Documente Academic
Documente Profesional
Documente Cultură
Retail
Management
Assignment
1
Executive Summery
This report follows an analysis of the Melbourne Brand HoMie, explores the brands
background, investigates the factors effecting the brand in its environment and a
competitor analysis, the purpose is to offer an overview look at their current station
and make recommendation on how the business can grow.
The brand HoMIe offers youth street wear with a unique business model. The whole
business is run with the purpose of helping Melbournes homeless, the two founders
of the store first founded a charity called homeless of Melbourne which has a
Facebook following of 30,000 people, and after which created the brand HoMie
which allows consumers to buy new apparel while helping the homeless. For every
item of clothing purchased items of equal value will go to a homeless person in
Melbourne. The brand started up last year in June 2015, went online in August 2015
and launched a female range in December 2015. Currently it has moved out of its
original store location in Melbourne central and is temporarily trading out of a small
portable hut in Melbourne central. The website is up and running but very
underdeveloped. The OBM analysis found the brand relies heavily of the goodwill of
their business model, which was extremely evident in the radar analysis as their
results were skewed mainly to giving back to the community.
In the OBM it was found resources such as donations from consumers and donations
of new sellable apparel from other retailers were heavily influenced by the goodwill of
the business model. This is a weakness for HoMie because it makes them very
vulnerable to the possibility of new entrants that have similar business models. If that
situation were to occur they would have no differentiating factor. The competitor
analysis supported this again as they rated lowly for value for money, low for
accessibility, average for fashion-ability of items, low for quality and high for giving
back to society. Through the VRIO analysis it showed that the brand is new and
underdeveloped so any advantages they had were not fully realised, as they were
not organised to exploit them. Therefore no SCA was found. The chosen location for
a new store was Brunswick, as their main criteria found through interviewing a HoMie
employee was affordability and space as they currently only have a small temporary
store which struggles to house 6 people inside let alone the small amounts of stock it
carries. Brunswick Street shopping precinct was chosen because of cheaper rental
yet still adjacent to the city. It is positioned on a shopping strip so the shop can share
in footfall traffic the other stores have.
The HoMie brand is new and exciting but has a lot of work to do to establish
themselves and fully realise the financial benefits of their current advantages, with
hopes of increased revenue and expansion in the future.
Introduction:
This assignment follows the analysis of a Melbourne brand HoMie an in-depth look of
their business, environmental and competitor analysis and from there offer an
overview look at their current situation and offer recommendation of how the brand
can expand and grow for example in terms of a new store presence.
Background
Brief History of HoMie:
HoMie is a new start up brand launched in June 2015 that sells youth oriented street
wear. The brand opened its first store in Melbourne Central in June 2015, launched
its online store in August 2015 and in December 2015 a female range was also
added to the brand. Initial plans were to only run for a month but ten months later
according to their Facebook page theyre still going strong. At the moment theyre
temporarily operating out of a portable hut in Melbourne Central, their old location
has been taken by a commercial brand thats renovating the shop space to suit their
own needs. Due to this information we can assume they will be moving into a new
shop space somewhere in Melbourne Central in the future.
About the Brand:
The defining attribute of the brand is the unique value proposition HoMie offers its
customers. The ability to buy new fashion while simultaneously allowing them give
back to the community and help a good cause. For every item sold HoMie will give
an item of equal value to the homeless. Another differentiating quality of the brand is
the VIP days, once a month the store closes its
doors and open exclusively to a group of
homeless people. They provide them with free
clothes, refreshments, makeup and hair
makeovers and employment advice.
Online Presence:
The brands online presence is currently well
established in terms of brand awareness with
Situation Analysis
Osterwalder Business Model Analysis:
Through the OBM analysis of the business it was quite obvious after completion how
reliant the brand is on the goodwill of their business model. The majority of key
resources and partners are heavily influenced by the goodwill of their business
model, for example the volunteers that man their retail store, the retailers that donate
sellable apparel to the business which are essentially free goods they can sell for
revenue and the initial support of Melbourne Central Management has meant that
they have received cheaper rental, almost halved (TheAge 2015) and the brand
appears in the centres marketing giving them exposure to new customers.
The main value proposition offered to consumers (W2_RCO1) is essentially their
business model, the ability to give to the homeless while buying new fashion items
for themselves. They also have a good Facebook following on their brands page of
6500 followers; again the main attraction to consumers would presumably be the
goodwill of the business model.
One of HoMies biggest challenges (W1_RCO1) is to operate while serving a profit,
since their brand essence is being able to give back to the community, they must first
cover their costs (W1_RCO4) in order to sustain themselves as a business before
being able to give back to the Melbourne homeless community. As a firm it is
important for them to understand their costs for them to be economically sustainable
and hence socially sustainable thereafter. Their cost structure is made up of the
necessary costs for operating an online store and a physical store. Items such as
rent, manufacturing, transport to the store or to online customers homes
A key weakness of the brand is that their main recourses, partners and to a certain
extent their revenue income is influenced by the goodwill of their business and it is
the goodwill in those consumers, suppliers and partners that allow the business to
operate smoothly and allow continuous cash flow. However it is important to note
that the firms ongoing fixed costs are generally not affected by the goodwill of their
business and are consistent regardless of how many sales and donations have been
made. This is a weakness as the firm depends on the generosity of consumers and
supplier to run smoothly, however these are not easily forecasted and may not be
consistent unlike their fixed costs, which are essential to cover in order to stay in
business.
Environmental Analysis:
Key findings were the opportunities of online sale growth for the future and the use of
data analytics to better understand the online consumers and utilise the website to
align with customers needs. This is relevant to HoMie because they only have one
physical store and one online. HoMies website is incredibly underdeveloped and a
major opportunity for them to capitalise on, to increase sales and develop their
technological relationship (W2_RCO05) with customers. Similarly the trend of word
of mouth marketing via social media is strong and only set to continue and with their
strong brand following on Facebook which is an advantage for them and an
opportunity for them to encourage people to share their experiences with their HoMie
purchase.
Some of the main threats found were the rapidly decreasing value of the Australian
dollar, which cuts into HoMie profits by raising the cost price of manufacturing. Some
of the major consumer trends were consumers becomes more demanding in terms of
faster service in apps and delivery times. Higher expectations of items to always be
on sale and a new way of shopping leaning towards bargain hunting behaviour are
all threats for HoMie as their online website is underdeveloped their current offering
is not competitive. Their price points are also not cheap, so the price driven
consumer would most likely not shop at this brand.
TOWS Analysis:
Strengths and Opportunities;
Since the brands business model has already been accepted well by consumers the
next step would be to boost awareness on a bigger scale to improve sales and online
and in store foot traffic. One strategy could be to use a fashion ambassador such as
a designer to create fashionable ranges, which would generate awareness for people
that may know the designer but not the brand.
Weaknesses and Opportunities;
Due to weakness of low capital and underdeveloped brand an opportunity may be to
find in demand skilled individuals that share in the brands vision to work for them at a
cheaper cost or volunteer basis. For example a much needed buyer, or designer to
create and rollout more products.
Creating a range that targets a higher income-earning segment, which has more
expendable income and is a more attractive market rather than youth wear as their
current market is limiting in capital revenue terms.
As one of their weaknesses is a high price point, which stems from a new evolving
supply chain, they could focus on streamlining operations to generate efficiencies
and lower costs to ascertain more working capital.
A major weakness and limiting factor for the brand is their website, therefore it is
recommended that the brand improve their website to increase sales through online
channel and overall revenue.
Improve online website as it is their current main and only shop and income stream
increase sale through online channel and overall revenue. Provide information such
as shipping and product info, and fix faults such as ability to add to cart, for pleasant
and easy experience for consumers.
My Company Inc
BeeKeeper
Glue
Stussy
Savers
Salvation Army
2.5
2
1.5
1
0.5
0
Giving back
to society
Easily
accessable
Fashionability
of items
Quality
BeeKeeper
Easily accessable
Glue
Stussy
Fashionability of
items
Savers
Quality
Salvation Army
Giving back to
society
The competitor analysis shows HoMie is not performing well for value for money, as
their goods are currently high priced compared to industry competitors and poor
quality. They rated low for accessibility as the website is not fully functioning and
does not allow you to add all of their goods to cart. Their one physical store is going
through a period of moving where theyre trading out of a small hut, however the
location of Melbourne central is very attractive sales and foot traffic wise. They rated
average for fashion ability of items, low for quality and high for giving back to society.
VIRO Analysis:
Valuable
Good Social
Rare
Hard to
Organised to
Imitate
Exploit
YES
NO
YES
NO
YES
YES
YES
NO
YES
NO
YES
NO
YES
YES
YES
NO
media following
Unique business
model
Good relations
with suppliers
Good relations
with centre
management
No SCA was found, as the firm is not organised to exploit any competitive
advantages they may have such as they good social media following and unique
business model. This is due to the firm being undeveloped since it is a new brand
and in its early stages of growth and expansion. One setback is not having a
consolidated and stable physical store. A staff member at HoMie said that they have
moved around a lot and this creates confusion for consumers going to their original
location and not seeing them there, there is also no information on their website to
say they have moved. The only inclination is a post on their Facebook page with a
photo of their new location and saying they have moved. It is important to clearly
communicate to consumers such as a sign at their old shop and a post on their
website stating they have moved to maintain good relationships with customers,
increase awareness of the brand and in the long run increase sales (W1_RCO5).
It is true that with time and stable growth HoMie will naturally develop a better
website and wider product range but these are still the two main recommendation to
help capitalise on their strengths and gain a SCA for themselves.
The will also provide a better total retail experience (W1_RCO2) for the end
consumer.
Location Decision within Melbourne:
After speaking to a staff member at HoMie Melbourne Central it was found that they
are planning to move outside of Melbourne Central. Also that the rent is no longer
halved, initially it was but now it has gone back to normal. They said they were
looking at Brunswick and St Kilda mainly due to space and affordability.
Taking into account some of important criteria for HoMie was affordability and space,
as the temporary little hut they are in now at Melbourne central is very small, they are
struggling to fit merchandise and even many customers in there. Brunswick Street is
the recommended chosen location due to close proximity to city, good foot traffic due
to location in the shopping strip. This would mean they receive walk through traffic
from people already shopping or dining in the area.
This location is also a good balance between what they can afford, visibility and
accessibility to customers. Being in an area adjacent to the city the consumers living
in Fitzroy would most likely be in a higher income bracket and higher disposable
income due to the higher house prices. They would presumably have better
purchasing power than consumers further out of the city, which creates more
attractive trading conditions for HoMie. The location is also still accessible to
consumers since it is in an area that is adjacent to the city and visibility is not
compromised too much as its adjacent to the city.
Conclusion
In conclusion HoMie is a new and underdeveloped brand with a lot of potential due to
the demand from consumers wanting more sustainable products and brands. They
currently have an online and small temporary physical store with a limited range of
high priced products of street wear. It is recommended to consolidate their store and
choose a location to set up a permanent shop so there is less interference with daily
trade. The website is in a much needed update and much basic info is lacking. The
supply chain must also realise some efficiencies as the price is currently too high, or
marketing campaigns are needed to communicate more specifically how the money
from the garnet is broken down and allocated, which would make consumers more
likely to want to purchase the clothing. The HoMie brand is new and exciting but has
a lot of work to do to establish themselves and fully realise the financial benefits of
their current advantages, with hopes of increased revenue and expansion in the
future.
Appendices
Appendix A.
Relevant Content Outcomes (RCOs)
Week 1: The Smart Approach
RCO1 Fashion Retail Challenges
RCO2 Total Retail Experience
RCO3 Creating Fashion Retail Solutions
RCO4 Retailing Costs and Profit
RCO5 Relationships with suppliers and customers
Week 2: Creating & Sustaining Value
RCO1 Value what it is, what it does
RCO2 Retail Value Chain
RCO3 Value Oriented Retail Strategy
RCO4 Service Retailing relationships
RCO5 Technology & Ethical relationships
Week 3: Strategic Planning
RCO1 Smart tools of Fashion Retail Strategic Planning
RCO2 Retail management and staff capabilities
RCO3 Goods and services mix
RCO4 Company objectives: sales; profits; image; customer satisfaction; resources
RCO5 Retail market analysis factors SWOT was performed to geneate stsate of
p/o
RCO6 Retail strategy control: activities; audit; feedback
Week 4: Global Strategic Planning
RCO1 Why go global?
RCO2 Planning growth strategies
RCO3 Global Export Assessment list
RCO4 Three pillars of Fashion Retail Global Strategy
RCO5 Fashion Retail Global Strategy factors: company; consumer; operational;
merchandising; store location
Appendix B.
OBM Analysis
Key Partners
Key Activities
Value Proposition
Manufacturing
sellable apparel
Design and
homeless while
sourcing
Online: back of
Followers on FB
page
about the
homeless (most
likely living in
every purchase an
Melbourne) that
want to do
house, inventory
item of clothing of
closed store in
many more).
management,
Melbourne Central
something to
Melbourne Central
distribution and
given to someone
alleviate the
Management: The
logistics
in need additionally
problem
all profits go
exclusively to a
towards the
select group of
homeless of
homeless people,
Melbourne.
Customer Segments
1. People who care
Customer
Relationships
free marketing.
clothes, makeup
Manufacturing
Key Resources
Channels
Online store
Facebook page:
Homie the brand
and Homeless of
Volunteers to
Melbourne which is
also created by
Donated apparel
owners.
from retailers
Public following on
Physical store in
Melbourne Central
FB page (6500
followers)
Online website
Cost Structure
Revenue Streams
Rent
Donations
Manufacturing
Distribution
Appendix C.
PESTE
PESTE Table 1
Global level
Regional level
National/
Local level
Country level
Political/Legal
Factors
Agreement
manufacturing in China
Election
Pn3. Possible elimination of
Carbon tax
Pn4. Liberalisation on trading
hours during public holidays
Economic Factors
Dollar
Sn1. Urbanisation
Demographic,
Cultural
Factors
Technological
Factors
Ecological/
Environmental
supply chains
Factors
Appendix D.
PESTE rationale
PESTE Table 1
Global level
Regional level
National/
Country level
Political/Legal
Factors
hours.
countries.
standards in China is
looks elsewhere to
Local level
Economic Factors
consumers.
mortar stores.
decrease in margin.
Demographic,
in income, expanding
Cultural
Factors
fitness apparel.
2014).
Factors
A trend where
information is shared
across the supply chain
to improve efficiencies.
Growing use of
smartphones, adoption of
mobile technologies and
increase in mobile
shopping segment.
Environmental
Factors
friendly products by
consumers
-The use of cotton by many
brands has a negative effect
to the environment through
substantial use of water and
pesticides.
-The globalisation of supply
chains has increased the
distance a garment travels
substantially and thus the
energy and atmospheric
pollution involved in
transporting it.
-Waste management as
landfill physical space is
limited
Appendix E.
PESTE Time ratings
Political Factors
Rank
Rank
4/5
5/5
manufacturing in China
Economic
Factors
Dollar
En6. Interest rates remain low
4/4
Social-
Sn1. Urbanisation
5/5
Demographic
5/5
Factors
(IBISWorld 2016)
Sn6. - Increase in bargain
hunting behaviour (IBISWorld
2016)
5/3
5/4
(Hodgson, F 2015).
5/5
(IBISWorld 2016).
Rank
Technological
Factors
5/5
5/5
(Hodgeson, F 2015)
4/5
3/5
Ecological/
5/5
Environmental
Factors
5/5
Appendix E.
PESTE Time ratings
Opportunity
Ratings
5-5
Threat
Short-Term
Medium-Term
Long-Term
Short-Term
Sn1. Urbanisation
Agreement
Aus Dollar
Growth
analytics to understand
(Hodgeson, F 2015)
2015)
Sn4. Consumers
and pesticides.
becoming accustomed to
price reductions
(IBISWorld 2016)
Sn6. - Increase in
bargain hunting
behaviour (IBISWorld
2016)
Tg1. Online Sales
Growth
Tg5. Word of Mouth via
online and social media.
Medium-Term
Long-Term
5-4
En5. Growing
trend for
2015).
Australian brands
to acquire other
brands (IBISWorld
2016).
4-5
4-4
Trend
manufacturing in China
En4. Consumer
sentiment expected to
rise in 2015-16
(IBISWorld 2016).
5/3
Pn1. Possible
Elimination of Penalty
rates for retailers
3/5
Appendix F.
TOWS Table
Low capital
Socially sustainable
traffic
development
management
Strengths
Opportunities
Weaknesses
simultaneously
more product.
youth wear.
realistically.
Threats
New brands that enter the
market with similar
business model
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