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This large product offer can also be seen with competitors such as H&M, Zara and Topshop, but are not yet offered with online brands The Ragged Priest, Omighty and PrettyLittleThing for example.

Urban Outfitters packaging presents an eco-friendly nature using recyclable paper bags and minimal packaging with online orders. For environmentally conscious shoppers, this gives a sense of intrinsic self-value, as well as emphasising UO's focus on product rather than less essential features like packaging.

Pricing:

Price hierarchy model (adapted from Harriet Posner)

Premium

Top

mid

entry

UO provides consumers with the top three levels of pricing strategy, therefore welcoming a wide audience base, no matter their spending ability and enhancing their ‘all-encompassing' brand values. With coats for example, ranging in price from £60 - £700, some consumers may wish to spend ‘mid-level' on UO own brand products and some may wish to trade-up due to brand names. Thus, using a cost price strategy, marking prices up due to intangible feelings of uniqueness and exclusivity.

Regarding the pricing strategy model, economy pricing isn't used as UO is a mid-range brand and using this would reduce desirability. Price skimming is used on sportswear, with prices being set high due to the high demand and high fashion garments on offer, owing to the rise of streetwear. They are also the main retailer within its competition selling a range of sportswear, giving UO a competitive advantage and in turn, maximum revenue. Penetration pricing can be seen on dresses in the winter months, where competition is high so ‘money off' promotions work to drive off competitors. Premium pricing is used on their higher end brands as stated previously.

These features contribute to the high customer-perceived value of Urban Outfitters compared to competitors, in which they are willing to pay more for a product that provides them with more perceived benefits such as higher quality and fashionability – linking to Kotler's ‘more for more' theory.

“Quality is remembered long after price is forgotten" (Gucci, A, 1938)

 Customer value MODEL

Price

Quality & Material

Styling Features

Visual Merchandising

Promotion

£85

Polyester material, able to machine wash, very thick and warm for winter, zip and poppers for extra warmth

Oversized fit – very on trend, ‘teddy fur' material, faux fur also on trend

Only a few on rail to create a sense of exclusivity and easy visibility in-store

10% student discount*

free returns

free delivery to store

£55

Thick cotton material appears durable due to heavy weight

High waist, rips and vintage look are on trend, skinny mom fit

Placed with complimentary colours drawing attention for shopper

10% student discount

free returns

free delivery to store

£46

Polyester and elastane, thick stretchy material to give comfort

Straight neckline – on trend, sparkly material suitable for winter months due to Christmas parties etc

Merchandised along with dressy wear making it easy for the shopper to decide on a particular style

10% student discount

free returns

free delivery to store

£59

Nylon, machine washable, soft comfortable feel

Mustard considered a colour of the season

Placed on its own to stand out

10% student discount

free returns

free delivery to store

£45

81% Cotton, 15% Modal, 3% Elastomultiester, 1% Elastane. Machine wash.

Boyfriend style, low rise, rips giving a relaxed feel

Accompanied by basic Ts to highlight relaxed look

10% student discount

free returns

free delivery to store

£46

100% polyester, durable fabric

Sparkly material, bell sleeves – on trend, v neck, mini pleats

Accompanied by more evening wear

10% Student discount

free delivery to store

free returns

£39.99

100% polyester, durable fabric which is suitable for an outwear piece

Hooded, oversized, puffer, zip pockets

Accompanied by outwear and jumpers

£39.99

100% cotton, machine washable, thick durable fabric

Vintage look, high waist, skinny mom jean with added stud detailing

Placed with other vintage inspired garments

£29.99

Polyester and elastane, machine washable, thin feeling

Velour and sequins are on trend and suitable for Christmas season, long sleeves, suitable for cold weather

Hidden between other garments, creating a crammed aesthetic

£79.99

100% polyester, soft feeling

Pumpkin colour suitable for October month, added detailing – pockets in the middle and drawstring hood

Placed with ‘streetwear' garments such as tracksuits and leggings creating a cool sense

Free delivery

Free returns

£25.99

100% cotton, thick feeling, durable fabric

Vintage mom fit, high waist, vintage wash

Placed with matching blouses creating an outfit

Free returns

£29.99

100% polyester

Rose gold, sequin detailing, puff sleeves all on trend

End of aisle creates more attraction

Free returns

£90

100% polyester

Fur hood, cuffed sleeves and drawstring bottom for added warmth

Middle of shop making the piece stand out

Free delivery to store

£40

98% cotton, 2% elastane, creating for a stretchy, comfortable jean

Small rips, mid-rise boyfriend fit

Placed alongside basic garments tops and Ts reflecting relaxed fit

Free delivery to store

£40

2% Metallic Fibre, 95% Nylon (polyamide), 3% Elastane, machine washable

Long sleeve, v neck, cross-over knot front for added detailing

Alongside dark coloured evening wear for added choice

Free delivery to store

What does the comparative shop show?

The comparative shop highlights Urban Outfitters as having higher price points on average, yet this is balanced out by their trendier product offer through unique styling details such as material use. In addition, promotions at Urban Outfitters tend to be superior and most frequent. H&M is shown to have a lower product quality in dresses for example, which appeared thin and uncomfortable, however their lower prices reflect this. Zara could be said to have the highest value proposition as their products remain on trend – following styles and colour schemes, their prices are mid and of good quality and practicality, for example the padded coat has extra details including a hood, drawstrings and pockets, appealing to both hedonic and utilitarian shoppers. Compared to UO, Topshop, H&M and Zara, River Island's prices are unjustifiable considering their lack of fashionability and styling details.

Questionnaire to show what consumers would choose – not always about practicality and price but based on overall product.

Augmented product model (adapted from Kotler et al, 2001)

core benefit: comfort, modesty, warmth

actual product: fashionable colour, velvet fabric, hooded, oversized fit, thick quality material, overall cool style presenting urban outfitters brand imagery

augmented product: promotions such as student discount and the loyalty scheme, breadth of colours and sizes, laid-back store environment, helpful and knowledgeable staff, free returns

BCG Matrix:

Dogs:

Stationery generates a small ongoing revenue with little cost as it takes up a small space in-store. Sales on stationery at UO are likely to be low due to the high cost, for example notebooks costing £16, whereby students can simply buy one for £2 elsewhere.

Question marks: Furniture is a new introduction into UO stores and due to its high prices, it's unlikely it will be of high growth. For example, this shelf costing £120, similar could be found in IKEA for around £50. However, the products are uniquely designed and differentiate from other furniture providers.

Stars: Sportswear as streetwear has extensively increased in popularity, therefore acting as a market leader for UO - especially as its consumers are young students, with a preference for comfy, relaxed clothing.

Cash cows: BDG jeans, a UO private label brand acting as a ‘classic range' in a low growth market with high market share, every season jeans are revamped with different materials and colours to enhance market share further.

Consumer Analysis:

Urban Outfitters understands the importance of feeling part of a reference group at the same time as expressing personal individuality, through a range of targeted product styles within one youth sub-culture, in an environment where they feel comfortable. “Personal individuality links with the concept of brand personality.” (Jackson and Shaw, 2009) Lifestyle retailing allows for social and individual identities to be fulfilled, in order to reach self-actualisation.  These elements represent UO's brand equity and heighten consumer loyalty.

The millennial Urban Outfitters consumer, born between 1980-2000 can be seen as ‘trend setters' through to ‘early mainstreamers' with regards to Henrik Vejlgaards diamond shape model (Appendix 7). The brand appeals to predominantly women, shown within their vast female product offer compared to that of the men's section. This could pose a loss to UO as young males especially are increasingly interested in streetwear. This consumer group are hedonistic, shopping for trends rather than for practicality, sometimes choosing this need over others in terms of Maslow's hierarchy of needs (1943), for many students it can be said they would rather spend money on clothes than food. Especially as their social economic grouping – L15 regarding the NS-SEC scale (Appendix 9), defines them as students with minimal disposable income. Concerning the VALs framework, they can be classified as ‘Experiencers';

“Young adults who want to experience being different. This class of consumers is filled up with early adopters who spend heavily on food, clothing and other youthful products and services.” (Bhasin, H, 2015)

“73% of innovators choose fashion to feel different” (Taplin, I, 2008) For millennials, cliques, reference groups and aspirational groups influence their purchasing behavior “facilitating effective communication” (Kotler, Keller, 2016) bloggers can act as “bees” as stated by Kotler and Keller to spread the trends, like the ‘trickle down' theory (Appendix 10).

Urban Outfitters website outlines the target audience as “culturally sophisticated, self-expressive and concerned with acceptance by their peer group.” This demographic are heterophillious being ethnically and socially diverse and determined by change as stated by Martin Raymond (2010). UO appeal to this through utilising progressive campaigns, championing youth such as the “Class of 2017” campaign which showcases influencers becoming activists “fighting for a more promising and inclusive future” (Fasanella, K, 2017. The influencers are also shown wearing Champion clothing which is considered a micro trend upon millennials, again appealing to the brands trend-setting shoppers.

UO stores are in America and Europe, and placed in important geodemographic locations such as student towns and cities. Thus, targeting Western shoppers, however they would benefit from opening stores in Asia where similar tastes in trends and styles among youngsters are merging.

Christopher Donnelly at Accenture noted; “68 percent of all Millennials demand an integrated, seamless experience regardless of the channel. [In addition], text messages, have an influence on just over half of all respondents in terms of their shopping behaviors.” UO answer to this through the use coherent channels and beacons in-store to notify consumers of promotions via text.

Model: The Urban Outfitters ‘Shopper type' as defined by Euromonitor:

Open minded experimenter:

Try new things

Influenced by multiple marketing sources

Enjoy treating themselves – students have a high propensity to spend on fashion garments

Pen Portrait:

Ella-Rae, is a 19-year-old Criminology undergraduate at the University of Exeter, hoping to become a social worker when she graduates. Ella-Rae has a busy social life, spending most of her student loan on nights out and clothes, her favourite shops are Weekday and Zara, always paying by card as she perceives it as spending less.

Ella saves little for necessities such as food, as she would rather look and feel good. She also sells a lot of her clothes on Depop and Ebay so that she can buy more, allowing her to constantly keep up to date with trends, and post fashionable content on her Instagram page for her many hundreds of followers. As well as selling on these platforms, Ella buys a lot of second-hand garments because they're inexpensive and more individual.

Ella-Rae also has a keen interest in music and photography and carries her Polaroid wherever she goes as she feels it's important to capture memories for the future. Ella would be considered a leader in terms of her fashion adoption level, with her friends looking to her as a reference regarding trends. Ella herself looks to bloggers and Instagram models such as Bella Hadid as an aspirational point of reference.

QUESTIONAIRE – CONSUMERS DIDN'T KNOW UO WASN'T SUSTAINABLE AS SUCH A BIG BRAND THEY EXPECTED IT, ESPECIALLY THROUGH VINTAGE LINES ETC AND STORE ENVIRONMENT WHICH PROPOSES A RUSTIC, EARTHY FEEL THROUGH RE-USED MATERIALS.

• Attitudes towards product? – questionnaire

Appendix:

1.

Image sourced via Value Based Management, 2016

2. Missguided have over 500 negative reviews on ‘Product Review', scoring2/5 stars. Most comments relate to poor quality garments.

Figure: Screenshot sourced via Product Review, 2017.

3. Easy to use app which sends messages using Appboy, determining high engagement windows for each individual recipient, so consumers receive messages when they are most likely to engage based on behavioral data – adding value for its customers. This send time optimization “boosted one-week retention for male loyalty program members by 138% and increased engagement among users who had been inactive for at least three months by 94%.” (Grennan, T, 2017)

4. Within the campaign, Urban Outfitters took advantage of five specific tactics:

• Dynamic audience filters. To further target its outreach, Urban Outfitters used dynamic audience filters — based on real-world location information and other data — to deliver messages based on visitation and behavior outside the app. For example, push notifications were used to promote party dresses exclusively to female audiences who frequent bars and nightlife locations.

• Emoji messaging. To make its messaging more eye-catching and engaging to the demographics targeted by the campaign, Urban Outfitters included emojis in its push notifications to heighten the fun, light-hearted tone. Appboy recently found that open rates for iOS and Android push notifications containing emojis have increased by 210% and 1,063%, respectively, year-over-year.

• Deep linking. To provide users with a smoother experience and increase the chances that messaging led to conversions, Urban Outfitters took advantage of mobile deep linking to send users right to the relevant page within the app when they tapped the message.

• Conversion events. To ensure accurate monitoring of the impact of promotional campaigns, Urban Outfitters used Appboy's Conversion Events feature to track when the push notifications sent as part of this outreach resulted in a purchase.

• Message testing. Urban Outfitters took advantage of message testing to evaluate separate versions of the campaign — one sent to the targeted PlaceIQ Audience, and one sent to female users who had previously expressed interest in dresses.

Tangible results

These tactics proved to be successful for the retailer. Along with the 146% lift in revenue, the campaign also resulted in a 75% increase in conversions. (Kirkpatrick, D, 2017)

5. Nike Sustainable Innovation Report, 2016

6. We have been systematically upgrading all our existing logistics platforms, introducing eco-efficient lighting, improving insulation, installing sophisticated climate-control equipment, supplying bicycles and electric vehicles for internal transport, and using renewable energy sources. (Inditex Online)

7. https://www.pinterest.co.uk/pin/201887995775266478/

8. A recent Forbes article noted;

E-Commerce Driving Growth

Most of Urban Outfitters' growth has come from online sales. This trend is indicative of the retail industry as a whole, as many companies haven't figured out a way to increase their in-store sales at the same rate as their online revenues. The progress of Urban Outfitters in its digital channel was evidenced by double-digit direct sales gains, and the DTC penetration increased to north of 35% for Urban Outfitters and Anthropologie, and over 50% for Free People. Given the strong showing, this segment remains Urban's biggest opportunity and primary focus, and the company intends to add followers and expand its social media presence, as well as build its content and add more products, categories, and brands. The company expects its digital sales to double within the next five years.

9. Anderson (2004) Long Tail theory:

“The Long Tail is a potential market, and successfully tapping in to that long tail market is often enabled by the distribution and sales channel opportunities the Internet creates. The Long Tail has strong implications for culture and politics. Where the opportunity cost of inventory storage and distribution is high, only the most popular products are sold. But where the Long Tail works, minority tastes are catered, and individuals are offered greater choice.” (Baradell, S, 2012)

10. The National Statistics Socio-economic Classification

11. “In this model, a style is first offered and adopted by people at the top strata of society and gradually becomes accepted by those lower in the strata.” (DeLong, M)

12.

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Anon, 2016, Pulse of The Online Shopper, A UPS Whitepaper,  Online available at https://solvers.ups.com/ups-pulse-of-the-online-shopper/ (last accessed 11.10.17)

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Taplin, Ian M. “Reflections On Richard Jones, Founding Editor Of e Journal Of Fashion Marketing And Management”. Journal of Fashion Marketing and Management: An International Journal 12.1 (2008): n. pag. Web.

Moodboard timeline images:

URBN Online, History, Available at http://www.urbn.com/who-we-are/history (last accessed 23.10.17)

Appendix Images:

Anon, 2016, Rogers Diffusion of Innovation Model, Value Based Management, Online available at http://www.valuebasedmanagement.net/methods_rogers_innovation_adoption_curve.html (last accessed 30.10.17)

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