Based on extensive research conducted on women's shopping behaviors as well as De Kliek's own research among Los Angeles women, the following marketing strategies will be employed:
- Develop strong relationships with customers by utilizing Style Assessment and offering services to help each woman determine the right clothes for her.
- Provide educational materials and programs that enable customers greater decision-making confidence.
- Build awareness of brand and services to exemplify strong store reputation.
- Provide customers with a sense of access to "inside information" and harness the power of a woman's personal network by leveraging marketing collateral designed for sharing and encouraging referrals.
- Utilize personal referrals and stylists to build traffic.
5.1 Sales Strategy
To overcome seasonality concerns, De Kliek will carry 20 percent of merchandise in fashion and wardrobe accessories. Additionally, De Kliek will provide alterations, personal shopping services and special ordering for our customers. Special Orders are a huge benefit as De Kliek obtains full-price sell-through and there is no floor space needed to sell the article.
Pricing
42% of households with a $75K income agree, "When I really want something, price is no object." [1]
At De Kliek, we are very committed to bringing high quality clothing to women and the prices will reflect a range of mid-to-high pricing. Average price points will be around $200. To maintain profit margins of 20%, De Kliek will negotiate and focus on obtaining an average 61% retail markup for all merchandise classifications.
Location
De Kliek will be located in an upscale neighborhood in Los Angeles. A significant proportion of the target market lives in this area. De Kliek will work with the local merchants association as well as local publications to generate PR and shopping in the neighborhood. De Kliek will also attract women from throughout other Los Angeles neighborhoods as well as the few women who come to LA from out of town to shop.
De Kliek will launch in July 2004 and have a website presence where fashionable customers throughout the country can go to learn more about the boutique, the Style Assessment, how to wear certain items for day, evening and weekend, and make personal shopping appointments.
Style Concierges
Most women are intimidated by upscale fashion boutiques, as many sales associates can come across rude and snobby. Additionally, the sales pressure from an associate can be a huge turn-off to a potential customer as it doesn't allow a woman to browse and get to know the store's products at her own pace.
De Kliek will have three store associates, or "style concierges:" myself, an assistant manager, and a PT employee (both still to be hired).
5.1.1 Sales Forecast
The appropriate merchandise -- and the right amount of merchandise-- are critical in building a successful clothing boutique. De Kliek will carry 15 merchandise classifications in addition to the Style Assessment. Each month, the sales forecast and open-to-buy (OTB) plan will be reviewed with De Kliek's inventory service provider, Retail Merchandising Service Automation (RMSA), against the previous month's sales to ascertain any adjustments and make the appropriate changes. As Open-to-Buy is planned, the percentage of merchandise that is new (i.e., Fresh ratio) will also be considered to ensure that the inventory is, on average, around 40-50% fresh.
Fall/Winter sales are forecasted at $272,141 for the rest of 2004 and $513,500 for FY2005, with an average monthly sales goal of $46,600. The summarized forecast for the Fall season is listed below:
Sales Highlights, Fall/Winter Season FY2005
- | Aug | Sept | Oct | Nov | Dec | Jan |
Sales | $36,450 | $43,740 | $50,301 | $46,780 | $60,814 | $34,056 |
% Increase | - | 20% | 15% | -7% | 30% | -44% |
Weeks/ Month | 4 | 5 | 4 | 4 | 5 | 4 |
Sales/ Week | $9,113 | $8,748 | $12,575 | $11,695 | $12,163 | $8,514 |
Sales/ Day | $1,302 | $1,250 | $1,796 | $1,671 | $1,738 | $1,216 |
Sales Forecast | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Sales | |||||
Casual Tops | $47,880 | $55,288 | $55,841 | $56,400 | $56,964 |
Blouses | $41,356 | $48,039 | $48,519 | $49,736 | $50,482 |
Sweaters | $37,343 | $43,721 | $44,377 | $45,043 | $45,718 |
Knits | $39,160 | $45,622 | $46,534 | $47,465 | $48,414 |
Pants | $43,707 | $50,972 | $51,737 | $52,513 | $53,301 |
Skirts | $33,839 | $39,904 | $40,703 | $41,517 | $42,347 |
Dresses | $26,110 | $30,710 | $31,017 | $31,327 | $31,641 |
Denim | $29,974 | $35,737 | $36,451 | $37,180 | $37,924 |
Separates | $20,024 | $23,824 | $24,301 | $24,787 | $25,282 |
Jackets/Blazers | $25,450 | $30,679 | $31,292 | $31,918 | $32,556 |
Coats/Outerwear | $22,211 | $26,520 | $27,050 | $27,591 | $28,143 |
Fashion Accessories | $53,372 | $62,243 | $63,799 | $65,394 | $67,029 |
Jewelry | $22,850 | $26,836 | $27,238 | $27,647 | $28,061 |
Personal Care | $11,983 | $14,164 | $14,306 | $14,449 | $14,593 |
Wardrobe Accessories | $17,737 | $21,032 | $21,243 | $21,455 | $21,670 |
Style Assessments | $2,767 | $2,976 | $3,036 | $3,097 | $3,159 |
Special Orders | $36,250 | $39,525 | $40,316 | $41,122 | $41,944 |
Alterations | $1,490 | $1,611 | $1,643 | $1,676 | $1,709 |
Total Sales | $513,503 | $599,403 | $609,402 | $620,315 | $630,937 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
Casual Tops | $20,588 | $23,774 | $24,012 | $24,614 | $24,983 |
Blouses | $17,370 | $20,176 | $20,378 | $20,889 | $21,202 |
Sweaters | $15,684 | $18,272 | $18,455 | $18,918 | $19,202 |
Knits | $16,447 | $18,973 | $19,163 | $19,643 | $19,938 |
Pants | $17,483 | $20,288 | $20,491 | $21,005 | $21,320 |
Skirts | $13,874 | $16,200 | $16,362 | $16,773 | $17,024 |
Dresses | $9,922 | $11,670 | $11,787 | $12,082 | $12,263 |
Denim | $11,990 | $14,155 | $14,296 | $14,655 | $14,874 |
Separates | $8,010 | $9,436 | $9,531 | $9,770 | $9,916 |
Jackets/Blazers | $10,689 | $12,759 | $12,886 | $13,209 | $13,408 |
Coats/Outerwear | $7,996 | $9,454 | $9,548 | $9,788 | $9,934 |
Fashion Accessories | $18,680 | $21,466 | $21,681 | $22,225 | $22,558 |
Jewelry | $7,998 | $9,346 | $9,440 | $9,676 | $9,821 |
Personal Care | $4,793 | $5,666 | $5,722 | $5,866 | $5,954 |
Wardrobe Accessories | $7,095 | $8,413 | $8,497 | $8,710 | $8,841 |
Style Assessment | $1,107 | $1,179 | $1,191 | $1,221 | $1,239 |
Special Orders | $14,500 | $15,655 | $15,812 | $16,208 | $16,451 |
Alterations | $596 | $638 | $644 | $660 | $670 |
Subtotal Direct Cost of Sales | $204,820 | $237,520 | $239,896 | $245,911 | $249,600 |
