allowing users to share and comment on special offers. No development required •! Enable users to purchase items from the mobile device by adapting the existing online shop. •! Promote TOPLOOKS app on the mobile site. •! Provide landing pages for QR code. (a)! An /HH76@/I42(H9489/33628(62;19C/@1(J+K&L( is a set of code provided by a company to help third parties use their featrures without having to develop it.
- 18. MOBILE APPLICATION !"!#$%&'!()$**+,-( •! Build a mobile app for TOPSHOP USA. •! Build a website making the bridge between the content posted by users on the mobile app and the desktop (Toplooks.us.topshop.com). •! Implement social plugins on toplooks.us.topshop.com allowing users to share and comment on the content posted. •! Set up a weekly contest allowing the TOPSHOP community to vote for the best look. •! Set up an annual competition where a movie star or a model representing TOPSHOP elects the best look among the weekly winners of the year. •! Make the bridge between the online store and the application. Note: The application and website associated to the app will be then used by other countries.
- 19. SMS TEXT CAMPAIGN !"!#$%&'!()$**+,-( •! Users text TOPSHOP to 33355
- 20. TOTAL BUDGET !"!#$%&'!()$**+,-( Mobile Website $ 80,000 •! Development $ 40,000 •! Maintainence (over one year) $ 20,000 •! Content (over one year) $ 20,000 Mobile Application $ 200,000 •! Development $ 70,000 •! Maintainence (over one year) $ 30,000 •! Updates & Upgrades (over one year) $ 70,000 •! Use of a Topshop Ambassador (Model or Star) (b) $ 00,000 •! Website Development $ 20,000 •! Extra Space Storage (server) $ 10,000 SMS Text Campaign (a) $ 40,000 TOTAL $ 320,000 (a)! 120,000 phone numbers * 3 messages (back&forth) * $0.10 = 36,000 + 4,000 (campaign set up fee) = $40,000 (b)! Part of the current sponsoring contracts budget. This doesn’t impact our budget .
- 21. FINANCIAL ROI !"!#$%&'!()$**+,-( Mobile Web Commerce ROI (a) = [ (Monthly Page Visits *12 Months * Conversion Rate * Average Purchase * Profit Margin) - Total Cost Mobile Web Site]/ Total Cost of Mobile Website = [ (22,500 *12 * 5% * $40 * 20%) – 70,000]/ 70,000 = 54% SMS Campaign ROI = [ (Text Impressions * Conversion Rate * Value of Action ) - Total Cost of SMS Campaign]/ Total Cost of SMS Campaign Text impressions = 12 months * 120,000 = 1,440,000 Value of action = Average purchase $40 * (margin 20% - 10% off) = $4,00 (value of action here does not include downloads) = [ (1,440,000 * 4% * 4 ) – 40,000]/ 40,000 = 476% Mobile Application (focused on Loyalty) = [Downloads * Activation Rate* Value of User - Total Cost Mobile App]/ Total Cost of Mobile App Downloads = 4% of 1,440,000 = 57,600 (according to the SMS ROI) + 50,000 (Assumption of viral effect) + 50,000 (other marketing channels) = [157,600 * 70%* $5,00 – 200,000]/ 200,000 = 176% (a)! Monthly visits on us.topshop.com = 225,000. Assumption: mobile visits = 10% of the website visits. Mobile visits = 22,500/month. Source: http://domainsoutlook.com/u/site/us.topshop.com.html