Reference no: EM133952695

Between a Rock and a Hard Place

A June 2017 report for Canadian-based IBISWorld published a market research report on children's and Infant's clothing market in Canada. The results were less than rosy. Overall, the industry was riddled with poor sales due to competition from alternative retailers. In such a climate, the report concluded, "many industry players have exited the industry."

During the same summer as the IBIS report, two retailers, both targeting girls in the youth and tween market either closed down or significantly curtailed their offerings. On June 2, 2017, Lululemon announced that its subsidiary Ivviva, which sold girls yoga and athletic wear, would close most stores and move almost all products online. On August 9, 2017, the Facebook page for Triple Flip, a Canadian retailer selling activewear to tween girls aged 7 to 13, announced that the company was closing all of its physical stores and shuttering its website.

Needless to say, the summer of 2017 was not easy on the female tween shopper in Canada. But, as could be seen from the IBIS report, these developments could not be deemed a complete shock. The "alternative retailers" seemed to be the culprit, but what did this mean?

Obviously the online options for retailing are well known; for example, Amazon has repeatedly disrupted retail industries with low prices and convenient delivery. But most companies now have online options, and as these become easier to use, the digital retail world will continue to grow.

Interestingly, the other culprit in the "alternative retailers" group was identified as department stores. This included discounters like Walmart and Winners, but also included a significant effort by higher-end firms like the Hudson's Bay Company to offer good products and prices on clothing for the young female market. And one feature of both Ivviva and Triple Flip was expensive products. Ivviva yoga pants, still selling online through Lululemon, can range from $60 to $80. This can be quite expensive, especially since younger children either outgrow or wear out clothing in a relatively short amount of time. However, this is still an underserved part of the market now, especially given the lack of bricks-and-mortar alternatives for this age group and their parents.

Tweens cannot be underestimated based on their age. As MKTG 4 states on page 137, tweens "make up approximately 2.5 million of Canada's total population, have direct spending power of more than $2 billion and an influence over how their families spend another $20 billion. This direct and indirect spending is significant, and with the market gap that exists, the gap could be filled with an offering that meets the needs of the tween market.

Retail expert Neil Saunders noted that "While there is some demand for athletic wear for younger girls, the level and frequency of that demand is insufficient to support a network of Copyright © 2019 by Nelson Education Ltd. expensive stores.'' It is no surprise then that, despite failure of the physical store concept, both Ivivva and Triple Flip, have continued to have some market presence. Ivivva products are selling under the Lululemon name on the parent company website. Triple Flip continues to sell teamwear for a variety of girls' sports and also has placed some products in pop-up and online stores of other retailers.

You have been asked to create a new retail concept for a youth female market in activewear, to fill the market gap left by the diminished activities of Ivivva and Triple Flip. You are tasked with researching the rise of nonstore retailing documented in both M4M and MKTG 4. You will need to properly establish a well-created and defended target market, and to make sure your new creative retail concept fits the needs of that market segment.

The resulting retail mix created should provide the necessary groundwork for a revitalized new offering in this market. You best be "clothing in" on a good idea soon.

Questions

1. The retailing mix for your new tween retail idea would include the 4Ps and which other two aspects?

a) Personnel and Perception

b) Presentation and Promotion

c) Personnel and Presentation

d) Presentation and Purpose

2. In determining the nonstore retailing option for a tween-based retail entity, you will need to decide on a proper channel structure. Your choice would be between all of the options below with the exception of which one?

a) Intensive

b) Exclusive

c) Selective

d) Perceptive

3. If you move forward with a nonstore retailing option for a tween retail operation, which aspect of the retailing mix will not be applied in a conventional way?

a) Personnel

b) Presentation

c) Product

d) Price

Short-Answer Questions

1. Create a proper market segment for the tween market described in the case. Be sure to support your segment with at least 2 criteria for successful segmentation.

2. Draw the retailing mix for your new tween-market retailing concept. Be sure to show how each element is applied to your idea.

3. Provide a comprehensive assessment of each of the nonstore elements you considered for developing a new tween retail concept. Provide reasoning for moving forward with your choices and reasoning for not selecting other options.