Women’s Lingerie��

Fall 2016 CADS 5500: Merchandising Portfolio �Madalyn Jenkins

Table of ContentsCompany Analysis…........................................................................................Slide 3-4Target Market...................................................................................................Slide 5Retail Strategy Analysis…...........................................................................Slide 6-7SWOT Analysis..................................................................................................Slide 8Market Research…..........................................................................................Slide 9-11Lingerie Financial Goals for 2017............................................................Slide 12Dillard’s Women’s Planned Sales for 2017 class/subclasses........Slide 13Suggested Price Points of Subclassifications for 2017.................Slide 146 Month Merchandise Budget Plan.........................................................Slide 15Planned Sales Plan for S/S 2017...............................................................Slide 16Bras/Panties Assortment Plan....................................................................Slide 17Visual Merchandising Plan In-Store Display .....................................Slide 18Executive Summary...........................................................................................Slide 19Reference List......................................................................................................Slide 20

Dillard’s Department Store�  Founded in 1938 by William Dillard.

�  The first store was opened in a shopping mall in Austin, TX in 1964.�  Dillard's marketing philosophy focuses on selling methods, keen attention of day-to-

day organizational details, alert personnel, and hard work.

�  There are over 300 stores located in 29 states (Dillard’s, 2016).�  Dillard’s is a high end department store that offers luxurious name brand merchandise

with strong branding from offering merchandise from over 150 high end name brands (Dillard’s, 2016).

“The company focuses on delivering maximum fashion and value to its shoppers by offering compelling apparel and home selection

complemented by exceptional customer care.”

(Dillard’s, 2016)

Type of Merchandise

The lingerie department offers a range of classifications including pajamas, shape wear, lingerie, bras, and panties. The main price points are $48, $58 and $88, depending on the brand and product.

Dillard's Lingerie Price PointsPajamas & Sleepwear $12.50,$24,$44,$60,$120,$140

Shape Wear $18,$38,$58,$62,$88,$98

Lingerie & Babydolls $44,$52,$58,$76,$98,$148

Bras $29,$40,$48,$58,$65,$78

Panties $5,$7,$10,$18,$24,$48

Other departments Dillard’s also offers includes:�  Men’s clothing�  Women’s clothing�  Children’s clothing�  Accessories�  Home goods�  Shoes

Target MarketDemographic

�  Dillard’s target market consists of middle aged, family and career-oriented women and their families.

�  Middle and upper class men and women.

�  All ethnicities; predominantly Caucasian.

�  Most ages ranging from high school graduates, college graduates, to middle aged adults.

Geographic

�  Customers can live in any climate where there is a local Dillard’s store. Most customers live in an urban or suburban area. Dillard’s might attract some rural customers that are willing to drive to the closest store.

�  The target market

comes from many different areas including 29 different states.

Psychographics

�  Customers who want the best deal, but don’t want to sacrifice quality.

�  Value the power of

a brand name.�  Customers can vary

from someone who plays golf to business people, moms shopping for the whole family, and men shopping for themselves.

Competitor AnalysisMajor Competitors

�  According to Hoover’s, Dillard’s primary competitors are JC Penney and Macy’s (Ramirez, 2015).

�  Belk is also a main competitor of Dillard’s.

Comparison of Price Points•  Dillard’s carries similar price

points and the same or competing brands.

•  Dillard’s keeps a competitive advantage over these stores by carrying more fashion-forward merchandise and private labels by exclusive designers with higher quality.

Macy'sPajamasandSleepwear $18,$28,$49,$64,$130,$160

ShapeWear $38,$48,$58,$72,$98

Lingerie&Babydolls $40,$56,$64,$98,$130,$160

Bras $22,$34,$48,$60,$88

PanIes $10,$20,$26,$38,$50

Belk

PajamasandSleepwear $15,$26,$48,$62,$115,$138

ShapeWear $20,$36,$48,$64,$90

Lingerie&Babydolls $40,$54,$64,$72,$90,$120

Bras $20,$38,$50,$68,$74

PanIes $8,$16,$26,$38,$44

JCPenney

PajamasandSleepwear $10,$16,$26,$38,$50

ShapeWear $10,$22,$34,$40,$52

Lingerie&Babydolls $18,$26,$42,$60,$68

Bras $15,$26,$38,$46,$58

PanIes $5,$12,$18,$26,$30

Dillard’s Lingerie Positioning Map

HighPrice

HighIncomeLowIncome

LowPrice

Weaknesses •  The decrease in mall popularity

and our traditional location in malls .

•  Younger consumers don’t perceive us as fashionable

•  We aren’t strong on social media •  We don’t focus on advertising

Threats •  The increased popularity of

specialized, boutique style stores. •  Other companies that have a

strong social media following. •  Companies with a more flexible

store layout for more popular locations.

Strengths •  Private brands bring in new

customers and create loyal customers.

•  Trustworthiness  •  Credit card loyalty system •  Strong customer service and

personal shoppers

Opportunities •  Improving social media to attract

a younger market. •  Promote our private label brands

to new customers. •  Expand our selection of sizes to

include a wider range of underserved consumers.

Market Research - Megatrends• Rocker Chic

Edgy and contemporary• Seductive Sleeper

Lingerie and corsets• Leather in various colors

(Premiere Vision, 2016).

Market Research - Color Trends

Aurora RedShows confidence while also providing some excitement and a sensual look with a pop of color (Eiseman, 2016).

Sharkskin A neutral color that is great to base your palette off of because it is easily pairable but also somewhat edgy and contemporary (Eiseman, 2016).

�  Elegant lingerie and sleeper (Matthams-Spencer,2016).

�  Corsets and structured silhouettes (Matthams-Spencer, 2016).

�  Edgy and unique look.

Market Research – Style Trends

Dillard’s Lingerie Financial Goals for 2017

Total Lingerie & Accessories Planned Sales 2017: $1,085,050,912Total Lingerie Planned Sales 2017: $108,505,091.20Inventory TO 2017: 3.19 Gross Margin %: 36.2%GMROI: 1.81

Dillard’s Total Annual Sales 2016: $6,754,550,000 Dillard’s Total Planned Sales 2017: $6,781,568,200

�  Dillard’s Total Planned Sales based on .4% increase. This is based on the .38 increase in 2015 (Ramirez, 2016).

�  Lingerie Department Sales 2016/2017: Ladies accessories and lingerie makes up 16% of Dillard’s total sales (Ramirez, 2016).

�  Accessories are 6% of lingerie and accessories, making lingerie alone 10% of total sales.

�  Gross Margin based on average of the last 5 years (Dillard’s Inc., 2016).

�  Inventory TO based on average of last 5 years TO (Inventory Turnover, 2016).

Dillard’s Past 5 Years Total Sales

Dillard’s Women’s Lingerie Planned Sales for 2017 (by class/sub-classes)

�  Based on knowledge that bras and panties sell more than daywear (Dillard’s Annual Report, 2014).

�  Babydolls/garters are slightly more popular than other daywear styles (Lingerie Retail Clothing Store Business Plan, 2016).

�  Based on the fact that slightly more panties are sold than bras (Lingerie Retail Clothing Store Business Plan, 2016).

BrasandPanIes 68% $73,783,462.02

Daywear 32% $34,721,629.18

TotalLingerieSales $108,505,091.20

Dillard's Buying%Daywear Sales$DaywearBusIer 13% $4,513,811.79Chemise 28% $9,722,056.17

Babydoll/Garter 31% $10,763,705.05Camisole/ShortSet 28% $9,722,056.17

TOTAL 100% $34,721,629.18 Buying%Bras/PanIes Sales$Bras/PanIes

Bras 49% $36,153,896.39PanIes 51% $37,629,565.63TOTAL 100% $73,783,462.02

Suggested Price Points of Sub- Classifications for 2017 Dillard’sWomen'sLingerie

PajamasandSleepwear 15% $12,$22,$42,$56,$68,$82 Stable

ShapeWear 4% $18,$30,$42,$56,$60,$86 DecreaseLingerieandBabydolls 13% $42,$50,$58,$62,$78 Stable

Bras 33% $28,$42,$48,$56,$66,$78 Stable

PanIes 35% $7,$12,$18,$24,$50 Increase

Total 100%

Dillard'sWomen'sLingerieSub-Classes %ofSales SuggestedPricePoints

Daywear BusIer 13% $18,$30,$42,$56,$60,$86 DecreaseChemise 28% $44,$52,$68,$78,$100,$140 Stable

Babydoll/Garter 31% $42,$50,$58,$62,$78 StableCamisole/ShortSet 28% $12,$22,$42,$56,$68,$82 Decrease

BrasandPanIes Bras 49% $28,$42,$48,$56,$66,$78 Stable

PanIes 51% $7,$12,$18,$24,$50 Increase

(LingerieRetailClothingStoreBusinessPlan,2016)

�  Decrease in planned price points for shape wear (bustier and camisole/short sets) as these percent of sales are very low in comparison to other sub-classes.

�  Increase in planned price points for panties because they are selling really well year round.

�  More lingerie is purchased in the earlier months of the year, especially February because of Valentine’s Day.

�  Another big time of the year for department stores to have lingerie sales is in the middle of the year, and summer months- May, June, and July.

6MonthMerchandiseBudgetPlanforS/S2017 FEB MAR APR MAY JUN JUL Total

NetSalesDistribuIon%By

Month 20% 15% 14% 17% 18% 16% 100%

NetSales$ByMonth

$10,850,509.12 $8,137,881.84 $7,595,356.38 $9,222,932.75$9,765,458.21 $8,680,407.30$54,252,545.60

ReducIonDistribuIon%By

Month 15% 13% 15% 17% 23% 17% 100%

ReducIons$ByMonth $1,627,576.37 $1,057,924.64 $1,139,303.46 $1,567,898.57$2,246,055.39 $1,475,669.24 $9,222,932.75

BOMStock-Sales-RaIoEsImate 2.35 1.30 1.15 2.10 2.35 1.75 -

BOMStock

$25,498,696.43 $10,579,246.39 $8,734,659.84

$19,368,158.78

$22,948,826.79$15,190,712.77 -

EOMStock

$10,579,246.39 $8,734,659.84 $19,368,158.78

$22,948,826.79

$15,190,712.77$17,053,383.50 -

PurchasesR

$(2,441,364.55) $7,351,219.93 $19,368,158.78

$14,371,499.33$4,253,399.58$12,018,747.27 -

PurchasesC

$(1,333,553.58) $4,043,170.96 $10,652,487.33 $7,904,324.63$2,339,369.77 $6,610,311.00 -

6 Month Merchandising Budget for S/S 2017

�  Based on ladies accessories and lingerie make up 16% of total sales; with lingerie alone making up 10% of total sales.

�  Annual lingerie sales 2017 $108,505,091.20, making 6 month sales for lingerie $54,252,545,60.

�  Based on .4% increase in sales growth.

(Ramirez,2016).

PlannedSalesPlanforS/S2017SeasonalSalesforDillard’sWomen’s

Lingerie $54,252,545.60ReducIons%ofsales 17%

MD% 12.00%Shortage% 3.00%

SalesDiscounts% 2.00%GM% 36.20%InventoryTurnoverPlan 3.18GMROI 1.804326019AvgInventoryRPlan $17,060,548.93

AvgInventoryCPlan $9,081,433.43ActualAverageInventoryR $17,053,383.50ActualInventoryTurnover 3.181336161IniIalMU% 45%

Bras/Panties Assortment Plan for Feb

2017 �  Nude, black, and

white are the highest distributed colors.

�  C36 is the most common bra size, so it has the highest distribution (Average Bra Size, 2014).

�  $42 is the most sold/popular price point for this assortment and has the highest distribution.

AssortmentFactor Elements %DistribuIon$ BOMStock$ %DistribuIonUnits BOMStockUnitsStyle Strapless 19% $4,844,752.32 19% 441 Push-up 23% $5,864,700.18 23% 534 DemiBras 26% $6,629,661.07 26% 603 T-shirtbra 21% $5,354,726.25 21% 487 AcIveBras 11% $2,804,856.61 11% 255

Color Nude 25% $6,374,674.11 25% 580 Black 21% $5,354,726.25 21% 487 Red 10% $2,549,869.64 10% 232 White 17% $4,334,778.39 17% 395 Pink 11% $2,804,856.61 11% 255 Grey 16% $4,079,791.43 16% 371

Size 32A 3% $764,960.89 3% 70 34A 4% $1,019,947.86 4% 93 36A 6% $1,529,921.79 6% 139 B32 5% $1,274,934.82 5% 116 B34 9% $2,294,882.68 9% 209 B36 9% $2,294,882.68 9% 209 C32 6% $1,529,921.79 6% 139 C34 11% $2,804,856.61 11% 255 C36 12% $3,059,843.57 12% 279 D32 7% $1,784,908.75 7% 162 D34 11% $2,804,856.61 11% 255 D36 10% $2,549,869.64 10% 232 DD 7% $1,784,908.75 7% 162

PricePoints $28.00 23% $5,864,700.18 21% 487 $42.00 34% $8,669,556.79 32% 743 $56.00 27% $6,884,648.04 29% 673 $70.00 16% $4,079,791.43 18% 418

Total 100% $25,498,696.43 2321

Visual Merchandising In-Store Display

�  Aurora Red and Sharkskin Grey will be the big color trends in lingerie for S/S 2017.

�  Featuring neutral and highly distributed colors– black, nude, white, and pink.

Executive Summary •  This presentation shows that Dillard’s is a very established and well-known company.

Their price points are competitively priced considering the high-end brands and even private label brands that Dillard’s offers. The SWOT analysis of Dillard’s determines their strengths, weaknesses, opportunities, and threats competitively. Also, the positioning map shows where Dillard’s stands competitively based on price points and income.

•  Dillard’s lingerie projected color trends for Spring/Summer 2017 include Aurora red and Sharkskin Grey. These colors will be found in many different predicted styles such as Seductive Sleeper and Rocker Chic.

•  Dillard’s total sales will increase by .4% in 2017. Women’s lingerie will make up 16% of total sales for Dillard’s. The planned inventory turnover, gross margin percentage, and GMROI are included in the 2017 financial goals.

•  Women’s lingerie can be broken down into Daywear and Bras/Panties. Most price points for these sub-classifications are planned to remain stable, with only a few slight changes.

•  The 6-month merchandise budget plan is based on estimates for higher net sales per month in February, May, June, and July. From this, monthly net sales, reductions by month, BOM stock, EOM stock, Purchases R, and Purchases C for the next 6 months are calculated.

•  The planned sales plan for S/S 2017 includes the breakdown of reductions, inventory TO plan, average inventory R plan, average inventory C plan, actual inventory R, actual inventory TO, and IMU.

•  The assortment plan for bras and panties includes the assortment BOM stock units at 2321 units and also shows distribution %, BOM stock, and distribution units.

•  Finally, a photoshopped depiction of an in-store display includes the predicted color trends, style trends, and Dillard’s store image.

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