Category Launch of Intimate Apparels

Category Launch of Intimate Apparels
Project submitted in the partial fulfillment for the degree of Bachelor of Fashion
Technology (B. F. Tech) under the guidance of
Prof. S. P. Jomichan
Faculty, NIFT, Mumbai
and
Ms. NamrataMaheshwari
Vendor Manager
Amazon India
By:
Mohini Priyadarshini
M/BFT/10/13
NIFT Batch: 2010-2014
NIFT, Mumbai
DECLARATION
I, Mohini Priyadarshinihereby declare that the Project titled “Category Launch of
Intimate Apparels” submitted towards, partial fulfillment of the Degree of Bachelor of
Fashion Technology is my original work and no part of the project has been copied from
any other reports or any other work carried by someone else which has been submitted
for any other degree/award. However, any material taken from any other published
source has been suitably referred and acknowledged at various places.
Mohini Priyadarshini
CERTIFICATE FROM GUIDE REGARDING COMPLETION OF WORK
This is to certify that the Project entitled “Category Launch of Intimate Apparels” submitted
towards the partial fulfillment of the Degree of Bachelor of Fashion Technology by Mohini
Priyadarshini is her original work under my guidance and the results are based on the research
done by her.
Prof. S.P. Jomichan
Faculty
NIFT, Mumbai
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my mentor,
Professor S.P. Jomichan, for his exemplary guidance, monitoring and constant
encouragement throughout the course of this graduation project. The blessing, help and
guidance given by him time to time shall carry me a long way in the journey of life on
which I am about to embark.
I am highly indebted to Professor Ranjan Kumar Saha (CC, DFT, NIFT Mumbai), for
his guidance and constant supervision as well as for providing necessary information
regarding the project & also for his support in completing the project.
I would like to extend my sincere thanks to all the faculty members who have tutored me
and made me capable of performing well in different aspects of this project.
I also take this opportunity to express a deep sense of gratitude to Ms.
NamrataMaheshwari, Vendor Manager, Amazon India, for her cordial support, valuable
information and guidance, which helped me in completing this task through various
stages.
I am obliged to staff members of Amazon, for the valuable information provided by them
in their respective fields. I am grateful for their cooperation during the period of my
assignment.
My thanks and appreciations also go to my colleagues who have willingly helped me out
in developing the project.
Lastly, I would want to thanks my parents who have been constant supports all
throughout.
ABSTRACT
Indian women innerwear market, which comprises lingerie and nightwear, has taken
great strides over the past few years. The Indian women became more conscious of
their bodies and started taking innerwear as an indispensable part of their wardrobe that
needs much attention.
With the increase in disposable income, changing consumers’ lifestyle, and rise in the
number of working women and better sense of fashion and style, the women innerwear
market is forecast to expand at a CAGR of around 14% during 2013-2015, according to
“Indian Women Innerwear Market Forecast to 2015” (Outlook India).
The women innerwear market is mainly unorganized, with unbranded products
dominating the industry. However, the scenario is changing with branded products
started getting popularity. Brands like Lovable, Bodycare, Jockey, Groversons, Triumph,
and Enamor are slowly making inroads into the women’s preferences.
While marketing and brand building are all part of the larger process, technology also
plays a prominent role in the acceptance and popularity of an innerwear brand.
Moreover, with the concept of online retailing catching pace, expansion strategies
adopted by companies will definitely give a new direction to the women’s innerwear
industry.
A number of websites like Zivame, Pretty Secrets, Flipkart, Myntra, Jabongetc are
already selling inner wear online. Amazon.in which was launched in June last year also
joined the mentioned club in May 2014.
This project covers pre-launch study done for Amazon.in to be able to successfully
launch the largest, widest and most comprehensive intimates store for women across
brands, price points and product types with an aim to tap the increasing demand and
opportunities in this segment. In order to achieve this goal, a market analysis was done
with the help of a few independent variables: location, demand, price, competition and
trends. It also includes a primary research involving 200 respondents across New Delhi,
Mumbai and Bangalore in order to study customer preferences and also determine
customer pain points attached to innerwear. Demand and market potential was also
assessed with the help of search volumes for intimates on junglee.com and google.com.
This analysis helped Amazon recently launch its intimate apparel store.
Offering the best selection and passing the profit to the customer through low prices in
the most convenient way is the Amazon USP, which stands true for the India Intimate
Store. The processes involved have been designed to make it scalable. Getting
maximum sellers on-board but through a checked process to maintain right data and
quality products to meet customer expectation is the first step towards a successful
store.
Not only the intimate store launch will help in catering to customer pain points such as
social embarrassment and hesitation but also open out various options available at
attractive price points. It solves the brand pain points as the real estate/ operation/
logistics costs are decreased manifold.
Organizing the lingerie industry and bridging the gulfs between demand, availability,
selection, convenience is a continuous wheel of action adopted by Amazon that will
make customers satisfied.
CONTENTS
1. Introduction to the company
1.1 Amazon History & Culture……………………………………………………..1
1.2 Amazon Principles………………………………………………………………2
1.3 Amazon Operating Countries…………………………………………………5
1.4 Amazon Services………………………………………………………………..6
1.5 Amazon in Global News………………………………………………………10
1.6 Amazon in Indian Headlines…………………………………………………13
2. Introduction to Topic……………………………………………………………...20
3. Research Objective………………………………………………………………..20
4. Problem statement………………………………………………………………...21
5. Coverage…………………………………………………………………………….21
6. Category Description……………………………………………………………..21
6.1 Shape wear……………………………………………………………………..22
6.2 Swim wear……………………………………………………………………...23
6.3 Sleep wear……………………………………………………………………...23
6.4 Lingerie………………………………………………………………………....23
7. Literature Review………………………………………………………………….24
7.1 Market Characteristic………………………………………………………..25
7.2 Market Size…………………………………………………………………….25
7.2.1 By Value………………………………………………………………...26
7.2.2 By Volume……………………………………………………………...26
7.3 Assessment of Demand……………………………………………………..27
7.4 Key Market Drivers…………………………………………………………...28
7.5 Market Segmentation………………………………………………………...30
7.6 Regional characteristics of Market………………………………………..31
7.7 Consumer Buying Behavior and preferences…………………………..32
7.7.1Characteristics of Indian Consumer ………………………………..32
7.7.2 Different Segments of Indian Consumers ………………………...32
7.8 Preferred Brands ……………………………………………………………..33
7.9 Factors Influencing Brand Preference ………………………………….33
7.10 Branded Players …………………………………………………………...34
7.11 Factors / Elements Influencing the Choices of Consumers ………35
7.12 Degree of Elasticity of Demand of Local Consumers ………………36
7.13 Scope in Indian e-commerce industry………………………………….37
7.14 Scope of Online Lingerie Industry………………………………………38
7.15 Trends………………………………………………………………………...42
7.15.1 Trends in Themes…………………………………………………..42
7.15.2 Trends in Colors……………………………………………………42
7.15.3 Trends in Fabrics…………………………………………………..43
7.15.4 Trends in Styling…………………………………………………...43
7.16 Category Management and Retailing…………………………………..44
7.17 Temporary Stores………………………………………………………….65
7.18 Marketing ……………………………………………………….…………..81
7.19 Diffusion Brand ……………………………………………….…………...91
8. Methodology……………………………………………………………………...95
8.1 Segments…………………………………………………………………..109
8.2 Competitive Scan…………………………………………………………110
8.3 Challenges Faced by brands…………………………………………...110
8.4 Store Experience………………………………………………………….111
8.5 Wireframe…………………………………………………………………..113
8.6 Customer Pain Points…………………………………………………....115
8.7 Amazon Intimate Shop…………………………………………………...115
8.8 Google Trends……………………………………………………………..116
8.9 Leading Brands……………………………………………………………117
8.10 Vendor Management…………………………………………………….119
9. Output……………………………………………………………………………..123
10. Conclusion……………………………………………………………………...125
11. References……………………………………………………………………...126
1.INTRODUCTION TO THE COMPANY
Amazon.in is operated by Amazon Seller Services Private Ltd, an affiliate of Amazon.com,
Inc. (NASDAQ: AMZN). Amazon.com, Inc. is a Fortune 500 company based in Seattle,
which opened on the World Wide Web in July 1995; and today offers Earth‘s Biggest
Selection.
Customers can now shop with confidence from any seller on Amazon.in and benefit from a
safe and secure online ordering experience, convenient electronic payments and cash on
delivery, easy returns, Amazon‘s customer service with 24x7 support, and a globally
recognized and comprehensive purchase protection provided by Amazon‘s A-to-Z
Guarantee.
Products on amazon.in range from; Books, Movies & TV shows; the Kindle family of EReaders, Tablets and eBooks; Computers & Accessories; Mobiles & Accessories; Cameras
& Photography; Portable Media Players; Toys & Games; Baby Products; Personal Care
Appliances; Health Care Devices; Watches; Fashion Jewelry; Home & Kitchen and Beauty.
It is still ―Day 1‖ and Amazon.in is relentlessly focused on expanding selection and raising
the bar for customer experience in India.
In Feb 2012, Amazon Seller Services made its foray into the Indian market with the launch
of Junglee.com, enabling retailers in India to advertise their products for free to millions of
Indian shoppers and drive targeted traffic to their stores.
With the introduction of the Amazon.in marketplace and launch of two new programs –
‗Sell on Amazon‘ and ‗Fulfilment by Amazon' – sellers across India now have access to
unlimited and free ‗virtual shelf space‘ and a scalable, pay-as-you-go fulfilment and
customer service offerings. Both programs have successfully been used by more than two
million sellers globally to sell to over 200 million customers worldwide and boost their sales.
Amazon will continue to strive to become a trusted and meaningful sales and logistics
channel for retailers of all sizes across India by doing the heavy lifting, enabling them to
focus on their core business functions and efficiently grow their business online.
1.1 Amazon History & Culture
100% Peculiar
We always put the customer experience first. This makes us peculiar. Some of what
we‘ve learned at other companies and at school – including some elements that could be
considered ―conventional wisdom‖ – may not apply at Amazon. These ―peculiarities‖
consistently show up in the way we build products and they influence our decisions. Not
only do they help guide us in our mission to be Earth‘s Most Customer Centric Company,
they give us the freedom to think a little differently and to embrace our differences.
Work Hard.
We have a high bar for ourselves at Amazon. Along with innovation and obsession over
customers, hard work is inherently part of any Amazonian‘s DNA.
Amazon‘s promise to deliver Earth‘s Biggest Selection-- a place to find and discover
anything customers might want to buy online at the lowest possible prices-- is a tall,
valued order. We are grateful to our customers for their business, and we work hard
every day to make sure that we continue to deserve their trust. We are proud of what
we‘re building at Amazon because we think it‘s something important, it matters to our
customers, and it‘s something we can tell our grandchildren about. From our perspective,
such things aren‘t meant to be easy.
Have Fun.
Here at Amazon, we work hard and we have a ton of fun while doing it! Fun is a core
competency at Amazon – we look for people that have fun at work and make it easy for
others to have fun. For example, at corporate headquarters, Amazon employees are
allowed to bring their canine friends to work. We will host musicians and authors for
exclusive ‗fishbowl‘ performances during the lunch hour. Plus we have arcade games,
ping-pong, and foosball tables scattered throughout campus, all to encourage fun!
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Make History.
In July of 1995 Amazon made its first sale on the internet. Today, Amazon has more than
152 million active customer accounts and more than 2 million active seller accounts.
Some interesting events in Amazon‘s history:
July 1994 – Company is incorporated, headquartered out of Jeff Bezos‘ garage.
July 1995 – Amazon.com sells its first book: Fluid Concepts and Creative Analogies:
Computer Models of the Fundamental Mechanism of Thought
October 1997 – Amazon‘s one-millionth customer places order which is hand-delivered
by Jeff Bezos to customer in Japan
June 1999 – Ten-millionth customer served
December 2005 – Customers order over 108 million items worldwide during Amazon‘s
11th holiday season
November 2007 – Amazon introduces Amazon Kindle
September 2011 – Amazon introduces Kindle Fire, Kindle Touch and Kindle Touch 3G
We‘ve accomplished a lot since our first sale in 1995 but there‘s still so much more to do.
Come to Amazon and make your own history. It‘s still Day 1.
1.2 Amazon Principles
―We see our customers as invited guests to a party, and we are the hosts. It‘s our job
every day to make important aspects of customer experience a little bit better.‖- Jeff
Bezos
Customer Obsession
Leaders start with the customer and work backwards. They work vigorously to earn and
keep customer trust. Although leaders pay attention to competitors, they obsess over
customers.
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Ownership
Leaders are owners. They think long term and don't sacrifice long-term value for shortterm results. They act on behalf of the entire company, beyond just their own team. They
never say "that's not my job."
Invent and Simplify
Leaders expect and require innovation and invention from their teams and always find
ways to simplify. They are externally aware, look for new ideas from everywhere, and are
not limited by "not invented here." As we do new things, we accept that we may be
misunderstood for long periods of time.
Are Right, A Lot
Leaders are right a lot. They have strong business judgement and good instincts.
Hire and Develop the Best
Leaders raise the performance bar with every hire and promotion. They recognize
exceptional talent, and willingly move them throughout the organization. Leaders develop
leaders and take seriously their role in coaching others.
Insist on the Highest Standards
Leaders have relentlessly high standards - many people may think these standards are
unreasonably high. Leaders are continually raising the bar and drive their teams to
deliver high quality products, services, and processes. Leaders ensure that defects do
not get sent down the line and that problems are fixed so they stay fixed.
Think Big
Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold
direction that inspires results. They think differently and look around corners for ways to
serve customers.
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Bias for Action
Speed matters in business. Many decisions and actions are reversible and do not need
extensive study. We value calculated risk taking.
Frugality
We try not to spend money on things that don't matter to customers. Frugality breeds
resourcefulness, self-sufficiency and invention. There are no extra points for headcount,
budget size or fixed expense.
Vocally Self Critical
Leaders do not believe their or their team's body odor smells of perfume. Leaders come
forward with problems or information, even when doing so is awkward or embarrassing.
Leaders benchmark themselves and their teams against the best.
Earn Trust of Others
Leaders are sincerely open-minded, genuinely listen, and are willing to examine their
strongest convictions with humility.
Dive Deep
Leaders operate at all levels, stay connected to the details and audit frequently. No task
is beneath them.
Have Backbone; Disagree and Commit
Leaders are obligated to respectfully challenge decisions when they disagree, even when
doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious.
They do not compromise for the sake of social cohesion. Once a decision is determined,
they commit wholly.
Deliver Results
Leaders focus on the key inputs for their business and deliver them with the right quality
and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.
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1.3 Amazon Operating Countries
BR (Brazil)
CA (Canada)
CN (China)
DE (Germany)
ES (Spain)
FR (France)
IN (India)
IT (Italy)
JP (Japan)
UK (United Kingdom)
US (United States)
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1.4 Amazon Services
Sell on Amazon.com
Businesses of all sizes can sell products on Amazon - one of the fastest ways to start
selling products online. Since 2000, Selling on Amazon has been helping individuals and
businesses increase sales and reach new customers. Today more than 30% of total
sales come from third-party selection.
Selling Plan Features
Features
Professional
Individual
Add new products to the Amazon catalog
Have Amazon handle customer service, shipping, and
fulfillment with Fulfillment by Amazon service
Use bulk listing and reporting tools from Amazon
Marketplace Web Service
Customize your shipping rates for products other than
Books, Music, Video, DVDs, Software, and Video Games
Offer special promotions and gift options for your products
(does not apply to Books, Music, Video, DVDs, Software,
and Video Games)
Earn top placement on product detail pages
Fulfillment by Amazon.com
Sell on Amazon.com or other channels, and we'll do the rest: world-class shipping and
trusted customer service. Amazon has created one of the most advanced fulfillment
networks in the world, and your business can benefit from our expertise. With Fulfillment
by Amazon (FBA) you store your products in Amazon's fulfillment centers, and we pick,
pack, ship, and provide customer service for these products. Best of all, FBA can help
you scale your business and reach more customers—in a 2013 survey, 73% of FBA
respondents reported that their Unit sales increased on Amazon.com more than 20%,
since joining FBA.
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Save Time and Grow Your Business With These Benefits:

Your products are eligible for Amazon Prime Free Two-Day Shipping, FREE
Shipping, and other benefits.
Prime members love free Two-Day shipping, and all Amazon.com customers can get
free shipping on orders over $35. FBA Listings on Amazon.com* benefit from customer
awareness of discounted shipping—and because most FBA listings are ranked without a
shipping cost, you get an edge when competing! FBA sellers are eligible for Featured
Merchant status in many categories, which can make them eligible to compete for the
Buy Box on individual products.

Customers get Amazon's trusted customer service and returns.
FBA handles customer service and returns for Amazon.com orders. Listings are
displayed with the "Fulfillment by Amazon" logo, so customers know that packing,
delivery, customer service, and returns are all handled by Amazon.

Our services let your business grow quickly.
Our fulfillment centers can handle practically any inventory requirement with no minimum
number of units, and can scale seamlessly. We handle the details, saving you time, so
you can focus on your business.

You can fulfill orders from other channels.
With Multi-Channel Fulfillment you can fulfill orders from other sales channels using your
inventory stored at an Amazon fulfillment center. Single source your inventory to
streamline your fulfillment operations. You manage your inventory through a simple
online user interface and can direct us to return the inventory in our fulfillment centers at
any time. Combine Fulfillment by Amazon with Amazon Webstore and you can offer
Amazon Prime to your customers on your website through Prime on Your Site.

It's cost effective and simple.
Pay as you go—you are charged for storage space and the orders we fulfill. And the cost
of shipping is included in your fees with no extra charge for Amazon Prime Free Two-Day
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Shipping and FREE Shipping on orders of $35. Fees for Selling on Amazon and optional
services may apply.
 Amazon Payments
Make it easy for millions of Amazon customers to pay on your site. Choose the solution
that is best for your business.
 Build a Website
Amazon Webstore is an eCommerce platform that enables you to build and operate a
profitable website.

How It Works
Amazon Webstore is an all-in-one, full-featured eCommerce platform that enables you to
build and operate a profitable online store—off-Amazon. Webstore's intuitive, self-service
toolset enables you to easily and rapidly build and manage your online business, with full
control and flexibility to manage the customer experience. With Amazon Webstore you
can leverage the strength and reliability of Amazon infrastructure, couple your standalone store with the Amazon Marketplace and Fulfillment by Amazon, and tap Amazon's
eCommerce expertise to make sure you have long-term success

Secure
In the online marketplace fraudulent purchases or the loss of critical data can be
devastating to an eCommerce site, but Amazon Webstore uses the latest Amazon fraud
prevention technology to protect both you and your customers.

Scalable
Since it's hosted on Amazon's cloud, your Amazon Webstore is built to grow just as fast
as your company at no additional cost.
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
Reliable
Online success depends on your ability to fulfill customer expectations and to
consistently provide a reliable service. Amazon's reliable infrastructure allows you to
build your online store on a solid and secure foundation and provide many benefits that
come from partnering with an eCommerce leader.

Benefits of Amazon Webstore
 Create a custom branded eCommerce site using Amazon technology
 Quickly create and maintain your Webstore with minimal IT support
 One interface for managing your inventory, product information, and orders across all
your channels
 List Amazon.com items on your own Webstore to augment your product selection
 No need to pay for a merchant account; Amazon provides payment processing with the
latest Amazon fraud protection
 Built-in optimization for search engines, and feeds to search and comparison engines, so
customers can easily find and buy your products
 Powerful library of ready-to-use merchandising widgets for effective merchandising of
your products
 Create and launch marketing promotions across all your channels (website, store,
phone) quickly by using a suite of ready-to-use promotions
 Take advantage of additional services such as Selling on Amazon, Fulfillment by
Amazon, and Amazon Prime on Your Site to grow your business and improve customer
satisfaction while reducing your Webstore fees.
 Increase conversion with proven features, such as high upsell cart, mini cart, best sellers
and personalization

Advertise on Amazon
Drive qualified traffic to your website. Use Product Ads to advertise your products to
Amazon.com shoppers.
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
Amazon Product Ads
 Reach millions of Amazon shoppers with ads that link to products on your website. Only
pay when a shopper clicks on your ad.
 Advertise your products
 Drive traffic to your website
 Provide highly targeted placements

Amazon Media Group
 Engage customers with your brand or drive direct response with display ads on Amazon
sites, across the web, on mobile and Kindle.
 Millions of Amazon customers
 On Amazon sites and across the web
 Browser, Kindle, mobile

Amazon Local
 Connect with new customers right in your neighborhood with tailored promotions.
 Only pay when customers purchase your offer.
 Connect with local Amazon customers
 Increase revenues
 Pay only for results
1.5 Amazon In Global News

Amazon Hiring Now: Creates 2,500 Full-Time Jobs with Comprehensive Benefits
Across its U.S. Fulfillment Network
SEATTLE--(BUSINESS WIRE)--Feb. 12, 2014-- Amazon.com, Inc. (NASDAQ: AMZN)
today announced it is hiring for more than 2,500 new, full-time jobs across its growing
U.S. fulfillment network.

Robots to move merchandise in Amazon’s Ruskin warehouse
The exterior walls are up and Amazon is starting to hire certain start-up positions for its
massive, 1-million-square-foot warehouse.
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
Amazon's Current Employees Raise the Bar for New Hires
In fulfilling online orders, Amazon.com Inc. AMZN -1.19% is all about expediency. The
fewer people involved the better. But when it comes to filling higher-level jobs, the ecommerce giant is in no rush—and it has a gan…

The Best CEOs of 2013
Every year around this time Sydney Finkelstein, professor of management and an
associate dean at Dartmouth‘s Tuck School of Business, produces his list of the Worst
CEOs of the year. For the first time this year he's als…

Amazon's Jeff Bezos looks to the future
Amazon is the world's largest online retailer, serving 225M customers worldwide. What's
next for the company that prides itself on disrupting tradition? Charlie Rose interviews
Amazon CEO and founder Jeff Bezos.

U.S. Postal Service to deliver Amazon packages on Sundays
The postal service will deliver Amazon packages on Sundays in the L.A. and New York
metropolitan areas at no extra charge starting this week. The service will expand to other
cities next year.

Amazon offers Sunday deliveries with US Postal Service
Amazon customers in New York and Los Angeles will be the able to have their packages
delivered on a Sunday, the online retailer announced. The company announced on
Monday that it has teamed up with the U.S. Postal Servic…

Amazon Creating 70,000 Full-Time Seasonal Jobs in the U.S. to Fulfill Holiday
Orders with Thousands Expected to Become Permanent Employees
Amazon.com, Inc. (NASDAQ:AMZN) is creating more than 70,000 full-time seasonal jobs
across its U.S. fulfillment centers this holiday season in order to meet an increase in
customer demand, a 40 percent rise over last year.
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
MBA Students Pick the 10 Companies With The Most Inspiring Leaders
The decision of whether to apply to a company or accept an offer is incredibly complex.
It's about pay, culture fit, and career goals. It's also about whether you believe the
leaders of the company want to and are capable.

Amazon.com to hire more than 1,000 for Coppell, Haslet hubs
Seattle-based Amazon.com began hiring more than 1,000 employees Monday for its two
large North Texas distribution centers. The facilities in Coppell and Haslet total 2 million
square feet of space and were the largest in…

Amazon Donates $25,000 To Governor's Books From Birth Foundation
At an event on Monday, hosted by the Fannie Battle Day Home for Children, Tennessee
First Lady CrissyHaslam thanked Amazon – the world‘s largest online retailer and a
statewide partner of the Governor‘s Books from Birth…

Since Launching Last Summer, Amazon Hourly Employees Enrolling in Career
Choice Program to Prepare for Careers in Game Design, Nursing and Accounting
Amazon Increases Tuition Pre-Payment to $3,000 a year, up to $12,000 Over Four
Years

Amazon Makes Top 50 of Fortune 500
Fortune released its annual Fortune 500 list today, with Amazon making its way into the
top 50. With over $61+ billion in revenues, Amazon jumped into the 49th spot on the
2013 list, just up from the 56th spot in 2012. …

What It's Like to Interview at Amazon
As Amazon.com Inc.'s AMZN share price has soared in recent years, so has its stock
with M.B.A. students. The company now ranks among the most-coveted destinations for
aspiring business leaders.

Most Innovative Companies 2013: #2 Amazon
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Amazon introduced same-day shipping in seven major U.S. markets more than three
years ago, but the e-commerce giant's significant 2012 expansion of its next-day and
same-day delivery services was a jolt: The entire retai…
1.6 Amazon in Indian Headlines

Amazon Launches In India, February 3, 2012
The world‘s largest online retailer Amazon.com Inc entered India on Thursday with the
launch of its shopping website junglee.com, in a major boost to the country‘s fast-growing
e-commerce market. Firstpost Technology

Amazon starts same-day delivery in India, December 6, 2013
Amazon has started its same-day delivery service in India, allowing users to get their
hands on their purchases within a day.
Buyers looking to avail same-day delivery for products purchased from Amazon will have
to pay a charge of Rs 99. This offer is valid only on items that come under the ‗Fulfilled
by Amazon‘ service, a delivery guarantee that the online retailer offers.
However, the scheme is not valid on all products covered by ‗Fulfilled by Amazon‘
guarantee. The service is not available for ―large and heavy items.‖
The scheme is currently limited to major cities like New Delhi, Mumbai, Bangalore, Pune,
Hyderabad and Ahmedabad.
Apart from this, Amazon is offering two-day delivery service in the country. Though this
service costs Rs 79 for each order, it can be availed at Rs 49 at present under a special
discount offer. Under the same offer, the e-tailer has made the orders shipped in 2-4
days as well as 5-10 days free.
 Amazon takes kirana route to deliver goods, Apr 24, 2014
E-commerce giant Amazon, whose founder and CEO Jeff Bezos recently spoke of the
possibility of drones dropping goods to US homes in the near future, is embracing the
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neighborhood kirana store
to
push
the
delivery
advantage
in
India.
This week in Bangalore, Amazon, in what's a first in India, started piloting the concept of
enlisting kiranas as delivery points. The move can help it overcome the problem of failed
deliveries, a pain point for most e-tailers globally, making the last-mile logistics less
complicated.
"We are continually innovating to find solutions that enhance convenience and
experience for our customers. We are running a pilot for in-store pick-up service in
Bangalore. We have identified and trained staff at small kiosks and stores, run by
individual entrepreneurs, to be our shipment pick-up points," Amazon India country head
Amit Agarwal told TOI last week.
What is significant is how — unlike Indian organized retailers like Big Bazaar who have
traditionally been pitted against mom-and-pop stores — this move from Amazon will help
create a hybrid model where online players leverage corner shops to boost customer
convenience.
"Depending on the results, we will take a call on how and what we want to roll out
nationally at an appropriate time," Agarwal said. Amazon will pay a fee to these smaller
brick-and-mortar retailers, but the world's largest online retailer did not give details of its
financial
arrangement
with
the
offline
stores.
The project is an indigenous improvisation on Amazon Lockers, which the company
operates in the US and some other markets. Amazon Lockers act as self-delivery
locations to pick up parcels from. "We want to be inventive in executing our global
strategy locally. We have a team of passionate builders in India," said Agarwal, who has
had a 15-year career with the Seattle-based Amazon, including a stint as executive
assistant
to
the
much
storied
Bezos.
The India head of the $75-billion internet giant, which started off by selling books two
decades ago, said the domestic e-commerce market "is still in its early days" and
possibly some of the present bigger names wouldn't exist in the future. Amazon is turning
the heat on incumbent market leaders like Flipkart and Snapdeal with its trademark
aggression focused on customer convenience, lower prices and a gargantuan collection.
14 | P a g e
Both Flipkart and Snapdeal, which operate on the same marketplace model like Amazon,
are well-funded by VCs and strategic players like eBay. The Indian e-commerce market,
estimated at $2 billion at present, is expected to grow to $8.5 billion by 2016, according
to
projections
by
venture
fund
Accel
Partners.
"The India operation is one of the fastest build-outs for Amazon globally—in terms of
selection, sellers, traffic and even mass media advertising," Agarwal said. Amazon has
been particularly sharp-focused on its one-day delivery in top 20 cities and recently
introduced a 'scheduled delivery' programme for high-value products like televisions.
It entered India ten months ago with a marketplace model since Indian laws place
restrictions on foreign investments in multi-brand retail. It had earlier tied up with India
Post Services to leverage the government postal system's extensive reach. "We use IPS
for over 19,000 pin codes through 1,40,000 post offices across all 35 states and Union
Territories in India. The number of deliveries through India Post has increased from 800
last June to over 10,000 by March this year," Agarwal said.

Amazon.in launches Shoes Store
New Delhi, India, April 16, 2014: Getting the right size, the right style and the right
comfort has never been an easy job for shoe shoppers until now. Amazon.in‘s newly
launched Shoes Store offers wide variety of well-known international & Indian footwear
brands, prices to suit all pockets, detailed product descriptions and size charts, and a 30day no questions asked return policy so that customers can shop for the right shoes for
themselves without any hassle and get them delivered to their doorstep. And of course,
there is Amazon‘s 100% purchase protection that ensures genuine products and a safe
and trusted shopping experience.
Amazon.in‘s new Shoes Store launches with a wide selection of over 5000 styles of
shoes for men, women and kids, from over 50 international and Indian brands.
Customers can now shop for an impressive array of brands including leading brands like
Crocs, Puma, Fila, Red Tape, Catwalk, Tresmode, Inc. 5, Disney, Converse, Havaianas
and Carlton London, and popular Indian brands like Metro, Liberty and Lords, at one
single convenient destination.
15 | P a g e
Vikas Purohit, Category Leader – Fashion, Amazon India, said, ―Amazon.in‘s Shoes
Store brings together all leading footwear brands, different retailers and boutique fashion
designers at one place. It‘s a single destination for consumers to keep up with the latest
international footwear trends and shop for the season‘s top picks. With our vast footwear
selection, a trusted and reliable shopping platform and quick & fast delivery services,
consumers can just soak themselves in the pleasure and enjoyment of shopping.‖
General Manager of Crocs India Nissan Joseph said, ―We are excited to see the launch
of the shoes category on Amazon.in and be part of it. I am sure that this would be the
beginning of a long term association between Crocs and Amazon that brings the best of
both our brands to customers in India.‖
Shoe shopping in this new store definitely promises to be an exciting experience. With a
wide range of footwear collection for men, women and children- from formal Oxford and
Derby shoes, high performance sports shoes, trendy loafers, comfy flats, in-vogue
stilettos, studded party-wear, colorful flip-flops, the store offers something for everyone.
With multiple vivid images to get a clear idea of the product, and accurate depictions of
size, material, color, heel type and height, finding that perfect style has never been
easier.
All footwear available on the Shoes Store will be listed in terms of the UK size metrics,
which is what most Indian customers are used to, to make it easier for the customer to
select the right size. Additionally, for those who may need help, there is a size conversion
tool called the ―Amazon Shoe Sizing Chart‖ for men, women and kids to help the
customer relate to the default UK size. Should that not be enough, customers can reach
out to Amazon‘s 24×7 customer care through chat or phone for any help regarding
footwear sizes.
While shopping for footwear, customers can also shop for shoe accessories such as
polishes, insoles, and brushes from several brands including Woly and Cherry Blossom,
providing a one-stop shopping experience for all shoe shoppers.
In addition to shoes, customers on www.amazon.in can shop with ease and confidence
from over 15 million products across categories including Books, Movies and TV shows;
Kindle Devices, Tablets and eBooks; Computers & Accessories; Mobiles & Accessories;
Consumer Electronics; Toys & Games; Baby Products; Personal Care Appliances;
Health Care Devices; Watches; Fashion Jewellery; Home and Kitchen; Beauty Products;
16 | P a g e
Video Games; Music; Luggage & Bags; Handbags & Clutches and Sports, Fitness &
Outdoor equipment and now Health & Personal Care products.
All customers benefit from a safe and secure ordering experience, convenient electronic
payments, Cash on Delivery, no-risk hassle-free returns policy, Amazon‘s 24×7 customer
service support, and a globally recognized and comprehensive 100% purchase
protection provided by Amazon‘s A-to-Z Guarantee. Customers across several cities in
India can also avail guaranteed next-day delivery at Rs. 99 per order on more than
180,000 products fulfilled by Amazon.
Customers can also now shop on Amazon.in through its latest mobile shopping apps for
iPhones, iPads and Android phones. They can use these apps to conveniently shop on
the go just as easily as they do on their PC; they can browse & search for their favorite
products, view recommendations & customer reviews, add to wish lists & cart and
complete the purchase using all of the payment options available on the site and track
the status of their orders. The Amazon mobile shopping App is available as a free
download through Amazon Appstore: www.amazon.in/apps.

Amazon India enters apparel retail with women's ethnic wear store
Press Trust of India, April 25, 2014
E-commerce major Amazon made its entry into apparels in India, with the launch of
ethnic and Indo-western wear for women on its platform. The move pits Amazon directly
against online retailers likeMyntra, Jabong and Flipkart.
It also announced the launch of a dedicated sunglasses store with the selection of more
than 2,800 styles catering to men, women and kids, across all ages, occasions and price
ranges.
With over 12,000 contemporary and traditional styles from over 90 apparel brands
offered by private labels and national and regional retailers, there's a lot in store for the
quintessential Indian women of today, Amazon in a release said.
With a vast selection of fashion jewellery, watches, beauty products, handbags, clutches,
shoes and now ethnic wear and sunglasses, Amazon.in offers a compelling fashion and
lifestyle shopping destination for women, the release added.
17 | P a g e
"With the launch of women's ethnic apparel and sunglasses, we now offer our women
customers, the season's hottest fashion picks on their fingertips," Amazon India Category
Leader- Fashion Vikas Purohit said.
Amazon on Wednesday also announced two new initiatives for sellers, with the aim of
increasing its seller base in India, and promising an accelerated and friction-free
experience for selling products on its platform.
The US-based firm launched the Self Service Registration (SSR) and Amazon Easy Ship
for sellers in India.
Amazon SSR enables sellers irrespective of their size, location and size of catalogue, to
self-register on the Amazon marketplace and start selling within a day without any third
party intervention, making the process quick, easy and transparent.
With Amazon Easy Ship, the seller has to pack the shipment and confirm to Amazon that
they are ready to ship. Amazon Logistics collects the shipment and ensures that the
product is delivered to customers in 2-4 days.

Amazon Ups the Ante to Tap Sellers in Indian Market
24th April 2014
Aiming to increase its seller base in India, e-commerce major Amazon today launched
two initiatives for sellers, promising an accelerated and friction-free experience for selling
products on the platform.
The US-based firm launched the Self Service Registration (SSR) and Amazon Easy Ship
for sellers in India.
"SSR provides sellers an accelerated and friction-free path to selling on Amazon and with
Amazon Easy Ship, sellers can leverage Amazon's investments in logistics to have their
orders on Amazon.in shipped straight from their own warehouses," it said in a statement.
The initiatives will help sellers improve their delivery experience and to scale and grow
their online business cost effectively and profitably, it added.
18 | P a g e
Amazon SSR enables sellers irrespective of their size, location and size of catalogue, to
self-register on the Amazon marketplace and start selling within a day without any third
party intervention, making the process quick, easy and transparent.
While, Amazon Easy Ship the seller has to pack the shipment and confirm to Amazon
that they are ready to ship. Amazon Logistics collects the shipment and ensures that the
product is delivered to customers in 2-4 days.
With SSR and Amazon Easy Ship in addition to Selling on Amazon and Fulfillment by
Amazon, sellers can now not only tap into online channel easily and quickly, but also
offer the customers a delightful experience, Amazon India GM and Director (Seller
Service) Amit Deshpande said.
"Initial response to Amazon Easy Ship, has been extremely encouraging. Within two
weeks of adopting the service, our sellers have seen an average of 30 per cent growth in
sales," he added.

Amazon.in unveils intimate apparel store for women
IANS, New Delhi, May 14, 2014
Online shopping destination Amazon.in has launched its Intimate Apparel store for
women and offers over 1,100 styles of innerwear and nightwear from popular Indian and
international brands.
The Intimate Apparel Store offers women customers an extensive choice in terms of
styles, sizes, colours, fabrics and prices from popular lingerie brands like Triumph,
Enamor, Bwitch and Amante.
"The Amazon Intimate Apparel Store aims to offer its customers a place where they can
find their favourite brands, or explore new ones in a variety of styles, colours, sizes and
prices," Vikas Purohit, category leader-fashion, Amazon India, said in a statement.
"We wanted our women shoppers to have a beautiful store that gives them products they
traditionally know of as well as try newer options that are not easy to get in the nearby
store," he added.
There are various sections like Curvy-shop, Cool-Cotton-Camis, and Lace Embrace.
19 | P a g e
2.Introduction to Topic
Indian women innerwear market, which comprises lingerie and nightwear, has taken great
strides over the past few years. The Indian women became more conscious of their bodies
and started taking innerwear as an indispensable part of their wardrobe that needs much
attention.
With the increase in disposable income, changing consumers‘ lifestyle, and rise in the
number of working women and better sense of fashion and style, the women innerwear
market is forecast to expand at a CAGR of around 14% during 2013-2015, according to
―Indian Women Innerwear Market Forecast to 2015‖.
The women innerwear market is mainly unorganized, with unbranded products dominating
the industry. However, the scenario is changing with branded products started getting
popularity. Brands like Lovable, Bodycare, Jockey, Groversons, Triumph, and Enamor are
slowly making inroads into the women‘s preferences.
While marketing and brand building are all part of the larger process, technology also plays
a prominent role in the acceptance and popularity of an innerwear brand. Moreover, with
the concept of online retailing is catching pace, expansion strategies adopted by companies
will definitely give a new direction to the women‘s innerwear industry.
3.RESEARCH OBJECTIVE
The main objective of the project is:
To help Amazon build the largest, widest and most comprehensive innerwear store for
women across brands, price points and product types with an aim to tap the increasing
demand and opportunities in this segment.
20 | P a g e
4.PROBLEM STATEMENT
The major problems facing the inner wear segment in India are:

About 70% of the Indian inner wear market is unorganized. Historically, the business
has been very local-area-centric where manufacturers generally supply only in their
vicinity and as a result, not many brands have gained a nation-wide status.

Retailers are the major obstacle in availability. Manufacturers make items in a range
of sizes and styles, but have trouble getting the products to the customers who want
them due to limited shelf space.

Most women hesitate to buy lingerie at stores. It is a very private affair and there is
some amount of embarrassment attached to it.
5.COVERAGE
The research covers the following aspects of the sector:

Market Characteristics

Consumer Behaviour and Preferences

Structure of foreign trade

Competition

Regulatory framework and Legislations

Marketing and Distribution structure
6.CATEGORY DESCRIPTION
Typically an intimates store covers all personal wear garments – underwear, bras,
stockings, shapewear, swim wear as well as sleepwear – anything worn next to the skin.
Functionally however we break these as (a) Lingerie (b) Shapewear& hosiery (c) Swimwear
and (d) Sleep & lounge wear. All these categories are further extended to sportswear,
maternity & nursing wear, juniors‘ line as well as plus sized to make a complete offering.
21 | P a g e
6.1 Shapewear& Hosiery: Shapewear is a relatively new product in India that is
witnessing increasing usage by women of all shapes and sizes across demographics.
The product is essentially available in the organized market and retailed mainly in the tier
1 cities by select branded players like Triumph, Jockey, Bwitch across different levels of
control (High and Medium control). Products typically covered include tummy flattening,
waist shapers, rear shapers, thigh shapers, body suits, shaping corsets and camisoles as
well as control slips. As a category it battles the perception of being high-priced. Prices
start at INR 500 for low control briefs and can go up to 7000 for a high control slips
depending on fabric and features.
Hosiery (as opposed to Shapewear) has been around for a while but is now considered
more of a winter wear or formal wear requirement than an everyday one. Available in the
organized and unorganized market, prices can start from INR 150 in local stores and go
upto 2000 in a brand store for a high spec product like slimming and sheen.
 UK analysis of the growth of shapewear
In a recent (June 2009) edition of Underlines magazine, there was a special dossier on
shapewear. Shapewear has already been referred to in the previous chapter, but further
comment on this, perhaps the only growing subsegment of the lingerie industry at the
moment, is important.
According to Underlines, but based upon a relatively small UK lingerie retailer survey,
shapewear sales in 2009 could be as much as 20% up on the prior year. From that
analysis:

three brands held half of the market: Bodywrap, Miraclesuit and Spanx;

55% of the retailers interviewed said that sales were up on the previous 12 months
and 41% said they were the same, and only 4% said they were worse;

the single most popular garment is slimming pants/knickers;

Although it is only the third-best seller, the Spanx brand is regarded as the number
one name that comes to mind in this sector, scoring an impressive 50% with
interviewees. The second was Bodywrap with 17%.

The biggest consumer age range is the 31-to-45 year-olds age group.[6]
22 | P a g e
6.2 Swimwear: Swimwear in India is largely run by local stores and unorganized players.
The exception is the tier 1 cities where sportswear brands like Nike, Puma or Adidas
feature their swimwear selection in limited stores with limited SKUs; else the swimwear
products have little market even in the sports goods stores and women swimwear has
had negligible presence. Department stores do not regard it as a key category due to the
seasonal nature and space constrains. In terms of an aggregator or an EBO the category
has had no strong player. For a customer looking at purchasing swim or beachwear,
there is no one store that he can go to. Brands like Mango and Benetton brought their
swimwear lines to India but these have over time vanished from their stores owing to low
selection and relatively higher price. Big chains like Zara too have not introduced these
even in their biggest stores. Page Industries (exclusive Jockey lisencee in India) tied up
with Speedo International in 2011 to distribute their swimwear range in India – the
expansion and penetration of the category by Page Industry is yet to be seen.
6.3 Sleep wear: Another largely unorganized sector driven category. There have been
few branded intimates players like Jockey and branded apparel players that extend their
lines like Next, M&S etc.
6.4 Lingerie forms the largest piece of the intimates category and is complemented by
the other three. Types of products under Lingerie: Apart from regular underwears and
bras, the Lingerie category includes

Teddy: looks like a standard one-piece swim suit for women which is mostly fitted
and used under clothing (for sheer tops/ fabrics)

Camisoles or Cami: covers the top part of the body like a tank top; its sleeveless and
well fitted (unlike the loose fitted chemise); it is sometimes cropped allowing midriff
exposure but most times covers the entire torso; sometimes come with a built-in
underwire bra. Worn under tops/tees/kurtas as vests or mild control shapers

Chemise: Slip-like garment that can be as short as hip-length or as long as floor
length. Can be sued to emphasize/ minimize curves depending on fabric and specs
(underwired/ shaper etc). Used as sleepwear or under sheer clothing

Bodice: vest-like garment worn over the blouse as a shaper/ waist clincher. Comes
with shoulder straps and without
23 | P a g e

Bloomers: loose fitted underwear that run longer in length that regular briefs

Corsets: fitted and structured innerwear that covers the top from the bust to the hips.
Mostly are lace up (or hook & eye) in the front, or back or both. They have a
characteristic boning that runs along the length of the garment and are used for shaping waist clinching or bust augmentation

Sports bras: garment that provides extra support and protection especially during
strenuous activity

Baby Doll: A short nightgown, or a short negligee.
7.LITERATURE REVIEW
Aim of Literature Review : To study the India inner wear market performance- both online
and offline.
This includes the following aspects:

India Innerwear Market Introduction

India Innerwear Market Size by Value and Volume

India Innerwear Market Segmentation
 By Women‘s wear Value
 Organized and Unorganized Market Value
 Low, Economy, Medium, Premium and Super Premium Category by Value
 Entry Price by Product Category

Trends and Developments in India Innerwear Market

Growing Popularity of Online Platform

Entry of Foreign Players

Existing number of Multi and Exclusive Brand Outlets

SWOT Analysis
24 | P a g e

India Innerwear Market Future Outlook
7.1 Market Characteristics
Foreign manufacturers were responsible principallyfor popularizing under garment
products inIndia. The first trendy movement for both men and women was seen when
Associated ApparelsPvt. Ltd., producers of Liberty shirts, introducedthe world famous
Maiden Form bras, Jockey men'sunderwear and Jantzen swimwear in 1962 in India. But
due to the government's restrictions forforeign brands, the company discontinued the
overseas tie-up and changed the names to Libertinafor lingerie and Liberty for men's
underwear in thelate 70s.The 70‘s witnessed the entry of under garments in India when
Peter Pan from Dawn Mills enteredin the market with lingerie styles of the West.
Thebrand was popular amongst the Indian women,but two decades later it vanished
from the market. ‗VIP‘ was the pioneer in introducing undergarment products in Indian
market in 1971. Another leading company ‗Rupa& Co‘ came in to the market in 1985.
Since the 80‘s till now, a large number of companies- both foreign and Indian had come
on the production steam. ([1]http://italiaindia.com/images/uploads/pdf/market-researchon-undergarments-sector-in-india.pdf)
7.2 Market Size
India‘s domestic market for undergarments was worth Euro 1,487 million in 2008-09. It
had registered a steady compounded annual growth rate (CAGR) of about 15% in those
three years. Volume wise, apparel market had grown from 0.9 billion units in 2006-07 to
1.05 billion units in 2008-09 at a CAGR of 7%. [1]
25 | P a g e
Market Size by Value (Indian Market)
Indian market by value terms was growing by about 15% in the past 3 years.
Considering the background as already discussed above, there is a likelihood of
marginal decrease in the market growth over next 3 years. The market is likely to grow
by 12.5% by value. [1]
26 | P a g e
7.3 Assessment of Demand (Indian Market)
Indian undergarment market by volume had grown at acompounded annual growth rate
(CAGR) of 7% in the years 2006-2009. Population growth, increasing disposable
incomes of consumers and the demand emanating more from women segment due to
change in demographics influenced growth in demand. However, the growth of the
sector slowed down considerably during 2008-09, as compared to the high growth
maintained during the previous years. This was due to the impact of the global
economic crisis, during which Indian apparel industry was one of the worst affected.
However, India‘s economy during the past few monthshas shown signs of recovery.
Government of India had projected GDP growth rate of 6.5% for 2009-10. This was
much better economic situation when one compares with the developed western
countries. The future growth of the apparel industry was expected to remain slow at
least for the year 2009-10, due to drop in demand from external markets like the US &
EU, which resulted in contraction in exports by about 30% and anticipated fall in
production by 20 to 30% since April, 2009.As per the available data, orders received in
the third quarter of 2008 by leading exporters slumped to the tune of 15-20% on an
average whereas the sales in domestic market also decreased by 10-15% on year-onyear basis.Intensity of financial meltdown which affected Indian economy is much less in
relation to west. Indian economy has shown tremendous resilience and economic
indicators seem to point out that market is gradually getting back on track with rising
consumer demand. In a volume driven market, low and economy range products
constitute the bulk of the market.
Purchase of undergarments is essential for any one irrespective of income category he /
she belongs to. Recessionary trend may somewhat impact the demand for higher priced
products and in such an eventuality, the consumers are likely toswitch over to lower
quality products without having much adverse impact on the overall growth ofthe market
in quantity terms. Considering all these aspects, the growth trend which was marginally
above 7% in the past 3 years may slow down marginally. Discussions with a crosssection of manufacturers, industry experts lead us to presume that growth of about 6.5%
by
volume
is
likely
to
materialize
in
the
next
3
years.
([1]http://italiaindia.com/images/uploads/pdf/market-research-on-undergarments-sectorin-india.pdf)
27 | P a g e
In 2012 the global lingerie market was reported to be 31.6 billion USD with Western
Europe and North America covering around 65% of the global market share. In India this
is currently pegged at USD 2.5 billion of which women‘s innerwear is the fastest growing
segment significantly outstripping the growth in the men‘s and overall innerwear market.
The industry is estimated to grow at a CAGR of 18% till 2015. However the market is
largely unorganised, with the organised players accounting for one-third of the market.
([2]Report by IS Advisors (2013) Emerging Markets Forecast to Lift Global Lingerie
Industry Publication title PR Newswire, Publication year 2012, Publication date Feb 27,
2012.)
A study by US-based fashion consultancy found out that the worldwide lingerie retail
market grew just 0.7% in the seven year period from 2004 to 2011. But the emerging
markets grew at 14% essentially in the organized sector. ([3] Report titled "Global
Market Review of Lingerie and Intimate Apparel - Forecasts to 2017"- Gangavathi
exports)
7.4 Key Market Drivers
The factors that have propped up demand for undergarments in the past few years have
been summarized below:

Indian economy has experienced GDP growth rate of 8to 9% in the last few years.
Sustained growth in economy in the past few years has contributed to the growth of
28 | P a g e
massive middle income groups. This has propped up the sales of undergarments,
particularly in the low and economy segment.

Young generation of professionals, both men and women, form an important consumer
group with high purchasing power. This buying group is more demanding in their choice
of innerwear, looking for quality products that satisfy comfort, fitting, styling needs etc.
This has resulted in a qualitative shift of consumers from low / economy range to
premium and super-premium range of products. The past trend of the Indian market
signals a gradual marginal shift towards the premium and super premium segments of
the industry. This segment is now considered as the major growth segment. Despite
being the smallest segment in the over all lingerie industry, the premium segment has
been growing at a compounded annual growth rate (CAGR) of about 30% in the last five
years.

Indian demographic structure has been undergoing transformation in the past few
decades. Indian has one of the youngest population in the world. An increasing shift of
population in favor of the younger generation would encourage further qualitative
transformation of the under garment market.

Domestic undergarment manufacturers have realized the huge potential of partnering
with the global luxury brands. This has helped them not onlyto extend their portfolio into
the luxury super-premium and premium segments but also makes them preferred
sourcing partners for these brands in India as well as internationally.

Preference for recognizable brands and rapid growthof organized retail is anticipated to
increase the current share of the organized lingerie market. Even though organized
retailing is still at its nascent stage in India, restricted mainly to urban cities,
undergarment market is likely to proliferate through increasing network of shopping
malls across India and its geographical spread in the rural sector as well.

Large number of professional fashion and designing schools across the country, work of
high profile designers towards innovative creations, media exposure, use of movie stars
both for advertising campaigns and as brand ambassadors are important instruments for
popularizing
demand
for
undergarments
in
the
years
to
come.
([1]http://italiaindia.com/images/uploads/pdf/market-research-on-undergarments-sectorin-india.pdf)
29 | P a g e
7.5 Market Segmentation
Market Segmentation by types of Suppliers Indian market structure of under garments
has evolved over the decades. From a rudimentary poor production and marketing
infrastructure of themid-50‘s, it has come a long way. Indian marketing structure is
evolving and yet caters to the diverse requirements of teeming millions - male and
female. The Indian under-garment market iswell- diversified and spread across various
regions. The size of the unorganized or informal sector is much larger in India According
to some estimates, informal sector accounts for more than 60% of Indian production.
The products positioned in this segment are the cheapest even though the quality
leaves much to be desired. India is also one of the most scattered retail markets in the
world. The products, so far, have been mainly marketed as a commodity and are price
and margin oriented. ([1]
http://italiaindia.com/images/uploads/pdf/market-research-on-undergarments-sector-inindia.pdf)
7.5.1 Market Segmentation by Price
The organized sector products are sharply divided under five distinct product categories:
Low, Economy, Medium, Premium and Super-premium based onprice segments which
in turn depend on quality. The market divides of the product categories based on price
segmentation of 2008 is as follows:
The manufacturers operating in the lower price segments are active mostly in the rural
and / semi-urban markets, which are extremely price sensitive,where availability of the
physical product at the minimum available price and not quality is the main
consideration. This market segment is shrinking over the years due to increasing
penetration from the organized sector. The economy segment is pre-dominated by lower
30 | P a g e
end of the organized sector manufacturers. The emerging trend of Indian market signals
a shift towards the premium and super-premium segments of the industry. These
segments are now considered as major growth segments. Despite being the smallest
segment in the overall lingerie industry, the premium segment has been growing at a
compound annual growth rate (CAGR) of 30- 35% in the last five years.
The low and economy segment, however, is growing interms of volume and value and
the industry is becoming more organized. Significant share of Indian market in the urban
sector is pre-dominated by players in the medium segment. The mid-market segment is
characterized by the presence of national players like Maxwell Industries (Daisy Dee
brand), BodyCare, Groversons,Red Rose, Juliet, Jockey, and Rupaetc.The market is
continuously expanding and becoming more and more competitive in respect of quality
and price.
The premium segment is characterized by either international brands or joint ventures of
Indian manufacturers with international companies. Lovable, Enamor, Benetton and
Triumph have successfully established themselves as premium lingerie brands.
Super premium products are clearly differentiated from premium segments by quality
and price. Super-premium products are considered luxury products and marketed by top
international giants like Triumph, Enamor and so on. Products in the premium and
super-premium category are distinguished in terms of style and design quotientand
related product features.
7.6 Regional Characteristics of the Market
The consumer behavior of a particular region which is economically not so developed is
different as compared to developed ones. The consumers in the less developed region
are understandably, more price-conscious. Always on the lookout for quality products,
their guiding principle is ‘value for money‘. A lower per capita income, in eastern region
for example, compared to western and northern India leads to a lower per capita
purchasing power. Additionally, Delhi being centrally located and Mumbai, being the
financial capital have certain advantages. The consumers who live in these cities are
more exposed to latesttrends and brands in inner wear collections and are more familiar
with design, quality and latest trendy fashion, as well as the luxury of greater choice.
Local ready availability of products also influences a consumer. The decision to stick to
a particular available brand seems to govern the purchase decision than the rarely
31 | P a g e
available choicest product. Logistics, convenience and easy availability are important
considerations for a local consumer.
Regional considerations, such as climatic conditions etc., play an important role in so far
as the purchase decision of undergarments isconcerned.
There are certain common considerations for consumers regardless of locations. The
consumers by and large are becoming increasingly more and more conscious of value
of money. Price sensitivity is a common concern. Purchase decisions of consumers
anywhere are more guided a combination of
demographic and psychometric factors, such as, disposable income, age-distribution,
pattern of income distribution, quality of upbringing, aptitude, tastes and preferences
and
so
on.
([1]http://italiaindia.com/images/uploads/pdf/market-research-on-
undergarments-sector-in-india.pdf)
7.7 Consumer Behavior and Preferences
7.7.1 Characteristics of Indian Consumer
The Indian consumers are noted for the high degree of value orientation. Such
orientation to value has labeled Indians as one of the most discerning consumers in
the world. Even, luxury brands have to design a unique pricing strategy in order to
geta foothold in the Indian market. Indian consumers have a high degree of family
orientation. This orientation in fact, extends to the extended family and friends as well.
Brands with identities that support family values tend to be popular and are accepted
easily in the Indian market.
Indian consumers are also associated with values ofnurturing, care and affection.
These values are far more dominant than values of ambition and achievement.
Products, which communicate feelings and emotions gel with the Indian
consumers.[4]
.
7.7.2
Different Segments of Indian Consumers
 Socialites:Socialites belong to the upper class. They preferto shop in specialty
stores, go to clubs on weekends, and spend a good amount on luxury goods. They
are always looking for something different. They are the darlings of exclusive
establishments. They go for high value, exclusive products. Socialites are also very
brand conscious and would go only for the best known in the market.
32 | P a g e
 The Conservatives: The Conservatives belong to the middle class. Theconservative
segment is the reflection of the true Indian culture. They are traditional in their
outlook, cautious in their approach towards purchases; spend more time with family
than in partying and focus more on savings than spending. Slow in decision making,
they seek a lot of information before making any purchase. They look for durability
and functionality but at the same time is also image conscious. They prefer high value
consumer products, but oftenhave to settle for the more affordable one.These habits
in turn affect their purchasing habitswhere they are trying to go for the middle and
upper middle level priced products.
 The Working Women:The working women‘s segment is the one, which hasseen a
tremendous growth in the late nineties. This segment has opened the floodgates for
the Indian retailers. The Indian women have grown out of their long-standing image of
being homemakers. Working women have their own mind in decision to purchase the
products that appeal to them.
 The Rich: India has over 1 million rich households (income greater than Euro 8,000
per annum). These people are upwardly mobile. Some of them in this category are
Double Income No Kids (DINK) households. They spend more on leisure and
entertainment-activities than on future looking investments. [4]
7.8 Preferred Brands
Well known national brands at the entry level operate through the medium priced
segment.
Premium
and
super-premium
product
categories-highlybranded
and
distinguished for exclusive product features operate at the high ends of the market.
Logistics, efficient supply chain management system and media exposure have largely
contributed to the popularity of these brands across the board. These are available in
plenty at retail outlets in each region especially in the metros/ state capitals. [4]
7.9 Factors Influencing Brand Preference
 Brand preference pattern of consumers depends upon a host of factors such as:
 Combination of price, quality & fitting as major parameters of purchase decision for
sensitive but smart consumers
 Track record of Indian manufacturer/ reputation of foreign joint venture partner.
33 | P a g e
 Reputation of international companies
7.10 Branded Players
The coming in of foreign brands like Canadian brand La Senza, Marks &Spencers
(M&S) and Triumph has sculpted the premium and super-premium segment in India.
While M&S bra range starts at INR 1,299, La Senza and Triumph start at INR 700 and
INR 799 respectively. For M&S, lingerie continues to be among the best-selling products
within its portfolio with 39% growth from last year and 50,000 bras sold in total for Q1
2013. Genesis Colors - a luxury fashion conglomerate - launched Bwitch in 2008 and
now plans to launch a range of 'young' lingerie targeted at 18-35 year-old women called
ShowOff with MTV. Bwitch extends its franchise apart from having company owned and
presence multi brand stores.
One of the key foreign players in India is Triumph – across 45 cities with over 300
outlets through retailers and franchisers. Operational in India since 2002 the brand
started franchising in 2009. The investment required to own a franchise of Triumph, is
INR 1.5-2 million and an area of 400-700 sq. feet.
Lovable has been franchising for over six years and has firmly set its position in the
lingerie market. Presently the brand has six franchised outlets and requires an area of
100 to 600 sq. feet. Ideally, an investment of about Rs 10- 20 lakh is what most lingerie
brands require to set up a franchise outlet. Lovable is now retailed through about 3,500
outlets, up from half that number two years ago. Lovable‘s sales have grown at a
compounded annual rate of 24 per cent over the past three years to INR 141 crore in
FY-12 while net profit has expanded 57% to INR 18 crore in the same period (1% of
total market share and 3% of the organized market share). The nine months to
December 2012 saw sales growing 15% with 18% increase in volumes. Daisy Dee‘s
retail footprint has expanded by over 2,500 in the past two years alone, taking total retail
footprint to around 10,000.
Jockey is exclusively licensed by Page Industries Ltd., located in Bangalore, for
manufacture and distribution of the Jockey brand innerwear and leisurewear for men
and women in India, Sri Lanka, Bangladesh, Nepal and UAE. The aspiring franchisee
needs an area of 800-1,200 sq. feet and an investment from INR 20-30 lakh.
34 | P a g e
Trends caters to the 16-35 age group which demands more colourful and stylish
product. Innerwear is priced between INR 200 to 3000. [1]
7.11 Factors / Elements Influencing the Choices of Consumers
Indian consumers spread across different regions are not homogeneous entities. The
consumers of each region are nurtured by its own culture, education and aptitudes
which condition their purchase criteria.
Local consumers of innerwear in each region are guided by:

Window POS Displays

Hoardings

Gift Vouchers

Fresh arrivals

Event Sponsorships

Discount Offers

Celebrity Endorsements

Advertisements / Features in Magazines

Advertisements and Sponsorships on TV/ Electronic Media
35 | P a g e
Consumers in general look for certain suitable attributes in a store for such purchase.
These include:

Availability of multiple brands- foreign and Indian under one roof

Arrangement of catalogues to facilitate comparison of different brands in terms of price,
quality and fitting

More choices of colors, fits and prices

Personalized shopping experience

Parking facility
Urban women consumers in particular find themselves quite vulnerable in selecting a
store for purchase of undergarments.

First, majority of counters at the retail stores are manned by men, making it
difficult/awkward for a large percentage of women customers to communicate their
preferences or enquire specific requirements.

Second, majority of stores are not equipped with sales persons who have sound
knowledge about measurements and sizes that gives good fit to a woman. This is a
typical problem all over India including the stores in the metros.

Third, a trial room is an important requirement especially for women, which is often not
available in retail stores. [1]
7.12 Degree of Elasticity of Demand of Local Consumers
Considering that price elasticity depends to a large extent on the extent of competition
among the manufacturers, the Lower and Economy segments of the market are usually
price-inelastic. These segments being highly competitive do not allow the manufacturers
any leverage to increase the price.
Higher up along the value chain, the affordability or paying capacity of the consumer is
higher. The product market which characterizes mid-product segment becomes
increasingly quality oriented and more diversified. Despite competitive pressure, the
price in this segment keeps on rising. The demand for the product becomes price
elastic.
In case of premium and super-premium product segments, where entire focus is on
quality, style and brand value, the consumer is insensitive to change in price. As per the
findings of retailer survey, even an increase of 5% in the price has an effect on low end
36 | P a g e
/economy category products, while mid-end category is usually able to absorb a 5-10%
price increase without a major adverse impact on the sales of a brand. [1]
7.13 Scope in Indian e-commerce industry
With Indian government planning to bring FDI in e-commerce, one can easily ascertain
the value this sector is playing in the Indian economy. Currently, the organized retail
market in India is valued at USD 41.44 Bn off the total USD 518 Bn retail market.
The online retail in India, on the other side, is a mere 0.6 Bn, i.e. 1.44% of the organized
retail segment of the country. However, as per the recent Assocham report, the Indian
e-commerce market is now valued at USD 16 Bn in 2013 and is expected to reach USD
56 Bn by 2023.
According to Manish Chopra, founder of Zovi, Indian industry provides a ―phenomenal
opportunity‖ to existing online retail businesses. Moreover he believes that the market
37 | P a g e
offers a good scope for players to raise outside funding if they have a promising and
economically sound business model.
Factors driving this growth
Various factors which have driven this growth include:

Increasing Internet penetration

Cheaper smartphones and data packages

Available payment options and SaaS providers

Fast moving lives with shortage of leisure time
Also, aggressive online discounts, rising fuel prices and availability of abundant online
options have played a crucial role in attracting shoppers.
However, with all the foreseen viable future opportunities in the space, building and
managing an online retail store has to move through a lot many crunches. Dealing with
online price wars, raising funds, managing scales, CRM, identifying what sells or not,
opportunities in rural or urban, etc are few of the challenges that one needs to focus
upon while entering into this space. ([5]Building an online retail startup in India, January
29, 2014 by Meha Agarwal)
7.14 Scope of Online Retail in Lingerie Industry
7.14.1 A Niche Play
In evolving online marketplaces, lingerie has been pretty much under wraps. There
are more than 50 webstores in India but lingerie, according to Sanjeev Aggarwal,
managing director of Helion Venture Partners, a venture fund, is "the fifth or sixth
category for multi-product webstores. Besides, it's a small, unorganized market. The
offline lingerie market is just above $2 billion and online is insignificant." For instance
two-year-old fashion retailer Jabong.com started lingerie as a category only six
months back. Another portal Yebhi.com, which started as a webstore for shoes and
added lingerie later, says innerwear sales account for 2-3% of their business and "it's
not a key category for us", says Nikhil Rungta, Yebhi's chief business officer.
38 | P a g e
Yet,
a
few
sites
Prettysecrets.com,
are
betting
on
Moodsofcloe.com
lingerie.
and
These
include
Laceandme.com.
Zivame.com,
Last
fortnight
Zivame.com, which claims to be India's largest online retailer of lingerie, raised $6
million in a fresh round of funding from Unilazer Ventures, IDG Ventures and Kalaari
Capital. Overall, much like the small size of lingerie market, venture money into the
vertical has also been minusculeless than2%of the $500 million venture investment
going into internet businesses in 2013. In all, Zivame.com has raised $9 million since
it started two years back; and another lingerie-focused portal Prettysecrets.com got
$1 million from three angel investors Indian Angel Network, Harvard Business School
and
Orios
Venture
Partners.
Ronnie Screwvala, the entertainment czar who's now wearing the investor hat as
founder of Unilazer Ventures says, "Lingerie is an under-explored sector due to lack
of organized retail. In this category there's a need for anonymity from the core
consumer and e-commerce will open up a strong latent demand." Contours of that
demand can be gauged from the daily orders that Zivame.com ships. Says RichaKar,
founder-CEO of Zivame.com: "We are averaging 1,200 orders daily. This has jumped
200% in one year." The category spans bra, panty, nightwear, fashion tapes, shape
wear and more. "We are selling solutions for innerwear," Kar adds.
7.14.2 Virtual Drivers
Karan Behal, founder-CEO of Prettysecrets.com, and Kar believe the value
proposition for online innerwear stores is fourfold. First, the choice online offers to
buyers or, in trade parlance, the sheer number of stock keeping units (SKUs) of
lingerie is far higher than for any other category. Says Behal: "The number of bra
sizes is eight times the number of men's shirt sizes." Adds Kar: "Retail stores stock
only the fast-moving category and sizes and not all the 85 sizes and 35 different
styles
of
bras."
Second, online ensures privacy of purchase. Third, lingerie portals offer unlimited
shelf space and, finally, online rises above the problems of physical distribution.
Explains Kar: "The top 10 cities account for 70-75% of our sales. A buyer in either
Dimapur in Nagaland, Surat in Gujarat or in Bangalore has access to the whole
39 | P a g e
inventory."
Behal has been in the lingerie business for three decades, selling via 250 retailers
across India. However, the company wound up the brick-and-mortar retail business to
focus entirely on online. Says Behal: "The problems in lingerie are poor supply
chains, lack of in-store ambience and the absence of trial rooms. Earlier [in the offline
model] there was a distributor, retailer and seller. Now between us and the customer
is
a
computer
screen
and
we
can
engage
with
the
buyer
directly?"
This helps Prettysecrets.com, launched in 2012, to improve margins and offer lower
than retail prices. While 70% of the sales of Prettysecrets.com come from its own
brand, zivame.com offers buyers a wider choice from local and international brands,
including Jockey, Enamor, Loveable, Curvy Kate, Ultimo, Panache and Promise.
Kar believes that online buying has brought in new lingerie buyers and even men are
comfortably buying off the webstores. She says: "80% of the buyers are eves. The
men tend to buy more on occasions like Valentine's Day." Adds Pragya Singh,
assistant vice-president, retail and consumer products, Technopak Advisors: "Men
buy lingerie as a gift frequently and they won't feel awkward about buying online.
Webstores
allow
buyers
men
or
women
-
to
discover
options."
7.14.3 For the Younger Eves
In fact the target market for Prettysecrets.com is 20-35-year-olds; as Behal explains,
this age group not only wants a variety of fashion wear and online is all about a wide
choice it is also more comfortable shopping online. "As awareness increases women
will flock online to buy innerwear," he says. Kar believes the choice offered online is
driving women to purchase lingerie six to eight times a year, compared to four times a
year
offline.
Lingerie retailers hope the trajectory of buying online will be similar to that in the
West, where both online and offline are far more evolved. For instance, in the US
alone there are more than 50 webstores selling lingerie, with Victoria's Secret being
40 | P a g e
the largest. About 30% of its $6-billion sales come from online shoppers. Others
include Bare Necessities, HerRoom, Freshpair, FigLeaves and La Mew.
Says Mittal: "I believe online can tackle many of the problems of lingerie shopping.
Typically you have untrained sales people selling lingerie in shops and most often
there are men behind the counters. Neither are there consultants to advise women on
new styles andbrands, like in the overseas markets. In India online has the
opportunity to bridge the gap."
A key reason for the glacial speed in innovation in the lingerie market is its small size.
At close to $2.5 billion, the market is dominated by mom-and-pop type retailers and
hence the opportunity is not deep enough for new experiments for the online
entrepreneurs. Says Arun Chandarmohan, co-founder of Jabong.com: "Lingerie is
intimate wear with limited availability. The biggermarketsgot the initial attention so you
had electronics and fashion accessories getting more attention online rather than
lingerie. Now, with online shopping on the rise, we see room for this category to
scale."
7.14.4 Can it Scale?
For Jabong.com lingerie is one of its 10 verticals; however, it's the lingerie-only sites
that could face a bigger challenge to scale the game. Says Alok Mittal, managing
director of venture capitalfirm Canaan Partners: "Unless it becomes $100-200 million
business online, lingerie will be too niche. It's a tough business to sustain as a
standalone vertical. Customer differentiation experience can make a webstore
attractive, but a good model can be copied easily. The better way will be a hybrid
model both online and offline options."([4]Indian Lingerie Industry Unleashing the
Growth Potential fiber)
41 | P a g e
7.15 Trends in Lingerie
7.15.1 Trends in lingerie theming
The themes that were presented at Paris Mode City in early September 2009 were,
as usual at these trade show events, an attempt to be all things to all people.
However, they do illustrate the thinking of the industry as it tries to lure customers and
consumers in today's economic situation. There were five themes under the banner
heading of The 24 hours of happiness story. The themes were:

Wake Up: "Awaken with a spring in your step, and a desire for natural freshness. A
world enriched by fine materials for a multi-functional wardrobe. Everything is white,
but if you like colour, the shades are powdery with spicy touches. "

Market Day: "A playful mischievous spirit. Nothing is left to chance: satin, pretty prints,
florals and bursts of colour, for a sparkling finish. "

Housework: "Masculine and feminine combine. Small geometric patterns and narrow
stripes. Retro cuts, vintage shades, seventies colour schemes. And... sexy is back!"

Tea Time: "Lace and tradition. Pretty details celebrate the new femininity: soft
colours, edges and finishes. Plus a touch of vintage. "

Clubbing: "As ever, you can't go wrong with black. Shiny fine materials on girdles
7.15.2 Trends in lingerie colours
An alternative take comes from the Drapers magazine review of the UK
Harrogate Lingerie & Swimwear Exhibition and its colour themes. Its headings had
similarities to Paris:
 dusty tones;
 coral;
 florals;
 vintage;
 prints;
 turquoise.
42 | P a g e
7.15.3 Trends in lingerie fabrics
To be brutally frank, there have not been any serious developments in lingerie fabrics
in the last two years.Lingerie fabrics frequently borrow ideas that have emerged in the
performance apparel sector, and performance apparel has been quiet on the fabric
front since the burst of swimwear activity connected with the Beijing Olympics of
2008.
As a result, it is only necessary to report that:
 'Skin on skin' fabrics such as Lenzing'smicromodal remain influential. 10,000-m of this
microfibreweigh only 1g, and the fibre is far more delicate than cotton, wool or even
silk.
 "Sensitive" a fabric from Eurojersey is a warp knit composed of 72% Meryl microfibre
and 28% Lycra. It has a high resistance to both chlorine and sweat, and hence is
excellent for the manufacture of both swimwear andlingerie.
 Trevira micro is an extreme fine gauge knitted fabric which offers both moisture
conductivity and breathability,
 Invista Lycra Body Care incorporates aloe vera or vitamins which deliver a softening
effect on the skin. The effect lasts for about 30 washes, which is well within the
normal usage for fashion underwear garments.
7.15.4 Trends in lingerie styling
According to Pamela Scott of Underlines, there are just two styling trends which are
'hot' at the moment. They are:
 burlesque boudoir
 shapewear([6]Global market review of lingerie and intimate apparel - forecasts to
2016: 2010 edition: Chapter 11 Industry trends, Author, Newbery, Malcolm; Zerai,
Rachael)
43 | P a g e
7.16 Category Management and Retailing
Category management (CM) is a recent retail management initiative that aims at
improving a retailer's overall performance in a product category through more
coordinated buying, merchandising, and pricing of the brands in the category than in the
past. Despite tremendous retailer and manufacturer interest in the process of CM and its
rapid adoption in the industry, much uncertainty exists about the consequences of CM
for channel members.(The impact of category management on retailer prices and
performance: Theory and evidence. Volume 65, Page 16)
Category management emerged in the early 1990s as a method of turning marketing
basics into an organised process. A great number of changes have taken place since
then. Many organisations - and certainly the marketplace - are not the same. The
traditional
process
of category
management focused
oncategories managed
as
business units. While that is still true today, category management now elevates the
importance of the consumer. For leading practitioners, the process has evolved into
consumer-centric category management. The new focus: using categories to target the
"right" consumer segments to ensure the long-term health of the shopper base, while
supporting the retail position and strategy.
Consumer understanding - demographics, attitudes, interests, shopping occasions, and
much more - is at the centre of it all. It is all about finding out what shoppers want and
providing it better than the competition can. In that way, the process solves the key
problem of shopper erosion. If retailers select the right products for target customers
and then price and merchandise them appropriately, the result should be a satisfied
consumer who remains loyal to a store.
Shopper loyalty is critical today because of consumer mobility. People are willing to
shop at different stores to fill shopping needs. In addition, they are willing to drive out of
their way to shop in a format that caters to their special interests. This trend has led to
the notion of 'trip management' as the next level of category management. In other
words, the process has to be more than managing categories. It has to be also
managing the types of trips that consumers make to the stores and how well retailers
capture various trips compared to the competition. These trips include the standard
weekly shopping trip, fill in, stock up, special occasion, and many others.
44 | P a g e
In
some
parts
of
the
world,
especially
in
developing
markets, category
management today remains a stretch goal - a new idea full of untapped potential. In
other areas, the original eight-step process that emerged in the late 1980's forms the
foundation of many companies' approach to category management. In developed
countries such as the USA and the UK, refinements are being made - most of them
designed to place consumer understanding front and centre. New ideas are emerging:
from 'trip management' to 'aisle management' to 'customer management'. Whether a
new descriptor emerges to replace 'category management' is yet to be seen. Even if that
does happen, what won't change is the overall objective - to help retailers and their
manufacturer partners succeed by offering the right selection of products that are
marketed and merchandised based on a complete understanding of the consumers they
are committed to serving.
The key to sales and profits in the packaged goods industry is the consumer who
resides between the manufacturer and the retailer. To develop and optimise the
relationship with consumers, trading partners have to leverage consumer touch points.
Some of them relate to the manufacturer (television, radio, and the internet), while
others relate to the retailer (point-of-sale data and customer service). All of them relate
to an improved ability to understand, serve and reach consumers.
In the past, there has been little harmony between trading partners. But in the future,
they will clearly define the touch points together and will harmonise the customer
relationship marketing effort. That is when, the authors predict, "collaborative customer
relationship management (CCRM) will blossom", and "represents a further development
of category management and the demand side of efficient consumer response (ECR)".
While category management began in the United States for supermarket retailing, the
process has spread beyond grocery to other channels of distribution. In addition, it has
spread to other retail industries such as electronics and books. The business of fastmoving consumer goods has morphed into a restless, cluttered industry full of demands
and compressed deadlines.
To succeed today, executives in every corner of the world seek a clear path forward.
Consumer-CentricCategory Management is set to provide a map by exploring both the
state of, and the state-of-the-art incategory management. This book's message is clear:
45 | P a g e
the future of category management will be very different than its past. Today's category
management is bringing a change to the structured process of how executives think and
make decisions about their businesses, no matter what information and information
technology they have access to. Ultimately, the winners in the marketplace will be those
companies that satisfy consumer needs by knowing how to blend data, insights, and
merchandising savvy.(Consumer-Centric Category Management: how to increase profits
by managing categories based on consumer needs. Volume 27, pages 68-70)
A comprehensive review of the literature on category management highlights the
opportunity for fashion marketing to consider the potential of category management, and
the specific research gaps.
Logistics-based quick response (QR) partnerships were initiated by the fashion industry
in the mid-1980s to maximise logistics efficiencies and costs (e.g. Giunipero et al, 2001).
Almost a decade later the QR model was adapted by the USA's grocery sector as
efficient consumer response (ECR) (Fiorito et al, 1995; Kotzab, 1999), and in European
grocery markets, category management has been adopted as a "cornerstone" and
development of these original ECR initiatives (Gruen and Shah, 2000; Kotzab, 1999).
Supplier-retailer
partnerships
are
central
to
both
QR
and category
management concepts. However, while the efficiency concepts of QR and the USA's
ECR practices rely principally on retail sales data, category management uses in-depth
information
on
the
consumer
to
support
joint
marketing
decisions
for
the category (Johnson, 1999). Furthermore, category management ignores traditional
product groupings (e.g. breakfast cereals) and focuses instead on understanding the
way consumers shop related products in a category (e.g. all products constituting
breakfast)
(Institute
essence, category
improvements
(i.e.
of
Grocery
Distribution
management seeks
improvements
in
to
(IGD),
2002;
complement
sourcing,
purchasing
Kotzab,
1999).
In
"supply management"
and
supply)
with
"demand management" activities (i.e. managing assortments and the introduction of
new products) (Gruen and Shah, 2000). The demand activities themselves are informed
by "marketing information" (Hines, 2001, p. 23) and are focused on meeting the needs
of an increasingly demanding and highly complex consumer (IGD, 1999; Johnson,
1999). Although the supply chain efficiencies and cost savings of QR enhance the
retailer-supplier partnership's business performance, it is considered that once these
46 | P a g e
types of cost and efficiency improvements have been made, they merely become
"industry norms" (e.g. Johnson, 1999, p. 260). By contrast, category management's
focus on leveraging consumer understanding to developcategory-based consumer
"solutions" (Wellman, 1997) offers an opportunity for creating sustainable competitive
advantage (Johnson, 1999; Joint Industry Report on Efficient Consumer Response,
1995). Delivering customer value in this way is totally in line with contemporary views of
supply chain management (Hines, 2001).
Category management has enjoyed rapidly growing acceptance and implementation by
retailers and suppliers in the grocery sector around the world (Basuroy et al, 2001;
Dussart, 1998; IGD, 2002). On the basis of its reported positive outcomes, it is not
difficult to understand its high adoption rates. Results from a recent survey by the UK's
Institute of Grocery Distribution (IGD, 2002) show how the majority of category
managementpractitioners
believe
that category
management improves
turnover,
profitability, market share, inventory levels, trading relationships, and consumer
understanding. Academic empirical research also reports the positive effects of
implementing category management. It is found to positively affect retailer prices and
profitability (Basuroy et al, 2001), and the implementation of category plans is perceived
by suppliers to positivelyaffect category performance (Dhar et al, 2001). Diffusion
of category management to other sectors is now underway (Basuroy et al, 2001;
Dussart, 1998; IGD, 2002; Kotzab, 1999). However, there is no evidence in the literature
or from industry intelligence that the fashion sector has embraced category
management. Indeed with regard to the latter, discussions with key informants working
in the fashion departments of two of the UK's leading food retailers and in menswear for
one of the UK's leading department store chains indicate that as yet no attempt has
been made to adopt category management.
The "consumer-centric" thrust of category management (IGD, 2002; Mathews, 1996;
Pearce, 1996) is embraced in the grocery industry's agreed definition of category
management as
"the
strategic management
of
product
groups
through
trade
partnerships, which aims to maximize sales and profits by satisfying consumer needs"
(IGD,
1999,
Appendix).
stage category process
to
The
grocery
guide
industry
suppliers
and
has
developed
retailers
in
an
eight-
their category
management efforts, from analysis for the category ("CategoryAssessment") through to
47 | P a g e
the subsequent joint strategy and tactics planning stages (see Figure 1). By means of
this process "the two sets of knowledge and skills are combined to tailor
the category offer to the retail outlet in question and its customers" (IGD, 2002) and a
"category plan" (Gruen and Shah, 2000) is jointly agreed.
Preliminary discussions with associates in the fashion industry identified the potential for
a collaborative investigation with a manufacturer in the intimate apparel sector. The
manufacturer, an international brand and its retail customer, a major UK-based apparel
retailer operated within the bra category, which represented all bra styles from
fashionable/glamour ranges to the more staple, functional basic garments. The
particular case scenario indicated that retailer and supplier both lacked fundamental
knowledge of the consumer. Retailercategory performance implied declining consumer
interest and as such, the retailer had recently implemented assortment reduction within
the category. Conversely, the supplier reported steady sales performance results from
other retailers for the same category. It also presented a situation of low retailer-supplier
collaboration with no evidence of joint decision-making. Acknowledging the potential
benefits of the research, the manufacturer agreed to sponsor the study.
Research design
Exploratory research is appropriate when little is known of a phenomenon (Churchill,
1995, p. 149). Previouscategory management studies in the grocery sector (Johnson
and Pinnington, 1998; Johnson, 1999; Qureshi and Baker, 1998) have argued the case
for developing quite advanced market research "tools" for understanding how the
consumer shops the various categories in the grocery sector; for example, recording
point of purchase activity, exit interviews and so on. However, the subject of category
management in the fashion sector is as yet unexplored. Furthermore, the research
context here is a situation where the intimate apparel industry overall appears to lack
fundamental knowledge of the bra consumer. Therefore, while sophisticated in-store
techniques may be wholly applicable for a sector that is further advanced in category
management, they may be less appropriate for gathering the required preliminary
insights into consumer behaviour for the bra category. The research therefore pursued
an in-depth, qualitative approach, the objective of which was to gain greater "insight to
consumer beliefs, attitudes and preferences" towards thecategory (IGD, 2002, p. 164).
48 | P a g e
The structure for the study was provided by a category management research
"framework", adapted from Johnson (1999). The objective of this framework was to
understand customer motivations and the impact of point of purchase marketing mix
variables. It comprised three key areas of focus:
(1) The pre-purchase environment. What influences the consumer's brand choice before
entering the retail store; for example, product and packaging design, advertising, or
promotions, brand image/positioning? Why was a specific retailer chosen?
(2) The consumer purchase process. What are the consumer‘s needs states driving the
purchase? Was the purchase planned or impulse and why? Where is the purchase
decision made? How is the category shopped?
(3) The in-store purchase environment. What are the in-store dynamics - that is, the instore variables that influence the consumer purchase process - for example, availability,
assortment variety, visual merchandising, category location/layout, shelf allocation,
service support, in-store promotions?
Data collection methods
Focus groups provide a versatile medium for generating rich research insights (Fern,
1982; Goldman, 1962). Furthermore, in category management research, focus groups
have generated greater depth to support retail sales and panel data. They have also
been
adopted
to
facilitate
the category definition
process,
to
understandcategory purchase modes (Johnson, 1999), and category usage, and to
identify new product opportunities (IGD, 2002).
A combination of four data collection methods was used, each selected to answer the
research questions within the three areas of the adapted Johnson framework. To
stimulate discussion of the pre-purchase environment, and specifically to reveal
consumer's perceptions of the leading brands in the category, the research deployed a
word association exercise. This was designed to determine the extent to which brands
were associated with established criteria of fit, comfort, style, quality and price (Mintel
Marketing Intelligence, 1997). Eight different bra brands were selected to represent
the categoryincluding, respectively, Berlei, BHS, Warner's, Marks & Spencer (M&S),
Triumph, Littlewoods, Gossard and Play tex. To counter the risk of peer contamination,
49 | P a g e
individual perceptions were captured on paper prior to general group discussion. Each
respondent was requested to insert against each bra brand any number of words or
phrases that could be used to describe that brand. A pre-test revealed that many
respondents had difficulty in generating their own words. Thus, from interviewing a
number of bra wearers a list of 40 positive and negative descriptors was compiled to
which respondents could refer if required. This controlled response process (Chisnall,
1992, p. 162) lasted approximately ten minutes.
The second part involved a semi-structured open discussion designed to explore the
consumer purchase process and the in-store purchase environment. This included
questions on usage and bra buying history and also probing on preferences with respect
to in-store variables; for example, merchandising/display and in-store selling activity.
Third, the research used a "blind" experiment to further explore the pre-purchase
environment and brand perceptions, and to understand the consumer's design
preferences. For this exercise, each respondent evaluated on paper a diverse selection
of seven unbranded garments representing the category. The evaluation criteria included
product design, perceived price, brand and function. Respondents were also asked to
indicate the likelihood of their purchasing each individual garment.
The final method of data collection was another open, semi-structured group discussion.
Due to the potentially sensitive nature of intimate apparel, this part of the study explored
bra buyer behaviour from the third person perspective. This involved the use of
projective techniques with the unbranded garments used as prompts (Haire, 1950).
These combined methods of data collection offered the opportunity for synergistic
outcomes (DeLorme and Reid, 1999) and for triangulation of the data (Denzin, 1978). In
total, each four-stage focus group lasted on average ninety minutes. A neutral
environment was chosen in which to host the focus groups; avoiding the stimulation and
distraction within one specific retail setting broadened the discussion to cover the retail
environment in general for the category. This also further supported the exploratory
nature of the study.
50 | P a g e
Sample
A stratified sample was designed to include six focus groups across a range of ages and
bra sizes. Using a recruiting questionnaire, Market Research Society-trained
interviewers screened and recruited forty-eight respondents to participate in the study.
In order to reduce the potential for sample bias (Sudman and Blair, 1999), the focus
groups were recruited and conducted in three separate locations within the Midlands
and the South East of England. An independent Market Research Society moderator,
selected for compatibility with the respondents, directed the focus groups.
Data management
Both the word association exercise and blind experiment were completed on paper. For
the former, individual comments provided against each brand name were then analysed
and scored either positively or negatively for six criteria of fit, comfort, attractiveness,
price, quality and a "no response" that indicated low brand awareness. For example,
comments such as "dull" but "good value" would score a negative point for
attractiveness and a positive point for price, whereas "glamorous" and "pricey" would
score the opposite. The number of positive/negative frequencies scored for each brand
were then calculated. In respect of the blind experiment, the mean scores for each
garment style were calculated against the evaluation criteria described above.
Each focus group was tape recorded during the open group discussion sections. The
tapes were then transcribed. All of the data was then analysed following the three key
activities of data reduction, data display and conclusion drawing (Miles and Huberman,
1994). Following the strategy advised by Miles and Huberman (1994) a combination of
within- and cross-case analysis was undertaken. The within-case analysis generated
insights into why certain behaviours, phenomena and situations existed for a particular
focus group. Cross-case comparisons were then conducted in order to provide insights
into how issues relating to consumer behaviour for the category varied from one focus
group to another.
The combination of data collection methods outlined above generated a considerable
amount of data. For conciseness, the results reported below represent a synthesis of
these data.
51 | P a g e
Findings
A key objective of this research was to explore how the fashion industry might use
"consumer insights" to inform supplier-retailer category management relationships, and
in so doing, to ascertain whether the industry might usefully deploy category
management. Discussion on how the industry might apply the collected insight to
specific steps of the category management process is covered in the next section. This
current section presents the insights, structured in line with the category research
framework outlined above.
The pre-purchase environment
In analysing the word association exercise it was apparent that the respondents held
strong attitudes towards the eight listed brands. The findings illustrated in Figure 3
visually depict the respondents' positive and negative perceptions of each brand. (For
each brand the score reflects the difference between the respective positive and
negative responses.) These indicate that from past experience, in terms of market
positioning, shoppers had formed distinct profiles of competing brands. From the mere
mention of a brand name, respondents were immediately able to describe the brand's
relative positioning. Not surprisingly, for the market leader, M&S, the balance of
responses was positive for all criteria. In addition, half of the respondents made an
unprompted association between M&S and "quality". No other brand achieved this same
consistent, positive ratings balance for all criteria: excellent scores on one criteria were
always counterbalanced by significant negative scores on another. For example,
Gossard achieved the highest score for attractiveness, but scored one of the lowest for
perceived fit. Similarly, the Playtex brand achieved the highest mention for fit, but was
negatively rated for attractiveness. Further, economy store brands BHS and Littlewoods,
while scoring positively for price, were negatively scored for fit, attractiveness and
quality. Warner's scored the highest number of "no response", which indicated a very
low brand awareness.
he general group discussion generated additional insights regarding the pre-purchase
environment. Surprisingly, given the high levels of brand awareness demonstrated
above, respondents admitted to low brand loyalty - both for own label and manufacturer
brands. Discontinuation of styles was a key complaint: "I liked the one I had. I buy one
52 | P a g e
and I like it, and then I find that they've stopped doing it. Or they change the range".
"The big mistake is that they don't keep the range for long enough. They turn it over too
quickly". "Every season, change; out goes the one that you're familiar with". The lack of
size consistency both inter- and intra- brand also inhibited brand loyalty: "You can buy
one bra, even two bras from the same manufacturer, and although it says it's the same
size on the packet, they don't fit the same". Overall, difficulties encountered finding a
well-fitting garment were seen as major obstacles to brand loyalty. Conversely, style
loyalty featured strongly; once respondents had found a style that they were happy with,
they would continue buying it until it was no longer available: "I've got about four or five
bras all the same style. I don't know what I'm going to do if they stop doing it to be
honest". "It's a problem when manufacturers change a design and they're no longer
available". Furthermore, with respect to choice of store the consumer admitted to a
tendency to store loyalty. The consumer will patronise those stores that they have found
offer depth of range, size availability and specialist fitting advice, and unlike other
apparel categories respondents
expressed
a
clear
preference
for
independent,
specialist retail stores.
The blind test experiment illustrated that the respondents had developed very clear
design preferences. Through trial and error they had developed a set of decision rules
for achieving fit and comfort. The first decision was often between non-wired versus
underwired bras, whereby non-wired provided greater comfort and underwired offered
greater support in more attractive designs. Fibre content was a strong consideration with
respondents generally preferring natural fibres. Individual design elements prompted
instant reaction. For example, the position of seams had been found to cause irritation.
Likewise, depth of underhand and the width and position of straps conveyed the degree
of support. Collectively, the combination of salient features, fabric design and shape
experienced in the past provided a quick formula for assessing the potential suitability of
a new purchase. Such was the extent of their accumulated knowledge and experience
of a garment's styling that most respondents could quickly evaluate the suitability of a
garment without the need for trying-on. This was an important consideration given the
perception of queues and customer service in chain stores: "I do find with X that it's hard
to try them on. I know they have changing rooms but there are long queues". With
respect to quality, respondents had clear expectations of fabric performance, and due to
the supporting nature of the garment could detect subtle changes in function and
53 | P a g e
durability: "I've bought a few from there (chain store) over the last year or so and they've
not been as comfortable for whatever reason. I've started going elsewhere". "I felt that
they've changed manufacturer. The quality of another favourite one went down and
that's when the elastic went and it shouldn't have."
The consumer purchase process
The majority of the respondents described how they are initially prompted into the bra
purchase process by a variety of "need states" (Johnson, 1999). These include the
garment's loss of functional support through deterioration of elasticity, the decline in the
garment's aesthetic appearance, a change in the wearer's own physiology driving the
need to buy a different bra size or the seasonal factor of holidays prompting product
replacement; "Holidays spur me on, so if I have one holiday a year then I'd buy annually
... if I'm packing things I look and I think 'that looks awful'. Or that doesn't go with certain
items I'd be wearing". For some, the prompt to purchase is linked to the hedonic value
(Laurent and Kapferer, 1985) of "pretty" bras; in the case of the respondents in this
study, the hedonism stemmed from the way in which "pretty" bras are associated with
"pleasing someone else", and further, how the wearing of them is seen as a treat or
reward: "It makes you feel special, really spoiling yourself".
In terms of the number of wear-occasions adopted by the bra consumer, the
respondents in the study presented a range of consumer typologies, from the
preference for only one bra type - "I've got four or five now that I wear on the go ... they
go universal if you like" - to three-style bra wardrobe: "three (bra wardrobes) in my case.
One sports, one ordinary, one special occasion ...". The most popular preference was
for two different types of bra, one type for functional everyday use and another purely for
evenings: "I just have a medium support, fairly plain bra for daytime and then I've got
fancier stuff for the evening". Despite the invisible nature of the garment, there was a
clear distinction between home and social use: "I have bras for work and bras for round
the house". Comfort was an important factor and some women relegated older garments
for daytime use: "... old ones that I wear in the day and nice ones for evening". "I wear
the old ones for gardening - it's a comfort one". However, discomfort was suffered for
social occasions: "When you go out at night you tend to wear something that's not as
comfortable - like we all squeeze ourselves into high heel shoes because they look
good."
54 | P a g e
Consistent with the behavioural implications of the high involvement profile for bras first
uncovered by Laurent and Kapferer (1985), the information search for bras was
described in this present study as both critical and extensive. In light of the consumer's
wide experience of the product, combined with the frequency with which bras are
replaced in her wardrobe, it is surprising that women find it necessary to undertake an
extensive search for each new bra purchase. This may be attributed to the reported
over-frequent discontinuation of styles and the lack of size-consistency offered by the
competing manufacturers. Together these increase the consumer's perceived risk and
so drive the need for her to restart the search process for each new bra purchase.
Significantly, only a third of the respondents considered the actual process of shopping
for a bra to be a positive, enjoyable experience. The majority found the experience "a
nightmare", "frustrating", "boring", "a necessary evil", "traumatic". The main reasons for
not enjoying the experience was the lack of attractive bras in larger sizes ("Bras for the
more fuller lady are very boring, old fashioned"), lack of choice in general, difficulty in
finding garments in stock, and the difficulties encountered in finding bras that offer fit,
comfort and the right body shape through clothes.
On average and depending on the quality of the bras and how long they lasted, the
respondents in this study claimed to buy a bra three to four times a year. Further, to
counter the risk of obsolescence consumers tend to buy in bulk when the product is
available. Availability of the preferred bra style is one of the key factors influencing
purchase. Given the importance of comfort and fit, substitution is rarely an option in bra
purchasing. Owing to the problems of limited availability of styles and sizes and product
obsolescence, the majority of the women categorised themselves as convenience
shoppers, buying a bra, not because they need one, but because one is available for
purchase: "If I see a nice one I think 'there's my size, I'll buy it', not because I really need
it. It saves me, when I do need one, having to go and hunt for one". In this way purchase
is prompted by the marketing stimulus of an in-stock situation, and underlines how
practitioners can stimulate purchase just by having an item available.
In terms of the number of bra purchases, the majority of the women bought at least two
bras at a time, though it is notable that some respondents claimed they bought three or
more at once. An alternative approach was to buy one bra, try it on at home, wear it and
wash it, then return to buy another exactly the same or in a variety of colours. This
55 | P a g e
propensity to repeat purchase and to possess multiple copies of the same garment is
arguably quite unique to the bra, and it further underlines the way in which the consumer
is motivated first and foremost by functionality and physiology, and then by the fear that
the manufacturer and/or retailer may discontinue their preferred style.
It is significant that the majority of women prefer to shop alone for bras. This contrasts
sharply with the preferred social interaction associated with other fashion categories,
where "the customers comparison to referent others appears to be of paramount
importance" (Dodd et al, 1998) and underlines the personal, intimate nature of
the category.
The in-store purchase environment
The issue of store loyalty founded on depth of range, size availability and specialist
advice has been highlighted above. Overall, the chain stores were seen as offering less
choice: "It's a shame because there used to be such a big range and there isn't. All you
see is 45 of the same one". By contrast, the specialist lingerie stores were perceived to
offer a greater variety of styles and depth of assortment to cater for a wider market: "I
take my two daughters to get their bras there (specialist store) as well because they
have special sizes and will order anything for you". With respect to the issue of specialist
advice an important theme to emerge from nearly half of the respondents was the need
to be correctly measured and fitted for a bra: "If I find a shop that I like and I tend to
keep going back there. I go to Xs now because they measure me properly". As many
respondents admitted to not knowing their correct size, they relied in part on trial and
error and were therefore unsuccessful in self-selecting appropriately sized garments.
One-fifth of respondents reported disillusionment caused by being incorrectly measured
in the past, with a noted difference between sizes recommended by different retailers.
Once again this increases the perceived risk associated with the probability of a mispurchase. The perceived variation in fitting and measuring services, combined with the
inherent size variation between manufacturers and even within the same brand, present
substantial obstacles to the bra buyer. Seeking to overcome such barriers to successful
purchase, over a third of respondents underlined the importance of the type of in-store
advice associated with the specialist lingerie retailer as opposed to a generalist chain
store. "I prefer a specialist shop - because there's usually someone there who
specialises ... knows what they're talking about".
56 | P a g e
Surprisingly, over half of the respondents considered price to be less important than fit,
comfort, value and quality: "If I see a nice one I don't even look at the price. If I think it's
going to fit, it's going to serve its purpose and I like it, I'll try it on and then look at the
price". "I think you get what you pay for - I used to buy cheap bras but they don't fit
properly". Some women believed the function and shape achieved by the bra to be most
critical: "If it made the best of what I'd got it would be worth any amount of money".
Furthermore, women could also be tempted to pay more for a special occasion or
special purpose bra: "If I've seen something I've liked I've pushed the boat out because
it was for a special occasion." "I do quite a lot of sport so you need a good fitting sports
bra, and you're always prepared to pay a lot for that".
On the subject of category merchandising the respondents were equally split in their
views towards different types of display. Half preferred to see bras displayed on
hangers, mainly so that they could be more easily viewed and handled; the other half on
the basis of being able to more easily select the required size - expressed a preference
for bras to be merchandised in boxes bearing a photograph of the garment, with just one
unboxed item of each style on display at the fixture: "If I go to X and get one, they're in
boxes with a photograph of somebody wearing it, I know what they look like and I
haven't
got
to
rake
through
-
I
just
grab
one
in
my
size
and
go".
Regarding category adjacency - respondents outlined their preference for intimate
apparel departments to be separated from both general apparel and more importantly,
from menswear: "I wouldn't want to be looking at my bras when the men are walking
through as a short cut to somewhere else."
Discussion and managerial implications
As outlined in the Methodology, the context for this present study was a situation where
in the absence of retailer-supplier collaborative working, the retailer was making product
range decisions that sub-optimised its sales. The supplier was also suffering
suppressed sales for this particular category compared with its other accounts. Perhaps
worst of all, the consumer was receiving much frustration in thwarted attempts to seek a
solution to her consumer needs. Category management provides a focused, in-depth
collaborative retailer-supplier approach to: defining the category and agreeing its role;
devising category strategy; and formulating tactics for implementing the strategy. As a
preliminary investigation, the objective was not to collect data specifically for the
57 | P a g e
purpose of working through the entire category management process .Rather, it was to
consider how - in theory - consumer research findings could inform a category
management process for a product category in the fashion sector. Accordingly, the
results presented above are now discussed in the context of the relevant stages of
the category management process.
Category definition
The bra market spans a range of garments, from styles that could be described as
utilitarian/functional to the more glamour/special occasion. The research indicated that
consumers seek a particular garment based on usage occasion and corresponding base
need; for example, comfort for everyday use or glamour for evening wear. These "~
results represent a marked contrast with the retailer's more simplistic and potentially
misleading, product-based view of bra categories, which are based - not on consumer
needs or motivations - but on bust size and/or bra construction (e.g. wired versus nonwired). There is a strong case for suggesting that the retailer's narrow definition of
bra categories is driving their under-performance; correspondingly, better knowledge of
the
consumer's
usage
behaviour
and
motivations
might
facilitate
better categorydefinition. For example, further consumer insights about the range of bra
wardrobes could inform the definition of a greater number of bra categories or, more
creatively, the intelligence could be combined with that from other categories to create
new categories. For instance, there may be scope for the creation of a completely
new category based on "special occasions" in which a range of traditional product
groupings (underwear, outerwear, accessories) could be marketed together. It is quite
feasible to propose that the category management process could lead to a similar redefinition of other fashion categories.
Category role and category strategy
Category management provides a framework for retail and supply partners to jointly
agree the role/business aims of the category and to plan and develop category strategy
(see Figure 1). The results of this study provide initial evidence of how shared consumer
insight can highlight opportunities for category growth and therefore, the opportunity for
jointly developing long-term category strategy for the categories identified. For instance,
in the case of the present research the identification above of a greater number of wear58 | P a g e
occasion related bra categories, would offer the opportunity to significantly grow the
market. The identification of the different categories could also help the retailer
understand the "role" of the particular category to their business. For example, the
agreed role of the glamour/special occasion bra category as a "variety enhancer" or
"occasional/seasonal" category (Dhar et al, 2001; Hoch, 2002) could be to generate
excitement in-store. Conversely, the "everyday/functional bra category could be
designated a "destination" or "staples" category(Dhar et al, 2001; Hoch, 2002), the
strategy of which would be to guarantee a level of in-store traffic for driving revenue in
other categories. These same principles would apply equally to other categories of
apparel. Further, this consumer research identified the importance of in-store bra
fitting/advice services. If customer service is central to a retailer's positioning, the
subsequent strategy for at least one of their bra categoriescould be for that category to
enhance the store image through this service provision.
Optimal assortment
Optimal assortment or range is concerned with maximising profitability through the
effective use of store space and stock. As such, it is concerned with offering a range or
mix of products and individual stock keeping units (SKUs) that balance inventory costs
and consumer needs. Based on the high number of SKUs required to cater for the
different shapes and sizes of women, bra categories pose a particular challenge to
managing assortment. Typically up to 60 different sizes are stocked in a range of
colours across a variety of styles.
The most relevant insight for assortment decisions provided by this research is the
identification of usage-related bra categories (see above). Broniarczyk et al. (1998)
found that so long as only "low-preference" items are eliminated from a retailer's
assortment and that category space is held constant, retailers might be able to
significantly reduce the number of items without negatively affecting assortment
perceptions and store choice. The findings of this present study indicate that by
reducing the variety and number of SKUs within the more functional bra category, the
consumer perceived the retailer to be less effective in meeting their needs, with the
obvious net result of a loss of consumer loyalty.
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Optimal new products
Hines (2001) identifies the timing of partner involvement in the product development
process as an important dimension in retailer-supplier partnerships. Category
management's optimal new products "improvement concept" (IGD, 1999) deals with the
development of new products to target specific consumer/shopper needs. It assumes
that to efficiently manage the roll-out of new products and the phasing of the old, the
retailer draws on the supplier's intimate and up-to-date knowledge of the consumer.
The UK's Department of Trade and Industry (DTI) analysis of the retail sector (DTI,
2003, p. 51) reports how market growth is being driven by the shortening of fashion
cycles; for example, the movement away from "four seasons" to more frequent product
range changes. Yet, as the present research demonstrates, in order to reflect consumer
needs, new product development strategy for bras has to recognise the functionglamour dichotomy. The fashion industry has developed QR processes that respond
quickly to retail sales data: replenishing the successful styles and delisting the unsuccessful. However, these may be too responsive for some apparel categories,
allowing insufficient time for consumers to evaluate the garment before they wish to
return to the store to repeat purchase. With respect to the bra category, the consumer
may not expect to repeat purchase "special occasion" bra ranges (for example,
garments for social evening wear in fashion colourways), but she does expect to be
allowed enough time to evaluate new, "functional" bra ranges (for example, bras for
everyday use). Across all fashion categories, for this type of product manufacturers and
retailers cannot afford to subject the consumer to risk each time they approach the
decision process. For the more functional bra category too much innovation may be
counterproductive to customer retention. Successful new product strategy and the
associated decision on the timing of range additions/deletions must therefore be based
on a sound knowledge of consumer perceived risk for the different subcategories that
constitute a retailcategory.
Consumers in the present study described how the lack of consistency across
manufacturer sizes presents a distinct obstacle to purchase. In terms of product
development, this highlights a clear opportunity for retailers and manufacturers to work
together to achieve industry-wide standardisation in sizes, perhaps via new technology
60 | P a g e
in body scanning (DTI, 2003). Conceivably, this partnership approach on garment sizing
would apply to other apparel categories.
Optimal promotion
Traditionally, the level of above-the-line promotional activity for the total intimate apparel
sector has been low (Mintel Marketing Intelligence, 1997). This study showed that
through the shopping and wear experience the consumer had developed an acute
sense of the competing brands' market positioning. This included both strong positive
and negative brand perceptions. This presents a clear opportunity for the industry to
invest in communications to support the manufacturer's desired positioning.
Within the literature the "optimal promotion" concept deals exclusively with sales
promotions designed to stimulate sales and to create in-store excitement (e.g. IGD,
1999; Dhar et al, 2001). The consumer's perceived risk of obsolescence, combined with
her experience of product non-availability, drive the consumer to bulk-purchase. The
study findings indicate, then, that retailers do not have a problem with encouraging
customers to buy, so long as they have the items available for purchase. Accordingly,
the scope of the "optimal promotion" concept has been widened to consider the
research's implications for "in-store promotion" and "communications" overall Oohnson,
1999, p. 263).
As outlined above, many consumers perceive the bra purchase as high-risk. Consumers
therefore value in-store measurement and fitting services. However, these services had
proved unreliable in some cases with a fifth of respondents reporting having been
incorrectly measured in the past. These findings underline the importance of in-store
personal selling and highlight the potential for retail and supply partners to work together
to improve the specialist fitting skills of their sales personnel.
With regard to repeat purchases, and in cases where disposable income is limited,
consumers outlined their strategy to return to repeat purchase rather than buying
multiple copies upfront. This is due to their strong belief that a bra cannot be judged for
comfort and fit until it has been worn and washed, and represents an additional factor
for the consumer to see the category as high-risk. With regard to communication
strategy, this is a cue for the retailer, with support from their supplier partner, to re-
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design their selling and warranty policies to include the promise of reimbursement in
cases of poor post-wash fitting.
Optimal replenishment
It is noted earlier that the "efficient replenishment" strategy from ECR bears a strong
resemblance to the quick response concept, and that the three demand/consumeroriented aspects of ECR (the category management "tactics" discussed previously) offer
a complement to quick response. Theoretically, then, category management does not
include consideration of replenishment issues. However, the IGD's (1999) inclusion of
the "optimal replenishment" factor in their description of category management could
signify that these demand-based and replenishment-based concepts are indeed
complements of each other. For this reason, the logistics-based findings from the
research are included here.
Product non-availability through obsolescence or stock-outs was seen as a significant
obstacle to purchase. Fearing non-availability, the bra consumer bulk buys items when
they are available. This signals the need for the retailer-supplier partnership to improve
their logistics processes to include improved forecasting competence and more
appropriate
inventory
policies.
However,
the
key
criterion
from
a category
managementperspective is that the corresponding QR replenishment strategies reflect
the identified category differences, with the more functional/basic SKUs attracting much
higher expectations of stock availability. Supporting Fisher's (1997) view that innovative
and functional products demand a different type of logistics "response", consumers
value availability on more functional styles and expect them to be repeatable. They do
not expect these products to be treated as high-fashion items that are introduced and
then quickly deleted from the retailer's assortment. Arguably this finding would apply to
any apparel category that incorporates basic and fashion merchandise.
Conclusions and research next steps
The empirical literature on category management (Basuroy et al, 2001; Dhar et al, 2001;
Gruen and Shah, 2000) focuses exclusively on food categories within the grocery
industry and indicates that in this sectorcategory management still faces significant
development. Further, although this literature reports on the gathering of consumer
62 | P a g e
insight for particular categories, it does not seek to apply these to the category
management process (e.g. Basuroy et al, 2001). The value of this study has therefore
been to demonstrate: how category management might offer significant benefits to
fashion marketing; and how consumer insights for the fashion industry can be applied to
the category
management process.
As
the
name
suggests,
thecategory
management process focuses on a particular "category", in this case the bra category.
However, as outlined in the previous discussion of results, there is good reason to
suggest that the model is generalisable to other fashion sectors.
The present paper argues that for the fashion industry category management would be
complementary to quick response (QR) strategies. As such, the real value of any insight
gathered for category management is in combining it with the retailer's sales data used
in QR. Additional value comes from demonstrating how the combination of retailersupplier information aids joint category planning efforts and, overall, supports the
partnership approach which to date is largely missing from the fashion industry's
attempts at QR. For example, in this particular study, without the consumer insight the
retailer assumed that falling sales were due to a declining category. Conversely, with the
insight to hand, both parties in the trading relationship learn that declining sales are the
result of not meeting the customer's category needs. They both gain invaluable
intelligence to use in their efforts to jointly agree the strategy and tactics for the
subsequently identifiedcategories.
The survey findings in the IGD (2002) report indicate that 96 per cent of the study's
respondents were confident that category management would be a "core business
strategy" for the next decade. The authors of this report indicate that category
management could be usefully transferred to other non-food sectors: "Category
management evolution is not complete. Nonfood retailers and providers throughout the
supply chain desire the success gained in the grocery business" (IGD, 2002, p. 220).
The inference from this report is that category management has still to be adopted in
non-foods, and as outlined earlier, although fashion is now a key part of some grocery
retailers' assortment, they have yet to adopt category management for their fashion
ranges. The category management implementation issues that food suppliers have
experienced at store level and the cumbersome category management process
manuals (see Table I, e.g. Gregory, 2001; IGD, 2002) could explain why the grocery
63 | P a g e
sector has not moved on to implement category management in their non-food sectors.
In addition, the interviews with key informants highlighted how the fashion and grocery
sides of the retailer's business operate autonomously, with limited sharing of best
practice.
Several opportunities for future research spring from the results of this study. In their
investigation into the antecedents and consequences of category planning and
implementation, Gruen and Shah (2000) found that "category plan objectivity" positively
affects "category performance". This present research has shown how consumer insight
can be used to create the category plan itself, and arguably the better the contents of
the plan (which could be termed plan "quality"), the better the category performance.
This offers the opportunity for future research to test the Gruen and Shah (2000)
framework, expanded to include this category plan "quality" construct.
As an exploratory study on one product category, the objective of this research was to
provide preliminary insights. The research design therefore limits the researchers to
drawing
anything
other
than
tentative
conclusions
about
how category
management could benefit the fashion industry overall. In addition, in terms of obstacles
to category management's transferability to fashion, it is conceivable that a demandand consumer insight-led category management process that works for grocery
products with more stable demand patterns is inappropriate for more supply-led, high
fashion ranges. Therefore, in order to enable more definitive conclusions, a key
research next step should be to investigate its applicability in all fashion sectors and its
relative applicability in categories that span all degrees of exposure to the "fashion
cycle" (Ko and Kincade, 2000). Following Ko and Kincade (2000) these could be
represented by four categories as follows: highly fashionable; fashionable; fashionable
and basic; and basic. Further, category management relies on detailed information on
the consumer's in-store behaviour. Therefore, as a study of consumer behaviour overall,
the corresponding lack of specific in-store insights collected in this research represents
a limiting factor. Any future research on category management in the fashion industry
should therefore employ the wide range of in-store market research techniques
described by Johnson (1999) and Qureshi and Baker (1998).
This exploratory research presents early evidence that category management could
offer distinct opportunities for retailers and suppliers in the fashion industry to work
64 | P a g e
together to generate sustainable competitive advantage. However, the concept has not
been without its critics (e.g. di-Nome, 1999; Gregory, 2001; Mitchell, 2001). Most of the
criticism surrounds the cumbersome nature of the manuals and templates supporting
the eight-stage process (Figure 1), the over-complexity of the data produced, and its
consequent inability to highlight the key, consumer insights that are so central to the
process. Acknowledging these barriers to implementation, the grocery sector has
streamlined
the category
management process
(ECR
Europe,
2000).
In
implementing category management, the fashion industry can therefore learn from the
experience of other sectors. For example, the industry would be advised to be more
flexible and pragmatic in applying what would seem like an inflexible process (IGD,
2002). Indeed as the IGD report points out, "nonfood retailers ... will take learnings from
existing practitioners in order to create bespoke processes to suit their markets" (IGD,
2002, p. 220). This suggests an additional and final avenue for future research. Studies
designed to apply the process to different sectors of apparel would identify: the
relevance of the process to the fashion industry; the industry's scope for flexibility in
applying the process; and how the process can best be applied within the
sector.(Journal of Fashion Marketing and Management, Volume 15, Pages 257-270)
7.17 Temporary Stores
The phenomenon of "temporary stores" has developed into one of the most significant
innovations in marketing since it first came to the attention of commentators in 2003.
Characteristic of the fashion marketing sector, it defines the establishment and
operation by established manufacturers of short-term retail premises. In Italy, the
country in which the case studies reported here were conducted, the English description
"temporary store" has been adopted to describe the phenomenon; an association for
practitioners of this very new tool of retail marketing, "Assotemporary", was established
there in 2008. Such stores are today more usually called "pop-up" stores or shops in
English-speaking countries, especially in the trade press. With new examples of such
transient "temporary" or "pop-up" stores appearing almost daily, this radically new
initiative deserves our attention.
The trend towards the addition of temporary stores to the strategic toolkit is a product of
recent changes in thefashion sector. In particular, time-based competition has reduced
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the lead time from planning through production to distribution (Sabbadin and Lugli,
2007) and accelerated the pace at which structural competitive advantages are renewed
within rapidly integrating organizations (Richardson, 1996). From the industry's point of
view, a limited timeframe implies the increased need for flexibility in production,
permitting continuous introduction of new lines and collections to the market, to satisfy
the continuously evolving interests and expectations of consumers. Many launches have
very short lives, and are soon removed from the marketplace. When a new product
enters the market with time-limited availability, however, it communicates something
about its uniqueness. Italy occupies a dominant position in the European Union textile
and
clothing
sector
(Taplin,
2006)
and
plays
a
leading
role
in
the
international fashion sector (Marchetti and Gramigna, 2007). Its total fashion-goods
business was worth [euro]67.6 billion in 2006, and its textiles industry enjoys an overall
turnover of more than [euro]9 billion (Eusebio et al. , 2007).
In his seminar The Competitive Advantage of Nations ,Porter (1990) attributes the
success of the Italian clothing industry to product innovation and differentiation, superior
quality and high levels of service. Structurally, it is characterised by a large number of
small firms, concentrated and localised in industrial districts, specialising in textile or
apparel manufacturing, or both. By setting up such networks, Italian fashioncompanies
have retained the advantages of small size, flexibility, creativity, adaptability and speed
of reaction to market changes (Djelic and Ainamo, 1999).
Industry statistics demonstrate a slow general shift during the last decade away from
production towards sales and service. Tartaglione (2005) is in no doubt that this has
been one of the most important aspects of the fashion sector's evolution. According to
figures from Sistema ModaItalia , the trade association that conducts research for the
textile and fashion businesses, annual turnover increased from the mid-1990s until
2002, slumped in 2003 and then continued to grow until the international crisis of 2008.
The management consultancy Pambianco reports that, despite that crisis, the
Italian fashion sector has maintained a slow but steady increase.
The overall trend in the Italian textile and apparel sector appears to have been different
from that in the rest of the European Union. In particular, distinctions can be seen in the
organization of the industry and in the distribution chain. The main channels of
distribution are through independent and traditional retailers, whereas large and
66 | P a g e
specialized distribution chains are characteristic of other European countries, where
independent retailers lost ground during the 1990s to specialized chains, department
stores and the like (Guercini, 2004). The atypical nature of Italian industrial development
and the success of its fashion branding, make it difficult to transfer the Italian model to
other countries. Firms in Italy have rationalized production by increasing overseas
outsourcing, mostly to Central and Eastern Europe, and by improving their distribution
channels (Taplin and Winterton, 2004).
The
traditionally
important
role
of
independent
retailers
in
the
distribution
of fashion clothing in Italy had been expressed by both their bargaining power and,
above all, their market power: they can shape consumer preferences. In fact, the retail
buyer no longer simply buys goods, but rather manages the integration of design, textile
sourcing and branding, operations that were previously in the domain of the
manufacturer (Guercini, 2004). Because the retailer is often the only point of contact
with the end consumer, many fashioncompanies, both mass market and luxury, strive to
establish direct contact with customers. They do so mainly through downstream
integration (Castelli and Brun, 2010), guided by research into the harmonising of
communication with consumers and distributors ([8] Castaldo, 2001).
Zaghi (2003) argued that the independent and fragmented nature of distribution in the
Italian fashionbusiness is due essentially to the typical structure of the firms involved in
the system, and their entrepreneurial culture, together with the brand owners' strategies
of product differentiation and vertical integration. In the recent past, the opening of
managed stores has been a noticeably widespread strategic initiative, especially for
companies that already have a network on which to build (Guercini, 2004).
Consequently, interaction between retailers and manufacturers has become an
increasingly relevant field of study (Castelli and Brun, 2010), in which context a number
of innovative formulae have been developed.
The progressive erosion of the reliability and effectiveness of traditional mass
communication vehicles has revitalized the role of retail premises in the communication
of a brand. AsAilwadi and Keller (2004) observe, to the extent that "you are what you
sell," manufacturers' branding helps to create an image and establish the positioning of
the store.
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During the 1990s, the view began to be prevalent that multi-brand stores were no longer
able to sustain a strong brand image, especially in the luxury sector. At the same time,
new stores have succeeded in projecting the brand's value systems, and exposing
customers to a multi-sensory experience (Ciappei and Surchi, 2008) in direct contact
with the brand. The proliferation of products brought about by advances in technology
and production processes has reduced their communicative efficacy, consumers
experiencing ever greater difficulty in the comparative evaluation of branded goods. As
Carpenter et al. (2005) assert, the retail store has become the "new vector" for
conveying the abstract attributes of brands, which it does through the medium of its
location, the ancillary services it provides, its staff, store design, and visual
merchandising.
Since branding is seen as central to the process of building relationships between a
company and its myriad stakeholders (Keller, 2003) and therefore as the main link with
the market (Guercini, 2001), the aim must be to transmit brand values in the most
effective way possible. The existence of stores multiplies the opportunities for
establishing contact with consumers, which is a particularly important strategic
consideration for brands that aim to build awareness rapidly, and attain an immediate
premium position especially in countries where they were not previously represented.
Kozinets et al. (2002) have suggested that a shop or store can achieve the twin aims of
awareness
and
positioning
by
creating
evocative
displays,
showing
off
the fashion collections in a way that takes visitors by surprise, encouraging them to
enjoy interacting with the brand, browsing the premises and finding out what else is on
offer.
The propositions discussed in this section help us to understand the context in which
new marketing tools are developed in the fashion sector. Our study focuses on one in
particular, the temporary store, which is becoming widespread but is, for the moment, at
the experimental stage of its development in Italy.
The remainder of this paper is structured as follows. The next section describes the
phenomenon in more detail, and distinguishes a number of variations on the general
theme of deliberately temporary stores. A thorough search of the literature yielded only
one very recent academic study (Kim et al. , 2010), which takes a different perspective
on the phenomenon from the one in this paper. The current study, therefore draws
68 | P a g e
instead upon the sources of information and discussion that are available: the national
and international specialised press, online and offline, newspapers and periodicals, and
web sites and forums. Section 3 presents the methodology underpinning a qualitative
research study: two case studies of fashion brands employing the temporary store
retailing strategy in Italy. The aim is to understand how this tool is put into practice and
the central role it plays in communicating the brand values and delivering the brand
experience. The final section draws conclusions and identifies managerial implications.
It also discusses the limitations of the case studies and recommends fruitful directions
for future research into the application of this new addition to the marketing toolkit.
Bauman (2007) asserts that we live today in a "liquid" society, in which identity and
appearance have lost their meaning and social structures are becoming fluid. Inevitably,
as the pace of life increases, they dissolve and reform from one day to the next; new
phenomena constantly break habitual patterns. We would argue that this tendency
towards fluidity holds true even for the methods of distribution and communication. The
temporary store is one such phenomenon.
Traditionally, familiar and dependable stores had allowed customers to do their
shopping at a relaxed pace. Customer satisfaction rested on the knowledge that they
could be counted on. In the contemporary hectic society, cutting-edge commercial
practices are making what was familiar become surprising, which is the milieu that gave
birth to the temporary store.
It is an expression of a new social and economic dynamic represented in modern
marketing trends inclined to rapidity and to the principle that "nothing is created, nothing
is destroyed, everything is transformed", as the eighteenth-century chemist Lavoisier
observed in a different context.
First noticed in Britain in 2003 and soon replicated in New York, temporary stores are
now rapidly spreading through Italy (Burattino, 2008). They have limited life spans that
are subject to pre-determined timeframes. Finn (2004) noted that they were furthermore
often "improvised".
To make their temporariness explicit, such stores often feature displays counting down
the days and hours that are left until they close. The duration of opening can be
69 | P a g e
between a week and 40 days, but is generally a month at most. Temporary stores are
distinguished by their exclusivity and style and by word-of-mouth promotion, which in
itself helps to attract the curiosity of passers-by. They are invariably strategically located
in high-traffic urban shopping areas, because the location is part of the packaging and
the store itself becomes the product.
In its short life, a temporary store is intended to take consumers by surprise, arouse an
emotional response, stimulate reactions, and enrich the complex of brand values that it
enshrines. As Addis (2007) puts it:
The generation of feeling passes through the multisensory involvement of the individual:
music, textures, aromas, colors, tastes, visual merchandizing and various symbols of
various types that are widespread tools for immersing the purchaser in the experience of
purchasing.
It is generally accepted that the curiosity which pushes consumers towards addictive
shopping leaves residual positive feelings about the brand, even if an individual has
simply walked into look around and has bought nothing. The emotional context
facilitates the purchase of products, even if not necessarily immediately (Edelson,
2009). As [12] Di Sabato (2009) puts it, the temporary store represents a sort of a
synthesis of communication and selling, perfectly reflecting the logic of "entertainment,
knowledge, experience". Its potential is realised in the emotional involvement of
consumers who have crossed its threshold, and taken part in a unique and unpublicized
event.
Temporary stores can also be used exclusively as showrooms. Until 2000, at least,
certain of the fashionshowroom owners in Milan travelled to Paris in search of buyers,
opening temporary showrooms which would serve as rendezvous during periods of the
highest commercial activity. Those were often in art gallery spaces, rented for ten days
or two weeks, in districts with a cultural profile to match their temporary purpose, such
as the Marais. They can be thought of as an early example of the "process of
democratizing the fashion industry" ( Di Sabato, 2009) that is now permeating the
sector, in the form of temporary stores: a virtuous circle that makes fashion more
accessible not only to consumers but also to all other actors in the system, and does so
without consuming significant resources. It is no longer necessary to be a big enough
70 | P a g e
enterprise to be able to make the investment needed to set up a conventional business
(Di Sabato, 2009).
The strong association of this marketing tool with the fashion sector in Italy is reflected
in the establishment by such prestigious associations as Assomoda (a trade association
of fashion agents, representatives and showrooms), in 2008, of a new association
dedicated solely to temporary stores and the associated phenomena of which they are
the
most
widespread
manifestation:
"Assotemporary".
Many of
its members
represent fashion clothing brands, especially in Milan, on account of its prestige and
location, but increasingly in other Italian cities. Bello (2009) notes that the association
reported the closing of 500 conventional stores in Milan alone in 2008, and that some 50
temporary stores had opened during the same period. It asserted that there will
increasingly be a place for these new businesses, which have been waiting to occupy
the space in the market created by the closure of traditional stores. Thus, an apparently
short-term approach is not a retreat but an innovative marketing tool.
The cost of operating a temporary store depends on the space available and the time of
year. There are of course, premium periods for which the price is higher than normal.
Rents tend to be charged on the basis of a one-week minimum and four-week maximum
contract, with discounts of 10 or 15 percent for signing the contract 120 days in advance
or committing to a two- or three-week period. The rule is that rental periods of more than
four weeks are not available. The price for a prestige location - in a large, highly visible
site with an adequate footprint and variety of internal spaces, in an area of high
commercial, tourist or residential value - can be all inclusive, for added servicing. Such
locations will ideally be near to appropriate commercial centres of gravity, such as
the fashion district in Milan.
The setup of a fully serviced temporary store will encompass: commercial organization
and store management; a customized layout of window displays; ambient music and a
bar; and facilities management at the beginning and end of the period.
The general concept of a temporary store can be realized in several forms, specific to
the particular needs of the brand, the marketplace and the management. Four in
particular have been labelled "guerrilla" stores, "nomad" stores, "temporary online
stores", and "temporary outdoor sites".
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Though typical temporary stores are in central, fashionable shopping districts, the
search for a strategically effective location can result in the selection of less obvious
places, perhaps linked to the cultural life of a city. That choice can, in itself, increase
curiosity and enhance word-of-mouth communication. Such guerrilla stores are typically
found in the suburbs of the great world capitals, in places that have no connection with
thefashion world. Their openings are unaccompanied by costly advertising campaigns,
but they bring their own history with them. Curious passers-by experience them as they
are and where they are, with their own aesthetic and architectural character. They
display the latest collections and exclusive lines, along with those from previous years,
old and new receiving the same treatment. The Italian periodicalSubvertising (2009)
comments that this amounts not simply to a retail strategy but also a new way of
communicating with an audience (Subvertising, 2009). The fashion brand Comme des
Garçons launched its first "guerrilla store" in Berlin in 2004, in collaboration with a
notable German art director.
The nomad store is unique in that it not a bricks-and-mortar shop but a van that
transports a single brand display from location to location, to reach the target market. It
thereby allows the brand owner to broaden its customer reach, or to make contact with
similar customers living in different districts of a city, or in different towns and cities
across a region or country. The Puma brand, for example, has 24 sea-freight containers
touring the world, inside each of which is a three-story structure comprising a shop, a
café, and two terraces and the staff offices. The strategic aim is to deliver a maximum
experience of the brand to visitors.
Reacting to the evolution of physical distribution, the temporary online store combines
the strategic advantages of the temporary store with the communicative and interactive
benefits of the internet. It can reach the whole of a potential market at a single internet
site, and is very easy to implement. The Italian specialist in designer luggage
and fashion accessories, Mandarina Duck, launched a temporary store online in the runup to Christmas in 2008.
The web site was centred on a virtual display window showing the "Y" luggage
collection, created in collaboration with a Japanese designer. For three months, it
provided potential customers with images, colour choices, prices and ordering code
numbers, and an automatic 50 per cent discount.
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The temporary outdoor site shares the main characteristics of a temporary store - single
brand, time-limited opening, location chosen to reach a target market with common
interests - but exists at an outdoor site, not in indoor premises. For instance, in the leadup to the "human race" mass-participation 10 km event in Vancouver in 2008, Nike
opened what they described as the "Nike Runner's Lounge". The aim was to offer an
"encounter" to running enthusiasts, providing them with free massages, drinks, snacks
and, of course, the chance to try out new running shoes from the Nike collection.
The temporary store phenomenon can be seen as one aspect of a broader trend
towards unconventional forms of brand promotion.
Over time, the perceptibility of mainstream media communication has been eroded,
marketers have had difficult establishing contact with target audiences, and the
"addictive" nature of consumers' media usage has tended to nullify the messages. The
consumers of today are more aware and better informed, yet have less time at their
disposal. Meanwhile, the development of social media and virtual communities has
opened up many newmodes of shopping behaviour. This scenario demands the
devising of new communication strategies, compatible with the large-scale social
changes that are underway, and capable of achieving their aims with more reasonable
levels of investment.
Unconventional promotion thus aims to communicate brand characteristics in a way that
moves beyond traditional marketing communications methods to which consumers have
become accustomed and indifferent: the classic TV commercial, radio ads, billboards,
glossy magazines and so on. It seeks to entertain while informing, the better to capture
the attention of consumers. A fundamental tool of unconventional marketing
communication is the generation and exploitation of word-of-mouth promotion.
Consumers are no longer simply the user of goods and services, but have come to play
an integral role in the production and distribution processes. They have also become
actors in the branding process, passing on advertising that they find particularly
interesting or amusing (Snyder, 2004; Ferguson, 2008).
The temporary store exemplifies the distinctive character of unconventional promotion in
one way in particular: it employs practically no overt methods of communication. Its
emphasis on word-of-mouth is as innovative as the very store itself is. The short lifespan
73 | P a g e
of temporary stores makes them by definition non-repeating events, characterized by
multisensory involvement. They are thus intimately related to the other types of
unconventional marketing labelled "viral", "buzz", "guerrilla", "experiential", "tribal",
"environmental", and so on (Koch, 2005).
The research objective is to fill a large gap in the marketing literature by examining the
special characteristics of the temporary store, and the managerial implications of its
arrival on the scene as a strategic addition to the marketing toolbox.
As a first step towards this objective, we carried out a thorough review of the
discussions of the phenomenon available in the national and international specialized
press, online and offline, newspapers and periodicals, and web sites and forums,
including case examples of the use of temporary stores by a number of national and
international fashion brands.
Beyond such basic description, our study aims to show why the brand owners chose to
use this new marketing tool, and thereby provide marketing managers who propose to
add it to their own toolkits with a clear understanding of the roles it fulfils, and of its
positive and negative features.
The second step in the research programme was a qualitative, exploratory study in the
form of case studies of two fashion brands that set up temporary stores in Italy. This
methodological choice rested on the general agreement that qualitative research seeks
to answer the "how" and "why" questions, and that the case study method is a useful
way of doing so (Easterby-Smith et al. , 2002; Saunders et al. , 2003; ,
Yin, 1994,
2004). AsEisenhardt (1991) put it, "inductive studies are especially useful for developing
theoretical insights when research focuses on areas that extant theory does not address
well". A case study is an example of that inductive approach, investigating a
contemporary phenomenon in its real-life context, especially when, as Yin points out,
boundaries between phenomenon and context are not clearly evident.
Selection of the case study subjects was made difficult by the shortage of information
about brands that had operated temporary stores in Italy. We found that the digital and
printed press commentary, and the web sites consulted, all restricted their reporting to
74 | P a g e
the most famous fashion brands doing so, or those that had made a particular event of
it.
Our aim was to study fashion firms which might be very similar in terms of their
customer base, production methods, prices and so on, but would differ in their brand's
longevity. We specifically sought both emerging and established fashion brands,
regardless of their nationality, so as to have a more comprehensive overview that could
reveal significant differences. In the event, only two companies could be selected for
study: the emerging Italian fashion brand Last Love and the long-established American
brand Levi's. The latter was the first to open a temporary store, in Milan in 2005, the
former opening the first in Florence in 2009. Both were promoting retro-styled
urban fashion, Levi's recalling the 1960s and Last Love the 1950s.
We employed three of the range of data collection procedures specified by Yin (2004)
as applicable to case-study research: interviews, documentation and observation.
Woodside and Wilson (2003) concur that case-study research should entail a multiple
approach to data gathering. In-depth interviewing is considered the most fundamental of
all qualitative methods by Easterby-Smith et al. (2002) and Yin (2004), specifically by
means of open-ended or focused interviews. We opted for the unstructured and flexible
open-ended approach, interviewers asking respondents for their opinions about events,
and probing for the key constructs implied by their answers. The resulting triangulated
data allowed us to validate the veracity of data by comparing each source with the
others.
The main sources of the data for analysis were interviews with the founder of Last Love,
who was also the Chief Designer, with her assistant, and with the Head of Marketing for
Levi Strauss Italia. Before conducting the interviews, we sought to gather as much
information as possible about the temporary store initiatives of the two brands, via the
trade press and relevant web sites, in order to develop an overall picture of the situation
that could feed into the organisation of the interviewing. The one-to-one interviews
lasted between 30 minutes, and an hour, and were tape recorded. Transcripts were
made within 24 hours.
The first part of the interview focused on the company, with particular emphasis on its
retail strategies and the ways in which the brand was currently being communicated.
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The second part, at the heart of the process, focused on the kind of information that
could shed light on our research questions. Respondents tended to respond widely to
the interviewer's open-ended prompts about the rationale for the use of the temporary
store, and about the pros and cons, adding useful information well beyond the limits of
the prompt.
The third step of our research exercise was to augment the findings of the previous
stage by examining such case-specific documentary evidence as company reports and
records, plus any available descriptions of the planning and operation of the temporary
store. This kind of input is known to be a particularly rich source of insights into firms.
Patton (2002) has argued that such sources can prove valuable not only because of
what can be learned directly from them, but also because they can act as a stimulus for
paths of enquiry to be pursued through the other data collection methods, such as direct
observation.
As a final step, observation of each temporary store's physical features was undertaken.
We were unable to make "field visits to the case study sites", as recommended by Yin
(2004), because our investigation was conducted after the temporary stores had closed.
Nevertheless, interviewees were able to show us the physical features of their
temporary stores, by means of visual records and materials of various kinds.
Having completed the investigation procedures, we carefully compared the two sets of
accumulated case material, searching for similarities and differences, before coming to
our conclusions about the findings and the answers to our research question.
The sales turnover of Levi Strauss Italia is among the highest among overseas
branches of the parent company, which has stores in 110 countries worldwide. The
company opened its first temporary fashion store in Italy in 2005 in Milan, on Corso
Vittorio Emanuele, a celebrated upmarket shopping street in the city at the centre of the
Italian textiles and fashion business. With a large window display, it occupied 250
square metres in a highly visible location in the very heart of the city, amid a continuous
flow of cosmopolitan and metropolitan traffic. The concept that animated this temporary
store anticipated the format that revolutionized the brand's high-street presence,
inspiring the layouts all Levi's stores in Europe. The very modern design pays homage
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to such icons of the brand's tradition as the "two horse" logo that has been stamped on
a leather label on every pair of jeans since 1886, and makes use of black-and-white
photo images and natural wood. The temporary store carried all of Levi's lines: "Red
Tab Guys and Girls", "Engineered" and "Levi's Blue".
The Last Love brand was created in 2004, at first as a small "total look" collection for
both men and women, the shirts having a notable success with young consumers. Over
the years, the range has expanded, for example including shorts designed for work, and
has concentrated on innovativeness and quality. The distinctive appeal of Last Love's
collection
is
the
strong
retro
influence
of
the
1950s,
above
all
in
its
accessories, styles and the subjects of the prints, executed with a strong sense of irony.
The fabrics, on the other hand, are contemporary and in harness with current trends.
The first temporary store, "27 days", opened for that period in June 2009, displaying its
entire latest collection, during the most important Italian fashionfair: "PittiUomo" (Pitti
Man), after the Medici palace of the same name in the heart of Florence. The company
had previously exhibited at the fair every year, in a section labelled Urban Panorama.
The findings of the case studies underline the reasons for fashion brands using the
temporary store as a marketing tool in Italy. The main functions of the store were the
same in both cases. There was also convergence with respect to the principal roles that
a temporary store fulfils, promotional and investigative, with a difference only in their
order of priority. The promotional aspect can consist of different elements that come
together in consolidating brand identity, brand image and brand awareness. By opening
a temporary store, a firm can highlight its brands' core attributes, and seek to
consolidate a positive message disseminated by word of mouth. Generally, there are no
ambitious sales objectives to be reached, simply the break-even point, since the real
objective is to communicate the brand. The promotional function of the temporary store
will thus be to promote new collections and new lines, to direct attention towards specific
products, to create "events", and to have a special retail presence in parallel
with fashion fairs and exhibitions.
The temporary store functions as a brand communication tool because it directs
consumers' attention toward the brand. Since it is widely believed that contemporary
consumers are less sensitive to brand advertising campaigns, brand owners do not try
as directly as before to exert a strong influence on consumer behaviour. The
77 | P a g e
progressive reduction in the communicative potential of conventional media increases
the strategic importance of communication at the point of sale. Traditional advertising
campaigns are insufficient to support the distinctive needs of high-fashion brands. It has
become more difficult to kick-start virtuous circles of communication, micro-segment the
market, and follow the more rapid pace of changes in demand, by means of previously
conventional communication methods. Those have consequently lost their reliability as a
tool for building the world which turns around the brand, whereas the new temporary
stores provide the ideal environment in which to exploit the value system that the brand
brings with it. The increasingly popular view of retailing as branding is one of the most
important trends in retailing Grewal et al , 2004). Temporary stores can thus be seen as
an unconventional vehicle for the communication of the brand. It allows a manufacturer
to manage in-store brand communication directly in the store, and accelerates a process
in which brand loyalty becomes more to the brand than to the point of sale.
The investigative function of temporary fashion stores concerns its usefulness for test
marketing in a specific location, before committing to the high capital costs of investment
in a permanent flagship store. This aspect is particularly important in the
Italian fashion context. The country occupies a distinct international position infashion,
not only for the high quality of its production and the creativity of its designs, but also as
a prestigious location for the opening of new stores: the majority of world fashion brands
have a retail presence in Italy. The main Italian fashion centres are in smaller cities than
their counterparts in the rest of Europe or the USA, meaning that the scope for opening
more than a single store in those city centres is limited by the availability of
premises.Fernie (1997) has asserted that the importance that "the image associated
with a particular location has on the brand" makes that not only a trading issue but a
positioning issue. In the case of fashionretailers, the strategic importance of location is
exemplified by their reliance on a presence in the "right" streets of the major cities.
Given the high demand for premises in these locations, their owners impose very high
rentals, which are contractually binding for at least six years. In this situation, the
temporary store becomes a retailing device that allows fashion brands more flexibility,
and offers significant opportunities for more careful pre-evaluation of the decision to
open an own-brand store. From the site owner's perspective, a temporary store fills the
downtime during a search for new tenants.
78 | P a g e
These investigative functions were found to have a different priority in the two cases
analysed. For an established fashion brand, such as Levi's, the temporary store's
principal purpose is to communicate the brand; the testing of a potential new market is a
relatively unimportant function. The reason is that consolidated brands can normally
draw on long past experience of new store openings. For an emergingfashion brand, the
investigative function has priority. Its purpose is to "test the water" in a new market by
assessing the amount of interest in the products on offer, evaluating consumers'
behavioural responses to them, in a specific national and city context, and provide the
basis for subsequent strategic marketing decisions. Yet, the promotional store will also
assume a promotional role to some extent. Last Love sells its fashionwear collection
alongside other lines in multi-brand clothing stores. By opening a temporary store of
their own, they were able to judge the level of interest in the whole collection among
their target market segment.
The case study analysis further shows that there were other motivations for the use of
temporary stores, which we can call "secondary". These were linked to the stimulation of
impulse shopping over the duration of the event, by means of sneak previews, discounts
and promotions, with the aim of selling-off excess warehouse stock and maintaining
sales levels at certain times of year. We consider these to be secondary objectives
because the pre-eminent objective of the temporary store is not to generate sales but to
manage the brand.
The inherent advantages of this marketing strategy are that only modest investment is
required to implement it, the weekly rental that can often be recovered in sales alone,
and that it is thus an effective way of simultaneously communicating the brand and
conducting market research. It will almost certainly cost less than that of a conventional
advertising campaign, and has the potential to lead to more positive shorter-term
results. However, it needs to be taken into account that the operation of a temporary
store demands a great deal of preparatory work for something that lasts at most four
weeks. In fact, to justify itself, it must harness the special characteristics of the brand,
aim at presenting all the important features and advantages, and in effect project the
brand's world. According to Hankinson (2001), the branding process enables
organisations to communicate simply and effectively through consistent communication
79 | P a g e
of a set of core values. This approach suggests that all elements of the retail offer will be
working in unison, sending out the same signals.
Communication may focus on establishing a personality for the brand, which is valued
by consumers and resistant to competitor replication (Bridson and Evans, 2004).
The customer's experience of a temporary store should be entertaining, engaging and
productive. The critical skill in using this marketing tool is knowing how to communicate
with actual and potential customers. Moreover, it must be a clearly communicated to
them that the store has a limited lifespan, or they might be led to the conclusion that the
store is an investment that brand cannot afford, and consequently form a negative
image of the brand. For this reason, count-down clocks in the store windows typically
show the days and hours to go before the definitive closure. Communication needs to
be very effectively managed, therefore, if the correct meaning is to be transmitted from
the beginning of the undertaking.
In conclusion, it is clear that the temporary store is an element of the marketing toolkit
between communication and selling. On the one hand, it is a mode of communication
that can project brand identity, and increase brand awareness and brand image; on the
other, it is a vehicle for testing sales potential in a new market. It seems particularly well
adapted to the fashion world, since it is able to respond easily and quickly to the rapid
pace of change in the sector with appropriate temporary offers. In fact, fashion is one of
the most visible expressions of change. It reflects change in aesthetic, economic,
political, cultural and social life (Cholachatpinyo et al., 2002).
The main limitations of our study are methodological.The data gathering and analytical
procedures and the number of case studies. With regard to external validity, our findings
cannot be confidently generalized, because the particularities of two cases are bound to
be context-specific. Similarly, case-study research inevitably suffers problems of
representativeness because it includes, by definition, only a small number of
observations of some more general phenomenon ([21] Gerring, 2007). Our study
examines and analyses only two companies, on account of the paucity of source data
relating to the temporary store phenomenon in practice, in general, and of information
relating to the particular questions we set out to answer. Nevertheless, our aim was to
better understand the phenomenon qualitatively, not to analyze its application
80 | P a g e
quantitatively. It is also, the case that in-depth interview bias can occur in any such
research, and is extremely difficult to rule out (Robson, 1993). Nevertheless, as
Woodside and Wilson (2003) counter-argued, the objective of case-study research is
not generalizing findings but to probe theory. These methodological limitations were
compounded, in this case, by the dearth of previous studies to fully inform our study.
Future research could improve the depth of analysis of the phenomenon of temporary
stores in the Italianfashion sector, the steady spread of which will make it easier to conduct
empirical research on the fashionbrands that choose to use them, among a larger number
of cases, and against the background of more and better information. It would be
interesting and useful to conduct a comparative study of other countries that have adopted
this marketing tool, such as the UK and the USA, to identify points of similarity and
difference, and draw more generalizable conclusions. At the moment, the lack of
international and national sources of information is an obstacle to the realization of that
attractive research plan. (Consumer-Centric Category Management: how to increase profits
by managing categories based on consumer needs. Volume 27, pages 68-70.)
7.18 Marketing
With the introduction of new communication tools such as direct-e- mail, Internet
promotions, online loyalty programs and the like, the Net is increasingly being
recognized
by
companies
as
an
important
element
of
an
effective brand-
building plan. Brand-building on the Internet has also seen a spurt in the recent years
with the emergence of specialised online brand-building firms. While the concept is
gaining widespread recognition in countries such as the US and Western Europe, where
the penetration of the Internet is very high, the concept is still at a nascent stage in
India.
Direct-e-mail: To build lasting, valuable relationships with customers, it is important to
target customer relationships using the personalised tool of direct-e-mail. E-mail is
recognised as one of the best one-to-one communication vehicles available today,
providing the fastest, most cost-effective way to deliver personalised, time- sensitive
information
while
maintaining
close
relationships
with
customers, prospective
customers, vendors, and partners. Essential to making e-mail work for brand-building
81 | P a g e
online is including a layer of customised e-mail delivery infrastructure that ensures
complete, personalised mass communication that is easy to manage.
Online contests/promotions: The recent times have seen a spurt in contest-based sites.
These sites only feature contests from various companies with attractive prizes for
winners. The lure of freebies generally attracts good traffic on these sites. The route
of online contests is taken by companies during product launches and to generate
excitement around their brands. Companies can also run successful and costeffective brand promotions
for
their
customers
on
the
Internet.
(Businessline,http://search.proquest.com/docview/221687993?accountid=38977)
Ad campaigns across print and online newspapers are more effective at driving web
traffic and building brandrecognition than TV advertising and search, according to
Newspaper Marketing Agency research.
The finding follows recent research from the IAB showing that online advertising had
overtaken newspapers for the first time.
The Newspaper Marketing Agency study looked at a brand ad campaign for car
company Toyota's Yaris model, and changes in web traffic to the brand's site as a result
of print and online newspaper ads.
It found that in 2006 Toyota saw a 23% increase in unique visitors to its home page
from brand advertising in national newspapers, and a further 21% increase in traffic as a
result of brand advertising on onlinenewspaShare of web traffic generated by ad media
(%)per sites like Times Online.
The increase in unique users from online newspapers represented 66% of the increased
traffic generated by a keyword search campaign for Yaris.
Newspaper Marketing Agency's planning director Anne Foster said that the data proves
that newspapers still play a massive role in brand building. "A lot of people talk about
search, but these case studies show that newspapers have an enormous reach and
play a key role in driving users to their product," she said.
Web analytics company Sophus 3 carried out the analysis of the data to gauge the
extent to which the ad campaign and its print and online media elements contributed to
82 | P a g e
the
growth
in
site
user
numbers.(New
Media
Age,
http://search.proquest.com/docview/225126458?accountid=38977)
Brand alliances are popular in the marketplace as far as they are used as:
- a strategy of signalling unobservable product quality and providing information about
attributes available in a product (Rao and Ruekert, 1994; Rao et al. , 1999;Simonin and
Ruth, 1998);
- reaching untapped market segments (Rodrigue and Biswas, 2004);
- introducing new products (Samu et al , 1999); and
- as an alternative brand extension strategy ( Park et al. , 1996).
However, despite the prevalence of such cooperative ventures between brands, along
with the strong academic interest in alliance relationships in marketing and business
(Bucklin and Sengupta, 1993), no attention has been paid to examine brand alliances as
a mechanism of building online brands. From both a managerial and academic
perspectives this is an issue that still deserves serious empirical scrutiny (Shankar et
al. , 2002).
Given that new and relatively unknown e-brands suffer substantial difficulties to
persuade consumers to engage in online transactions (Grabner-Kräuter and Kaluscha,
2003; McKnight et al. , 2002; Wang et al. , 2004), the rationale behind the use of brand
alliances as a mechanism to overcome these difficulties is clear. First, the premise of
brand alliances is that brands are valuable assets that may be combined with others to
form a synergistic alliance to convince consumers that a double signature on the offer
represents increased value (Rao and Ruekert, 1994). Second, the network nature of the
electronic medium makes easier for brands to be oriented toward collaborations for
market access, reputation endorsement or mutual benefit (Chatterjee, 2002; Davis et
al. , 2000; Leuthesser et al. , 2003).
Being so, we contribute to this growing body of research by investigating the
consequences of brand alliances' evaluations on an unknown online brand.
83 | P a g e
After positioning our research in light of the literature on brand alliances, we use
theories of Information Integration and Attitude Accessibility and Signalling and
Asymmetric Information research to provide a foundation for proposing and then testing
a model of brand alliances' evaluations and their effects on the primary brand (i.e. the
online unknown brand) participating in that associations. Subsequently, we describe the
methodology conducted to test the hypotheses and analyze the results. The comparison
of the theoretical model proposed with other alternative models provides additional
evidence to answer our research questions. Finally, we discuss the theoretical and
managerial implications of the results, including some directions for future research.
Brand alliances
Rao et al. (1999) define brand alliances to include all circumstances in which two or
more brand names are presented jointly to the consumer. These alliances or
collaborative efforts can take a variety of forms (e.g., true product combinations,
bundled products, joint sales promotions) and can be represented physically (e.g.,
bundled package of two brands) or symbolically (e.g., an advertisement). Furthermore,
they can pair two or more well-known brands or a new brand with one that is well
reputed and of higher status.
Brand alliances are formed for a variety of reasons with the rationale that they serve as
marketplace signals. That is, the primary brand and its brand ally together can signal
quality to the marketplace that the primary brand, standing alone, cannot. The extant
literature documents this idea when reports the basic findings that brand alliances:
- may improve the image of the focal or primary brand and signal greater product quality
(Park et al., 1996);
- may have more effect on less familiar brands triggering the transfer of consumer affect
from a high-quality to a low quality brand (Levin et al. , 1996; Simonin and Ruth, 1998);
- may positively influence quality perceptions of unobservable product attributes of a
partner brand (Rao et al. , 1999); and
- may enhance the attitudes toward the partner brands of the alliance (Lafferty et al.,
2004; (Simonin and Ruth, 1998).
84 | P a g e
Based on these insights it would appear, then, that brand alliances are of special
strategic interest both, for established brands entering new markets, and for new brands
to the market. Being so, this brings us to the question of whether brand alliances may
also contribute to overcome the difficulties of new online brands to persuade consumers
to engage in online transactions. This question is of special relevance because the vast
majority of internet-only brands operating today are still unknown to most internet
shoppers (Grewal et al., 2003), and the number of "start-ups" remains substantial
(Bensebaa, 2004). Furthermore, the importance of having an established and welldefined brand as a component of successful marketing strategies paints a rather black
picture for new online brands that are relatively unknown to consumers.
Under such circumstances, a problem that is often debated nowadays is that of how
overcoming and mitigating the users' perceptions of risk and uncertainty that arise
during the initial contact with unknown brands' web sites. Taking into account that the
nature of online transactions generally requires customers to provide personal
information, it is undoubtedly true that these perceptions are a substantial barrier to the
development of e-commerce.
Drawing on signaling and asymmetric information research and cognition-based theory,
previous studies have analyzed how different informational cues (e.g., web site
characteristics, site appearance, seals of approval or return policy and privacy
disclosures) may help to make inferences about the unknown brand. However, the use
of brand names as signalling cues has been scarcely approached as a value and image
enhancer in an online environment. This lack of research is quite surprising, especially
in view of the widespread opinion that branding is the key in online buying decisions and
building online trust (Cheskin Research, 1999;Leeet al. , 2005; Shankar et al. ,
2002;Yousafzai et al. , 2005).
Accordingly the current research focuses on whether new, relatively unknown brands
may be able to get a first transaction with consumers through the association with
reputed and well-known brands. In doing so, we draw mainly on brand alliances
literature to offer some insights to the questions of:
- how brand alliances' evaluations affect consumers' subsequent reactions toward an
unknown online brand;
85 | P a g e
- the mediating role of brand alliances' evaluations in the model proposed, and
- how attitude toward the webpage and trust in the unknown online brand help leverage
consumers' reactions toward the new online brand.
Antecedents to attitudes toward the brand alliance
Consistent with both theories, when individuals process the brand alliance stimulus
information the evaluation associated with the known brand (brand C) will be retrieved
automatically as far as its associations and attitudes are more salient and accessible in
memory. This same idea is also suggested by Adjustment Theory. According to it, when
information exists where the ally brand (brand C) is familiar and well-reputed and the
brand A is unknown, subjects anchor on information that is most easily accessible to
affect the attitude toward the alliance itself (Tversky and Kahneman, 1973). At this
regard, previous research has mainly focused on prior attitudes toward the ally brand as
having positive effects on the brand alliances ( Lafferty et al. , 2004; Rodrigue and
Biswas, 2004;Simonin and Ruth, 1998).
Nevertheless, we are of the opinion that in an online buying context brand reputation
plays a key role in the evaluations of a brand alliance that has not been explicitly
considered in the literature. Several reasons justify the introduction of brand reputation
in a model of brand alliances. From a company's point of view, brand reputation is
recognized as a valuable intangible asset by numerous authors because it is difficult to
create, imitate or substitute (Fombrun and Shanley, 1990; Hall, 1992,1993). This
resource-based view of brand reputation makes apparent that, when there is a lack of it,
a new or unknown online brand is interested in pursuing an alliance with other brands
that enjoy this intangible resource. Being reputation endorsement the objective of the
alliance, the new brand hopes to enjoy image reinforcement and build user awareness
as a result of the association with the reputed brand ally.
From a consumers' point of view, brand reputation elicits a greater perceptual
enhancement of the brands in their mind (Chaudhuri, 2002). Therefore, it makes the
brand more salient and accessible in memory to anchor on it when evaluating the brand
alliance. Furthermore, the increased uncertainty and perceived risk that characterize the
transactions over the internet, and in particular with unfamiliar web-vendors, increase
86 | P a g e
the function of a brand as a signal that provide clarity in the decision making and a
guarantee performance (Erdem and Swait, 1998;Erdem et al. , 1999). In this sense, the
reputation of a brand provides information as a market signal about the overall value,
esteem, and character of a brand as seen or judged by people in general (Chaudhuri,
2002), which is based on the consistency of the brand to perform in a similar fashion
over a prolonged time.
Consequently, and based on the above-reasoning, we propose that when consumers
are exposed to a brand alliance the reputation of the brand C influences the
favorableness of their attitudes toward the alliance:
H1. Brand C's reputation affects positively the attitude toward the brand alliance.
Consumers' perception of product fit, or the extent to which consumers perceive the two
products categories implied in the alliance to be compatible or related, is also expected
to play a significant role in consumers' reactions. Particularly, it is expected that attitudes
toward the brand alliance are enhanced when a relatively high degree of product fit
exists. In support of such a direct effect several distinct research streams can be
mentioned to explain processes underlying evaluative judgments including bundling,
joint sales promotions, and brand extensions. The rationale behind such a direct effect
is that similarity among stimulus (e.g., product classes) facilitates consumers'
generalizations of attitudes and evaluations, which is in line with the theoretical
postulates of Categorization Theory and Schema Congruence research. Empirically, the
positive effect that product fit exerts on the attitudes toward brand alliances is welldocumented in previous studies (see Lafferty et al , 2004; Simonin and Ruth, 1998;
University of Minnesota, Consumer Behavior Seminar, 1987). Therefore, in line with
previous studies we also posit that:
H2. Product fit affects positively the attitudes toward the brand alliance.
Effects of the brand alliance on the new online brand
Previous research has observed that consumers' evaluations of a brand can be
enhanced or diluted when new information and associations are provided. For example,
87 | P a g e
brand extension literature has demonstrated that poor brand extensions represent a
certain degree of risk by possibly diluting consumers' evaluations of the brand ( Loken
and Roedder, 1993; Sullivan, 1990). By the same token, brand enhancement rather
than brand dilution takes place when extensions are perceived positively.
In a brand alliance setting, similar potential exists for an alliance to influence the partner
brands because it potentially represents new evaluations and associations for both
brands (Lafferty et al. , 2004; Simonin and Ruth, 1998; Washburn et al. , 2004). The
rationale behind this effect is consistent with Information Integration Theory. It suggests
that as new information is received and evaluated, attitudes are modified. Because the
alliance represents a new type of association, previous research has demonstrated that
more favorably evaluated alliances will end to yield more favorable subsequent
evaluations of the partner brands than will less favorably evaluated alliances.
This synergistic effect of a brand alliance is also suggested by Classical Conditioning.
According to it, when stimuli that instil positive affect are paired with neutral (unfamiliar)
brands, the neutral brand comes to elicit positive affect as well. More specificallyHillyer
and Tikoo (1995) affirm that when high-equity brands are paired with low-equity brands
the power of the formers will result in favourable feelings toward the latter. In other
words, the low-equity brand will enjoy image reinforcement and/or quality perception
boost as a result of its association with the other brand.
Furthermore, according to the brand attitude and advertising literature (Brown and
Stayman, 1992;MacKenzie et al. , 1986) the positive attitude towards a brand transfer
into attitudes towards its advertisements and other communications (e.g., web site)
(Balabanis and Reynolds, 2001). Then, being the web site an important cue because it
may also contribute to consumers' initial trust (Wakefield et al. , 2004), we posit that
attitudes of consumers towards the brand alliance transfer into attitudes towards the
web site of the new online brand:
H3. Attitudes toward the brand alliance affect positively the attitudes to brand A's web
site.
As a result of the brand alliance, we also believe that initial trust beliefs can be formed.
Initial trust is characterized by a lack of experience with or firsthand knowledge of the
88 | P a g e
other party (i.e. the brand) (Wakefield et al, 2004). Being so, cognition-based trust
theory posits that initial trust heavily relies on cognitive cues (Koufaris and HamptonSosa, 2004; Wang et al., 2004). According to Signalling Theory, when consumers
determine whether to trust to the new online brand they will take into consideration the
brand alliance as a signal to make inferences about the unknown brand. Because the
well-known and reputed brand in the alliance puts its good brand name at stake when
pairing with an unknown brand, consumers may infer that the brand alliance represents
a credible signal. Otherwise there are severe costs in the loss of brand equity and future
sales if the reputed brand is linked or paired with untruthful brands. The theoretical basis
of context effects in brand evaluations also provides plausible explanations to this effect
(Levin and Levin, 2000; Meyers-Levy and Sternthal, 1993). Research on context effects
has revealed assimilation effects where contextual information becomes an integral part
of the target's description (Levin, 2002). In our theoretical setting, this means that
information about the pairing of the reputed brand with the new online one may affect
consumers' impressions of the latter. Therefore, a signal about the brand alliance
provides a particularly interestingly contextual factor influencing brand evaluation.
Consequently we propose that higher positive evaluations of the brand alliance will
promote more favorable perceptions of initial trust in the unknown brand:
H4. Attitudes toward the brand alliance affects positively the initial trust to the new online
brand A.
Accordingly to Cognition-based Trust Theory initial trust may also be relied on first
impressions and in e-commerce the first introduction between a consumer and an ebrand is often through its website. In this line of reasoning, McKnight et al. (2002)
conclude that first impressions of a web site are significant to make consumers trust,
and Wakefield et al. (2004) affirm that consumers tend to trust the online brand based
on how good the site looks to them. Then, we suggest that attitude towards the website,
as an evaluative impression, has a positive effect on initial online trust:
H5. Attitudes toward the new online brand's website affects positively the initial trust to
online brand A.
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7.19Diffusion Brand
Based on the existing literature, a diffusion brand is defined as a step-down line
extension of an existing luxury brand (Fernie et al. 1997). A step-down extension may
be evaluated by consumers as a cheaper alternative compared to a luxury product. This
may diminish the prestige and social status associated with the existing brand name
(Kim and Lavack 1996; Kim, Lavack and Smith 2001; Pitta and Katsanis 1995).
However, Aaker (1996) indicates that consumers' increasing value orientation has the
ability to influence a step-down extension to become a competitive necessity. Marketers
should extend their brands in a direction that is suitable for the current environment (i.e.
a step-down extension for the younger middle market) (Aaker 1997).
The product quality assesses whether a product delivers benefits that consumers desire
for need satisfaction (Keller 2008). A brand is meaningless unless it possesses
something that is marketable for consumption, thus it is essential for a product to
possess high quality (Knapp 1999; Rao and Ruekert 1994). A brand should have
functional and psychological attributes to portray its brand image (De Chernatony and
Dall' Olmo Riley 1998; Low and Lamb 2000). Brand image is the perception about a
brand that is reflected by the brand associations held in the consumers' memory (Aaker
1991). When fashion houses introduce a diffusion brand, the extension should have
similar quality and image compared to the parent brand in order to establish product
quality and brand image fit (Bhat and Reddy 2001; Martinez and De Chernatony 2004;
Park, Milberg and Lawson 1991). Perceived fit is a major determinant for the success of
a brand extension. The perception of fit allows consumers to establish a common
ground between the parent brand and its diffusion brand(s). This helps to establish a
desired positioning relative to the parent brand to achieve similar product quality and
brand imageevaluation (i.e. product category and brand image fit) (Bhat and Reddy
2001; Bridges, Keller and Sood 2000; Kim, Lavack and Smith 2001; Martinez and De
Chernatony 2004; Park, Milberg and Lawson 1991). The desired positioning of a
diffusion brand can be achieved via the use of Bhat, Kelley and O'Donnell's (1998)
brand naming strategies.
Brand (extensions) naming strategies are techniques to position a brand extension
either closer to or further away from the parent brand. They include sub-brands, nested
brands and new brands. Sub-branding combines the use of an individual brand name
90 | P a g e
adjacent to the parent brand name to form a new and composite name (eg. Armani
Exchange). Nested branding occurs when a new brand name is introduced by the
parent brand name (eg. Dockers by Levis). New brand occurs when a product is
introduced with a new brand name (e.g. Prada - MiuMiu) (Aaker 2000; Bhat, Kelley and
O'Donnell 1998; Speed 1998). Sub-brands and nested brands are likely to achieve
favorable evaluation because they made use of a new name in addition to the parent
brand
name.
This
helps
to
transfer
existing
awareness, quality perceptions,
brand image and associations from the parent brand to these extensions (Martinez and
De Chernatony 2004; Rio, Vazquez and Iglesias 2001; Srinivasan and Till 2002). When
a good fit is perceived between a parent brand and the new product, subbranding or
nested branding will be a suitable naming strategy. According to Bhat, Kelley and
O'Donnell (1998), consumers' acceptance of these brand naming strategies comes in
the order of their closeness with the parent brand. They range from a sub-brand, a
nested brand to a new brand. It is unlikely that a new brand will be evaluated favourably
on the basis of the parent brand. However, if consumers perceive a poor fit between the
parent brand and the new product, a new brand may be the best solution (Aaker 2000;
Bhat, Kelley and O'Donnell 1998; De Chernatony 1997; Kim 2003). However, it is
unknown how young consumers evaluate diffusion brands, specifically if it can be used
as a substitute or an alternative for status display. Further how the product attributes are
evaluated is also unknown.
A diffusion brand is likely to achieve product category fit with the parent brand if the
extension product is in the same product category as the parent brand. This enables
fashion
houses
to
utilize
existing
manufacturing
expertise
to
produce
the
extension product. If the extension product strays too far from the product category of
the parent brand, it may be judged skeptically by consumers. A stronger fit between
the product category of the parent brand and its diffusion brand may result in more
favourable consumer evaluation (Park, Milberg and Lawson 1991; Sheinin 1998).
Interestingly, Keller and Aaker (1992), and Bottomley and Holden (2001) confirmed that
perceived quality can exercise a direct effect on the evaluation of an extension,
regardless of fit. Further, Chang (2002) argues that product category fit is not as
important as compared to brand image fit to determine consumer evaluation of a
diffusion brand. Similarly, when companies pursue a brand extension, it is also
necessary to consider the country of origin (COO). The reason is that consumers tend to
91 | P a g e
use COO as an extrinsic cue to make judgments about the quality of a product (Agrawal
and Kamakura 1999). However, recent research suggests the traditional description of
COO has become less important for product evaluation. Therefore, it is necessary to
identify whether COO is an essential cue to establish the desired positioning for
the product of a diffusion brand.
Strategies for Brand Naming of Diffusion Brand
The study provides several strategic directions for brand managers especially those
contemplating brand naming initiatives for their diffusion brands. Depending on the
objectives of the organisation, the appropriate brand naming strategy can be adopted.
The results suggest that sub-brands and nested brands have similarproduct quality and
brand image evaluation compared to the parent brand. Based on the results, subbrands
and nested brands have demonstrated product quality fit and brand image fit with the
parent brand (Bhat and Reddy 2001; Kim 2003; Martinez and De Chernatony 2004;
Park, Milberg and Lawson 1991). These perceptions of fit allow young status seeking
fashion innovators to utilise sub-brands and nested brands as potential substitutes for
the parent brand for status display (Eastman, Goldsmith and Flynn 1999; Mason 1981;
Veblen
1899)
and
to
demonstrate
one's
willingness
to
try
new
fashion products (Goldsmith 1990). As such, it seems that it does not matter with either
brand naming strategies as long as we are targeting status seeking fashion innovators.
Based on Simmel's (1904) trickle-down theory, individuals may adopt a sub-brands
and/or a nested brand in their early stages of the product innovation as status symbols.
Strategists and brand managers of established luxury brands may want to consider such
extensions to cater to this market. Young consumers can choose to demonstrate their
fashion innovativeness and improve their social standing through ownership of such
diffusion brands. Both sub-brands and nested brands carry the name of the parent
brand, so the purchase of a diffusion brand is perceived as the consumption of a
new product range from the parent brand (Aaker 2000; Bhat, Kelley and O'Donnell
1998; Kirmani, Sood and Bridges 1999). On the other hand, while a new brand has
been shown to have no difference in product quality evaluation when compared to the
parent brand, status seeking fashion innovators asserted that it did not carry the
same image as the parent brand. The findings suggest that a new brand is not a good
proxy or substitute for the parent brand to express status.
92 | P a g e
Strategies for Country of Origin cues
The results also suggest declining importance towards country of origin (i.e. 'Made in')
as an information cue to assist consumer evaluation of a diffusion brand. Young status
seeking fashion innovators mostly supported that COO cues are irrelevant towards
the product quality and brand image evaluation of a diffusion brand.Products today are
often designed, manufactured and assembled in multiple countries. The brand origin
should be more important to reflect the quality and image of the brand than where it is
made reflecting results from recent literature (Ammonini, Keogh and Sweeney 1998; Lim
and O'Cass 2001; Mort and Duncan 2003; Thakor and Kohli 1996; Thakor and Lavack
2003). The results also suggest that the impact of a COO cue is minimal when it is
combined with other information cues. A brand name is more effective to communicate
the imageand quality perceptions of a diffusion brand lending support to Amine and
Shin's (2002) proposition that 'as long as it is brand X, it does not matter where it is
made'.
Sub-brands and nested brands are accepted by young status seeking fashion
innovators regardless of its COO due to emergence of hybrid country affiliations.
Therefore it is better to emphasise its brand origin along with the brand name. As long
as the luxury brands insert quality control throughout the production process, it should
not affect the quality and image perceptions of the brand (Amine and Shin 2002; Iyer
and Kalita 1997; Lim and O'Cass 2001; Thakor and Kohli 1996).
Promotion and Pricing Strategies for Diffusion Brands
In the present market, a diffusion brand (a step down line extension) is widely utilised by
fashion houses to internationalise their brands and broaden their appeal to the younger
middle market (Fernie et al. 1997). Based on the findings diffusion brands, namely subbrands and nested brands should be targeted towards young consumers for status
display and to express their fashion innovativeness. Fashion innovators are opinion
leaders in the product category of fashion. They are among the first to try
newfashion products(Goldsmith, Moore and Beaudoin 1999). A sub-brand and a nested
brand allow them to demonstrate their willingness to try a new fashion product that is
93 | P a g e
connected with a particular parent brand name. Luxury fashion houses should target this
group of consumers to facilitate word of mouth communication and spread the use of
new fashion innovations (Goldsmith and Goldsmith 1996; Muzinich, Pecotich and
Putrevu 2003; Rogers 1995; Valente 1995).
Young consumers are likely to have higher interests towards in-fashion products, but
they may not be able to afford the premium prices of the parent brand (Flynn, Goldsmith
and Eastman 1996; Goldsmith and Flynn 1992; Lim and O'Cass 2001; O'Cass 2000).
Diffusion brands offer a more affordable alternative to the young middle market as
compared to the parent brand. This allows young status consumers to experience the
ownership of a (luxury) fashion brand at a lower cost (Fernie et al. 1997). Fashion
houses should promote diffusion brandproducts towards young status fashion
innovators as new products, while emphasising the existing qualityperceptions and
brand image of the parent brand to reduce initial marketing and promotional
expenditures (Aaker 1990; Dacin and Smith 1994; Klink and Smith 2001; Yoo and
Donthu 2001).
Strategies for Brand Fit of "New" Brands
Nevertheless, it is not advisable to promote a new brand as a substitute for the parent
brand. The results did not fully support a brand image fit between the parent brand and
its new brand. A new brand may be developed into a brand of its own. This allows luxury
brands to distance any parent brand associations without affecting the existing
brand image and minimize the importance of perceived fit between the parent and
diffusion brand (Bhat, Kelley and O'Donnell 1998; Laforet and Saunders 1999).
However, a new brand requires a substantial amount of time and financial support to
achieve the same level of recognition and trials compared to a sub-brand and/or a
nested brand. Therefore, a new brand may be treated as a future investment for luxury
brands to develop a house of brands to target different segments of the market (Aaker
and Keller 1990; Dacin and Smith 1994; Martinez and De Chernatony 2004; Yoo and
Donthu
(Journal of Global Business and Technology, Volume 6, Issue1, Pages 41-51)
94 | P a g e
2001).
8.METHODOLOGY
In order to build the most comprehensive intimate store the methodology adapted will
include:
Study of consumer preferences and various brands’ offering with respect to
launching an online Intimates store for Amazon.
This includes the following aspects:

Classification of the highly segmented market into four segments — economy, midmarket, premium and super premium.

Study of players in each of these segments with respect to:
 Market Share
 Price points
 Fashion quotient
 Online/Offline presence

In depth analysis of consumer preferences through amazon tools.
Competitor scan
This includes a study of the competitor offering for Spring Summer 2014 collection with
respect to:

Key trends for Spring Summer 14

Product offering with respect to:
 Style
 Price points
 Selection & availability
 Delivery

Competitor websites to be studied:
 Zivame
 Myntra
 Jabbong
95 | P a g e
 Flipkart
 Pretty Secret
Junglee.com
Data for the following innerwear related search keywords was pulled out from
www.junglee.com for the period- January 1 to March 31, 2014, with a view to study the
demand and popularity of innerwear as a category on another online portal.
Lingerie
KEYWORD
SEARCHES
Lingerie
Lingerie Sets
Babydoll Lingerie
Sexy Lingerie
Lingerie for women
TOTAL
26140
2120
600
870
1320
31050
RESULTS
CLICKED
7410
540
160
170
210
8490
CLICK RATIO
0.283
0.254
0.266
0.1954
0.159
0.2734
Bra
KEYWORD
SEARCHES
Bra
Bra Panty
Bra Panty Set
Panty and Bra
Bra Slips
Breastfeeding Bra
Bwitch Bra
Cup Bra
Daisy Bra
Daisy Dee Bra
Front Open Bra
Halter Neck Bra
Lace Bra
Net Bra
Padded Bra
Padded Push Up Bra
Panty Bra Set
Push Up Bra
328640
7760
16940
4570
530
450
880
1050
1680
3530
360
1320
6000
440
7240
7100
750
4600
96 | P a g e
RESULTS
CLICKED
86300
1890
5050
1230
60
50
270
220
630
1630
90
760
1800
130
2540
1800
260
940
CLICK
RATIO
0.2625
0.2435
0.2981
0.2691
0.113
0.111
0.307
0.21
0.375
0.462
0.25
0.576
0.3
0.296
0.3508
0.254
0.347
0.2043
Sexy Bra
Sports Bra
Sports Bra
Strapless Bra
Transparent Bra
Women Bra
TOTAL
790
2660
1340
1760
720
880
401990
200
1350
650
780
210
190
109030
Panty
KEYWORD
SEARCHES
CLICK RATIO
119490
5240
7700
4630
240
120
150
160
RESULTS
CLICKED
29510
1400
1860
2130
100
40
50
50
Panty
Panty and Bra
Bra and Panty
Bra Panty Set
panty for women
sexy bra panty
thong panty
transparent
panty
disposable panty
jockey panty
padded panty
TOTAL
220
150
190
138290
70
50
60
35320
0.318
0.333
0.316
0.2554
KEYWORD
SEARCHES
CLICK RATIO
Cotton
Shapewear
Shapewear
Shapewear
Women
TOTAL
12
RESULTS
CLICKED
0
2,0900
910
7020
240
0.335885167
0.756
21822
7260
0.3326
KEYWORD
SEARCHES
CLICK RATIO
Night Suit
Night Suit
Girls
2360
RESULTS
CLICKED
550
150
0
0
0.246966
0.2671
0.2415
0.4600
0.417
0.333
0.333
0.313
Shapewear
For
0
Night Suit
97 | P a g e
For
0.233050847
0.253
0.508
0.485
0.443
0.292
0.216
0.2712
Night Suit For
Women
Night
Suit
Womens
Night Suits
Night Suits For
Women
Women
Night
Suit
TOTAL
260
120
0.462
110
0
0
4280
1480
0.345794393
790
250
0.316455696
1070
500
0.46728972
9020
2900
0.3215
KEYWORD
SEARCHES
CLICK RATIO
Hot Nightwear
Long
Top
Nightwear
Nightwear
Nightwear
For
Girls
Nightwear
For
Women
Nightwear
For
Womens
Nightwear Satin
Nightwear
Sleepwear
Nightwear
Women
Satin Nightwear
Transparent
Nightwear
Women
Nightwear
Womens
Nightwear
TOTAL
290
200
RESULTS
CLICKED
580
0
4,3110
200
1,6040
20
0.37207
0.1
1770
440
0.248587571
3990
1220
0.305764411
110
250
10
0
0.091
0
1880
580
0.308510638
3310
270
1270
120
0.383685801
0.444444444
2730
790
0.289377289
1030
200
0.194174757
59140
21270
0.3596
Nightwear
2
0
This data was then compared with last year‘s data of the same period (January 1 to
March 31, 2013) and the following observations were made:
98 | P a g e
Ke
yw
or
d
Sh
ap
e
we
ar
2
0
1
4
3
1
0
5
0
4
0
1
9
9
0
1
3
8
2
9
0
2
1
8
2
2
Ni
ght
sui
t
7
7
0
0
9
0
2
0
4
6
0
6
0
5
4
5
0
2
7
5
9
1
4
0
6
6
1
3
1
2
Br
a
Pa
nty
Ni
ght
we
ar
TO
TA
L
99 | P a g e
79
10
Searches
2
0
1
3
2
3
1
4
0
3
4
0
7
8
0
1
1
2
3
6
0
1
4
9
8
7
Lin
ge
rie
Ch
an
ge
%
C
h
a
n
g
e
%
Clicks
C
h
a
n
g
e
C
h
a
n
g
e
1
0
.
9
8
Click
Ratio
2
0
1
3
2
0
1
4
3
4.
1
8
7
6
5
0
8
4
9
0
8
4
0
61
21
0
1
7.
9
6
8
6
2
3
0
1
0
9
0
3
0
2
2
8
0
0
2
6
.
4
4
2
5
.
3
0
2
7.
1
2
25
93
0
2
3.
0
8
2
7
5
4
0
3
5
3
2
0
7
7
8
0
2
8
.
2
5
2
4
.
5
1
2
5.
5
4
68
35
4
5.
6
1
4
9
7
0
7
2
6
0
2
2
9
0
13
20
1
7.
1
4
2
2
7
0
2
9
0
0
6
3
0
13
08
0
2
8.
4
0
2
1.
3
4
2
1
2
7
0
1
8
4
2
7
0
3
3
.
1
6
2
9
.
4
8
3
5
.
7
9
11
62
85
1
6
4
8
5
1
4
5
1
4
5
4
6
.
0
8
2
7
.
7
5
2
9
.
0
3
2
6
.
9
6
2
6
.
6
3
4
7
8
5
3
9
1
2
5
2
0
1
3
3
3
.
0
6
2
0
1
4
2
7.
3
4
3
3.
2
7
3
2.
1
5
3
5.
9
7
2
7.
8
6
Google Adwords
In addition to Junglee data, search volume data for inner wear related terms on Google
and related websites was also studied for the periods - January 1 to March 31, 2014 and
January 1 to March 31, 2013.
Lingerie
Month
Jan
Feb
March
2013
volume
2,99,770
2,86,850
3,27,090
2014
volume
3,76,210
3,42,480
3,99,890
Change
76,440
55,630
72,800
%
Change
25.50
19.39
22.26
As per above figure, search volume for ‗buy lingerie‘ and related terms has increased
from Jan-Mar 2014 to Jan- Mar 2014.
100 | P a g e
Bra
Month
Jan
Feb
March
2013
volume
4,51,370
4,13,220
4,63,390
2014
volume
5,82,810
5,07,360
5,60,520
Change
1,31,440
94,140
97,130
%
Change
29.12
22.78
20.96
As per above figure, search volume for ‗buy bra‘ and related terms has increased from
Jan-Mar 2014 to Jan- Mar 2014.
101 | P a g e
Panty
Month
Jan
Feb
March
2013
volume
3,92,320
3,54,170
3,82,810
2014
volume
4,61,150
4,09,090
4,64,940
Change
68,830
54,920
82,130
%
Change
17.54
15.51
21.45
As per above figure, search volume for ‗buy panty‘ and related terms has increased from
Jan-Mar 2014 to Jan- Mar 2014.
102 | P a g e
Shapewear
Month
Jan
Feb
March
2013
volume
169,640
167,960
190,650
2014
volume
252,550
228,410
256,960
Change
82,910
60,450
66,310
%
Change
48.87
35.99
34.78
As per above figure, search volume for ‗buy shapewear‘ and related terms has
increased from Jan-Mar 2014 to Jan- Mar 2014.
103 | P a g e
Nightsuit
Month
Jan
Feb
March
2013
volume
86,890
76,540
79,220
2014
volume
108,060
87,910
102,790
Change
21,170
11,370
23,570
%
Change
24.36
14.85
29.75
As per above figure, search volume for ‗buy nightsuit‘ and related terms has increased
from Jan-Mar 2014 to Jan- Mar 2014.
104 | P a g e
Nightwear
Month
Jan
Feb
March
2013
volume
410,790
377,130
4,05,750
2014
volume
515,860
454,570
5,02,050
Change
1,05,070
77,440
96,300
%
Change
25.58
20.53
23.73
As per above figure, search volume for ‗buy nightwear‘ and related terms has increased
from Jan-Mar 2014 to Jan- Mar 2014.
The above data clearly shows that there has been a noticeable increase in the search
volume for inner wear shopping related terms.
As a part of the primary research, respondents were also asked about the frequency of
buying different categories of intimate apparel, with an aim to study customer demand
and buying pattern.
105 | P a g e
How often do you buy a bra?
4%
6%
18%
27%
<1 month
1-3 months
3-6 months
6-12 months
>12 months
45%
How often do you buy an underwear?
3%
2%
21%
<1 month
1-3 months
3-6 months
48%
6-12 months
26%
106 | P a g e
>12 months
How often do you buy nightwear?
0%
9%
12%
41%
<1 month
1-3 months
3-6 months
6-12 months
>12 months
38%
How often do you buy shapewear?
0% 2%
<1 month
8%
1-3 months
16%
3-6 months
47%
6-12 months
27%
>12 months
Key Market Drivers
The factors that have propped up demand for undergarments in the past few years have
been summarized below:
107 | P a g e

Indian economy has experienced GDP growth rate of 8 to 9% in the last few years.
Sustained growth in economy in the past few years has contributed to the growth of
massive middle income groups. This has propped up the sales of undergarments,
particularly in the low and economy segment.

Young generation of professionals, both men and women, form an important consumer
group with high purchasing power. This buying group is more demanding in their choice
of innerwear, looking for quality products that satisfy comfort, fitting, styling needs etc.
This has resulted in a qualitative shift of consumers from low / economy range to
premium and super-premium range of products. The past trend of the Indian market
signals a gradual marginal shift towards the premium and super premium segments of
the industry. This segment is now considered as the major growth segment. Despite
being the smallest segment in the over all lingerie industry, the premium segment has
been growing at a compounded annual growth rate (CAGR) of about 30% in the last five
years.

Indian demographic structure has been undergoing transformation in the past few
decades. India has one of the youngest population in the world. An increasing shift of
population in favor of the younger generation would encourage further qualitative
transformation of the under garment market.

Domestic undergarment manufacturers have realized the huge potential of partnering
with the global luxury brands. This has helped them not only to extend their portfolio into
the luxury super-premium and premium segments but also makes them preferred
sourcing partners for these brands in India as well as internationally.

Preference for recognizable brands and rapid growth of organized retail is anticipated to
increase the current share of the organized lingerie market. Even though organized
retailing is still at its nascent stage in India, restricted mainly to urban cities,
undergarment market is likely to proliferate through increasing network of shopping
malls across India and its geographical spread in the rural sector as well.

Large number of professional fashion and designing schools across the country, work of
high profile designers towards innovative creations, media exposure, use of movie stars
both for advertising campaigns and as brand ambassadors are important instruments for
popularizing demand for undergarments in the years to come.
108 | P a g e
8.1 Segments:
The lingerie market is highly fragmented. The market for branded lingerie in India can be
divided into four segments — economy, mid-market, premium and super premium. The
segments are defined by price as well as the fashion quotient offered by the brands.
Enhanced product attributes across fabric, multi-functional features too define a
segment‘s offerings. The mid to premium segment forms 52 per cent of the market and
is expected to grow fastest at 22 per cent CAGR in the next five years. The Super
Premium segment today forms 5% of the market. The branded lingerie market faces stiff
competition from regional brands besides the unbranded segment. Local brands enjoy
strong regional distribution, local manufacturing and hence low pricing which in turn
generates high volume for such brands.
109 | P a g e
8.2
ECONOMY
MID MARKET
PREMIUM
SUPER PREMIUM
Price
< 100
100-500
400-2500
400-5000
Range
Brands
Rupa, Juliet, Red Goversons,
Rose,
&
Regional Beauty,
Paris Enamor,
La
Hanes, Amante,
Etam,
Unbranded Jockey, Daisy Dee, Lovable,
players
like Libertina
M&S; Cloe
select
Body
also
Care,
Softy,
SKUs
Lady Care, Little
Triumph,
La
Perla,
Scandale, Mariemellie,
Bwitch!,
Neva,
Senza,
from
Jockey
Lacy,
Featherline, etc.
Market
43%
Share
share
market 52% of organized market
5% of organized market
8.3 Challenges faced by Brands:

Limited shelf space: Space restrictions in off-line stores that does not allow them to
showcase their entire range of products like loungewear, negligees, shapewear, maternity
or plus sized lines etc

Lack of open advertising. Most lingerie retailers employ in-store branding and outdoor
imagery is restricted to the more modest sports bras rather than the bikini cuts so as to not
rile sensibilities

While some brands have tested waters with online stores like economy and mid-segment
players and with some brands like Mybra and Groversons launching their ecommerce sites,
for premium brands (like Bwitch), online retail is just 1% of the sales

Lingerie is relegated to the third floor in a tiny corner in department stores and on 1 st or 2nd
floors in malls

Lack of knowledge among consumer and sales staff. Brands say that most customers in
India claim to be either a 34B or 36B - no one knows the real fit. Further it is an industry run
by men – from manufacturers to dealers making product awareness even more difficult

Inventory risks: the number of size variations per SKU can be as high as 72 and hence the
risk of left over cut sizes is always high (band size 28 to 42 with cup sizes starting AA to G)
110 | P a g e
8.4 STORE EXPERCIENCE
In India, currently there are few offline stand-alone intimate stores like La Senza in key
metros. The concept is more popular in department stores and Shop-in-Shop stores like
Lifestyle, Shoppers Stop and Debenhams where a significant area is given to these
categories grouped together, led by popular brands like Lovable, Jockey, Triumph, Bwitch!,
Enamor to name a few. Online portals like Zivame and Pretty Secrets both started their estores in 2012 with claims of the largest lingerie stores. Softlines specific e-comm portals
like Myntra and Jabong offer the selection though it falls short of covering all kinds of
customer needs by a product, size, fit and price requirement
Depending on the store format (SIS, EBO, MBO) and the city (metro vs tier 3) the customer
experience while shopping for lingerie can vary for the same brand.
FLAGSHIP
/ SIS
EBO
STORES LIKE
SEGMENTS
La
Senza, Shoppers
IMPORTED ONLINE
MARKET
LINGERIE
Stop, MBO
Jockey,
Lifestyle,
Triumph
Debenhams
Essentially
LOCAL
in
Central, local
Mid-market
the
Zivame,
high
PrettySec
street;
rets,
Neighbourhood
Myntra,
lingerie walah
Jabong
to Economy
to Unbranded
Mid-
a
market to
Premium and Super Premium
mid-market;
super
few SKUs from
Super
premium
select premium
premium
brands
segment
PRESENCE
Tier 1 cities
Tier 1, tier 2 cities
All tiers
Tier
1; All tiers
select tier 2
EXPECT
The
entire Semi-trained
product range for
in case of the super
111 | P a g e
premium
staff A man behind Women
& the counter, a sales
premium rather clueless who
Privacy,
staff convenie
guide nce
and
flagship store; brands with poor saleswoman.
a subset of it communication
you;
And an opaque range
in case of an skills; trials; best carryhome
EBO; relatively seller selection
bag;
easy
selection
returns
only on bras;
a more
of segments
unique and -
limited erotic
and products
sizes
like
shape
wear and
baby
trained
staff
dolls,
who
―sell‖
widest
more
than
range of
recommend
sizes
what is best
(espZiva
for you (for eg
me);
they will try to
Tools
sell
and
you
the
push up bra
guides
since
a
that help
best
seller
you pick
even
though
you
it‘s
the
might
right
size
really need a
minimizer)
DON’T EXPECT Older
Most
styles. Recommendations, Premium
flagship or
stores
complete segment,
are product
rooms,
Trials; in
trial innerwear;
case
any returns
apparel
of
brand
knowledge;
entire product or fit
focused
showcases
selection
range related product
sites – do
space information. In
not
and
they owing
to
always put out constrains;
the
latest returns;
selection;
cross
size
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Functional
range
brand returns
easy terms
of
entire brands,
of
most
sizes; stop at Lovable
and
that
too
stock the basic
expect
range
and
variety of
product,
WHY
WORKS
understanding;
line. Black and
brand,
easy returns
whites are the
price
bestsellers;
size;
returns
returns
IT Brand
and
loyalty Convenience,
Proximity
brand choice, trials
comfort & OTC provider of nce
building
discounts
or
Mostly as a Convenie
fantasy
and
variety
lingerie
Factors influencing choice of store: availability of multiple brands foreign and local; ease of
price, quality and fitting comparision between brands / SKUs; more choices of colours, fits &
prices; personalized shopping experience.
8.5 STORE LOOK & FEEL: The Wire Frame
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Customer Shopping Behaviour
The Indian consumer hasn't yet decided on a "most-favourite brand" leaving the brand
proposition open for many players. The branded market has led to specialised segments in
the market from T-shirt bras (one of the bestsellers and fastest-growing product) to fashion
bras and at-home bras. With the coming on international lingerie brands and fitting
sessions conducted by some of the popular chains like Shoppers Stop, awareness of fit
and varieties has been on the rise among Indian women. This new awareness has also
broken some of the older shopping preferences like cotton is no longer considered to be
the best fabric. Brands have seen good acceptance to products in lycra, synthetic fabrics
as well as lace.
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8.6 Customer Pain Points:

Size availability: Being a high size depth category, most retail channels keep to limited size
options and so a combination of small bands with large cup sizes are rarely found in stores

Special need: maternity lines, plus sizes, sports bras, juniors bra (or first bra), nursing bras,
or mastectomy lines are not available in stores in most cases

Product availability: Different requirements for shapewear are not met. Most women claim
that M&S is the best place to look for shapewear provided it‘s one of the larger stores.
Waist Clinchers and waist shapers are not to be seen in the SIS store formats

Product awareness and information: Poor knowledge of products available to cater to
needs for e.g. women in tier 2 and 3 cities are sometimes not even aware of shaping or
slimming garments that can allow them to wear dresses/ clothes of their choice.
Additionally, the store staff is either poorly informed or unable to communicate the product
features

High price of shapewear and nightwear is stores.
8.7 THE AMAZON INTIMATE SHOP
Objective: To offer all types of innerwear, in all kinds of styles, across the widest possible
range of sizes, within the premium to super premium segment with small curated players
from the mid-market segment, catering to most special needs (plus, maternity, nursing,
sports, mastectomy)
Solve known customer pain points:

Size availability: Ensure sizes from 28AA to 44FF/ XS to 4XL; (some sizes for all brands to
ensure coverage across the target size range)

Product availability: Include shapewear, nightwear, accessories, hosiery, variety in bras
and underwear like minimizers

Product awareness & info: A+ detail pages; prod specs and training material from brands;
self-help size & fit guides

Price variety: Selection coverage 65% premium; 25% super premium and 10% mid-market
Zivame
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Pretty
Shoppers
Proposed A.in
Secrets
Stop
SKU
1500
900
297
1800+
Brands
39
12
6
40+
Starting price
99
139
129
99
Highest price
5000
2800
2400
Special
Maternity/
YES
sizes
Nursing
Yes
yes
yes
Sports
Yes
yes
yes
YES
Teenage
Yes
no
no
YES
Mastectomy
Yes
no
no
NO
Prem + Sup
Segments
Prem
Mid
Premium
to Mid to Sup Prem
Premium
CL
Retail
3P
Retail
%3P
E
units
units
Revenue 3P rev units
U
1,460,
1,785
30,671,2
37,39
S
670
,782
96
8,915
D
522,0
657,9
10,388,5
18,75
E
58
80
59
9,503
U
172,2
414,0
3,511,95
8,699,
K
93
50
3
995
%3P
FT
C ret ret
%F
ASP
CM
rev
%
units
BA
in $
%
31
22.1
25.3
%
4
1%
34
26.2
20.6
2
3%
20
20.9
6.51
%
4
%
%
47.9 117,2
55%
55%
0%
75
8%
46.1 110,3
56%
64%
8%
92
21% %
26.4 14,23
71%
71%
2%
0
8%
C
56,51
86,96
N
5
9
695,2
379,891
14
17.3
61%
65%
0%
18
4,549
8%
%
2.50
8.43
%
8.8 Google trends: Shows a stable interest

Jockey underwear is a rising trend with 170% increase in searches over the last year

Online bra shopping searches up by 150% from last year. Key regional interest from
Karnataka, Delhi, Maharashtra, AP, UP, MP, Gujarat
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8.9 Leading brands
OWNING COMPANY
Triumph
BRAND
(India) Triumph Classics
International
SEGMENT
Premium
AMAZON TARGET
&
super Yes
&
super Yes
premium
Sloggie
Premium
premium
Gokuldas
Innerwear Enamor
Premium
Yes
Mid and premium
Yes
Mid
Yes
Lovable
premium
Yes
Benetton
Premium
Yes
Amante
Premium
Yes
Bwitch!
Premium
Yes
PeriPeri
Premium
Yes
La Peches
Premium
Yes
Hanes
Mid market
No
Juliet
economy
No
Pvt Ltd
Page Industries
Maxwell
Jockey
VIP Daisy Dee
industries
Benetton
Genesis Colours
Product
Basic
Underwear, bras, Underwear,
Underwear,
bras,
Offering
underwear,
slips, camisoles, bras,
nightwear,
sports
vests & bras
night
wear, nightwear,
innerwear,
camisoles,
sports
bras, sports
chemise,
multi-packs,
doll,
innerwear,
shaprewear, multi packs,
camisoles,
different fabrics and styles,
chemise, baby accessories,
doll,
select specific lines,
shapewear,
multi
117 | P a g e
baby
packs,
occasion
different
fabrics
and
styles,
accessories,
occasion
specific lines
Why
it Low in price, Comfortable,
works
Understand
larger
lasting,
distribution
expensive, meet product, better environment,
basic
not fits,
Understand
lasting product,
needs, shopping
available
better
department
staff
sales
stores as well as
stand-alone
stores in tier 1 to
select tier 3 cities
Online
Presence
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None
Few
most
better
lasting
shopping
personnel in stores
in environment,
select
fits,
Few
trained
8.10 Vendor Management
Getting line list from brand
Analyzing the product range and offering
Suggesting the credit terms to the seller
Advising the seller the best buying mix as per his/her budget
Sharing the NIS template with the brand
Walking them through the template
Scanning the filled NIS template and de-bugging errors
Getting the RBS team to catalog the list of products
Sharing the list of cataloged product IDs with the seller for shipment creation
Physical shipment is then dispatched
The inbound team receives the products at the warehouse
The products are then stored at a system generated bin location
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Getting the line list from the brand

Getting in touch with the brand and asking them to offer the line list of all the products
that they carry.

A line list is essentially a comprehensive list of products with item description and
product thumbnail images.
Analyzing the Product Range and offering

It‘s preferable that the line list received is not a sub set collection of the actual range.

A check on the brand offerings by the brand store and other competitors is advisable.

If the line list is less than the actual range, then approaching the brand and requesting
to share full line list is done.

It might happen that the brand is out of stock and hence the full range is not available.

In that case, we always get back to the brand after the given ETA and request those
products.
Suggesting the Credit Terms to the seller

Buying model

Margin Net of Taxes

Credit Period

Stock Correction

EOSS sharing
Advising the seller the buying mix

Planning a buying mix according to the range and budget

Getting seller‘s approval for the buying mix (PO)

Making changes as discussed with seller

Post this the seller places a PI
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Sharing the NIS template with the brand

NIS (New Item Setup) template is a cataloging template which is filled by the brand to
capture required attributes of the product.

It is an elaborate catalog which has both required and mandatory attributes which
enables us to capture intricate data about the product

It is restricted to given set of values for a number of attributes which becomes a
challenge as all products have to be categorized within those options but enables us to
categorize products efficiently.
Walking them through the NIS template

The NIS template is an initial step towards maintaining sanctity of data captured.

Explaining the categorization, restrictions and requirements of the same to the brand is
a crucial step.
Scanning the filled NIS template and de-bugging errors

Post receiving the filled template from brand a scan of it is done to ensure the data filled
is complete and in accordance with instructions.

If changes need to be made, we either get back to the brand to get missing data or
make minor changes ourselves
Getting the RBS team to catalog the list of products

The RBS team does the item creation post which unique IDs (ASINs) are created

Any difficulty faced by the team is also addressed by the VMs
Sharing the list of products IDs with the seller

The ASIN list is shared with the seller

Then the seller creates a shipment list for the products mapped against these ASINs
from his seller account.
Physical shipment is then dispatched

The shipment then leaves for the Amazon warehouse via different carriers.
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
The shipment ID for each shipment dispatched from seller is unique to maintain
database of the in-warding process.

The products are then stickered with Amazon specific IDs before dispatch.
The inbound team receives the shipment at the FC

Once the goods reach the FC, the inbounding starts by matching the product sticker
with the product TITLE created.

In case if any slightest mismatch a ticket is raised to the VM team to suggest the course
of action required.

Quality check is done for some random products, post which the products are stacked.
Then the products are stacked

The system generates automatic bin numbers where the products are then stored.
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9.Output
The Intimate Apparel Store for women on www.amazon.in that offers more than 1100 styles
of lingerie and night wear essentials including bras, underwear, shape wear and sleep wear
from over 35 popular Indian and international brands. Taking care of varied customer
needs, the store offers small to curvy sizes in bras along with a variety of style options like
push-ups, non-wired, T-shirt bras etc. that help customers choose the right functionality
according to their need. With the launch of the Intimate Apparel Store along with the recently
launched Health & Personal Care store , Amazon.in now offers a one-stop destination for all
women customers to buy their everyday essentials like undergarments, sanitary napkins,
tampons, fertility kits etc. from the privacy of their homes.
The Intimate Apparel Store offers women customers an extensive choice in terms of styles,
sizes, colors, fabrics and prices from popular lingerie brands like Triumph, Enamor, Bwitch,
Amante, Scandale as well as private labels like Sweet Dreams, Pretty Secrets and Lovable.
They can also browse through a variety of bikinis, boy shorts, briefs, and thongs, or select from
shapewear that help to look ‗in-shape‘ . Customers can also order for stylish nightwear as
Amazon.in‘s new Intimate Apparel Store offers latest styles like baby dolls, pyjama sets and
separates in silks, satins, cottons and blended fabrics catering to special occasions like
wedding, vacations as well as to everyday needs.
―The Amazon Intimate Apparel Store aims to offer its customers a place where they can find
their favourite brands, or explore new ones in a variety of styles, colours, sizes and prices. We
wanted our women shoppers to have a beautiful store that gives them products they
traditionally know of as well as try newer options that are not easy to get in the nearby
store,‖ said Mr. Vikas Purohit, Category Leader- Fashion, Amazon India .
The selection has been curated into various sections like ‘Curvy-shop’, ‘Cool-CottonCamis’, and ‘Lace Embrace’; and the brand specific ‗size chart‘, enables customers to pick a
product of choice with ease. Within the Lingerie store, customers can shop for bras by band
and cup size; Bras are available in a wide range of cup sizes from AA to E with
functionalities like wire & wire-free, maximizer-minimizer, multiway-backless etc.
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Price Bracket from 110 INR – 4999 INR has been offered for customers to pick from. Detailed
product description that include high resolution images, wash care instructions according
to the fabric type and detailed size guides enable customers to make a well informed
choice.
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10.Conclusion
•
Offering the best selection and passing the profit to the customer through low prices in
the most convenient way is the Amazon USP which stands true for the India Intimate
Store. The processes involved have been designed to make it scalable.
•
Getting maximum sellers on-board but through a checked process to maintain right data
and quality products to meet customer expectation is the first step towards a successful
store.
•
Not only the intimate store launch will help in catering to customer pain points such as
social embarrassment and hesitation but also open out various options available at
attractive price points.
•
It solves the brand pain points as the real estate/ operation / logistics costs are
decreased manifold.
•
Organizing
the
lingerie
industry
and
bridging
the
gulfs
between
demand,
availability,selection , convenience is a continuous wheel which will make customers
satisfied.
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11.References& Bibliography
[1]http://italiaindia.com/images/uploads/pdf/market-research-on-undergarments-sector-inindia.pdf
[2] Report by IS Advisors (2013) Emerging Markets Forecast to Lift Global Lingerie Industry
Publication title PR Newswire, Publication year 2012, Publication date Feb 27, 2012.
[3] Report titled "Global Market Review of Lingerie and Intimate Apparel - Forecasts to 2017"Gangavathi exports
[4] Indian Lingerie Industry Unleashing the Growth Potential fiber
[5] Building an online retail startup in India, January 29, 2014 by Meha Agarwal
[6] Global market review of lingerie and intimate apparel - forecasts to 2016: 2010 edition:
Chapter 11 Industry trends, Author, Newbery, Malcolm; Zerai, Rachael
Bibliography
[7]
Consumer-Centric Category
Management:
how
to
increase
profits
by
managing categories based on consumer needs. Volume 27, pages 68-70.
[8] The impact of category management on retailer prices and performance: Theory and
evidence. Volume 65, Page 16.
[9] Category management: A new approach for fashion marketing? Volume 38, Pages 809834.Publication- Emerald Group Publishing, Limited, Bradford, UK.
[10] Journal of Fashion Marketing and Management, Volume 15, Pages 257-270.
[11] European Journal of Marketing Volume42, Issue9/10, Pages954-976.
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Site References:

www.google.com

www.inside.amazon.com

www.w.amazon.com

www.gim.amazon.com

www.amazonservices.com
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