Market Analysis- Competition and Consumer: Clothing Stores Essay Example

(women's wear), 44813 (children and infant stores), 44814 (family clothing stores), 44815 (clothing accessories), 4482 (shoes stores), and 4483 (jewelry, luggage, and leather goods stores) (Statistics Canada 2006). This coding and classification system can be a useful tool for companies to asses their competition. Top Five Companies in Canada Competition is fierce in this particular industry, so we turned to the Financial Post research database to help us determine who the top five players were. Based on revenue, the top five clothing stores in Canada are Reitmans Canada Limited, La Senza Corporation, Le Chateau Inc., Danier Leather Inc., and West 49 Inc (CanWest 2006b) 1. Reitmans Canada Limited had the highest sales of all the retail apparel companies in Canada (See Appendix A). The company operates under six different names, each of which targeting different market segments, from plus sized women to expecting mothers.

This offering captures a large percentage of the market, allowing the company to generate sales from a number of different sources. Reitmans does not rely on a particular product or market segment to make a profit because it targets such a large consumer base. The company has been in business for 80 years and has developed brand loyalty and recognition from many different consumer groups.  La Senza Corporation is also among the top five industry players.

Its reputation for quality, affordability, and elegance has resulted in La Senza becoming one of the most well known lingerie brands among young women and is a popular choice for men buying gifts for their significant others. Its brand is highly recognizable and has successfully been targeted towards the “tween” market, a fast growing segment of young

girls and teenagers with growing levels of discretionary income. La Senza’s wide product mix, along with highly visible and accessible stores located in malls across Canada, attract buyers from most consumer segments. Le Chateau Inc. has become a leading industry player because of its appeal to fashion conscious men and women. It has chosen to manufacture a large portion of its merchandise in Canada, giving it a unique capability to quickly adapt to changing trends (Le Chateau 2005). Le Chateau has steadily developed and strengthened is name and reputation as being a leader in providing the latest fashions at reasonable prices.

Danier Leather Inc. is appropriately included as one of the industries top players because it has been able to achieve high sales by targeting the middle market of leather goods and accessories, a market in which there is currently little competition. The company designs, manufactures and sells its goods allowing it to effectively control costs of production while adapting quickly to changing consumer trends and providing high quality goods (Danier Leather Inc. 2006). Over the past several years, Danier has also developed a wholesale business, tapping into a different target market and has effectively made leather goods accessible and desired by markets with lower income than its original market.

West 49 Inc. is included as one of the top five players in the industry because it provides apparel and equipment to the fast growing segment of young, fashion forward, male and female snowboarders and skateboarders. There are few competitors in this market and with 118 stores across Canada, West 49 is one of the most highly visible chains offering this type of apparel, with operations under

seven ifferent names, West 49, Billabong, Off The Wall, Arsenic, Amnesia, D-Tox, and Duke’s Northshore (CanWest 2006c). Stores are located in malls all across Canada to attract even non boarders, further increasing its market share by appealing to a wider range of young shoppers.

Reitmans Canada Limited – Hoover’s Report

According to Alex Biesada, author of the Hoover’s Report for Reitmans Canada Ltd. (see Appendix B), Montreal based Reitmans Canada Limited is a retailer of men’s and women’s apparel and accessories.This publicly traded company currently has 880 stores in Canada, and plans to open an additional 60 stores in 2006. It operates under six different names, Reitmans, Smart Set, Penningtons, Addition-Elle, RW. , and Thyme Maternity, each one targeting a specific market segment in the retail clothing industry. The flagship entity, Reitmans, has 355 stores across Canada, specifically targeting women between the ages of 25 and 45.

Reitmans’ major competitors include American Eagle Outfitters, Hudson’s Bay, Wal-Mart Canada, H, Le Chateau, Sears Canada, and Zara (Biesada 2006). Products and Product Lines Reitmans Canada Ltd. ffers a broad product line through its six stores, including both men’s and women’s wear, junior wear, and accessories, enabling the company to cater to a large consumer base of women of all ages and sizes, expecting mothers, and men. Reitmans alone has a narrower consumer base than it’s parent company, but also carries a broad product line including apparel for average sized women, plus sized women, petite women, and plus sized petite women. The company also carries product lines of outerwear and accessories.

Each product line contains both career wear and casual wear, all of which are ready-to-wear and easy to maintain. Reitmans offers

both classic and trendy apparel, and emphasizes the comfort and affordability of its products.

Part B – Customer Segmentation

In this section, we explore three possible consumer market segments for Reitmans. Please keep in mind that the segmentation analysis is exclusively on the Reitmans chain of retail clothing stores and not on the Reitmans Canada Ltd.

The entity, as discussed earlier.

Segment #1 - Newly Entering Women in Business (NEWBS)

Demographic/Geographic: The NEWBS market segment represents young women aged 22-30 who are entering the professional workforce for the first time. These women have just completed their post-secondary education and are earning an annual income between $35,000 and $45,000. They are most likely unmarried, and currently in the “Bachelorette” stage of the Family Life Cycle. NEWBS live near the city centre, probably in rented apartments. Psychographic: NEWBS are independent, hard-working women who do not have much leisure time because of their busy lifestyle.

They are quality and value-conscious because of low levels of discretionary income. They have worked hard for their job and want to present a professional image that reflects their accomplishments. Behavioral: In terms of usage behaviour, NEWBS will make a large purchase of a basic wardrobe prior to entering the workforce, and will make occasional purchases every one to three months to update their wardrobe and make seasonal purchases such as summer skirts or winter coats. When considering benefits that may be experienced, NEWBS will be able to buy all the clothes they will need for work at affordable prices, without having to sacrifice quality and fashion. They can also find everything they need to outfit themselves from head to toe, including clothing, outerwear, and accessories in one place,

saving them valuable time.

Members in this segment are similar in that they are new entrants into the professional workforce needing affordable and high quality clothing for the workplace. The segment differs from other segments because of demographics and the unique need of an affordable wardrobe for their first office job. The segment is large enough to realize a profit because of the increasing numbers of female graduates from post-secondary institutions, especially in business and professions such as engineering, where more professional attire is required. The segment size can be easily measured by obtaining statistics on recent female graduates from universities and colleges.

This market can be reached easily by advertising in fashion magazines read by young women, on public transport and in transit shelters, since this segment would most likely use public transit to travel to and from work.

Segment #2 - Empowered Former Fatties

Demographic/Geographic: This group represents women who are participating in weight-loss programs and have lost a significant amount of weight. They are aged 30-55, working or middle class, with an income between $40,000 and $75,000. They live in suburban households with their families, are married or recently divorced and are most likely in the “Full Nest I or II” stage in the Family Life Cycle. Psychographic: Empowered Former Fatties have worked very hard to lose weight, and are proud of their new bodies. They have a renewed awareness of their own self image and a new lifestyle of active living and healthy eating.

These women value empowerment and self-confidence, and would like to reward themselves for accomplishing the goals they have set.Behavioral: In terms of usage behavior, women in this segment will need to make

one large purchase to replace most of their existing wardrobe and will continue to add new items seasonally or as they lose more weight. The benefits that Empowered Former Fatties will receive include being able to find clothes that encourage self-expression, social meaning and self-identity at affordable prices, allowing them to easily establish a whole new functional wardrobe. Members of this segment are similar because they have recently lost weight and require a new wardrobe.

They also share a recent commitment to healthy living and feeling good. The segment is different from other segments because the women have renewed their self-confidence and have a sense of achievement that they want to reward, thus building a new lifestyle and need for a new wardrobe. The segment is large enough to be profitable to Reitmans because of the ongoing trend towards health-consciousness and weight loss programs, which is highly likely to continue into the future. Secondary research done for weight-loss and fitness companies could be used to provide accurate measurements of size and purchasing power of this segment.The segment could be easily reached by using existing Reitmans advertisements on television that already convey a sense of female empowerment.

Partnerships with organizations who offer weight loss programs could allow Reitmans to penetrate this target market with ease.

Segment #3 - Hopeless Husbands

Demographic/Geographic: The Hopeless Husbands segment consists of married men, aged 35-50 who need to buy gifts for their wives but have limited knowledge of women’s fashion. These men are working or middle class, earning an annual income of $50,000 to $100,000.They live in suburban areas with their families and are most likely in “Full Nest II or III” of the

Family Life Cycle. Psychographic: Hopeless Husbands value their time as they spend most of it working hard to support their families.

They also value quality products and services that will make the most of their hard-earned dollars. They have little knowledge or interest in fashion. Behavioural: In terms of usage behaviour, purchases will be seasonal peaking during the Christmas season. They will return for occasional purchases such as birthdays and Mothers Day. Hopeless Husbands want an easy solution for their holiday shopping, and suggestions for purchases by helpful staff make this possible. They benefit by being able to buy gifts that their wives will actually like, and further benefit by purchasing from a store that allows for easy returns and exchanges of merchandise.

Hopeless Husbands seek to invest little time and effort in the purchasing process. Hopeless Husbands are similar in that they have a recurring need to buy gifts for their wives, yet never seem to know what to buy.The segment is very different demographically from other all-women segments Reitmans would normally target, and is large enough to generate a profit due to the large number of married men who need to buy Christmas gifts every year for their wives. Existing data for the jewelry industry could be used to accurately measure purchasing power of married men and segment size.

Reitmans can reach this target market by employing the tools of other retailers hoping to attract gift buying husbands, such as jewelry stores. This can be accomplished by placing advertisements on the TV or on the radio, and in men’s washrooms providing hopeless men with gift buying ideas.