1.0 Introduction
Fashion is a popular style in particular time or practice. Success in fashion industry depends on the ability to design and recreate in clothes, accessories or footwear with tastes and styles that meet the customers’ expectation. Fashion adds an important design dimension in textiles, leather, etc, that is capable of capturing the perceived value of customers. So to speak, the fashion factories produce clothes, accessories and other fashion products but what consumers really want are emotions, dreams, hopes and cultural identities. Fashion retailing is typically a consumer goods market. It is more characterized by fickle customer preferences, numerous competitors in the industry, short product-life, and countless manufacturing, marketing and retailing alternatives. According to “The Fashion and Apparel Industry Report” released by Statista, fashion consumers are predicted to have more buying power, approximately $12 billion in this year (Statista, 2020). Especially in the E-commerce Fashion Retailing Segment, the worldwide revenue will increase from $481b in 2018 to $606b in 2020 as shown in Fig 1. In this analysis report, the target international fashion retailer is decided to be Vans, which is well known for selling stylish, casual and comfortable footwear in the U.S and global fashion retailing market. Even though Vans has gained a popularity within the U.S market, it is still difficult for the retailing brand to challenge traditional footwear giant such as Nike in the global fashion industry. Therefore, it is necessary and essential to reassess various market entry methods for Vans to enjoy business success in the global stage.
Source Credit: Statista
Fig 1: Worldwide revenue in billions of USD in Ecommerce Fashion Industry
2.0 Current Competitive Market Entry/Expansion Method
Currently, there are three competitive market entry or expansion method that have been employed by Vans in both the domestic and global market. They are Flagship Stores, Franchising, and Internet sales. The chosen retailer throughout the report is decided to be Vans, a U.S footwear fashion retailer.
2.1 Flagship Stores
Flagship stores are core stores for international fashion retailers. They are often designed much larger than standard outlets of brand name stores and located in prominent shopping area such as Madison Avenue in New York. Shopping at Flagship stores is gaining popularity in the past two decades. Consumers particularly from high-income group prefer to purchase fashion products at flagship stores of corresponding brands(Moore, Doherty&Doyle, 2010). A flagship store, like the aforementioned, is often the most prominent and extraordinary store of a brand. Therefore, it can provide customers with the widest choices of fashion products. Besides, it also provides the highest quality of services and creates a luxurious environment for the target customer segments(Perks, 2009)..
There are three major characteristics of a flagship store(Moore&Doherty, 2007). First, flagship store is often company-owned instead of running by individual retailer. In other words, international fashion retailers will directly operate their own flagship stores instead of renting to a third party. Second, a flagship store often carries only one product. It does not sell the product of other brands like ordinary retail stores. Third, fashion retailing companies intend to build their own flagship stores mainly for the sake of brand management instead of generating profit. Flagship stores are distinguishable because of their prestigious scale, design, store layout, location, and operation cost. It makes a significant contribution to enhance the brand value and popularity (Plazibat&Brajevic, 2011). Sometimes Flagship stores are designed by famous architect or located in historical buildings further adding to their exclusivity and elegance. Vans (2019) recently opens its largest flagship store outside the U.S on the famous London’s Oxford Street. The flagship store is about 4714 sq. feet large. It basically sells Vans’ best selection of footwear, apparel and accessories with premium quality. Flagship stores is a brilliant market entry method for Vans, as a U.S fashion retailer. It contributes to the successful development of relationships between the distribution partners, fashion media, brand profile and target customers.
Source Credit: Retail Gazett, 2019
Fig 2: Van’s European largest Flagship Store
2.2 Concessions
Concessions or more often in-store concessions allow a company or an organization will promote their services and products to target customers within a fashion retailing environment such as DIY store, shopping centers or supermarket (Doherty, 2000). As compared with flagship stores, concessions will not just target at high-income group or only build for the purpose of branding. It can effectively promote a retailer’s businesses to reach a large number of potential customers in a relatively cost-efficient manner. It also allows marketers of a fashion retailing company to conduct market research on customers’ buying preferences and behaviors, raise brand awareness or test new product series. For instance, just in the beginning of this year, Vans decides to open up its first community-driven store in Downtown Los Angeles (DTLA) (Fibre2Fashion, 2020). The concession store invites LA-based artist, Geoff McFetridge, to design the store layout. Vans’ concession store is decorated with raw brick and concrete walls. Atmospheric photos of professional or legendary skating players like Ray Barbee, Tino Razo, etc, are also hanged on the store’s walls. It mainly creates a holistic brand image of Vans that is specialized in surfing, skating, sporing spirits and unorthodox tastes(Moon&Kiron, 2002). From the example of Vans’ concession store, it can be observed that the store pe se does not intend to embrace luxuriousness, exclusivity and elegance but rather mix with local arts and Vans’ unique values. Vans currently have over 200 concession stores in the U.S alone. These concession stores actually convey Vans’ brand value, that is, a kind of rebellious and non-conventional subculture, to target customers(Palladini, 2016). As as marketing entry strategy, concession stores can effectively create a consistent and coherent brand image in a target market. In every concession store, potential and target customers can experience a unique culture of a retailing brand(Evans, 2002). Therefore, it can significantly enhance the brand awareness and popularity among the target customer group.
Source Credit: Fibre2Fashion, 2020
Fig 3: Vans’ first community-driven retail store in L.A.
Internet Sales
Like the aforementioned, internet sales or broadly speaking, the E-commerce has become a very popular marketing entry strategy among fashion retailers(Rothaermel, Kotha& Steensma, 2006). As shown in figure 1, in the two years, the E-commerce Fashion Industry will keep growing. Ten or twenty years ago, not too many people actually believe that consumers will ever take to buying fashion products online(Singh et al., 2005). However, situation is dramatically changed now. According to the report published by eMarketer, apparel and accessories sales in the U.S has grown from $28b in 2010 to $73b in 2016(eMarketer, 2016). It proves that in the U.S internet sales of apparels and accessories can generate more revenue than all the other categories.
Source Credit:eMarketer, 2016
Fig 4: Apparel and Accessories Sales in the U.S
Vans also care about internet sales and E-commerce very much. Through uploading stylish and unique design of new series, customers can effectively find their ideal shoes. For instance, the All weather MTE as shown in fig. 5 is a product designed for customers to wear in almost all environment and weather conditions. “Keep it classic” series are designed for customers from the older generation and create a sense of nostalgia because this customer group had wore the classic Vans shoes since they were very young. Through clicking into the pictures, customers can also immediately find a vast variety of products from the same category. It tremendously saves the time for customers to make a buying decision because they are no longer necessary to go to a concession or flagship store by themselves. Apart from sales, Ecommerce is also an effective marketing entry tool because Vans and other fashion retail stores can reach potential and target customers through internet marketing. Through registering customers’ buying preferences (customers may click into an online picture several times. It shows that they are particularly interested in one product. Online software has the intelligent function to direct or guide customers with recommended options based on their buying preferences. It can thus meet the demand and expectations of customers very accurately.
Source Credit: ecomm.design, 2020
Fig. 5: Vans’ Internet Sales Marketing Entry Strategy
3.0 Hierarchical Model of Market Entry
The hierarchical model of market entry encompasses elements nearly all the previous strategies, theories, and methods in a hierarchical way. In this report, the newly revised model will be comprised of all the three methods above, namely flagship stores, concessions and internet sales. For instance, if Vans decides to enter a new market such as China, it is advisable for Vans to first build a flagship store there. It is largely because Chinese customers do not really have a brand awareness about the brand name of Vans. When it comes to buying sports footwear, Nike, Adidas, Air Jordan, etc, are more widely recognized than Vans. In other words, Vans do not develop brand awareness in such a new market. Flagship Store will allow Vans to first target at the high-end customer groups. Through locating the flagship store in exclusive area along with the flagship stores of other brands such as Nike, Chinese customers will gradually realize that Vans actually promotes very distinctive values and cultures as compared with Nike and other sports footwear producers. Especially young people will be cognizant of the fact that Vans are promoting a rebellious and anti-conventional subculture. The target customer group with the same values and identities will be influenced by the unique culture and value of Vans and thus start to purchase Vans’ products. In the second stage, after creating a good brand awareness in China’s market, Vans can continue to invest in building more concession stores. As compared with flagship stores, concession stores are more cost-efficient in promoting Vans’ values and brand image to potential and target group. Thirdly, Vans should have more internet sales in China. So far, eBay and Amazon are top E-commerce or online marketplace for selling Vans’ products. However, Vans should also notice that the above-mentioned platforms are not very popular in China’s context. In China, there are potential substitutes such as Taopao or Jingdong.com. As such, Vans should focus on promoting its services and invest its marketing resources in China’s Ecommerce platforms in order to sell and advertise its products.
4.0 Conclusion
In conclusion, it is indisputable that flagship stores, concessions and internet sales are all practical methods in marketing and selling products of an international fashion retailer. Among all the market entry methods, internet sales or Ecommerce seems to be the best option. It is because online sales generate the largest portion of the retailers’ revenue. However, in order to enter a new market successful, it is more advisable for a fashion retailer to employ a hierarchical model of market entry. Through the 3-stage market entry approach, it is feasible for a brand to develop brand awareness, popularity and loyalty. It can also generate more profits for the retailer as well.
Reference
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