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In: Business and Management

Submitted By corryp
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QRT Task 1
Business Proposal

Frilly creations is a unique children’s boutique that specializes in children’s and women’s clothing. It has been in business for 17 years and in 2009, its tremendous growth enabled them to be able to move to a larger location. They have managed to continue to be very successful even without having a strong online presence. However, because of this, it makes an online expansion seem to be an attractive and low-cost way to increase their sales even more so. This online expansion business proposal outlines the viability of the children’s clothing market, including, but not limited to online competition issues, marketing strategies that can overcome these issues, and even how the use of social media can help to increase their profitability.
1)
Boutiques which specialize in children’s clothing, as well as women’s clothing are in most instances single stores. Because of this, a lot of times they have a lot to gain from expanding their business into the online phase. In 2013, in the United States clothing accounted for roughly 18% of all online sales. This number includes men, women, and children but also undoubtedly continue to grow because people will continue to shop online because it is more convenient, not to mention sometimes even cheaper because of the promos that are given. It is said that the annual growth rate for online retail sales since 2007 is 19% (Ben-Shabet, Moriarty, & Nilforoushen, 2014). And undoubtedly, convenience is a big part of that growth trend. The market for more exclusive items, such as designer clothing, is directly aligned with the financial strength of the consumer. The more exclusive and expensive of an item a consumer has the more confidence they possess. With unemployment at a 5-year low, it is expected that in the coming years consumers will continue to shop and spend money online in all areas of retail sales, not to exclude even the exclusive items as well (Kurtzleben, 2013). Online shopping offers not only convenience but also constantly offers incentives for shopping online such as discounts, free shipping, and even free merchandise in some instances online. This is very appealing to the consumer which has, in turn, contributed to an increase in online shopping. BizReport 2013 also states that online shopping has steadily increased for the past 15 consecutive quarters. This shows us how important it is to have the online experience in place for the consumers in order to help increase profits for businesses.
In the past, there have been concerns that clothing may not be a good match for online shopping. This is due to the fact that consumers can’t touch, try on, and actually see the clothing. However, most clothing retailers have proven this concern to be false due to the fact that they have seen their online sales coupled with their brick and mortar store sales help increase their profit significantly (Rooney, 2012). The online shopping experience also allows retailers to offer different and unique items than they would have in their store. This, in turn, helps give customers a unique shopping experience while they are shopping online that is similar to what they would receive in a small local store. If a children’s boutique can become well prepared for an online sales program they will definitely be able to reap the benefits.
Online expansion can be full of advantages as well as challenges. One advantage is the increased selling potential that online will bring to the business. Without the overhead that comes with the actual brick and mortar store, the online shopping experience will allow for a substantial increase in profits for the store. In addition, having online shopping capabilities can also increase the awareness of the actual physical location of the brick and mortar store which, in turn, can help drive more new and current customers in. An additional benefit can be using the customer reviews to increase the positivity of the stores reputation; online and in the physical location. If a customer is online shopping and happens to see that another customer had a good experience and/or liked the products they received this will increase the chances that the customer that is currently shopping online will complete a purchase before closing out of the website. A difficult challenge for a children’s boutique that is venturing out to an online venue is the opportunity that customers will have to compare prices at their fingertips. Customers online have the ability to compare prices on similar items in a matter of seconds before making a purchase. Unique and niche children’s clothing boutiques are not necessarily geared toward providing the lowest prices, but rather providing a unique, more upscale shopping experience. In the physical, brick and mortar location, Frilly Creations has control over things that enhance the overall shopping experience of customers while they are in the store. These details help to influence the buying decisions of the customers. Examples of what is provided is the mood, lighting, color scheme, music, and personalized attention. It even has a special children’s corner that the kids can play dress up in and even have stories read to them by a “princess”. This helps to keep antsy kids occupied while their parents continue to shop. This cuts down on the chances of parents having to leave because of disruptive kids. It instead allows for a very stress free shopping experience. The less stressful the customers experience is the more apt they are to buy. When customers are shopping online, you don’t have the ability to provide those special details, therefore price becomes more of a factor. With just a few clicks customers may be able to find identical or similar items at cheaper prices. Another challenge of online expansion is keeping enough inventory in stock. They must make sure that they continually stock enough inventory to not only keep up with the in store demand but also the online demand. This will enable them to continually be able to keep up with online orders as well as provide timely shipping to customers. Online customers are not likely to return to the site if the items they order are continually out of stock or take too long to ship.
2)
The children’s unique clothing industry is highly fragmented, with a market that has room for “large numbers of smaller players” Bodimeade (2013). This is great news for children’s clothing boutiques that can offer the pleasurable, relaxing shopping experience in their physical location as well as a peak shopping experience online. Current trends that are available show us even more of an increase in online shopping by customers as well as even an increase in mobile shopping because customers are starting to shop and compare prices online on their mobile devices while shopping in brick and mortar stores (Reyhle, 2013).
Frilly Creations strives to fulfill a variety of customer needs. It could be something specific and tangible like finding the perfect confirmation dress for their daughter, or something broad and intangible such as having their children look beautiful on picture day or keeping their children occupied so they are able to shop stress free. Unfortunately, Frilly Creations isn’t the only business that can fulfill these needs. The following evaluates the website as well online capabilities of Frilly Creations against three very different types of competition. Childs Play is a direct competitor with a brick and mortar location just a few blocks away from them. It is a children’s boutique that sells similar merchandise. Moms Escape is considered a substitute competitor. It is a boutique/salon that specializes in beauty services for mom, and also sells a variety of children’s and women’s clothing. Janie and Jack is a category competitor; a larger, nationwide luxury retailer of apparel, shoes, and accessories for children ages newborn to twelve.
Three factors we are comparing are 1) Store 2) Website 3) Online shopping capability Frilly Creations -Website is under construction but provides store information including address, hours, and phone number. No prices or photographs of merchandise are given. Shopping cart is visible but not functioning due to construction of website.
Online shopping has great potential but entire website needs to be revamped

Childs Play -Has a website with store information only and directs customers to its social media site. Has no online shopping capabilities at this time.

Mom’s Escape- Website includes fully functional shopping cart, photographs and descriptions of children’s merchandise and beauty services, as well as an option to make appointments for beauty services. Online shopping is fully functional.

Janie and Jack- Website includes fully functional shopping cart, photographs and descriptions of merchandise, and multiple shipping options. Online shopping is fully functional and includes an option for payment in other currencies as well as even an option for international shipping.

One positive aspect of Mom’s Escape is the professional beauty services it offers, both in store and the capabilities of scheduling these services online as well. Another is how it caters not just to women who are purchasing beauty services but also to women who may be looking for unique children and women’s clothing. However, a negative aspect could be how their emphasis on physical beauty is conceived as superficial or even pushy. It may make customers feel that they have to have some type of beauty service done in order to shop. A positive aspect for Childs Play is the popularity it has gained on social media. On Facebook, it has 4,612 likes and enjoys a 4 star rating from 90 ratings. In comparison, Frilly Creations has 347 likes and 17 ratings with 3.5 stars. However, a negative aspect for Childs Play is the fact that its inventory is quite limited which prohibits them from being able to fulfil orders in a timely fashion in most instances. In contrast, Janie and Jack is a lot bigger when compared to these single small clothing boutiques. The larger the size of the company the more easily it allows for greater promotion via its website. Most smaller clothing boutiques can’t match this, nor do they need to. Janie and Jacks size can also, however, prove to be a negative aspect, because it’s harder to provide the personal connections and unique shopping experiences that smaller children boutiques specialize in and are known for.
3)
Frilly Creations customer base is almost entirely comprised of the female origin. The women’s ages span from young to old, however, the greatest concentration is in the 30-45 year age range. According to the customer database, about 65% of the customers live within thirty miles of the store. Customers come into the store for different reasons. Some customers come in to shop for gifts for their kids or grandchildren. Others may come in to purchase gifts for other children or even themselves. Most families come from annual household incomes at or above $125,000. Frilly Creations has just celebrated its 17th anniversary, which means that the store is now seeing business coming from 2nd and in some instances, even 3rd generation shoppers (Etherington, personal communication, 2014). In most all instances in a household, women do the majority of the shopping for their children. Because of this, small children’s boutique shopping generally appeals to and attracts these shoppers because of the uniqueness of their inventory and the stress free shopping they vow to provide. They also tend to attract households who have a higher percentage of disposable income and who desire and appreciate the unique, but relatively expensive items that help to set Frilly Creations apart from other boutiques.
Frilly Creations enjoys several competitive advantages. The first is the trust that they have acquired due to being in business for 17 years. This trust reassures customers that they have both business expertise and quality merchandise. The second is the unique range of products that they offer that can ultimately provide the possibility of one-stop shopping for some customers. An example of this would be a customer that is looking for a new party dress for her daughter, a new blouse for herself, and a gift for a friend’s baby, can essentially find all three of these items in Frilly Creations.
The main goals for venturing to online capabilities is to increase the local awareness of Frilly Creations, increase the customer base to the brick and mortar store, and increase online sales. Increasing these three things will, in turn, increase overall profit. Three marketing strategies will also be put into place in order to achieve and accomplish these goals as well as attract and keep its target audience. The first marketing strategy that will be put into place will be email promotion. Frilly Creations already uses a type of email program that sends alerts out to customers in order to notify them of new arrivals, sales, and events. Because this list is compiled of current customers who have signed up in the store it is already focused on the target audience, thus making reaching them more of a simplified process. In the text of the mass email that will be sent out, an invitation will be included to pass the email on to a friend for extra 10% savings for both parties. Email promotion will benefit Frilly Creations because it is a low cost way to market but also has the ability to reach a very large audience and can also even be target specific. An added benefit is also the fact that it provides a link to the website within the email which enables customers the opportunity to click through and browse items, thus enhancing the potential for a sale to occur.
The second marketing strategy would be the online advertising. To accomplish this, and keep the owner happy at the same time we will honor his commitment to local businesses, and therefore use Florida Printing and Graphic Services for the online advertising. This will benefit Frilly Creations because it will give them the capability to target a wide variety of customers within the same geographical area as the actual brick and mortar store. They also offer payment plans for any size budget as well as the option of discontinuing future and current advertising with no penalty which offers a no stress transaction. Also included in this, is the ability the store will have to access important information like how many times the ad for their business was viewed and even how many times it was clicked. (UDS, 2014). This marketing strategy also benefits customers because they will only see the ad when they are doing a search that matches some of the key words in the ad. This type of advertising helps prevent the aggravation that comes with pop-ups.
The third marketing strategy is utilizing Facebook. Frilly Creations currently has a Facebook page with 347 likes and a 3.5 star rating. Since the users who have already liked Frilly Creations on Facebook are likely to have friends with the same or similar likes and interests, a series of daily Facebook ads and posts will be posted. The end result goal of this is to increase the number of likes for Frilly Creations, both for the individual posts that are written, as well as for the business page in general. Depending on each individual person’s user settings on Facebook, when certain individuals click the like button of the posts, it will show up in the newsfeeds of their friends which will enable their friends to like the post as well. By doing this it will even further increase the fan base of Frilly Creations on Facebook. In order to continue driving customers to our page, discounts will be offered for liking or sharing certain posts and weekly giveaways will be offered as we reach certain fan goals. Facebook in comparison to email is a means to even more easily reach target audiences because of the fact that they have already chosen to receive store updates when they signed up in the store and “liked” us on Facebook. This strategy can benefit the customer by providing monetary value in terms of discounts, promotions and giveaways and can benefit the company by providing exposure and increasing the customer base.
Another online marketing strategy that can be used is incorporating a blog into the stores online website. In this blog the employees and owner can discuss and post pictures and links to upcoming events, new merchandise, and sales. In addition, the general public and customers can also add to it their experiences with the company’s product as well as even having the ability to add pictures. They can also read what others have to say about the company in general or their experiences with the product, shipping time, and quality. By incorporating a blog it will help to spread the culture and experiences of the company. Customers will be able to access the blog and read about upcoming events, arrivals of new merchandise, see pictures of current and new merchandise, and read what other customers have to say about the company as a whole. This is a great way to help spread the word and give customers even more of an outlet to find out more information about the company. The more interaction we can get on the blog, especially positive feedback from customers, the more our customer base should increase by acquiring new customers. Making sure the blog is constantly being updated is also a big key. All information needs to remain current in order to keep customers reading, interested, and coming back.
Another online marketing strategy Frilly creations can use is pay per click advertising. This advertising process can help to drive customers to their website. Frilly Creations simply picks a website to put their advertisement on and every time someone clicks on their ad, they pay the website publisher an agreed upon fee. This is a low cost way to help increase customer traffic and a good way to help market to a targeted group of people. Pay per click advertising is also very keyword based which means that it is based on the search term or keyword that a user enters to be searched. They can choose one keyword, multiple keywords, or a particular keyword phrase. The most important thing is to target particular keywords in which they want their advertisement to appear. One great thing for the advertiser in regards to pay per click advertising on search engines is the fact that their advertisements are displayed when potential customers are already expressing interest or intent; they are already searching for a product that Frilly Creations has to offer. Pay per click is a great way for companies to use advertising to present their products to customers that are already in the buying cycle. Pay per click is not only a great way to drive traffic to their website but can also help with brand recognition. If you combine these two things, it will ultimately assist in driving profits upward.

4)
Social media, especially over the last few years, has really started to show a great potential towards impacting businesses. The fast exchange of information between customers and businesses is very beneficial, especially when customers have good things to say about a business and their products. However, it can prove to be very damaging if they’ve had a bad experience because others can get those results just as quickly as good ones. As a business, if you are a user of social media sites, you will have the ability to participate in the process of the exchanges as well as the ability to tell your own story. You can randomly shoot out coupons, promotions, and announcements as well. Frilly Creations is already a user of Google Plus, Facebook, Twitter, and is on Instagram. However, the number of likes and followers that Frilly Creations has in comparison to other local boutique competitors is seemingly low. In addition, the use of these social media sites is currently low volume and could be substantially improved by using all of them in a more consistent and direct way, which would also help to enhance customer interaction, thus helping to drive sales upward. Social media gives businesses the ability to promote customer interaction. Frilly Creations could benefit from using social media to create weekly contests such as voting for a particular outfit in order to be entered into a drawing for a chance to win it, or even an annual photograph contest that asks customers to take a picture of their child or themselves wearing an item purchased from the store or website. Lastly, promotion to alert customers that they can find Frilly Creations on each of these social media sites should be placed in every email sent out as well as on signage in the store. Frilly creations can use google + just like they do Facebook by finding friends and inviting them to like the google + page. Google + also has an advantage over Facebook of allowing users to separate their friends into different groups. This allows you the ability to share things with certain groups instead of everyone. Frilly creations can use this feature by separating people based on whether they are more interested in childrens or womens clothing. That way when new merchandise comes in it can be shared with the particular group that would be the most interested. Separate sales promotions can be done for each group to such as 10% of childrens clothing on Tuesdays and 10% of womens clothing on Thursdays. Google + gives you the ability to help target different groups of people in different ways. Frilly creations can use Instagram to post pictures of current and new merchandise that arrives. They can also have customers email them pictures of themselves or their children wearing an outfit from Frilly creations and post that on Instagram as well. Once a month a contest can be put into place where customers send in pictures which are then posted on Instagram. Other users can then “like” the pictures that are posted. The picture with the most “likes” receives a 30% discount coupon for the store. By getting customers involved on Instagram it gives them access to look at the many items that the store has to offer plus it gives the store the ability to really showcase their items with the ability to reach a large audience. Frilly Creations can use Twitter to blast out sales each day. Each day they can randomly post on Twitter a sale that will be going on that day. They can change the time every day in order to attract customers with different schedules as well, such as 2-4pm or 8-10am. This randomness will help keep twitter customers actively seeking the company to see what is being posted. They will also be more apt to set the notification to on for the company in order to receive the notifications of sales. This will allow more of a broadcast with all posts, whether it a sales announcement or a post about new merchandise being delivered. Twitter also has the ability to post pictures so this will allow Frilly Creations the ability to broadcast new items out in a different way also. In order to get followers to their Facebook, google +, Twitter, and Instagram accounts Frilly creations will need to have links placed on their website, blog, and mass emails. They can also have something placed at the bottom of the receipts that are given to customers and have employees point it out as they give the customer the receipt. The store should also make sure signage is placed on the front door and in more high traffic areas letting people know they can find them online in these areas as well. The more they can broadcast where they can be found online within social media, the more their fan base will increase. The more fans they can gain the more they can increase their social media promotion and ultimately their overall profit within the store.

References

Ben-Shabet, H., Moriarty, M., & Nilforoushen, P. (2014) http://www.atkearney.com/consumer-products-retail/ideas-insights/featured-article/-/asset_publisher/KQNW4F0xInID/content/online-retail-is-front-and-center-in-the-quest-for-growth/10192

Bodimeade, M. (2013) Global apparel industry. http://www.companiesandmarkets.com/MarketInsight/Textiles-and-Clothing/Global-Apparel-Industry/NI7468

Leggett, H. (2013) http://www.bizreport.com/2013/08/ecommerce-spending-up-for-15th-consecutive-quarter.html

Reyhle, N. (2013) retail trends for 2013. http://retailminded.com/5-boutique-trends-2013/

Great Big Canvas. (2002-2014). Retrieved from http://www.greatbigcanvas.com
Belew, S. & Elad, J. (2009). Starting an online business. An all-in-one desk reference for Dummies (2nd ed) Hoboken, NJ: Wiley

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