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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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EXECUTIVE SUMMARY

Reserved is a Polish high-street fashion brand that offers low cost-fast fashion products inspired both from the catwalk and fashion influencers.

This report contains a detailed analysis of Reserved´s primary activities - supporting by Porter´s Value Chain -  to study in depth its competitive advantage - marketing and sales - over other fashion retailers. It finally draws to a conclusion concerning the relationship between the marketing and the gained value of the brand.

Throghout this report both primary and secondary research has been used - journals, books, surveys…

INTRODUCTION

With 468 stores worldwide and over 700k followers on Instagram, Reserved is one of the 5 brands of the polish company LPP, and one of the fastest growing fashion chains in Europe (The Guardian, 2016). Reserved is a fast-fashion brand where the customers, women men and kids, have the benefit of new products inspired both from the catwalk and fashion influencers weekly. (Reserved annual report 2017, page12)

Porter´s Value Chain (1985) illustrates a chain of everyday activities which are divided into primary and support activities. A value chain analysis is described as “a tool to analyse the internal activities of a brand with a final goal of identifying which activities are most valuable to the brand and which could be improved to provide the brand with a competitive advantage”. (Dillon, S. (2018) The fundamentals of fashion management. 2nd edn. London: Bloomsbury)

In order to consider Reserved's reported competitive advantage over other fashion similar retailers it is necessary to study the Company and its value chain. This report attempts to study this advantage and review the results against other similar retailers.

LIMITATIONS OF BRIEF

The primary research was difficult. At present Reserved has only one store in the UK, wich limited the posisible audicence to interview, many customers (or potential customers) of this busy destination flagship store declined to answer any of the interview questions.

The information gathered from the questionnaire could have been more accurate as many of the surveys were only part completed, or they where completed by non-Reserved customers.

Investigating Reserved online provided little additional helpful information.

RESEARCH METHODS

In undertaking this report, primary and secondary research was conducted.

Primary research includes interviews and customer surveys.

Secondary research includes data from various other sources in order to have deeper understanding of the company's 17.3% growth rate in last year (Reserved annual report 2017, page 9).

VALUE CHAIN

Inbound Logistics.

The great majority of Reserved's products are sourced from external manufacturers in China (see chart), although the company also uses production centres in other Asian and European countries (Reserved annual report, page 21), with a view to equalizing production and sourcing on a global basis. The benefits of outsourcing are that it extends the value chain beyond the geographic boundaries of the business, where the supply chain becomes the value chain (Christopher, M. (1992) Logistics & Supply Chain Management) in Poland has grown enormously which gives added stability to both the company and the local Polish workforce (Reserved annual report 2017, page 22)

More Research.

OPERATIONS

At the present time Reserved caters for Kids, Men and Women, the last one divided as well in YFL, Fashion Line and Modern line (Reseved 2018). Reserved is able to dress a customer for any occasion which reduces the possibility of the customer buying from a competitor (Porter´s Five Forces, 1979). (research customer loyalty???)

Sustainability is becoming more important for Reserved and for its customer (see survey results). In 2014 Reserved decided to abandon the use of angora in its products, and is now expanding the ecological line- ECO AWARE. (Reserved annual report 2017, page 32) eccofriendly materials. All of these strategies are important steps towards a more sustainable and responsible industry, and are appreciated by customers.   

New products every week responding fast to the consumer demands (research fast fashion???)

OUTBOUND LOGISTICS

Reserved owns 3 distribution centres where it exports an average of 620k products daily. In the past year 100% of these products where exported by road, the most eco-friendly shipping way. (Reserved annual report 2017, page 49)

The abilities of click and collect and home delivery services enables the customer to buy products 24/7 increasing sales volumes considerably (Poloian, L. (2009) Multi-Channel Retailing).The distribution network enables Reserved to deliver its products in the UK in about 2-4 days (Reserved 2018), with the benefit of that all of the packaging used is made out of recycled paper. (Reserved annual report 2017, page 104)

-MARKETING AND SALES

The flagship store is in one of the busiest shopping streets in London. It is characterised for having a brand new visual merchandise proposal every day. Alongside this, very modern in-store technology including big screens all over the store displaying its new lines (store audit)

Its online presence is very big mainly thanks to its collaborations with celebrities, giving the brand a positive image. The only negative is that the omnichannel is not complete as this retailer has not yet got an app (Reserved 2018) which may produce a loss of customers.

-SERVICE

Reserved customers tend to be between the ages of 15 to 25 (see survey) who are normally in a hurry, so the brand makes extra efforts to give the best shopping experience possible, trying to avoid the customers having to wait in a queue.

Although at the moment there is only one store in the UK-in one of the busiest shopping streets in the world - Reserved is planning to upgrade to Westfield Shopping Centre (Drapers, 2017).

Reserved´s clear online website leads to a 50% of its customers preferring to buy online (survey), other strengths are the brands fast delivery times and easy returns as well as its 24 hour telephone customer service. (Reserved 2018)  

COMPETITIVE ADVANTAGE:

Porter states that a firm differentiates itself from its competitors when it offers something unique, that is valuable and sought after by buyers beyond offering a better price (Farrington, B. and Lysons, Kenneth. (2000) Purchasing and Supply Chain Management)

and in Reserved´s case it's Marketing and Sales.

Nowadays consumer habits are changing and their expectations are continuing to rise (Mintel 2018). Retailers like Reserved must go the extra distance to stand out from their competitors.

Reserved´s main competitor is Zara - among all of the other inditex brands -  (see survey). Both of them provide high fashion items at low prices, but what is different is that Zara does not participate in any form of advertising (it relies on word of mouth and customer loyalty) and has never carried into effect any sough of collaborations, all of the contrary from Reserved.

Thanks to the attention to advertising and e-marketing Reserved attracts new customers from diverse audiences, cultures and countries making it a diverse and out-looking brand for the global market, making it the most selling brand of LPP (Reserved annual report 2017, page).

In their Oxford Street store screens are all over the walls to see a review of all new products, and the amount of stock backs this up. The space is used carefully to make it feel enticing and luxurious. (store audit)

For the proprietor, Marek Pietochki, what differentiates Reserved from its competitors is the way they interpret trends presenting them with an Easter European ‘touch' (Drapers) and the speed that they implement these changes, but what may be the real difference to Reserved's customers is the Celebrity endorsement. (see interview).

Reserved is unique for its celebrity collaborations, (Cindy Crawford, Brithish Vogue, Kate Moss etc.), who have real purchasing influence. The aim of celebrity endorsement is that the personality of the celebrity will become associated directly with the brand and that will reinforce the brand´s image and position in the marketplace (Marketing fashion book)

One of the most recognized collaboration was with Kate Moss, the face that opened the flagship store. Buses, taxis and walls all throughout London were covered by her image. Apart from her being the brand image at that moment, they also released a line of clothes inspired in Moss and her british style.

All of this advertising was perceived in a positive way, making customers wanting to aspire to her style, personality and presence wich led to an increase of sales.

Conclusion

Reserved is clearly an established international brand, where all of the primary activities contribute towards gaining a competitive advantage over other brands, but we can confidently say that what makes the business stronger is its marketing and sales.

Due to this stratergie value is added to the market, the collaborations help the brand grow and the increasing presence on social media and advertising make the brand stronger.

Although the physical entry has been late with only one store to date, the companies growth has been strong overall, with its Uk expansion remaining largely on e-commerce.

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