presented by: tiffany hogan, analyst mary brett whitfield, senior vice president may 23, 2014...
TRANSCRIPT
Presented by:
Tiffany Hogan, AnalystMary Brett Whitfield, Senior Vice President
May 23, 2014
Apparel Retailing Webinar SeriesHot Topics: Amazon and Activewear
© Copyright 2014 Kantar Retail
Copyright © 2014 Kantar Retail. All Rights Reserved.
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Disclaimers
The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.
This seminar is not endorsed or otherwise supported by the management of any of the companies covered during the course of the workshop or within the following slides.
© Copyright 2014 Kantar Retail
• Activewear Activity
• “Amazon Fashion Is Booming”
3
Agenda
© Copyright 2014 Kantar Retail
Activewear, What’s the Big Deal?
Source: Kantar Retail ShopperScape®, Feb 2013, NPD, research, analysis 4
USD14 billion+ industry
Among the fastest-growing segments of U.S. apparel industry
Fashion: Gen Y is more likely than other cohorts to cite athletic shoes and activewear as top categories where they are currently trading up
Function: ShopperScape® has consistently shown that women are more likely to be making an effort to live an active lifestyle (i.e., eating healthier and exercising more)
© Copyright 2014 Kantar Retail
Activewear Is Everyday Wear
Source: Kantar Retail ShopperScape®, March 2014 5
Nearly six in 10 wear it at least once a week
58% of women wear
active wear at least once a
week
58% of women wear
active wear at least once a
week
Frequency of Wearing Activewear(among all female primary household shoppers)
Incidence of Wearing Activewear at Least Once a Week, by Cohort
(among all female primary household shoppers)
© Copyright 2014 Kantar Retail
Activewear Part of Everyday RoutinesAt home and while out and about
6
Exercise
Out & About
Going Out
Source: Kantar Retail ShopperScape®, March 2014
Seniors
Boomers, Seniors
Gen Y, Gen X
Gen Y
Seniors
Gen Y
Seniors
Where and When Shoppers Wear Activewear(among all female primary household shoppers who wear activewear at least once a week
Shopper cohorts at least 10% more likely to wear activewear for activity
At home
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In Aggregate, Function Trumps FashionValue (price) comes in third
7Source: Kantar Retail ShopperScape®, March 2014
What’s Important When Buying Activewear(shoppers rating factor 4 or 5 on 5-point scale among all female primary
household shoppers who wear activewear at least once a week)
Comfort 90% FunctionFit 87% Function
Price 86%
Easy-care fabric 79% FunctionPerformance attributes 54% FunctionAppropriateness for specific activities 51% FunctionStorage (e.g., pockets) 37% FunctionCan buy coordinating clothing 35% FashionBrand name purchased before 34% FashionFamiliar brand name 33% FashionAll natural fabric 31% FunctionStyle/look popular right now 28% FashionColor/pattern popular right now 25% FashionBrand name that has been around a long time 23% FashionCan buy coordinating shoes/accessories 21% FashionBrand name popular right now 15% FashionDesigner or high-end brand name 14% Fashion
© Copyright 2014 Kantar Retail
Gen Y Places Premium on FashionAll fashion-related aspects of activewear features more important to Gen Y
8Source: Kantar Retail ShopperScape®, March 2014
What’s Important When Buying Activewear: Fashion(shoppers rating factor 4 or 5 on 5-point scale among all female primary
household shoppers who wear activewear at least once a week)
© Copyright 2014 Kantar Retail
Gen Y also Spends More on Activewear
9
Activewear also takes a bigger chunk of the apparel budget
Self-Reported Past 6-Month Spending on Activewear
(among all female primary household shoppers who wear activewear at least once a week)
Activewear Spending as Percent of Total Apparel Spending
(among all female primary household shoppers who wear activewear at least once a week)
Source: Kantar Retail ShopperScape®, March 2014
© Copyright 2014 Kantar Retail
Mass Retailers Have Largest Share of Preference
All Female Shoppers
Gen Y Gen X Boomers Seniors
Mass Retailers (net) 32% 35% 28% 34% 32%
Apparel Specialty Retailers (net) 19% 27% 21% 13% 11%
Department Stores (net) 18% 10% 18% 24% 14%
Sporting Goods Retailers (net) 8% 10% 10% 6% 5%
Amazon.com 3% 6% 3% 2% 2%
Apparel specialists challenge mass among younger cohorts
10Source: Kantar Retail ShopperScape®, March 2014
Where: Most Recent Activewear Purchase(among all female primary household shoppers who wear activewear at least once a week)
Mass: This skews toward Walmart … but
close to evenly split between Walmart and
Target for Gen Y
Mass: This skews toward Walmart … but
close to evenly split between Walmart and
Target for Gen Y
Apparel Specialty: Just 3–4% of this is the activewear specialists; largest portion of share held by
off-price specialists
Apparel Specialty: Just 3–4% of this is the activewear specialists; largest portion of share held by
off-price specialists
Department Stores: Large Boomer share
driven by Kohl’s
Department Stores: Large Boomer share
driven by Kohl’s
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• Lululemon Effect
• Lifestyle Brands Creating the Activewear “Experience”
11
Activewear Retailing Trends
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The “Lululemon” Effect …
Source: Kantar Retail Analysis 12
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… Is Having a “Trickle Up” Effect“Low” Fashion Influences “High” Fashion
Source: Kantar Retail Analysis 13
Marc by Marc Jacobs DKNY Tommy Hilfiger
Ralph Lauren J Crew
© Copyright 2014 Kantar RetailSource: Kantar Retail Analysis 14
… And a “Trickle Over” into Specialty Retailing
© Copyright 2014 Kantar RetailSource: Kantar Retail Analysis 15
Activewear in Lifestyle BrandsProduct Differentiation and Customer Experience
© Copyright 2014 Kantar RetailSource: Kantar Retail Analysis 16
Activewear in Lifestyle BrandsProduct Differentiation
© Copyright 2014 Kantar RetailSource: Kantar Retail Analysis 17
Activewear in Lifestyle BrandsCustomer Experience
Extend the experience beyond the
product.
© Copyright 2014 Kantar RetailSources: Kantar Retail Analysis & VF Corp. Q1 Earnings Call 18
Activewear in Lifestyle BrandsProduct Differentiation
© Copyright 2014 Kantar RetailSource: Kantar Retail Analysis 19
Activewear in Lifestyle BrandsCustomer Experience
• Engaging customers through online training program
• Using athlete partnerships to create a motivating environment
• Mobile app available in June
- Like the macro trends in retail, activewear is becoming more about the experience for lifestyle retailers
- Successful retailers will need to create an environment for the consumer as well as tailored products
© Copyright 2014 Kantar Retail
Key TakeawaysPlaying in activewear requires positioning with the customer in mind
Source: Kantar Retail research, analysis 20
Strategic Positioning
Value
• Create differentiation and cohesive brand platform• How does this category complement or supplement?• Position to drive performance among core/target
audience and lift KPIs
• Align with shopper requirements• Find appropriate mix of product, price, in-store experience $
© Copyright 2014 Kantar Retail
• Activewear Activity
• “Amazon Fashion Is Booming”
21
Agenda
© Copyright 2014 Kantar Retail
Apparel as Growth Category at Amazon
Source: Amazon.com 22
Amazon Fashion is booming. Premium brands are recognizing that they can use Amazon to reach fashion conscious, high-demo customers, and customers are enjoying the selection, free returns, detailed photos, and video clips that let them see how clothes move and drape as the models walk and turn.
Jeff BezosFounder and CEO,
Amazon.comApril 2014
© Copyright 2014 Kantar Retail
Amazon Has Second-Largest Apparel Shopper Base
Source: Kantar Retail ShopperScape®, March 2014 23
Monthly Shopping Incidence for Apparel at Key Retailers*, Among All Female Primary Household Shoppers
*Inclusive of shopping at stores and website as applicable.
© Copyright 2014 Kantar Retail
Shoppers in the “Amazon Ecosystem” Even More Likely to Be Regular Apparel Shoppers
24
Gen Y Gen X Boomers Seniors AmazonPrime
Members
MonthlyAmazon
Shoppers
All Shoppers:
24%
All Shoppers:
24%
Monthly Amazon Shopping Incidence for Apparel, (among all female primary household shoppers)
Source: Kantar Retail ShopperScape®, March 2014
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Amazon Apparel Shoppers Are Younger, More Affluent
25Source: Kantar Retail ShopperScape®, March 2014
*Female apparel shoppers
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Amazon Draws Apparel Shoppers from Top Apparel Destinations
26Source: Kantar Retail ShopperScape®, March 2014
Cross-Shopping:Monthly Amazon Shopping Incidence for Apparel, Among Monthly Apparel Shoppers at Key Retailers
(among all female primary household shoppers)
*Read as: 44% of all female shoppers who shop at Walmart at least once a month also shop for apparel at Amazon at least once a month
© Copyright 2014 Kantar Retail
The Future of Amazon.com/Fashion
• Adopting improved visual merchandising
Source: Amazon.com, Kantar Retail analysis 27
© Copyright 2014 Kantar Retail
The Future of Amazon.com/Fashion
• Adopting improved visual merchandising
• Bringing a portfolio of concepts into the “ecosystem”
Source: Amazon.com, Kantar Retail analysis 28
© Copyright 2014 Kantar Retail
The Future of Amazon.com/Fashion
• Adopting improved visual merchandising
• Bringing a portfolio of concepts into the “ecosystem”
• Testing and learning with platinum partners
Source: Amazon.com, Kantar Retail analysis 29
© Copyright 2014 Kantar Retail
The Future of Amazon.com/Fashion
• Adopting improved visual merchandising
• Bringing a portfolio of concepts into the “ecosystem”
• Testing and learning with platinum partners
• Leveraging social media
Source: Amazon.com, Kantar Retail analysis 30
© Copyright 2014 Kantar Retail
Amazon Exceeds 244M Customer Base
31
Third party growth remains strong
Source: Kantar Retail analysis; Company reports
+17% vs. Q1 2013
Active Customer Accounts have exceeded 244M for Q1 2014. Expanding digital content and services, and continued focus on selection, price, and convenience will accelerate this growth into 2014. Third-party units as a percentage of total units was 40%, consistent with Q1 2013.
Active Customer Accounts have exceeded 244M for Q1 2014. Expanding digital content and services, and continued focus on selection, price, and convenience will accelerate this growth into 2014. Third-party units as a percentage of total units was 40%, consistent with Q1 2013.
Active Customer Accounts = customers who have purchased products on Amazon at least once in the last 12 months
Y-o-Y growth >60%
© Copyright 2014 Kantar Retail
Amazon Continuing to Innovate Supply Chain/ Fulfillment
32
• Austin, TX• Cincinnati, OH• College Station, TX• Columbus, OH• Dallas, TX• Houston, TX• Indianapolis, IN• Lexington, KY• Los Angeles, CA• Louisville, KY• New Orleans, LA• New York, NY• Oklahoma City, OK• Philadelphia, PA• San Antonio, TX• Shreveport, LA• Waco, TX
In the U.K.: London, Birmingham, Milton Keynes, Oxford, Nottingham, Manchester and Leeds
Making the revolutionary, routine—New Sunday
Delivery Markets
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Amazon Rolling Out Same-Day Delivery
Kantar Retail Analysis, Amazon.com 33
Spreading across United States, Germany and UK
Prime members pay $5.99 and non-Prime members pay a minimum of $8.99 + $0.99 per extra item.
Cutoff times vary by distance from Fulfillment Centre and only include ≈ top 10,000 SKU’s.
• Baltimore 11:00 a.m. local time
• Boston 11:00 a.m. local time
• Chicago 7 a.m. local time
• Dallas 12:15 p.m. local time
• Indianapolis 11:30 a.m. local time
• Los Angeles 12:15 p.m. local time
• New York City (and parts of New Jersey) 8:00 a.m. local time
• Philadelphia 8:30 a.m. local time
• Phoenix 12:15 p.m. local time
• San Francisco 12:15 p.m. local time
• Seattle12:15 p.m. local time
• Washington, D.C.11:00 a.m. local time
Orders are generally delivered in the evening from 6-9pm, although more flexible choices may come online soon
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The Future of Online-Only Apparel RetailingWhich model will prevail?
34Source: Amazon.com, Kantar Retail analysis
ContentCuration
Experience
AssortmentExecutionFulfilment
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Multi-Channel Retailers Not Standing Still
• Nordstrom adds “Search & Send” functionality for full Nordstrom Rack inventory, and Rack Alerts app lets shoppers make merchandise requests
• Neiman Marcus organizes for more efficient cross-channel operations
• Gap expands Reserve in Store
Introducing new tools, new functionality and organizing to better compete
Source: Company websites, Kantar Retail analysis 35
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• Activewear Activity
• “Amazon Fashion Is Booming”
36
Questions?
© Copyright 2014 Kantar Retail
Contact:
Tiffany [email protected]
T:+ 1 614 355 4045www.kantarretailiQ.com
Mary Brett WhitfieldSenior Vice [email protected]
T:+ 1 614 355 4010www.kantarretailiQ.com