The Interior Market of Debenhams in 2014 - Essay Example

?The Interior Market of Debenhams in Introduction Debenhams is a UK based firm that specializes in the production of various brands ranging from childrenswear, womenwears as well as menswear. With differentiated customer products, the firm has created a strong customer loyalty that has resulted to a remarkable expansion of the company operations across UK and in foreign countries. With more than 240 stores in 28 countries, Debenhams has effectively penetrated the market an aspect that has made it to become the 11th biggest online store in the UK market (Rosie, 2010). One of the major aspects that have made the company to attain a competitive edge in the homeware industry is the employment of skilled designers that have embarked on production of brands that meets the needs of its customers in the local and international markets. Some of the notable designers include Ted Baker, Jane Packer, Erickson Beamon, Janet Reger, Matthew Williamson and Ashley Thomas among others. Based on its high investment in British design for the last 20 years, Debenhams has benefited from a stable financial position that has assisted the company in expanding to other countries. This paper discusses the direction that Debenhams interiors market is heading for 2014 with reference to its customers, products, and the retailer. The consumer In efforts to increase its sales, Debenhams has embarked on increasing the number of customers who purchases its products. Debenhams customers are individual consumers who cut across the whole family regardless of gender, age, and social status as well as foreign customers. Its main business is in clothing though they have adopted various strategies in order to successfully tap footwear industry (Data monitor, 2011). Majority of the customers are women who spend few minutes to almost the whole day in the stores. The time spent by the customers in the store varies from one store to another depending on their purchasing power. For example, most customers who visit White rose store are middle class earners and spend less time compared to the other store in the city center. They have customer who visit their store on weekly and monthly basis but on average a customer visits the store every quarter and spends about half a day in different sections shopping. More to that, the store boost itself based on increased number of online shoppers through its website as well as their iphone application for the smart phone users and a video facility that offer online display of products, well known designers interviews and photo shoots. (Data monitor, 2011). The company controls 17 percent market share in the clothing industry in United Kingdom. (Data Monitor, 2011). However, many customers visit the stores to compare prices and may end up visiting the store several times without making a purchase and when they does it, most probably it will be an impulse buying of another product rather that what they needed in the first place. In UK, most shoppers have changed from using traditional shopping method to the internet based shopping. Debenhams has opted to use different channels to reach its target consumers; it has convectional stores as well as online kiosks (Neolane, 2013). It also allows its customers to order products that are not available on their shelves for the same day delivery. Clients adopt shopping methods that suits them. Debenhams customers who adopt new channels are frequent and valuable than then store shoppers (Data Monitor, 2011). Most customers are embracing these changes because online channels offer convenience and are slightly cheaper. This is especially so for Debenhams since most of their customers are women who are busy with family and tight working schedule. Customers are also given ample opportunities to compare the prices of the three products that include furniture, outdoor and lighting brands. In line with this, the company has enhanced its online shop, reduced the delivery period and increased its range of products. Demand for custom made products has also increased compared to other labels that are more expensive (Jason and Detlev, 2010). Debenhams has is own lines of cloth that are cheaper as the company is able to control the production cost and thus low prices and increase in revenue. Its aim is to increase demand on its own brands over its competitors. The company has also focused in increasing its consumer base by launching a new cloth line and footwear for men and footwear women. Consumer buying behavior In UK, most people are loyal to specific brand and designers, but they may switch to another brand depending on other factors. This is not always the case for low income earners who are not concerned with lifestyle dressing and social status (Women swear Industry Profile, 2012). In higher income areas, customers are brand specific and their choice is influences by Fashion, social status and price (Womenswear Industry Profile, 2012). In hard economic times, during unemployment and due to high cost of living, most shoppers consider value and price. Debenhams offer low prices due to their own labels, since it can control production cost, and avoid the shipping cost. However, most Debenhams customers are middle class earners and high class earners who juggle between busy schedules and therefore also shop due to convenience and sense of ownership that is created by local labels. Debenhams also offer wide range of products in one store and customers also choose to purchase their products in one point. Manager in the stores are independent on how their stores are planned. Most of them plan them in a way that the fast moving products are placed at the top floor to increase the time each customer spend in the store and increasing the probability of converting the visitors into customers ( Data monitor, 2011). Consumer’s behaviors are also affected by the government policies. For example, increase in VAT on consumer goods from January 2010 has decreased the purchasing power of the consumers who are forced to postpone purchasing of non basic products or turn to low quality products that are cheaper. Consumer expectations A consumer demand and desires changes very fast in a fashion conscious areas. For a company to sustain its customers, it must produce strong brands and continuously market their products to attract new customers. Due to increased competition and low disposable income, consumers expect the companies to offer quality and dynamic products in a market where Fashion is very unpredictable (Womenswear Industry Profile, 2012). Debenhams have improved their old stores and their customer services but the customer review indicates that their services delivery has not been effective especially for the online shoppers. The complain that the orders are not delivered on time and in some cases some products are missing or worse still different products are delivered. In hard economic times and new entrants coming in the customer expect high quality products for the same price. Market position Debenhams has a large market share in United Kingdom. This has been facilitated by the wide range of products that are highly demanded in the local market. The company had about 17 % of the total sales on clothes in United Kingdom in 2011. It is clear that Debenhams derives more than 50% of their revenue from clothes. However the company is doing poorly in the footwear there needs to strengthen their shoes department or lose its footwear shoppers to its competitors. Competitors Home ware market In United Kingdom is dynamic and competitive. Debenhams main competitors are well established retail companies that offer similar products and few new entrants as well as manufactures who choose to sell directly to the consumers through online kiosks due to increased access to internet (Womenswear Industry Profile, 2012). When manufactures sell their products directly to the consumers they have a price advantage. According to Women’s wear Industry Profile (2012), major competitors’ retail companies include Arcadia Group Limited that has more than 2,500 outlets around United Kingdom and around 420 stores in other parts of the world, Marks and Spencer Company with more than 690 stores in United Kingdom and many others in different areas among other stores (Womenswear Industry Profile, 2012). Home made and custom made products also pose as greater competition to the convectional ready made products offered by the store, since most customer associate uniqueness with lifestyle. The second hand industry also threatens the level of income for the new products store as a result of the current economic hardship and low buying power especially in poorer regions. Despite this Debenhams is promising to offer its customers quality products, variety of products and effective customer services. Debenhams also recognizes that customer buy more that what they are targeting to buy and has ensured the tap into this potential by having more stores in most center. Current strategies In its efforts to reach more customers, Debenhams has adopted an accessibility policy. This entails provision of exceptional products that meets the needs of its customers regardless of their physical abilities. One of the key strategies that the company has adopted is modernization of its stores including introduction of new products. Training of employees is another vital strategy that the company has adopted. It is worth to note that one of the notable ways of increasing the profitability of any company is by undertaking an extensive training of the work force (Jason and Detlev, 2010). Debenhams is also in the process of improving shopping experience that entails establishing various facilities to its customers. Major facilities that the company has initiated include more parking spaces, lift facilities, accessible toilets, consumer’s collection points and confidential communication system between the customers and the sales representatives. As the number of its customers expands, Debenhams has established a home shopping. This implies that in addition to visiting the firm stores, customers can now purchase their favorite products via the internet (Spiro et al, 2008). Likewise, customers can order their products through the telephone. Additionally, through making calls to the sales representatives, customers can now identify the location of the stores where they can find their products. Debenhams is also focused at opening more stores in foreign countries. This is supported by the fact that the firm has recognized the diversified needs of its market segments thus providing the products that meets the needs of its customers. In addition, the company has established franchise partners that are vital in the distribution and advertising of its brands in various markets. Notable countries that Debenhams has opened new stores include Malaysia, Kuwait, Malta, Jordan, Egypt, Bulgaria and Georgia among others. To ensure that it retains its customers and attract more clients, the firm has embarked on product diversification. The table below indicates examples of products that the company has introduced in the market. Furniture Outdoor products Lighting brands Rich Dark Acacia bedside cabinet Silver Diagonal Diamante Clutch Bag Flush Ceiling Light Wood & Weave Five Drawer Chest Silver Peep Toe 'Matrisciano' High Heeled Court Shoe Stanford Rustic Light Ceiling Light Rich Dark drawer chest Light pink embellished ruched bust dress Litecraft Welton Pendant Ceiling Light Oak bed frame Black Diamante Clasp Sandals Octi Antique Brass 3 Light Ceiling Light White 'Select Visco' 800 divan bed Aki 3 Glass Ceiling Light Currently, Debenhams has embarked on making changes in its marketing mix components. For example, the firm has reduced its prices in order to attract more customers in the local and foreign markets. Examples of items that the company is now selling at low prices includes Lilac Textured Twist Clutch Bag that is currently been sold at ?13.50 from ?18.00, Mid Rose Pleated Satin Clutch Bag earlier prices was ?25.00 and now it is been sold at ?18.75 while Black Patent Bow Clutch Bag current price is ?9.00 from ?12.00. Similarly, the company has reduced the prices of its furniture (Jane, 2006). For example, a dining table with four chairs is been sold at ?400 down from ?1,200. Aluminum pans price has been reduced from ?150 to ?45 while Litecraft is been sold at ?23.76 down from ?30.00. The product One of the primary products that Debenhams has introduced in the market is furniture. With a significant reduction in the prices of furniture, the product plays a role of opening price point. In this way, the company has not only increased the number of its customers but also it has ensured repeated purchases from its existing clients. Based on the stiff competition that the firm is facing in the UK and foreign markets, Debenhams has used the penetrative pricing mechanism that entails reducing its furniture prices to enter new markets. As a result, the company has attracted large number of customers that are looking for quality but low priced products. Debenhams has also specialized in the production and selling of out door brands. With a large product portfolio that caters for all customers regardless of the age and sex, outdoor products plays a role of must have for the Debenhams customers. The reduction in prices especially for women ware is a major strategy that the firm has adopted in order to attract more female customers regardless of their professional. The introduction of attractive designs is also an imperative aspect that has attracted large number of clients to purchase outdoor products from the company (Kotler, 2000). In this way, the company has not only distributed risks among many units but also it has enjoyed repeated purchases from loyal customers thus increasing its total sales and profit. The various lighting brands that the company has introduced in the market plays a role of inspiring not only the company but also its customers. Through the excellent work of its designers, the company has introduced new designs on its lighting brands thus motivating its employees who are engaged in the marketing process as well as its customers globally. The three products (furniture, outdoor and lighting brands) will improve Debenhams image both locally and globally. For instance, the company is now viewed as a firm that caters for all customers regardless of their income. This is based on the reduced prices and extensive advertisement that is undertaken through the company website and through magazines. Similarly, the product images that are depicted on the company will assist the customers in selecting their desired designs. Debenhams market position will likewise improve since the company is not compromising the quality of the three products despite its reduction in prices (Pinson, 2004). In this way, the firm will effectively face off its competitors thus having a significant control of the industry. The products will create a positive appeal to the customers. First, they are of high quality thus making the customers enjoy the value of their money. Secondly, their prices are low thus resulting to more customers preferring them as compared to those of the competitors. Conclusion Based on the above discussion, it is cleat that Debenhams has recognized the need to maintain strong positive relationship with its customers. Despite stiff competition in the UK market, the firm has established quality products that make its customers undertake repeated purchases thus improving the company sales. Customers expect to purchases products that are worth their money. This is a fact that Debenhams has not overlooked leading to improved designs as well as reduced prices. As the company expands in the developing countries, it has embarked on extensive advertisement of its products as well as portraying product images through the internet. In this way, it has created strong customer awareness. The three products by the company namely furniture, outdoor and lighting brands have played a major role in improving the image of the company in the local and international market. This has not only made the company to attain a competitive edge but also it has resulted to more customers from developed and developing nations. References Data monitor. (2011). Debenhams plc' 2011, Debenhams Plc SWOT Analysis, pp. 1-10, Business Source Complete. Viewed 5 April 2013. Information on Debenhams reduction in prices. Available from http://www.debenhams.com/home-furniture . Retrieved 5 April 2013. Jane, M. (2006). The Queen of Retail makes a dull brand shine. The Guardian. Retrieved 5 April 2013. Jason, P and Detlev, Z. (2010). Surveillance and Society: Marketing and the Rise of Commercial Consumer Surveillance. Available from. http://www.yorku.ca/dzwick/S&S_Pridmore_Zwick_Editorial.pdf. Retrieved March 20,2013. Kotler, A. (2000). Principles of Marketing. London: Pearson education. Pinson, L. (2004). Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future. Chicago: Dearborn Trade. Neolane, (2013). Technology environment: Case Study of Debenhams. http://www.debenhams.com/home-furniture . Retrieved 5 April 2013. Rosie, B. (2010). Debenhams has faith in shoe chain. Marketing Week. Spiro, L., Rich, G. & Stanton, J. (2008). Management of a sales force. Boston: McGraw-Hill Irwin. Womenswear Industry Profile: the United Kingdom. (2012.) Womenswear Industry Profile: United Kingdom, pp. 1-33, Business Source Complete, EBSCOhost, viewed 5 April 2013. http://ehis.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=29cf094d-5140-4595-9d90-3cfe8a3d9067%40sessionmgr111&vid=2&hid=102 Read More