Replace the position of creative director for each of the firm''''s fashion brands with amore collective creative ecosystem.Peck was betting that market intelligence fueled by Big Data coul
ĐẠI HỌC QUỐC GIA THÀNH PHỐ HỒ CHÍ MINH TRƯỜNG ĐẠI HỌC KINH TẾ - LUẬT KHOA KINH TẾ ĐỐI NGOẠI - - MÔN HỌC CHUYỂN ĐỔI SỐ VÀ TRÍ TUỆ NHÂN TẠO Giảng viên: Nguyễn Thế Đại Nghĩa Mã lớp học phần: 215MI5202 Ca học: Sáng thứ 3 Nhóm sinh viên thực hiện: STT Họ và tên MSSV K214021480 1 Dương Minh Khuê K214021478 K214021476 2 Đoàn Thu Hoài K214020164 K214011421 3 Dương Thị Trà Giang 4 Võ Thị Thương 5 Nguyễn Phương Anh TABLE OF CONTENTS 1 Trang Table of contents…………………………………………………………………………2 A Objective………………………………………………………………………………3 B Key issues to tackle………………………………………………………………… 4 I List of issues…………………………………………………………………… 4 II Some solutions………………………………………………………………… 5 C Evaluate options……………………………………………………………………… 6 I Criterion……………………………………………………………………….6 II Options……………………………………………………………………… 6 III Evaluation of options…………………………………………………………6 D Recommendations……………………………………………………………………8 I Our recommendations……………………………………………………… 8 II Five Forces…………………………………………………………………….8 III SWOT Analysis……………………………………………………………….9 IV Financial Analysis……………………………………………………………11 E Implementation…………………………………………………………………… 13 I Timeline………………………………………………………………………13 II Resources estimation……………………………………………………… 14 III Contingencies…………………………………………………………… …16 IV Risk mitigation………………………………………………………………16 F Conclusion…………………………………………………………………… ……19 2 A OBJECTIVE 1 Summarize the objective of your proposal - Use predictive analysis to sell existing products - Use predictive analysis to sell new products - Predicting consumer interests - Looking forward to the future 2 Replace the position of creative director for each of the firm's fashion brands with a more collective creative ecosystem Peck was betting that market intelligence fueled by Big Data could outperform a creative director at predicting the future fashion tastes of consumers Could data-mining replace the artistic vision of a creative director? Was this the right approach to fashion development for all three of Gap’s brands? Selling Gap’s products on Amazon could open up a whole new data stream to Peck and his managers, providing insight into the shopping habits of existing customers when they weren’t shopping on the company’s own digital platforms or in their stores, and providing access to new customers not currently attracted by the company’s distribution efforts Should he allow Amazon to sell his brands? 3 Address consumers' shift to omnichannel shopping, focusing on dissolving the wall between the physical and digital channels 3 Deliver a better customer experience 3 B KEY ISSUES TO TACKLE I List of issues 1 Slow growth in core markets Gap Inc competed in the $3 trillion global apparel industry, which accounted for 2% of the world’s gross domestic product (GDP) The U.S and Canadian markets accounted for over $340 billion and were expected to grow annually by 2% through 2025 These two markets accounted for 84% of Gap’s sales Millennials were spending less on apparel Speaking to investors at a retail conference, Peck claimed that “there are no compelling [fashion] trends driving the business” and lamented that there had been a change in consumers’ buying habits such that there was a lack of need to replenish their closets 2 Competition The mid-tier apparel landscape was fragmented and overcrowded 3 Rise of e-commerce Consumers were shifting their purchasing from brick-and-mortar stores to online channels In the U.S., 19% of apparel was sold through online channels in 2016, and in 2015 clothing became the best-selling online sales category, driven by Amazon’s increasing strength in apparel Amazon, the world’s largest multi-line, multi-brand Internet-based retailer, was on track to become the largest seller of apparel in the U.S by the end of 2017 As online sales grew, brands did not need the same number of storefronts Empty stores lined the American shopping malls, as both specialty retailers and department stores simultaneously faced pressure to close locations Gap had over 3,000 physical stores By 2017, Gap Inc.’s online sales exceeded $2.5 billion 4 Rise of Fast Fashion New competitors, such as H&M and Zara, compressed supply chains, delivering low- priced looks knocked off from luxury fashion runways within weeks of their unveilings With an average product cycle time of 10 months, Gap lagged competitors such as Zara which could deliver products to stores within four weeks due to their consumer- responsive and decentralized buying process, which allowed individual stores to order small batches of product, wait to see how consumers responded to it, and then airlift additional products to backfill the store’s inventory within days The speed and pace of the fashion cycle was dizzying, with new styles appearing in stores on a weekly basis in a constantly renewing fashion cycle 4 5 Heavy and frequent discounting Clothing was increasingly commoditized as consumers viewed the lower-quality fast fashion offerings as disposable, yielding a need for low prices and heavy discounting Retail analysts were concerned about an overabundance of price promotion at Gap, where 40% discounts were common 6 Gap’s size and ubiquity were transforming from asset to liability Consumers looking to forge a unique identity were moving away from Gap’s classic offerings II Some Solutions: 1 Replace creative directors with Big Data obtained from Google Analytics, Google Trends, social media, the company's own sales and customer databases to inform the next season's assortment 2 Develop an augmented reality app - Use data-driven decision making: personalize shopping experiences based on browsing and purchase history - Develop email programs to provide relevant, personalized messages to consumers 3 Messaging based on consumer's searching, or deliver another landing page based on browsing history or IP address 4 Understand why consumers were not buying as much from Gap's physical stores develop Gap's digital and mobile e-commerce platforms to drive customer engagement 5 C EVALUATE OPTIONS I Criterion The solution provides the highest efficiency for the Gap II Options 1 Option 1: Product strategy: Big Data in, creator directors out Advantage: - Make the most of the resources and collaboration to form the most optimal idea - Using a collaborative model, decentralized, data - driven - Avoid conflicts in synchronization between employees and leaders - Control through hard data saves time, bộ and professionalism Weakness: - The lack of creative director leads to a clear fashion orientation, as a ship without captain - There' s a lot of conflict in making synchronous decisions between a group of partners without a guide - The big problem is whether Big Data can replace the director' s artistic vision 2 Option 2: Big Data and analysis of marketing Advantage: - Use the available data sources to analyze and anticipate the appropriate marketing needs - Analysis of the prediction to marketing existing products or create new products that meet tastes - Catching consumers' tastes will have a business strategy consistent with market demand - In short term, new tastes are usually based on existing tastes, predictable Weakness: - Customer tastes are difficult to predict because consumers are notoriously poor to predict their future behaviors - Consumer interests are built rather than revealed, subject to marketer manipulation, unstable over time - The taste of each person is not the same 6 Document continues below Discover more fCrhoumy:ền đổi số UEL1 Trường Đại học… 195 documents Go to course NHÓM-7- Phuclong - Hope it helps 45 100% (7) [221MI5217] Group 7 CASE GROW 17 100% (5) 222MI5216 Group-3 Final-Project 31 Chuyền 100% (1) đổi số Practical 02 Google Teachable Machine 4 Chuyền 100% (1) đổi số Chapter 02-AI and Digital… 100% (1) 18 Chuyền đổi số 221MI5207 Group 3 Teachable Machine 11 3 Option 3: Product 3.0 Chuyền đổi 75% (4) số Advantages: - Using Big Data as the original source of innovation for fashion trends, combine the' clear brand vision with a common model' - Based on google analytics can be defined soon - Significantly improved the ability to meet the supply chain and inventory management Weakness: - 4 Option 4: Change the distribution model Advantages: - Access to digital customers - Amazon can provide a customer access gap even if they don' t shop on the company' s platform - The distribution of products through two alternatives is to use amazon as a transport channel or use amazon as a distributor Weakness: - Can' t guarantee the situation around the customer - The choice between giving up control to use the amazon giant 7 D RECOMMENDATIONS I Our recommendations 1 Our recommendation solution Replace creative directors with Big Data obtained from Google Analytics, Google Trends, social media, the company's own sales and customer databases to inform the next season's assortment 2 Our recommendation solves the issues Gap' s leadership needs to appreciate that customer' s fashion requirements are built in social ways by collective behavior and taste in tastes and interests As a result, designers do not consider the impact of social effects on consumers' tastes that have weakened the goal of changing gap products in conformity with the changing market demand Another notable issue involves the need for the company' s essential need for large data implementation to promote product innovation Market - based market research strategies have previously backfired Accordingly, the company can apply new analytical methods to assess customer behavior on the garment market The use of large data to assess the trend in garment and customer change is important because it affects the success of gap in its operations Therefore, we believe that peck' s decision to eliminate the creative director while using large data analysis to promote the development of the creative costume to match the customer' s interests in different segments is appropriate II Five Forces The threat of Bargaining power Bargaining power Threat of Competitive Rivalry New Entrants of the buyer of supplier Substitute Low Moderate to high Moderate to high High High Numerous Numerous Few suppliers and Low Dominating players dominating players the quality of differentiation players Saturated market Identical products material among the Products are products The manufacturer really identical 8 High rivalry Zero switching cost is wholly Readily Zero switching among the depended upon availability of cost of the competitors Many substitutes the supplier for the substitute buyer Strong brand image, raw material high quality, skin Strong brand friendly, which is plastic Zero switching High identity environmentally cost of the advertisement friendly buyer and No substitute promotional activities Zero switching cost III SWOT Analysis 1 Strength - Gap is one of the people who make special retail forms, in which a retailer focuses on a more specific product category rather than carrying many of its own products and products It is still the biggest example of this category, with 135, 000 employees and 3, 659 locations owned by the company and franchise at 50 countries, accounting for 36 7 million square feet of goods, creating global revenue - Enjoy a good reputation by advertising through mass media - Gap Inc management of the brand year: gap, banana republic, old navy, athleta and intermix, and used to be the U.S style of simplicity All these brands are common in different demographic segments it' s the way the retail fashion brand is headed for multi - diversity customer segments - Enough knowledge and experience to adapt to new fashion trends - Providing quality products for many different customers, closely observed gaps in market trends are changing and customers' demand The retail company provides products that match the trend of the needs It gives the company a unique competitive advantage compared to other brands - Have strong financial figures - A long - term multi - brand portfolio 2 Weakness - Putting the burden on these brands over the season to another is an individual being inspired 9 - Clothing and retail accessories are a very competitive industry The gap of the gap has not made a difference compared to other competitors It reduced the market share to a large level - There is a limited share with high - brand conversion - Revenue and declining profits are a major weakness that the company can' t handle Still use their assets and not profit on assets and equity - Gap is lagging compared to the opponent on the effective usage of online sales - Not to grasp the needs of customers 3 Opportunity - The core capacity of the organization could be a success in similar product - The development of the market will reduce the advantage of competitors and facilitate the Gap Inc., to increase competition compared to other competitors - New trends in consumers' behavior can open new markets for the gap, inc., which provides a great opportunity for organizations to build new revenue lines and diversify into new product categories - This investment has opened new sales channels for the gap, inc In the next few years, the company can take advantage of this opportunity by understanding its customers more and serving their needs using large data analysis - Expanding international markets focused on Asia - Use online retail trends and improve their site to introduce products to customers 4 Threatening - Digital brands are increasingly filling gaps in fashion retail areas and forms digital revolutions for rival brands such as gap and other competitors like zara or mango - Bitter competition - stable profitability has increased the number of companies in the industry, which has caused pressure to decline not only for profits but for sales - New technologies are developed by competitors or market breakers may be a serious threat to the future and long - term industry - Provide products with high levels of competition - Risk associated with global supply and production IV Financial analysis 1 Cost (fixed, variable) 10 - Fixed: Gap Inc.' s gap in the global garment industry, $ 3 trillion, accounting for gross domestic product (gdp) The U.S and Canada market accounted for more than $ 340 billion - Variable: 2015 and 2016 were disappointing (see evidence of 9, 10, 11, and 12 for the recent financial statement of the Gap Inc reduced in eight quarters before increasing 2% in the fourth quarter of 2016, which sales sales of 2% in the year 2 Revenue prediction - Fiscal 2015 results were impacted by a series of strategic actions to position Gap brand for improved business performance in the future, including rightsizing the Gap brand store fleet primarily in North America, streamlining the brand's headquarter workforce, and developing a clear, on-brand product aesthetic framework to strengthen the Gap brand to compete more successfully on the global stage During fiscal 2015, the Company completed the closure of about 150 Gap global specialty stores related to the strategic actions During fiscal 2015, the Company incurred $132 million of charges in connection with the strategic actions, primarily consisting of impairment of store assets related to underperforming stores, lease termination fees and lease losses, employee related expenses, and impairment of inventory that did not meet brand standards Financial results for fiscal 2016 are as follows: Net sales for fiscal 2016 decreased 2 percent to $15.5 billion compared with $15.8 billion for fiscal 2015 Comparable sales ("Comp Sales") for fiscal 2016 decreased 2 percent Gross profit for fiscal 2016 was $5.6 billion compared with $5.7 billion for fiscal 2015 Gross margin for fiscal 2016 was 36.3 percent compared with 36.2 percent for fiscal 2015 Operating margin for fiscal 2016 was 7.7 percent compared with 9.6 percent for fiscal 2015 Operating margin is defined as operating income as a percentage of net sales Net income for fiscal 2016 was $676 million compared with $920 million for fiscal 2015, and diluted earnings per share was $1.69 for fiscal 2016 compared with $2.23 for fiscal 2015 Diluted earnings per share for fiscal 2016 included about a $0.41 impact of restructuring costs incurred during fiscal 2016, a non-cash goodwill impairment charge of $0.18 related to Intermix, an $0.11 benefit from the gain from insurance proceeds related to the fire which occurred at the Company's Fishkill distribution center campus, and a 11 favorable income tax impact of a legal structure realignment of about $0.15 Diluted earnings per share for fiscal 2015 included a $0.20 impact of costs related to strategic actions incurred during fiscal 2015 During fiscal 2016, we distributed $367 million to shareholders through dividends - Our business priorities in 2017 include: • offering product that is consistently brand-appropriate and on-trend with high customer acceptance, with a focus on expanding our advantage in the most promising categories; • delivering meaningful product innovation; • creating a unique and differentiated customer experience that builds loyalty, with focus on both the physical and digital expressions of our brands; and • attracting and retaining great talent in our businesses and functions 20 In fiscal 2017, we are focused on investing strategically in the business while also maintaining operating expense discipline One of our primary objectives is to continue transforming our product to market process, with the development of an advantaged operating platform To enable this, we have several product, supply chain, and IT initiatives underway Further, we expect to continue our investment in customer experience, both in stores and online, to drive higher customer engagement and loyalty, resulting in market share gains Finally, we will continue to invest in strengthening brand awareness and customer acquisition Fiscal 2017 will consist of 53 weeks versus 52 weeks in fiscal 2016 - So, in order to grow financial resources, management should apply some of the business strategies in certain countries, such as china, where there is a huge population to promote business operations The gap in adaptation to the market model changes it reduces the ability to sell and make revenue decrease, because the creative managers in the company have not accounted for the dynamic aspects of the modern market, which are not developed by the consumer - appropriate brand E IMPLEMENTATION I Timeline 12 With the firing of his creative managers, peck is betting on a new role for Big Data - as the original source of creativity for a new line - predicting how fashion will be in the next season In a strategy that he named the 3 0, peck promised to combine the' clear brand vision with a common model' To do that, we have to study customers by doing the Big Data First of all, we have to filter the product Products that are designed and put into store, real - time sales data are analyzed to determine which items should be placed and which items should be left Collect customer data: - Collect customer feedback This is how to get information about what customers are thinking about product, business services - Customer psychology: through asking them to evaluate' star' feedback on social media - Third - party data: without access to large amounts of customer feedback we can rely on data that is made by market research companies To help us identify customer problems facing and demonstrate empathy by improving services, better products - Analysis of situations and dialogues By interviewing directly or through online exchanges of feedback, there may be an implicit fact behind it - To collect online behavioral data through website interaction, products and content of the enterprise Platforms like google analytics or lucky orange software contain data that the business can make conclusions about - The main prediction model is another source that some companies are using when they want to know the insight and make decisions With artificial intelligence (who is increasingly able to use algorithms and statistical models to handle large numbers of data so as to make predictions about customer experience - Increase the testing of products to validate the better commercial results, or test reality in stores - Google Analytics data is also a source of inspiration The recent fashion trend, men's jogging pants, was identified early, as Gap managers noticed that customers were using the search term on the company's websites and adoption was gradual across North America is predicted based on the geographic location of various people using the search term - Combine trends that detect real - time performance and faster action on it So, using real - time data from the e - commerce register and the ecommerce 13 purchase data to announce what the company has produced for the future inventory, not only for the buyers but also for new season releases Data analysis - Description: based on rules and recommendations to decide which products will be present in the store and know what consumers really want from them to restructure their business to assign a certain analysis path to the organization Because customers are very clear in evaluating the company doing well and what is doing not good - Predictive analysis: instead of a creative manager, each of the brand' s vision statements plays a role as a filter so that trends can be unified with the image of the brand So set up questions to validate the gap brand If you don' t get through those filters, they won' t show up in the store In this way, each trend is present in the entire brand category, which appears at banana republic, gap and old navy but is interpreted through the unique lens of each brand Managers of brands are encouraged to share information about trends in the portfolio Trend filter - Filter down the downward trend into the appropriate sources that the leader feels is the right brand and consistent with the trade It allows the company to join the trends that are happening at the same time in the designer' s house and the high - ranking space, which allows us to integrate into those trends in the old navy The conversion of the trend into products can be quickly sold in the new market After having all the data, the first focus and the most important thing to change the trend, tightening inventory Finally, through the "opening season program," try putting a small amount of merchandise into stores, wait to see how customers respond, and then quickly produce significant quantities of active products Good move to get them into the store before the end of the same season II Resources estimation - Manpower: Expertise, knowledge, experience, skills: Attitude The manpower of the Gap Inc is often assigned to recruit, train and create the atmosphere On average, 70% employees at Gap Inc would like to go to work every morning and communicate with their colleagues Most of the Gap Inc employees said the working environment was created positive by their staff 14 - Raw materials: Raw materials: use of low carbon fiber, using less water and producing less waste to protect the environment Tangible assets: modern machinery, equipment and modern Tool Material base - Financial sources: Cash, income, expenses, credit Investment, bonds, shares Partners, state subsidies From selling products or loans Technological resources: Technological resources storage and management of invisible resources The sale of the gap products on amazon may open a new data stream for peck and his managers, providing detailed information about the customer' s shopping habits as they do not shop on the company' s digital platform or at their stores, and provide access to existing customers The architecture of the architecture ensures that the technology they build fits and operates! This group is the key to monitoring the cohesion of our products together to make something larger, and consistent with our technical standards and strategies to finally create an optimized and appropriate ecosystem The architecture group helps explain our standards and plan solutions from the beginning The engineering and operational group are the product - based groups that follow the devops model and are ultimately responsible for solving all kinds of problems and creating the tools that promote our business The people in this group focus on using their technical expertise to bring important results to the business Part of each product group, information security includes security, product security, network defense and management Infosec is responsible for reporting and monitoring risks of network and the ability to recover from cyberspace through detection of threat and leading response The group ensures that they build with security priorities and help establish the standards and protocols that protect organizations from inside The group of technical products in collaboration with people from all over the business to provide products promoting solutions 15 In 2017, the Gap Inc.' s gap began to equip mobile store workers to serve better customers on the store floor - Invisible resources: The unity of the staff, the working environment: The personnel division of the Gap Inc has a direct impact on the working environment Their environmental reviewers 72% are positive and 61 employees with a' relaxed' working rate and are satisfied at the Gap Inc - Other resources: Operating resources include sources of money that the enterprise must pay to ensure that project activities are effective They include fees such as bonuses, employees, or depreciation of shared assets within the enterprise Contractors and outsource: also a factor that should be considered when the enterprise cannot be self - supplied within the necessary resources Backup budgets are the type of resource that needs to be evaluated in every project to ensure that the working team can respond timely to the risks possible III Contingencies - Before conducting data analysis, the enterprise needs to ensure that the data source you provide is exactly the right format for analysis To have the' clean' data source requires businesses to invest a large amount of time But if it doesn' t work out the quality of the input, the results, the reports that are after analysis will not achieve high value, even big errors - But with the development of industrial panels, Big Data technology is cybersecurity Storing new data, classified information could be one of the major targets that attract cyber attackers - Security risk: technological secrets, business secrets may be disclosed, or leak out… - Before operating Big Data technology, businesses need to integrate all the different data sources to the system IV Risk mitigation - Careful the boundaries between personalizing customer experience in a manner that is appropriate and useful without being affected => customer privacy - Camping at stores, combining customer feedback and salespeople in real - time code - Combination of physical and online stores => due to the rise of e - commerce - Combine trends that detect real - time performance and faster action on it 16 - Working systematically to find all the trends -> to catch up with the trends - Filter trends (brand and trade - in) - Try taking a small amount of goods into stores, waiting to see how customers respond and then quickly produce significant quantities of active products to put into store before ending the same season To implement Product 3.0, Peck shifted some manufacturing from Asia to the Caribbean to receive items faster He implemented fabric platforming, buying large quantities of fabric and holding it in inventory so that designs could be quickly created in response to of-the-moment trends He shortened the time it took for items to go from design to stores and postponed making the final decision on orders until he could incorporate the most recent data trends from limited-quantity early releases designed to test the waters Cutting the development cycle down to 8-10 weeks in some categories enabled Gap to be much more nimble and responsive to consumer purchasing data - Through the changes, Peck was listening closely to data from the "voice of the customer" program He explained: “I spend a lot of time reading reviews of our products online And our customers are very clear in telling us what we're doing well and what we're not doing well And those are the things the teams are acting on in both Gap and Banana [Republic], to get the product back to where it needs to be." - Product repair; cut back on TV ads and window sales, while increasing investment in the company's digital platforms - Change the distribution model; consider all opportunities beyond the traditional mix of channels and stores - The significance of the right product assortment was indicated by the first “Risk Factor” that Gap provided to investors in its 2016 Annual Report: “We must successfully gauge apparel trends and changing consumer preferences to succeed Our success is largely dependent upon our ability to gauge the tastes of our customers and to provide merchandise that satisfies customer demand in a timely manner - The company was at a crossroads, and Peck saw an opportunity “We were in an industry that was changing dramatically," he said “And looking back on it now, I think we probably all underestimated the magnitude and speed of the changes taking place .We are in a market that is in significant disruption A time of disruption means that market share becomes more fluid." He continued, “We've been doing business the same way for 40 years, and there are very few 40-year-old business models that are successful forever Periods of disruption are periods of 17 disproportionate opportunity More money is made during disruptive times – but is also lost – than is made during times of stability.” - The engineering and operational group are the product - based groups that follow the devops model and are ultimately responsible for solving all kinds of problems and creating the tools that promote our business - Information security includes security, product security, network defense and management activities Infosec is responsible for reporting and monitoring risks of network and the ability to recover from cyberspace - With the help of predictive analytics, compare supply-demand ratios and can avoid continuing to market products that are not well received by most customers - Determine product placement on store shelves depending on customer buying habits and needs and devise new business strategies for improvement - Combines simultaneous analysis of timing data, transaction data, social media data, and weather forecasts to determine the most accurate product that is always ready to deliver to customers 18 F CONCLUSION I Object - Use predictive analysis to sell existing products - Use predictive analysis to sell new products - To predict consumer interests - Looking forward to the future II Issues - Slow growth in core markets - Competition - Rise of e-commerce - Rise of Fast Fashion - Heavy and frequent discounting - Gap’s size and ubiquity were transforming from asset to liability III Recommendation Replace creative directors with big data obtained from Google Analytics, Google Trends, social media, the company's own sales and customer databases to inform the next season's assortment 19