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Case summary:
The proposed “#WangByYou” concept redefines the way we purchase clothes and interact
with brands before, during, and after the process by giving design back to the consumer.
If you pay attention to fashion-related news, you have likely heard all about the “death of
retail” and how its demise is approaching faster and faster. Yet, the reality is that 9 out of 10
transactions are still made within brick-and-mortar stores, leaving the entire fashion industry and
its consumers confused in terms of future directions and how to proceed in today’s market in
terms of points-of-sale (WWD, 2017). Different theories are suggested, but in terms of a bigger
picture for the future, a quote that comes to mind is by Harry Selfridges, the man that
revolutionized the world of department stores and how we shop. He stated, “Excite the mind and
the hand will reach for the pocket.” (Secrets of Selfridges, 2014)
Of course, this is easier said than done. According to a report conducted by Applied
Predictive Technologies that polled 256 retail executives from the U.S., U.K., France, Germany
and Japan, “six out of 10 respondents closed physical stores directly in response to the challenges
posed by heightening digital-centric alternatives.” (WWD, 2017) Because, how can one compete
with Amazon’s slashed prices, or simply the desire to shop that a customer gets when sitting at
And while the rise of e-commerce may be a factor in “the death of retail”, it still lacks the
shopping experience, a “personal touch”, as well as the human interactions that traditional stores
offer. All of these factors not only drive sales, but offer consumers a connection and a sense of
loyalty with the brands they choose. After all, deliberating between a dress in-store for hours is
not the same as clicking “check out,” and this allows for an opportunity to reinvent retail.
So how are brands fighting back? Well, it varies, depending on the price point as well as
the branding and approach of each brand, but the standard answer is “experiential retail.”
Rebecca Minkoff dipped her toes in the tech-store concept by creating fitting rooms which
feature different lighting settings and even give an option for their customer to ask for more
champagne to be delivered. This deals a lot more with appealing to the millennial and younger
customers, who obsess over the way their outfits will look when pictured online. Another
example is a brand with a lower price point, the e-commerce website “Missguided”
(www.missguided.com), which recently opened its own physical retail store (Retail Week,
2016). The brand specializes in fast fashion to always stay on trend with the customer and the
way the store experience matches this is with over exaggerated visual merchandising, featuring a
bright pink Barbie-type Jeep, unicorn-model mannequins, and quotes on the wall that scream out
things like “make the naughty list this year.” Although there is no interaction with technology,
the in-store entertainment is how ‘Instagrammable’ the whole thing is, that, apparently, it is even
entertainment concept is Nike. With the recent opening of the Soho flagship store, the iconic
sportswear brand is embracing technology and experiential retail. Some examples include a
treadmill which stands in front of a digital wall, intended to allow the customer to test out
running shoes in-store while watching the different workouts on screen to see potential uses.
Going off of that, there are various parts of the store that feature a basketball court and a mini
soccer field for customers to be able to interact with each other while testing products. One of the
floors even has a shoe customization bar, appealing to millennials which obsess over custom-
everything. The store features touch screens throughout which allow customers to browse for
sizing, colors, and to check what is available both in-store and online (Nike, 2016). The Nike
example shows how an in-store entertainment concept can allow for improvement of operations
that launched in October 2017, “Nordstrom Local” is a 3,000 square feet space which does not
have any inventory, but simply dressing rooms, on-scene stylists, and tailors (Thomas, 2017).
Besides fashion merchandise, there is also a nail salon as well as a beverage bar for customers to
relax at while they are shopping. If someone actually decides to make a purchase, the items can
be delivered straight home, or picked up in-store. So, what is the whole point? To provide
customers exactly what they seem to lack in both oversized department stores as well as online –
service. The store does not need a foot-traffic Mecca – simply a place where customers can
develop relationships with the brand itself and more importantly stylists which can later bring in
In comparison to each other, each leading fashion retailer mentioned above has its own
heritage (or the lack of thereof), customer base, and sales volumes. To take it one step further,
each of the retailers serves a different customer base so strategy varies. Of course, the Nike cleats
addict is not the same person who buys Rebecca Minkoff dresses or handbags from Nordstrom.
Hence, each store needs to offer a customer experience that will appeal to their individual
clientele. Rebecca Minkoff and Misguided chose visual merchandising and the “instagram”-
appeal to frame their entertainment concept, while Nike and Nordstrom went for functional and
A designer that has been extremely successful and is yet to pioneer experiential retail is
Alexander Wang. Known as the wunderkind of the fashion industry and the first American
designer to creatively direct a major luxury French house (Balenciaga), Wang has been making
ripples in the industry one collection at a time. The most recent exhibit of how much experience
plays into this designer’s vision is the way in which he launched his Spring Summer 2018
collection. Putting 32 of the biggest fashion models in the industry on a party bus that made two
stops in downtown New York to showcase his collection to the public before the editors, Alex
Wang is redefining the standard fashion format. Unfortunately, his retail experience falls on
“average” at best and hence, in addition to the above, that is why he is my retailer of choice for
this case study. While Wang’s Soho space has beautiful visual merchandising and innovative
product, the brand could benefit from an in-store concept which would further affirm his brand
More specifically, the fact that Alexander is not pursuing some sort of experience within
his retail space already is simply off brand. He has made his name by pulling stunts like the party
bus fashion show, along with his infamous #WANGFest - the after party of his fashion shows,
which always features performers and some sort of fast food galore. Hence, it would only make
sense for the Alexander Wang brand to create a unifying concept of his social media fame,
A major reason behind the “death of retail” is that consumers find themselves not having
a real reason to go to a store, when ordering online gets them the bottom line - access to the
product they want to buy. However, in luxury specifically, because the brand is not just about the
bottom line, but about the experience, added value and the emotional connection that one forges
For Alexander Wang, it has often been all about democratization of his brand, even
though his price point is that of a contemporary luxury designer. His “T by Alexander Wang”
line is more financially accessible and hence, many shop that line from an aspirational
The proposed concept is to partner with the company “CALA” on a permanent basis to
change the way clothes are produced, marketed, and shopped. CALA is a fashion platform which
has a custom fitting process for consumers, and partners with designers and brands to produce
custom-made garments for those consumers. The turn-around time is less than two weeks, and
the price point can vary but goes as low as $80. An example of a pop-up collaboration that this
company did was for MADE and Wiz Khalifa (Wiz is a very popular rapper). MADE staged a
fashion show event and Wiz’s collection was produced and sold through CALA which allowed
him to dab into an industry other than music. On-site, CALA had body scanning booths which
allowed them to get the most accurate measurements of customers and then the customers could
In terms of Alexander Wang, the concept would be that CALA body scanning booths
would be permanently placed in his flagship NY store and visiting customers could use them to
do the same with Alexander Wang’s “T” collection. Since this collection is more accessible and
the items are all cut and sew there would be no complications with difficult production
components to keep costs low. During regular seasons, this would allow customers to buy
custom sizes and fits of the merchandise that they see in-store. The orders would be delivered
back to the store, and customers would come back for a fitting and styling session, which would
provide more incentive to shop and spend time at the store Additionally, this would allow stylists
to create customer relationships, ultimately leading to even more sales. In-store, the associates
could also use the Alexander Wang app which would have all the profile information of the
person that is shopping – their previous purchase, any returns that were made, the customer’s
measurements, etc.
The designer would also have exclusive, in-store only, releases when presenting his New
York Fashion Week collections. This would be a “see now, buy now” of sorts but would involve
releasing 2-3 pieces of apparel that would represent the runway collection for the T by AW
consumer. There would be an in-store event for the loyal customers (as proven by the amount
they shop at AWang, store visits, social media engagement) to be able to custom order their own
versions and receive a tote with the infamous AWang barcode logo as a product upgrade. The
rest of the public would be free to shop the selected pieces in-store too, for a limited amount of
The proposed concept allows Alexander Wang to keep the same structure to his
collection and merchandising, but allows there to be another very potentially dominant way for
customers to shop his clothes – on their own terms. For the most part, the brand will not need to
change assortment, besides for offering limited quantities of the special edition pieces since
On an on-going basis, the booths would prove to be an in-store experience, in line with
the experiences that Wang puts on during his fashion shows and promotional events. They would
be an actual reason for customers to come to the store, and the service would continue after they
placed their custom orders orders, since they would come in for their “styling and tailoring”
sessions upon pick-up of order items. If the designer wanted to further open the option of
customization, there could be other promotional offerings like choosing a denim patch or a
custom engraving to add to the order so the customer could also “be the designer”. Since all of
the releases, promotions, and promotional events would be in-store, the above creates a new type
of shopping cycle where the physical store is involved every step of the way.
company called Body Labs, which was purchased by Amazon during the span of this case study.
Body Labs is a 3-D modeling company, which creates virtual 3D body models of the human
body. It makes sense that Amazon would use this platform to create a similar concept - making
online shopping easier in terms of fit. However, this is not a physical in-store experience. There
are also other start ups that try to make clothing fitting online easier. Some include “Acustom
Apparel”, “Stylewhile”, and “Fits.Me” (Stephens, 2017). That being said the proposed concept
deals with a complete experience ranging from the actual store experience to events to digital
On a marketing level, the campaign is proposed as all about the customer. Besides for the
obvious element of a better fit with tailored clothing, this allows the customer to feel like the
designer. In today’s world of Supreme x Louis Vuitton, Selena Gomez x Coach, Gigi x Tommy,
Hence the, campaign would be called “#WangByYou,” with each t-shirt bearing a custom
label (ie. “#WangByJohn”) and would be even further explored through digital channels, and
specifically the Alexander Wang app. Today, Alexander Wang posts “#Wangover Guides” on
his social media accounts which are Wang-approved recommendations - music, exhibits, and
Wang-approved events happening in New York. Customers could scan their apps when they
attend the events mentioned on the channels, and “unlock” potential access for next collection’s
event (where they could shop pieces first and get the exclusive tote) by interacting with the
platform – whether that is by attending events, visiting the store, shopping online or buying
custom-made garments. This would continuously make the in-store experience relevant and offer
incentive. While the digital experiences would be more aimed to the generations that are tech-
friendly – Generations X, Y, and Z – the promotional support of the in-store and #Wangover
events would also cater to those that are less interested in app-interaction.
If the concept works out well, the next step would be expansion in the larger Alexander
Wang stores and a potential trunk show model for the smaller ones. The way to make sure that
this concept works both logistically and in terms of consumers, is to balance the exclusivity of it
along with demand and profits (Abramovich, 2015). Hence, it would only be limited to
Alexander Wang standalone stores and not wholesale accounts. This would allow control of the
concept and not overload the company with too many custom orders.
As with any customization concepts, there are challenges that need to be overcome. The
idea of mass customization was mentioned above, but one point to note is that the concept would
only work with a higher-end retailer such as Alexander Wang because the extent of the “mass”
concept needs to be limited. Gathering of data will allow CALA and Alexander Wang to plan
and prepare for stock. While additional customization promotions (ie. embroidery, custom denim
patches) are encouraged, the company will need to be aware of the volume and cost of products
and hence keep these types of promotions limited and stick to the cut and sew model as a whole.
Initially, the concept would require a full year of operations to be able to gather data from
customers’ profiles, as well as general feedback. During that year, there would be assessment of
weekly and monthly sales, with special attention to fashion week and other promotional events.
After the first year, though, the concept would be re-evaluated on a larger scale in order to make
any necessary changes and only at that point would other stores be considered for expansion.
Ideally, in the long-term (or even past that first year) Alexander Wang would acquire the CALA
company which will would allow for bigger expansion and capital for research on artificial
intelligence and other ideas that may later come into play, since the technology is expanding at
The financial plan inventory is based on the best selling SKU’s from alexanderwang.com
and specifically the T collection, as that is what the case study is based off. The increased
revenue takes into account the changing value of the dollar (inflation), as well as takes its
assumptions from percentages based on industry standards, derived from the closest publicly
traded peer (Coach) and the average of publicly traded tech company (for CALA). In terms of
the growth that is portrayed, this is based on the assumption that the concept takes off, even with
certain months doing less well than others since this is the nature of any business. See on next
page.
Conclusion
While certain brands, such as Nike, have been relatively successful with their in-store
entertainment concepts, often, the issue with the industry attempt at creating a retail experience
is that brands’ concepts a) do not fit with the brand identity of the store, b) are simply aesthetic
(as can be seen with Missguided and Rebecca Minkoff) and c) do not break boundaries of the
To quote Alexander Wang himself, “The industry’s changed so much that you can’t just
design something, put on a great show, and say, ’Okay, my job is done.’” (Axelrod, 2012) The
concept outlined in this case study embodies just that: it is a complete re-evaluation of the way
we purchase clothes and how we interact with brands before, during, and after the process.
Financial Plan - Income Statement
Currency: USD
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Total After Six Months
Inventory Sold 286 271 269 269 270 272 1,636
Total Revenue 127,561 157,738 202,097 260,963 338,256 440,702 1,527,317
Cost of Good Sold1 (42,095) (52,054) (66,692) (86,118) (111,624) (145,432) (504,015)
Gross Income 85,466 105,685 135,405 174,845 226,631 295,271 1,023,302
Sales, General and Administrative2 (65,056) (80,447) (103,070) (133,091) (172,510) (224,758) (778,932)
Research and Development3 (19,134) (15,774) (20,210) (26,096) (33,826) (44,070) (159,110)
Operating Income 1,276 9,464 12,126 15,658 20,295 26,442 85,261
Income Tax (446) (3,313) (4,244) (5,480) (7,103) (9,255) (29,841)
Net Income4 829 6,152 7,882 10,178 13,192 17,187 55,420
Assumptions:
COGS (%) of Revenue 33% 33% 33% 33% 33% 33%
SG&A (%) of Revenue 51% 51% 51% 51% 51% 51%
R&D (%) of Revenue 15% 10% 10% 10% 10% 10%
Tax Rate (%) 35% 35% 35% 35% 35% 35%
Metrics:
Revenue Growth (%) N/A 23.66% 28.12% 29.13% 29.62% 30.29%
Gross Margin (%) 67.00% 67.00% 67.00% 67.00% 67.00% 67.00%
Operating Margin (%) 1.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Net Income Margin (%) 0.65% 3.90% 3.90% 3.90% 3.90% 3.90%
Notes:
1 COGS (%) of Revenue derived from closest publicly traded peer Coach (COH) metrics
2 SG&A (%) of Revenue derived from closest publicly traded peer Coach (COH) metrics
3 R&D (%) of Revenue derived from average of publicly traded tech companies. This is also the fee to CALA.
4 Assuming the start-up does not take up any debt, there are no interest payments due throughout the 6 months
5 Does not include debt or cash
Currency: USD
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Inventory SKU Sell Through Assumptions
Inflation Rate 0 0.3 0.3 0.3 0.3 0.3 on
Hand
SKU Category Sweatshirt
Price $ 275 $ 358 $ 465 $ 604 $ 785 $ 1,021
Units On Hand 50 27 24 24 25 28 9
Units Sold 34 18 16 16 17 19
% of Total 67% 67% 67% 67% 67% 67%
Units Added 50 10 15 16 17 20
Unit Added Growth 0% -80% 50% 7% 6% 18%
Revenue $ 9,213 $ 6,347 $ 7,394 $ 9,649 $ 13,085 $ 19,296
#WangByYou Logo
Soho Flagship Store Interior - booth would be Soho Flagship Store Exterior
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