A brand that represents luxury, class and style, Ralph Lauren, found by a dreamer entrepreneur in New York, USA in the year of 1967 with the objective to sale his own designs. Nowadays, the famous Pony logo is recognized around the world and also is considered one of the most important global brands.
The company is focus in the design and sale of clothing for men, women and kids, maybe the more recognized product is the famous polo shirt; a shirt that has had the same minimalist design for a lot of years and until now is an outfit that represents elegance and style. Additionally, the firm offers almost all types of clothing. Additionally it had added to its portfolio the sale of fragrances, home accessories and restaurants.
The brand has international presence and its designs can be fine from Mexico to India. The strategy of the company is in the way B2B and B2C. The firm possesses its own physical stores, also called flagships, which are characterized by their unique design and location, and also its products could be finding in retailers stores such as Sears and El Corte Ingles.
In the actual situation, the brand has suffered a stumble in 2017; it lost its CEO, fired employees, closed many stores included one of its flagship stores in New York, and it managing logistics and operations issues. The tendency for the E-commerce shop has also been adopted for Ralph Lauren. However, the E-commerce environment is still not robust and it has not been used correctly. The decision to improve the E-commerce store was taken recently and it will be ready until 2018.
With a continuous growing of e-shoppers (people that buy via online) around the world and the tendency to keep buying via web, most of the stores are rethinking their strategies and focus its efforts in develop and strong E-commerce cycle. But, is it possible for the old-schools brands and wisely companies to reinvent their strategies and focus on an E-commerce environment? It looks possible; a good example is Nike and Walt Mart that has increased their sales via online.
Regarding to the previous question, for the next 3 years will be common to see how most of the big old-school brands will be handling this E-commerce transition to dominate their markets again. Ralph Lauren is included in the positive scenario. The companies that can’t manage these challenges will disappear. The E-commerce now is a must and not an option.
A second tendency that is growing is the big stores selling clothes at cheaper prices. This is the case of Primark and H&M, the quality of the product maybe is not the best but is good enough. This business has a lot of success and it has won terrain against big fashion brands. Additionally, customer mindset has changed, the brand is no more important; “I dress what I like to dress, no matter if my outfit cost less than $50 USD.”
The last forecast is related to reduce operational expenses with only one stock and to have presence in different E-commerce platforms. The companies will improve the management of their business intelligence or adopt one such as SAP. This will let the companies to see information that was “invisible” and help them to take accurate decisions.
Additionally, it will be easier to connect their databases to the different E-platforms; there will be plug-ins or modules that will facilitate the connection with all the platforms. Nowadays customers still have problems connecting their databases to the sites, what causes the users to have two or three different s inventories, one for its own platform, and two more for different E-commerce such as eBay and Mercado Libre. This will let to the companies or users to manage efficiently their inventories and also to have presence in more platforms.
Customer segment: the segmentation is directed to customers with medium or high income. The products are expensive.
Value proposition: design and commercialization of premium clothes, accessories, fragrances and home goods. All of them are exclusively designed by the brand and they are considered premium and unique. A second proposition is the restaurants.
Channels: the different channels that Ralph Lauren uses are listed below:
- E-commerce store: Ralph Lauren has its own shop online (Attachment #1)
- Flagships or stores: Ralph Lauren has its own “mainly” stores, Flagships, in important cities and streets but also it has other shops located in shopping centers. (Attachment #2)
- Social networks: It has presence in the most important social networks, Facebook, Twitter, Instagram, and YouTube. In these platforms the firm shares its products and curiosities of the company such as interviews, events, etc.
- Third party retailers: many small and big retailers around the world commercialize Ralph Products, such as Sears, Liverpool, El Corte Ingles, etc.
Customer relationship: it creates relationship through personal assistance for the customers that go to buy into the stores or eat in the restaurant. Other method is the offers the brand has in the reverse of the ticket one someone buys something or coupons.
Revenue streams: the main revenue stream is sales of products and food.
Key resources:
- Design skill: designs of products are unique and exclusive, for this reason is mandatory to have skilled designers.
- Employees: It needs people to take care of stores and restaurants. The stores and people play an important role in customer experience, for this is necessary to have employees committed with the brand.
- Marketing skills: advertising and marketing campaigns play also an important role. The campaigns should be very effective to give the message of exclusivity and luxury. For this reason is necessary to have skilled marketing workers.
- Chef skills: for the restaurants is necessary to have skilled chefs.
Key activities:
- Marketing campaigns, the
- Design of the products
- Cook food
Key partnerships:
- The brand designs the products but a third party, maquila, is in charge to produce them. Maquila should be a trustful partner to fulfill with the exclusive designs.
- Retailers or departmental stores are important because with they can reach more customers.
Cost structure:
- Rent of the stores, flagships and restaurants. Fulfill with the space where these are located.
- Maquilas: manufacturers of the products
- Marketing and advertising: the cost incurred in the marketing projects
- Salaries
The company is interesting because it not trying to sale via online, its social media channels and web page never mention the E-commerce store to buy. Their strategy is to position its products as top and luxury, and to find the closest local store of the visitor in the web page.
Analyzing its web page, it´s easy to find using Google. A feature to highlight is the localization of the closest store, the company consider important to buy in its flagships, even Steve Jobs remarked them as the best in the world. However, the web page only shows the products but they can´t click on them to buy it or the option to go to the store is not available. If someone wants to find the E-commerce, the user has to do it through the search engine.
According to Similarweb.com the average visit duration of the users is more than 5 minutes and review an average of 6.1 pages per visit. The countries that visit more the web page are USA and Spain. In traffic sources, the main channel where the people arrive to the site is through search engine with a 39.49%, then it has direct visits with 26.09% and in third place are referrals with a 27.42%. Social media platforms only represent 2.70%.
Information taken from Similar Web
Disaggregating the searches, 83% are organic and the rest is paid. This means the company doesn’t have to invest in Google Ads to appear in the first position. If someone search with the keywords “polo, Ralph Laure or polo Ralph Lauren” the results will always throw Ralph Lauren page in the first place.
Analyzing the most important social media platforms, Facebook, Twitter, Instagram and YouTube, the first impression is the low interaction the company has on them. Let´s analyze one by one:
- Facebook: with more than 8 million of users but its last publication was in February 2017. (Attachment #3)
- Twitter: with around 2 million of followers but it doesn´t have a continuously presence in the platform. The company publishes every 2, 4 or 6 days. (Attachment #4)
- Instagram: with more than 6 million of followers and has the same behavior as Twitter. (Attachment #5)
- YouTube: with around 40 thousands of followers and its last publication was in February 2017. (Attachment #6)
About social networks, Ralph Lauren is not using them correctly, the company has them almost abandoned and its behavior is not constant. In all the platforms the firm publishes interesting topics as the events, products and famous stars but they haven´t redirected the followers to the E-commerce.
Related to the recent plan of Ralph Lauren “Way Forward” plan published in 2016, one action is to install SAP to improve its global E-commerce, operating and logistics systems. With this strategy the fashion brand will be able to enhance its CRM and obtain more information about its stores.
My recommendation for the E-commerce strategy is to focus in to attract more E-shoppers. The tendency to buy online is growing more and more and Ralph Lauren is taking the decisions very slow. The firm has presence in social networks and search engines but it is not redirecting the users to the correct channels. The interaction in social networks is very low; it needs to be more constant, every follower could be a potential customer.
Finally, Ralph Lauren doesn´t has a mobile app, this tool not only will help to sale more but it can be used to create a link between the customers and the brand. Ralph Lauren means luxury and exclusivity; the app can be the tool to make feel the buyer important and unique.
- Improve the use of the social networks to attract more customers. The platforms should have more life. They are publishing little information and interaction is low. These platforms can be the path to the E-commerce.
- Improve the web page to sale more. The web page announces all the products but none of them can´t be buy it. It should have the option to buy it. Additionally, the site doesn´t has the option to go to the E-commerce, it should be added. The feature to find a closest store is good but what happen with the users that don´t has a near store; they should be able to go buy online.
- Don’t invest in search engine positioning. Ralph Lauren appears in the first places when the user looks at it.
- Improve CRM. Use the new system SAP to obtain more information of the customers. The behavior of the buyers is always changing, they need to track their preferences and combine them with the tendencies with the objective to have what the customer is looking for.
- Develop and App. The app could increase the sales but also can be the tool to create that feeling between customer and the brand.
- Physical stores should be use as marketing space and showrooms. The stores should also be strategic points to promote the E-commerce change. Show to the customers the benefits to do it online and the variety of the products they could find.
In general, I consider the E-commerce environment of Ralph Lauren is very weak, they have recently invested in the tools (such as SAP and a new E-commerce store) and it has presence (social networks, web page, E-commerce, etc.) but they haven´t “squeezed” them correctly; maybe it’s because they’re facing some internal problems but once they manage them the firm should invest more for digitalization. It could be difficult because the company grew with the “old school” way. However, even now with a non-well E-commerce strategy, the sales represent 8.8% (Attachment #7); this is around $610 million USD. What could happen with a well-handled E-commerce strategy?
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