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COMPETING IN THE EUROPEAN TEXTILE RETAIL MARKET …
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COMPETING IN THE EUROPEAN TEXTILE RETAIL MARKET – STRATEGIC CHALLENGES & OPPORTUNITIES 7th July 2016
Transcript of COMPETING IN THE EUROPEAN TEXTILE RETAIL MARKET …
COMPETING IN THE EUROPEAN TEXTILE RETAIL MARKET –
STRATEGIC CHALLENGES & OPPORTUNITIES
7th July 2016
DATA IS THE NEW OIL …
BUT THE “BRAND” IS STILL THE SPARK
WHAT YOU SHOULD TAKE AWAY TODAY
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We operate in a challenging environment
Industry players apply a set of levers to survive
Technology plays a key role to keep the engine running
But brand equity rules – without it, no right to exist
AGENDA
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Snapshot of the Tom Tailor Group (TTG)
Our challenging business environment
How to keep the engine running
Why brand equity matters
Wrap-up
TOM TAILOR GROUP (TTG) AT A GLANCE
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~
TWO UMBRELLA BRANDS – FOUR BRANDS
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in €m
SALES GREW TO ~€1B – ~4.5X IN 10 YEARS
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217261 283 300
348412
630
907 932 956
32 35 22 38 40 48 66 77 87 76
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
TOM TAILOR GROUP Sales Rec. EBITDA
+2.5%
X 4.5 in 10 years
TTG: AN OMNICHANNEL PLAYER
Retail- StoresFranchise-
Stores
Shop-in-
Shops
Multi-Label
partner
Shop-in-
Shops
(vertical)
465 in
Europe
202
worldwide
3,134
worldwide
In 21
countries
~9,141
worldwide
11 in
Germany
1,022 in
EuropeIn Germany
Retail-Stores
14.000 POS around the world
RETAIL WHOLESALEE-COM WHSRETAIL E-COM
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AGENDA
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Snapshot of the Tom Tailor Group (TTG)
Our challenging business environment
How to keep the engine running
Why brand equity matters
Wrap-up
FASHION – A TOUGH ENVIRONMENT
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FASHION – A TOUGH ENVIRONMENT
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Stagnating market
Every month…
Channel mix shiftPrice challengers
Outsourced production Volatile commodities
… a new collection
A VOLATILE GERMAN TEXTILE MARKET
12Source: TextilWirtschaft
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-2
-10
-5
01
-1
10
-3
5
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2
5
8
-5
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-8-7
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-16
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-5
-1
2013 2014 2015
%-Change in market sales year-on-year
FY Market development -3% 0%-2%
Source: Gartner and Statista
PRICE PRESSURE FROM THE “LOW END”
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MATERIAL PRICES TOUGH TO PREDICT
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$cent / pound
Materials ~65% of total cost Tough to predict – example cotton100%
Labor
Overhead
Transport / handling
Import duty
$
Material
0
50
100
150
200
250
Apr 08 Apr 10 Apr 12 Apr 14 Apr 16
+340%-70%
RESULT: INVESTORS SKEPTICAL ABOUT OUR INDUSTRY
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Many players lost value in the last years…
-32%
-63%
-78%20152014 2016
-32%
..only few verticals gained
20152014 2016
+48%
+12%
3 years share price trend: 3 years share price trend:
AGENDA
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Snapshot of the Tom Tailor Group (TTG)
Our challenging business environment
How to keep the engine running
Why brand equity matters
Wrap-up
KEEP THE ENGINE RUNNING: WHAT’S THE OIL?
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Latest Fashion trend: restructuring & cost cutting
TECH: SOME GOOD GROWTH LEVERS
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Omni-channel capabilities Predictive Analytics
Pricing / Promotions Consumer Journey
Endless aisle / order from store
Click & collect /
inventory check
Ship from store
Return to store
Dynamic pricing Mark-down mgmt.
Context-driven
forecasting
Inventory
modelling
On-/offline journey
POS motion tracking
In-store mobile ads
WE ARE CURRENTLY BUILDING OUR NEW
TECHNOLOGY PLATFORM
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SAP Customer Activity
Repository
POS
POS
POS
Abverkäufe Bestände
CRM
Business
Warehouse
Fashion
Management
Webshop B2C
Omnichannel-
Plattform
Abverkäufe
Hybris B2B
Hybris Marketing
Sales Reports
Retail-nahe Partner
Merchandise
Planning
Assortment
Planning
Allocation
Mgmt.
Abverkäufe
Kundenaufträge
AGENDA
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Snapshot of the Tom Tailor Group (TTG)
Our challenging business environment
How to keep the engine running
Why brand equity matters
Wrap-up
A STRONG BRAND IS GOOD – ALWAYS
A UNIVERSAL TRUTH – E.G., AUTOMOTIVE
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Drives customer loyalty … … and willingness to pay
(1) Anteil derjenigen Autobesitzer, die bei Kauf eines neuen Autos der Marke treu bleiben
(2) Relativ zum Marktdurchschnitt; ausgedrückt durch Gesamt-Markenwahrnehmung; bewertet durch Notensystem von 1 bis 10 mit 10 als bester Note
(3) Preisprämie, die Hersteller über alle Modelle hinweg erzielt; in jedem Segment, relativ zum 10 %-Quantil berechnet (kleinste Importmarke mit signifikantem Volumen); bereinigt um unterschiedliche PS-Ausstattungen
Source: DRI; Automotive Market Research Data; BCG-Projekterfahrung; BCG-Analyse
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10
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-2 -1.5 -1 -0.5 0 0.5 1 1.5
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10
20
30
40
50
60
70
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-2 -1.5 -1 -0.5 0 0.5 1 1.5
Customer
loyalty(1)
Brand strength(2)
Avg.
price
premium(3)
Brand strength(2)
$0 $20 $40 $60 $80 Brand value Market capitalization
BRAND MATTERS ALSO FOR TEXTILE PLAYERS
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(*) In case of holdings, a portion of the market capitalization was estimated
Sources: „BEST GLOBAL BRANDS 2015“ Interbrand and Financial Time, 2016
Value in $b
Brand value ($b) as % of market cap*
$37.5 48%
$28.5 41%
$14.0 22%
$22.2 58%
$6.8 25%
$6.2 60%
$7.3 122%
$5.9 87%
$4.6 85%
$4.3 101%
CLEAR ROI ON MARKETING IN TEXTILES…
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Marketing spend as % of sales
• Adidas / Nike: ~11-13%
• Puma (till 2014): ~4%
• Puma: (2014/15): ~12%
+11%
AGENDA
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Snapshot of the Tom Tailor Group (TTG)
Our challenging business environment
How to keep the engine running
Why brand equity matters
Wrap-up
WRAP-UP
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Fashion is & will remain a tough market
We‘ll see continued consolidation of brands & trade partners
Technology & data helps to survive
But without brand equity, there is no reason to exist
