Online Promotionality – Team 2

CHALLENGE:

How can Theory maximize full price online

sales across all channels?

Industry

Trends and

Challenges

Company

analysis

Strategic

Imperative

Recommended

Solutions

2

INDUSTRY TRENDS

BUY NOW, WEAR NOW“But what about simply offering clothes that

people want to buy at the time they actually need them?”

INTEGRATED RETAIL“Firms that fail to adopt an omni-channel

marketing strategy risk losing their customer relationships.”

Source: Business of Fashion, May 18 2016

INDUSTRY TRENDS

4

Source: National Retail Federation, 2016

SELLING THE EXPERIENCE“While distinctive product and correct pricing may

help a brand reach a certain level of success, crafting a unique experience could catapult it.”

KEY INDUSTRY CHALLENGES

“Early” deliveries

hurting full price

sales

Instant gratification

Decreasing perception

of newness –

fast fashion

Information

transparency through

technology -

overexposure

KEY INDUSTRY CHALLENGES

4Source: CFDA and BCG , May 18 2016

BUY NOW,

WEAR NOW

INTEGRATED RETAIL

“Supply and accessibility of product has outgrown the

demand”

-Andrew Rosen

Source: Business of Fashion, Feb 3 2016

% of Total June Sales by Delivery Month

How are these trends affecting Theory?

WOMENS MENS

5

Buy Now, Wear Now

Source: Global Merchandising Monthly Report

Key Insight: Customer’s summer purchases are being driven from product delivery at the beginning of the year

How are these trends affecting Theory?

6

Integrated Retail

Source: Trendalytics Dashboard

7/21/16

Key Insight: More distributors means less control

“You need to be visible,

but the distribution

should be high quality”

-Claudia D’Arpizio,

Bain & Co.

Source: Business of Fashion, August 10 2015

STRATEGIC IMPERATIVE

STRATEGIC IMPERATIVE:

Drive full price sales across all channels

through control and differentiation.

10

CONTROL DIFFERENTIATION

Source: Forbes, July 9 2015

Customization

NikeID: Personal

Customization of DTC gear

Brings more profit directly to

the brand (better margins)

Unique offering only available

on Nike site

Source: Kelly Pedersen

Segmentation

Different offerings for different

accounts depending on

customer demographics

80% of DTC product is

exclusive

Amazon agreement to restrict

3rd party sellers

STRATEGIC IMPERATIVE:

Drive full price sales across all channels

through control and differentiation.

11

CONTROL DIFFERENTIATION

More sustainable over time Larger return on investment Builds brand equity and loyalty in

both DTC and wholesale channels

RECOMMENDATIONS

Objective:Maximize online full price sales by providing

an engaging, exclusive and informativeexperience to Theory customers.

DIFFERENTIATION

1. Introduction of online membership program

2. Increase DTC exclusives through collaborations/capsules

3. Site enhancements that improve path to purchase

13

Theory Unwrapped, Theory BCD [behind

closed doors]

Goal: create a membership program that creates a feeling of exclusivity

to drive full-price online purchasing

Rewarded behavior: full-price online buying

Tiered system benefits: Increases customer engagement

Exclusivity makes customer feel valued

Works best to promote high-commitment

“Experiential rewards” > monetary rewards

Measures of effectiveness: Customer retention rate

Negative churn

Basic idea: 1 “point” for every $1 spent on full-price product online Special point events (double point days)

Opportunity to spend points on 3rd party benefits/rewards “experiencing the Theory

lifestyle”

1. ENGAGE: MEMBERSHIP PROGRAM

12

*Opportunity for

wholesale: potential for

members to earn points

on 3rd party websites by

entering member number

at checkout

Program BlueprintAccess to exclusive VIP events

Entered in raffle for Theory runway tickets

Exclusive exclusives

Seasonal fabric swatch book

Seasonal pre-views

Specialty accessory

Personalized double-point days

Free two-day shipping

Early access to Theory/Helmut Lang sample sales

Complimentary tailoring

Free gift wrapping

Complimentary tote

Bronze Silver Gold Platinum

1. ENGAGE: MEMBERSHIP PROGRAM

All access Top 50% of

customers

Top 25% of

customers

Top 10% of

customers

13

Theory coffee table book with touch and feel exclusive Brand Education/Awareness

Relationships with Mills

is what makes Theory unique

Blogger/Artist/Model Collabs/Campaigns

Influencers

Product ambassadors

Curated Collections and Online Exclusives Color/fabric programs

Limited Edition

Wholesale: increase amount of account exclusives to

promote curated, segmented assortments (less overlap)

2. EXCLUSIVE: DIRECT OFFERINGS

Specialization

Source: Business of Fashion, July 3 2016

Customer Education

“Buy Now, Wear Now”: Promote product stories to

highlight different styling options for the current

season offering. Curated homepage campaigns relevant to today

“Shop the Look”

Wholesale: Theory lookbooks advertised on account

homepages

#inTheory: Transform the tab as the information

guide to all things Theory Videos about sourcing background

Peer-to-peer sharing (uploadable photo gallery)

Monthly store “Spotlight”

Integrated Retail: Make path-to-purchase online

more similar to that of an in-store

experience Personalized services

Streamlined information from

store to site

3. INFORM: SITE ENHANCEMENTS

15

RECOMMENDED TIMELINE

Initiative Level of Investment

EstimatedTime

DeptsInvolved

1.

2.

Initiative Level of

Investment

Estimated

Time

Departments

Involved

1. Theory

Membership

Program

Medium 1 – 2 years Ecommerce, Marketing, IT, Retail

2. DTC

Exclusives

High (Long-termStrategy)

2 – 3 years Ecommerce, Design,Production, Merchandising, Retail, Marketing

3. Site

Enhancement

s

Low (Quick Win) 6 months – 1 year Ecommerce, IT, Marketing

16

QUESTIONS?

APPENDIX

Current Actions

Suggestions Legal Agreement

Restrict Online retailers from selling

to 3rd parties

Give consistent guidance of online

marked down styles by account

Improve promotional calendar

-Promotional Events

-Promo codes

Restrict off-price accounts from

selling product on online platforms

Source: Trendalytics Dashboard

7/21/16

Wholesale DTC

Understand who the online customer

is!

Consumer Analytics

Average Order Value

Source/Medium

Bounce Rate

Email Marketing

In house Social Media Campaigns

Linking our site to SM platforms

Objective:Maximize online full price sales by taking initiatives with our accounts

CONTROL

22

Curated offerings per account

“Online Exclusives” labeled

Styles

Colorways

“Countdown” labels

Re-evaluate business with yoox.comCurrent Off-price Distributors

Shopbop.com