OMNICHANNEL

RETAIL STRATEGIES
Lecture 1

• Nov 12, 2020

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Course Outline
• This module equips students with omnichannel retail
strategies and issues that affect marketing in the fashion
business.

• Omnichannel marketing focuses on providing a

seamless retail experience to customers by engaging
them in physical store, online website, mobile app, social
media, and other channels.

• The module also covers the current issues in

developing on-site and off-site location strategies, and
the contemporary concepts and skills in developing and
implementing fashion retail strategies.
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Syllabus
• Ext Env, Competition (Session 2, 5) (Session 13)
EXTERNAL • Retailing Revolution
ENV (Session 3)
• Future of Retail OMNICHANNEL
• Consumer Behaviour (Session 4) RETAILING
STRATEGY

• Product (Session 6)
MARKETING • Price (Session 7)
MIX • Place (Session 8)
FASHION • Promotion (Session 10)

• People
(Session 11)
SERVICING
• Process
• Physical (Session 9)
Environment
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Teaching Methods
• Lectures and consultations
• Individual assignments
• Class participation
• Group Discussion
• Sharing
• Self reading (textbook and articles)
• Case study

4
 Assignment Brief
INDIVIDUAL ASSIGNMENT 50%
• OMNI CHANNEL RETAIL ENVIRONMENT ANALYSIS & REPORT

Due Date: 5 Jan 2021 (Session 8)

Weighting: 50%
Report Format: Business Report
Font size: 12 Times New Roman
Spacing: 1.5 lines
Word Limit: 2,500 words (+/- 200 words),
excluding appendices and reference page

• Articles fro reference:

• “the Best Retailers Combine Bricks and Clicks”
• “From Bricks to Clicks: Winning at e-commerce in China”
• “The Secrets to Selfridges’ Success”
• “The Future Of Retail Isn’t Physical Vs Online, It’s Omnichannel” 5
 Assignment Brief
GROUP ASSIGNMENT 50%
• OMNICHANNEL RETAILING PLAN

Due Date: 4 Feb 2021 (Session 13)

Weighting: 50%
Report Format: Strategic Plan & PowerPoint Presentation
Font size: 12 Times New Roman
Spacing: 1.5 lines
Word Limit: 2,000 words (+/- 200 words),
excluding appendices and reference page

• Brainstorm and create a “Retail Concept/Store for the Future” for a fashion
retailer that build a “seamless customer experience”.
• Develop a 1-year strategic plan that will put your business on the road to
launch, development, and thriving in the market
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Session 1: Learning Objectives
• What is Fashion?
• What is Retailing?
• Characteristics of Fashion Retailing

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What is Fashion?

8
Which Style do you like?

Mix & Match & (Clash) Traditional 9

The Look!

Hybrid Classic 10
Fashion vs. Style

FASHION Fashions
becomes
FADE, style
unfashionable
is ETERNAL.
STYLE never.

Coco Chanel
Yves Saint Laurent
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What is Fashion?
Fashion is to do with change:

• Fashion essentially involves change, defined as a

succession of short term trends or fads.

• from this standpoint there can be fashions in almost any

human activity from medical treatments to popular
music.

• the concept of fashion will be taken to deal with the

garments and related products and services

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 Defining Fashion
• Fashion is a style that is popular in the present.

• It is a set of trends that have been accepted by a

wide audience.

• It is a complex phenomenon: psychological,

sociological, cultural or commercial points of view

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Why Style is so important?
• When do you start to have your own choice of
clothing?
• Why do you need to control?

• 1st Impression
• Appearance
• Who you are in
the public

Tavi Gevinson @ Age 13 Coco Princess @ Age 6

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Look Good and
Feel Good

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 傅園慧 Fu Yuanhui
Fashion Consumer

Why we buy?

Where to buy?

What to buy?

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What brand?

Multi-brand store Mono-brand store 17

Class Discussion 1
What do you know about Fashion?

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What is Fashion?
• Fashion involves a strong creative and design
component. Design skill is essential and can be
seen in all products from the made-to measure suit
to the elaborate embroidery on a cardigan.

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What is Fashion?
• The level of design can vary considerably from a
basic item such as a T-shirt to the artistic creations
of Coco Chanel, Christian Dior, Yves St Laurent or, in
more recent times, Stella McCartney.

VS

HKD99 HKD5,200 20
What is Fashion?
• The majority of garments sold do not come from
Art, but the inspiration for the design of many of
those garments may have come from works of art.

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Structure of Fashion Market

PRICES

ASPIRATION

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 Classification: Luxury Brands

https://luxe.digital/business/digital-luxury-ranking/most-popular-luxury-brands/ 23
Who owns What?

https://fashionretail.blog/2019/04/08/luxury-and-fashion-corporations/ 24
Classification:
High Street / Fast Fashion Brands
• Topshop / Topman (UK)
• Uniqlo (Japan)
• Forever 21 (US)
• H&M (Sweden) – H&M,
Monki, Cheap Monday,
COS…
• Zara (Spain) – Zara, Pull
& Bear, Massimo Dutti,
Bershka, Stradivarius…
• Esprit (Germany)

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Classification: Sports Brands
• Nike (US)
• Adidas (Germany)
• New Balance (US)
• Reebok (US)
• Puma (Germany)
• Li Ning (China)
• Asics (Japan)
• Fila (Italy)

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Classification: Famous Select Store Brands
• Dover Street Market (UK)
• Opening Ceremony (US)
• Corso Como (Italy)
• I.T (Hong Kong)
• Aland (Korea)
• Beams (Japan)

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Fashion is about Seasonality
• The competitive philosophy of the fashion industry
revolves around seasonality.

• The industry has a vested interest in developing

new products for the customer at the expense of
existing items: this process is known as planned
obsolescence.

• Planned obsolescence is not confined to the

fashion industry, it occurs in several other
manufacturing sectors such as the electronics or
automobile industries. Eg. Iphone
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Season for Fashion Retailer
1. Early Spring (CNY) Jan / Feb
2. Spring (Valentine’s Day) Feb / Mar
3. Early Summer Apr / May
4. Summer May / Jun
5. High Summer Jun
6. Summer Sale July
7. Traditional Autumn July / Aug
8. Back to School Aug
9. Autumn Sep / Oct
10. Party Wear Nov
11. X’mas Dec
12. Winter Sale Dec / Jan

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What is a Fashion Trend?

“ Fashion used to come from one source

at a time, be it the street, the runways or
the entertainment business. The
interesting thing about today is that
influences come from high and low-
everything from couture to Target.”

Michael Kors

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What is most fashionable?
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 https://www.lyst.com/the-lyst-index/2019/q1/

Eg….

• Many customers
appreciate the
continual change in
fashion products and
services.
• Unfortunately, the
rate and direction of
change are usually
slower and less
predictable than the
fashion industry
would like.

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HK Fashion Brands
HAUTE
COUTURE
PRICE
LUXURY

DESIGNER

AFFORDABLE
LUXURY

PREMIUM

HIGH STREET

MASS MARKET

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WHAT IS RETAILING?

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The Evolution of Retail
https://coreshopsolutions.com/evolution-of-retail-and-its-customers/
• Retailing is undergoing 2 significant shifts. The 1st is technological and the other
is consumer behaviour. Retailers that stay ahead of the curve at both fronts will
thrive in the long-run.
The Retail Evolution Generation of Customers
Retail 1.0 Silent
• Physical Stores • Option of just Brick and Mortar
• Self Service • Simply Come and Buy the Product
• Single Channel
Retail 2.0 Baby Boomers
• Department Stores • The Rise of Radio and TV Ads
• Supermarket • Started to hold the power
• Hypermarket
Retail 3.0 Generation X
• Technology Advancements • The Internet Boom
• eCommerce Boom • Customers Become the King
• Global Selling
Retail 4.0 Millennials (Generation Y)
• Ecommerce and social media • The Age of Omni-Channel
• Multi-channel and Omni-channel • Now at the Core of Everything
Retail 5.0 Generation Z
• Reimagined Physical Stores • Smartphone
• Self-checkout System • Engagement in social campaign
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• AI and Robots
 RETAIL 3.0

RETAIL 2.0

RETAIL 1.0

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What is Retailing
 Retailing encompasses the business activities
involved in selling goods and services to
consumers for their personal, family, or household
use.

 It includes every sale to the final consumer.

 This is the last stage in the distribution process.

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Figure 1-4: A Typical Channel of Distribution

Manufacturer
Retailer

Wholesaler Final
Consumer

Retail Management, a strategic approach, 11 ed, Chapter 1

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The Philosophy

Retailers can best address these questions by

fully understanding and applying the basic
principles of retailing, as well as the elements
in a well-structured, systematic, and focused
retail strategy.

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Are these Retailing?

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Non Typical Channels
• Retailing does not have to involve a store, other
formats include:
• Mail and phone orders
• Direct selling to consumers in their homes and offices
• Web transactions
• vending machine sales

• Retailing does not have to include a “retailer.”

• Manufacturers, importers, nonprofit firms, and
wholesalers act as retailers when they sell to final
consumers

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Functions performed by Retailer
 Retailers undertake business activities and perform
functions that increase the value of the products and
services they sell to consumers.

 These functions are:

1. Providing assortment of product and services (wider selection of
products on one location)
2. Breaking bulk (into smaller quantity)
3. Holding inventory (availability of goods)
4. Providing services (easier to buy, trading hr, credit hr, product
information, delivery)

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Figure 1-5: The Retailer’s Role in the
Sorting Process

Retail Management, a strategic approach, 13ed, Chapter 1

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Relationship Management Among
Retailers and Suppliers
• Disagreements may occur in the following areas:

• control over channel

• profit allocation
• number of competing retailers
• product displays
• promotional support
• payment terms
• operating flexibility

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Distribution Types
• Exclusive: suppliers make agreements with one or
few retailers, designating such retailers as the only
ones to carry certain brands or products within a
specified geographic area

• Intensive: suppliers sell through as many retailers

as possible

• Selective: suppliers sell through a moderate

number of retailers

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DISTRIBUTION CHANNELS

Exclusive Y-3 Stand alone store

Lane Crawford

Selective Adidas Flagship

Adidas Originals
Concept Store

Intensive Adidas
Performance Store
Sportshouse.
Marathon,
Giga Sports…
Mongkok Sports
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shoes street
Figure 1-7: Comparing Distribution Types

Retail Management, a strategic approach, 13 ed, Chapter 1

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Where are the customers?

• Hong Kong online portal

HKTV Mall, has revealed
the average number of
daily orders on its site last
month was 22,400 – up
64.7 per cent on January
last year and nearly 20 per
cent on December.

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Why do people support Retailer?
• Communications and bonding best
 Social Interaction take place in the traditional wet
market environment.
 Eg. Wet Market / Ladies’ Market
• These shows that traditional wet
market is an easy place to initiate
conversations even with strangers,
hence showing relevance to
initiating community bonding
between individuals of different
social and cultural backgrounds.

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 Class Discussion 2
• Which is your favorite Fashion Retailer in HK?
• Why is it your favorite store?
• What are the differences of Fashion Retailing vs.
other product categories?
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CHARACTERISTICS OF
FASHION RETAILING?

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Special Characteristics of Retailing
• Average amount of a sales transaction for retailers is much
less than for manufacturers.

• Final consumers make many unplanned or impulse

purchase.

• Retail customers usually visit a store, even though mail,

phone and web sales have increased.

DON’T YOU
THINK SO?
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Figure 1-8:
Special Characteristics Affecting Retailers

Retail Management, a strategic approach, 13 ed, Chapter 1

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What is Retail Strategy?
• An overall plan for guiding a retail firm.

• Influences the firm’s business activities.

• Influences firm’s response to market forces

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Six Steps in Strategic Planning
1. Define the type of business

2. Set long-run and short-run objectives

3. Determine the customer market

4. Devise an overall, long-run plan

5. Implement an integrated strategy

6. Evaluate and correct

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Eg. Zara

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Eg. Zara
• Zara is one of the largest international fashion companies. It
belongs to Inditex, one of the world’s largest distribution
groups.

• The customer is at the heart of its unique business model,

which includes design, production, distribution and sales
through our extensive retail network.

• 3 winning formulae:
• Short Lead Time = Fashionable clothes
• Low Quantities = Scarce supply
• More Styles = More choices and more chances of hitting
it right

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Eg. Zara Information Technology

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Aspects of Zara Strategy

• Growth objectives • Employee relations

• Appeal to a prime market • Innovation
• Distinctive image • Commitment to
• Focus technology
• Customer service • Community involvement
• Multiple points of contact • Monitoring performance

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Retailer Strategy Mix
 A Strategy Mix is the firm’s particular combination
of:
1. store location
2. operating procedures
3. goods/services offered
4. pricing tactics
5. store atmosphere
6. customer services
7. promotional methods

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Retailing Concept, a strategic guide
• Communicating with shoppers and viewing their desires as
critical to the firm’s success.
1. Customer Orientation
• Determines the attributes and needs of its customers
and to satisfy them
2. Coordinated Effort
• Integrates all plans and activities to maximize efficiency
3. Value Driven
• Offer good value to customers
4. Goal Orientation
• Retailer sets goals and uses its strategy to attain them

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Figure 1-10: Applying the Retailing Concept

Retail Management, a strategic approach, 13 ed, Chapter 1

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Retailer’s Performance in terms of
Retailing Concept

1. Total Retail Experience

2. Customer Service
3. Relationship Retailing

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1. Total Retail Experience
• Includes all the elements in a retail offering that
encourage customers during their contact with a
retailer
• No. of salespeople
OF COURSE
• Displays YOU CAN
• Prices THINK OF
MORE
• Brands carried ELEMENTS!
• Inventory on hand

• Effect of unsatisfactory experience:

• Not to patronize a retailer again

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2. Customer Service
• Activities undertaken by a retailer in conjunction with the
basic goods and services it sells:
• Store hours
• Parking
• Shopper-friendliness
• Credit acceptance
• Salespeople
• Satisfaction is affected by expectations and past experience
• Strong impact on total retail experience

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HKRMA Service & Courtesy Award 2018

WHY
SERVICE IS
SO
ESSENTIAL?

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Typical Customer Services

• Credit • Gift Certificates

• Delivery • Trade-ins
• Alterations • Trial Purchases
/Installations • Special Sales
• Packaging/ Gift • Extended Store
Wrapping Hours
• Complaints / Return • Mail and Phone
Handling Orders
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3. Relationship Retailing
• Retailers seek to establish and maintain long-term
bonds with customers, rather than act as if each
sales transaction is a completely new encounter

• Concentrate on the total retail experience

• Monitor satisfaction with customer service
• Stay in touch with customers

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Customer Respect checklist
• Retailers could use to assess their relationship
effort:

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Effective Relationship Retailing
• Use a win-win approach
• It is harder to get new customers than to keeping
existing ones happy
• Develop a customer base
• Ongoing customer contact is improved with information
on people’s attributes and shopping behavior

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Through Mobile Devices?
• mobile devices have revolutionized the way
customers engage with brands, offering companies
an unprecedented opportunity to improve
customer care and lock in old customers, while still
capturing new ones.

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VR Shopping https://news.vice.com/story/alibaba-vr-
shopping-buy-singles-day

• Alibaba, the Chinese e-commerce giant that earlier

this year outpaced Walmart as the world’s largest
retailer, debuted this meta mall, called Buy+, last
week ahead of China’s Singles’ Day shopping
festival on Friday.
• On Day One, an hour after it launched, 30,000
people had tried the platform, according to the
company, which for the occasion produced 150,000
cardboard headsets, sold on Taobao, its consumer-
to-consumer marketplace for about 15 cents
apiece.
• As of Thursday, 8 million people had tried it.

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Big Data
• Big data is data sets that are so big and complex that
traditional data-processing application software are
inadequate to deal with them. Big data challenges
include capturing data, data storage, data analysis,
search, sharing, transfer, visualization, querying, updati
ng, information privacy and data source.
• How Big Data helps?
• Based on the demographics and personal behavior
patterns, big data helps marketers develop assumptions
about their consumers. While a majority of
organizations consider their customers’ spending
power as the biggest parameter to be the MVP or
‘Most Valuable People, that shouldn’t be the case.
These customers don’t score high in terms of brand
loyalty and can shift their interests over time.

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https://www.statistics.gov.hk/pub/B10800032
019MM04B0100.pdf

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 https://www.scmp.com/comment/opinion/arti
cle/3064699/four-coronavirus-driven-chinese-
consumer-trends-will-last-even

• China will see even more online shopping

• There will be accelerated use of artificial intelligence
and robotics.
• Aa renewed emphasis on local community commerce
as shoppers seek to limit travel.
• Expect increased food safety awareness
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What you have learned today?
• What is Fashion?
• What is Retailing?
• Characteristics of Fashion Retailing

Next Week:
• Please visit some fashion stores (online / offline)
• Case Study:
Is Lane Crawford better placed than other
department stores to survive the pandemic?
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