Technology and its impact in the on-line fashion

industry

Group 3 Katie Reimer

Linda Jacobsen Bill Messick Jimmy Asip

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.

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

Advertising focusing on an image

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

US Advertising Spending

Website Evolution

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

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

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.

Technologies that Support the Business Application Site Model

Broadband

Flash-ware

Secure transactions

Authentication (name and password)

Digital signatures

Encryption

Secure servers

Website Evolution Example

Brochure Site Model Reebok 1996

E-Commerce Site Model Reebok Store 2002

Business Application Model

Reebok 2006

Website Evolution

http://shop.org/video/mov-sm.asp

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

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

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.

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

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

Survey Questions

1. How appealing is the web site?

2. How user friendly is the web site?

3. How strong is your initial reaction to the web site?

4. How effective was the web site in marketing the brand?

5. Did your perception of the brand change after viewing their web site?

Diesel

Diesel

1. 70% 4 or 5

2. 45% 2

3. 55% 4

4. 40% 4

5. 70% No

1. Overall appeal of the site 2. User friendliness 3. Strength of initial reaction 4. Effectiveness in marketing the brand 5. Did your perception change

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%

Prada

1. 46.7% 2

2. 73.3% 1

3. 46.7% 2

4. 80% Tie between 1 and 3

5. 80% No

1. Overall appeal of the site 2. User friendliness 3. Strength of initial reaction 4. Effectiveness in marketing the brand 5. Did your perception change

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%

Puma

1. 68.8% 4

2. 56.2% 4

3. 90.3% 3 or 4

4. 43.8% 4

5. 81.2% No 1. Overall appeal of the site 2. User friendliness 3. Strength of initial reaction 4. Effectiveness in marketing the brand 5. Did your perception change

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%

Old Navy

1. 87.4% 2, 3, or 4

2. 50% 5

3. 62.4% 3 or 4

4. 68.7% 4 or 5

5. 100% No 1. Overall appeal of the site 2. User friendliness 3. Strength of initial reaction 4. Effectiveness in marketing the brand 5. Did your perception change

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%

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.

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

Survey Conclusions

After analyzing the survey data, we determined that based on our criteria that our sample rated the sites as follows:

1. Old Navy

2. Puma

3. Diesel

4. Prada

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

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.