1 Market Research Report 2018 by Evie Nairne
MARKET RESEARCH REPORT 2018
BY EVIE NAIRNE
1 2 3 4 - 5 Introduction
6 - 9 Marco Market Research
12 – 16 Demographic and Ethnographic Shifts
CONTENT 20 – 21 Secondary Brand, Retailer Research and Performance
24 – 31 Current Marketing/ Branding Mix
4 32 – 33 Competitor Analysis
34 – 39 Primary Consumer Research CONTENT
40 – 51 Primary Brand Research – Shop Report
52 - 53 Conclusions and Recommendations
54 - 55 Bibliography
5 Kappa is an Italian sports brand that was founded in 1916 by Abramo Vitale in Turin, Italy. Before it became Kappa, the brand simply rebranded some socks that were mismanufactured in 1956. People went crazy for them, soon placing Kappa on the market as one of the leading sock and underwear brands. Later in 1968, the founder’s great-grandson furthered the reputation of the brand by setting out to make casual unisex clothing, which was received well by young consumers due to its creation of the now iconic Omini logo. As time went by Kappa began to thrive more, with its innovative research and development of technical sportswear. After its official branding in 1967, Kappa took off, with appearances throughout the 1984 LA Olympics. In the 90s, sportswear has become part of the everyday look, so the brand used this advantage to slip into the everyday market too. Today, we see Kappa on many sports kits as well as on the street, proving that Kappa is a multidis- ciplinary brand. Although we must notice that it has lost its respect along the way, causing it to only be stocked in sporting or department stores. Therefore in this report, I am going to research into the current market as well as Kappa’s brand performance to see what Kappa needs to be doing in order to gain its leading title back. WHO? AND WHAT? AND WHERE? WHO? AND WHAT?
6 7 8 MACRO MARKET RESEARCH The ongoing global political shifts have affected the state of the fashion industry due to its ongoing problems such as ‘geopolitical instability, terrorism, Brexit, and stalled trade deals’ as they are causing a ‘pervasive sense of uncertainty in the global economy’ (McK-BOF, 2017 report). This has had a knock-on effect causing the prices of luxury products to increase. This will not be helped by the recent US elections, as this could weaken trade deals even more. Furthermore, fast fashion brands continue to struggle with the effects of war/conflict in the Middle East. POLITICAL
The UK’s political state has not been aided by the 2008 recession, which has caused the economy and employability rates to suffer. Therefore as prices have risen, fast fashion sales have decreased, as people need to spend their money on survival staples. Furthermore, this has caused the level of competition between brands to rise, causing individual brands to see effects on their sales and profits and even face the threat of closure. ECONOMICAL
9 The main source of social change is millennials. The new generation is focusing on sustainability and ethics, as well as wanting great prices and great quality. Therefore while fast fashion is struggling to comply with consumers need for cheap products that aren’t made in sweat- shops, high fashion is struggling to get noticed with such high pric- es. Also, these young people are so influenced by celebrities styles, that brands are struggling to keep up with them. ‘43% of consumers SOCIAL look for inspiration before buying and 23% says that social media is that influence.’ (Mintel) proving that people are now relying on feedback from other sources and not on advertising or marketing campaigns.
The biggest changes have come from the ever-developing world of technology. It has changed the way retail works by making it so easy to shop online, but still gain a personal experience through online chats with interactive sales assistants. ‘In 2018, we anticipate that online sales of clothing and accessories in the UK will rise 8.2% to £16.3 billion.’ (Mintel) Technology has also improved the production and supply chain and has brought greater effectiveness to the sales and marketing of fashion products. It has also helped with ‘overseas expansion through E-commerce having helped them go past borders and sell to a larger customer segment.’ TECHNOLOGICAL
10 MACRO MARKET RESEARCH The fashion industry has always had to comply with legal rules and regulations, such as following, ‘tax restrictions, export restrictions, and inflation costs.’ Not to mention the growth in environmental laws. As well, they must stick to the workers’ rights, but with the increase in fast fashion the need for cheap workers expands, but the cheapest LEGAL source of work is illegal sweatshops. However, if brands show legal and ethical compliance it could increase their reputation. within the market.
Environmental problems that fashion brands are facing is the carbon emissions that are released during the transportation of clothes. As well as the sheer amount of non-recyclable packaging they use that gets dumped into a landfill. As for ethical impacts, it is apparent that people are very focused on this before deciding to buy a product. Additionally, fashion brands that use real animal fur/skin, face being boycotted by groups such as PETA. Another focus of consumers is sustainability, therefore it is good to see that ETHICAL ‘more than 65% of the consumers are seeking sustainable fashion actively.’
11 12 13 What have consumers have spent more money on in the last 12 months? G1
“MINTEL ESTIMATES Clothing THAT CONSUMER Holidays SPENDING ON CLOTHING AND Technology ACCESSORIES WILL Eating Out RISE 5.3% TO £60.8 2 4 6 8 1 BILLION IN 2018.” % More The same Less
When looking at retail markets performance, it vital to look at what consumers are spending their money on. This also How much do consumers spend on clothing? helps to determine what other markets are key competitors. G2 8 In Graph 1 we can see that in the last 12 months people have not only just spent more on clothing, but more on that market than any other. Graph 2 proves that consumer spending habits have risen 5.3% to £60.8 billion and it estimates that it will continue to grow till 2023. Findings from Mintel state that in recent years menswear has outperformed womenswear, but this sudden surge has been driven by womenswear. 6 1 1 , With Kappa being part of this most popular market, the brand has the potential to thrive, but it must 5 consider new consumer trends and brand relevancy otherwise it will be lost to the many other competitors.
4 2 13 2 16 2 19 2 22 1412 DEMOGRAPHIC AND ETHNOGRAPHIC SHIFTS Where do consumers shop most? G3
It is important to consider where people are sourcing their clothing from, and Others how that is affecting the market. Graph 3 shows that clothing specialists still gain the biggest percentage of the market, but also how ‘online-only retailers now capture 12.3% of consumer spending.’ With Kappa choice Supermarket to only stock in sports specialist and department stores, it could be that Kappa is missing out on a major consumer market. The brand does, however, have the online market covered. Mintel estimated that online Sports Specialsts consumer spending on fashion items will rise 8.6% to £19.0 billion in 2018.
Graph 4 shows that people have been shopping more frequently too. Department Stores
How often do consumers shop? Online Only Retailers
G4 Once a week or more Clothing Specialists
2-3 times a month Where do consumers shop most?
Others Once a month Supermarket
Sports Specialsts Once every 2-3 months
Department Stores
Once every 6 months Online Only Retailers
5 1 15 2 25 3 35 4 Clothing Specialists
% 15 Why don’t consumers shop online?
OVERALL, 89% OF one of these G5 CLOTHES BUYERS Don t trust online ARE SATISFIED Delivery time WITH THE Delivery price Enjoy in-store shopping
RETAILER THAT Browsing
THEY USE TO BUY Sizing CLOTHING MOST uality FREQUENTLY - Try before you buy G6 Why consumers do shop online? Why consumers do shop online? one of these one of these Don t like shopping in-store Don t like shopping in-store With the internet now extinguishing Time saver the need for in-store shopping why Time saver do brands still do it? Research shows Prefer to try at home us that some consumers do still
ReviewsPrefer to try at home prefer the traditional way. Graphs 5 and 6 prove to us that at the moment More uniqueReviews products it is still vital that brands have both online and offline shops. Even Fast delivery More unique products though Kappa does have a clear online presence, it lacks in stores. Better selection Fast delivery Perhaps the impersonal experience
Online is cheaper of buying in sport department stores Better selection is the reason for Kappa’s decline. 16 DEMOGRAPHIC AND ETHNOGRAPHIC SHIFTS Online is cheaper Do consumers care about ethics when making a purchase? G7 We must also consider the main influences on customer spending habits. They often Prefer to buy brands involve social and that are reducing their ethical factors. Graph impact on the environment 7 suggests that most people do buy items they have seen on social media or in fashion magazines. Would like to receive Therefore Kappa needs rewards for recycling unwanted clothes to promote their brand according to these 2 4 6 8 1 influences. Graph 8 tells us that consumers % are bothered if brands Yes Sometimes No harm the environment. G8 Again, Kappa must consider their choice Do consumers care about ethics when making a purchase? of manufacturing and means of transport in order to gain a wider audience. Prefer to buy brands that are reducing their impact on the environment
- WITH ALMOST Would like to receive rewards for recycling A THIRD (30%) unwanted clothes
VERY SATISFIED. 2 4 6 8 1 17 % What purpose do consumers buy sportswear for?
5
4
3 %
2
1
Everyday Sport Use ot Purchased Any
Graph 9 shows that sportswear brands are not just tied to consumers of sport, but also the everyday man too. This should be considered as this widens Kappa’s target audience for future collections and campaigns.
18 DEMOGRAPHIC AND ETHNOGRAPHIC SHIFTS ‘KAPPA® IS ONE OF THE LEADING BRANDS IN SPORTSWEAR AND LIFESTYLE WORLDWIDE: A TECHNICAL, NONCONFORMIST, COLORFUL, FLEXIBLE, COMPETENT, GLOBAL AND ITALIAN BRAND.’
19 20 21 2220 SECONDARY BRAND, RETAILER RESEARCH AND PERFORMANCE MARKET SECTOR High Street Fashion
MARKET SEGMENTATION Womenswear, Menswear, Sportswear, Kidswear, Accessories, Footwear and Rugby and Football Cub Kits PERFORMANCE Clear and effective branding has increased Kappa’s reputation within the sports sponsorship market. However, as a retail brand, it lacks advertisement, events and amount of stores, which has caused the brand to lower itself to only being stocked in sportswear stores liked JD.
23 1956 1967
1916 1958
24 1981 1994
1969 1984
25 Kappa first found its personality when the brand was officially registered in 1967, however, the brand didn’t really make a name for itself until the 80s. In 1981 The Kappa authentic logo appears for the first time on the USA Track And Field team during World Championship in Rome, then in 1984, the first Kappa tracksuit with the iconic vertical Omini logo sequence appeared on many sporting stars in the LA Olympics that year. In later years Kappa furthered its sponsorship opportunities to other sports. Now, over 100 different sporting teams’ uniforms are provided by Kappa. The brand has just Launched The Napoli 2018/19 Home Football Shirt. This has been a big marketing campaign for Kappa this year with its release accompanied by a video which so far has 891 views. It is true that the sports sponsorships are what gave Kappa it title within fashion, however, the brand must consider that even though its marketing methods are towards the general market (TV/ printed ads) this is not covering their wider audience as it is only tailored to the dedicated football fans.
Kappa is also the title sponsor for a techno music festival in Torino, Italy. This partnership began in 2013 and has proven to be a huge success with last year’s attendance at over 50K people. Even though the festival has SPONSERSHIPS counted 62 nationalities, it still needs further promotion outside of Italy. In fact, there is a huge market for rave culture in the UK, perhaps a similar festival is what London needs to bring back the British Kappa culture.
26 CURRENT MARKETING/BRANDING MIX 27 COLLABORATIONS
KAPPA X CON.CEPT
Kappa does aim to continue to create fresh new products, so there is no chance of the brand going out of style or mind. This AW17 collection for Kappa was By collaborating with many other brands, Kappa should gain a collaboration with the creative twice the amount of publicity, however, they are failing the firm ‘the con.cept’ that brought the advertise these works themselves. It is essential that they brands name back into people’s begin to understand the importance of social media. At the minds. Alongside the collection moment their social media presence consists of products was a lookbook shot by Nick Sethi shots, there are no posts of their best creative work or ‘coming that displays the brand’s relevancy soon’ posts which would really boost their following. They in NYC in the 80s. This collection should also explore other ‘below the line’ strategies, such as was the start of Kappa’s strategy pop-up shops, events, campaigns or publicity stunts as this of rediscovering its roots in hope of would allow for a personal brand to customer relationship making the brand revenant again. through interaction. The events they have done have been Although, Kappa is Italian, and it successful, however, there is simply not enough especially is notable that this has not been in the UK (no reported campaign events in the last year.) highlighted in recent campaigns.
2826 CURRENT MARKETING/BRANDING MIX SS18 COLLECTION
A collection that pays tribute to Kappa’s origins. With the return of the trademark tracksuit in an array of new colours, the brand celebrates the football and youth culture of the 80s and 90s. This collection was aimed to at millennials to discover their roots, while the baby boomers reminisce about their free days. This SS18 was promoted via a lookbook that was shot on 35mm film by Alex de Mora.
29 KAPPA X FAITH CONNECTION
This collaboration offers a new style for Kappa, combining of the ionic Omini logo with officer trousers and sequined track pants. These new pieces were released alongside a music video directed by Vic Mensa, in which he pays ‘homage to great artists of the early 80s.’ It was further promoted by both brands with an intimate dinner at SPiN NY, guests include Kitty Cash and Young Paris. The night involved a series of activities, DJ sets and cocktails. This event did great things for Kappa, they should consider more events as they help to introduce personal consumer experiences with the brand.
30 CURRENT MARKETING/BRANDING MIX KAPPA X #HEINEKEN100
This year both Heineken and Kappa share their support for football culture by partnering up for this year’s #HEINEKEN100, a campaign that aims to promote brands that have lived through the football heritage. This partnership was celebrated with the release of 6 collaboration pieces, that were only available to the public for 24hrs. This exclusivity and the use of the hashtag created a viral craze, meaning all people were talking about that day was Kappa.
31 KAPPA X K-WAY
This September Kappa teamed up with K-WAY to create a ‘one off and one-of-a- kind’ collaboration in order to elevate K-WAY’s relevancy in the US and Kappa’s relevancy in the UK. The campaign has already proven successful on social media, with features from Instagram influencer Ari Petrou (320,000 followers).
3032 CURRENT MARKETING/BRANDING MIX KAPPA SHADOW X WIZ LIMITED
More recently, Kappa teamed up with Japanese brand WIZ LIMITED to create their collaborative ‘SHADOW’ collection. The limited edition jackets, sweatpants an tees were captured with the city of Tokyo behind it. The brands decided to limit these products to two pop-ups located in Sendai and Nagoya, Japan giving exclusivity and need for customers. What we must consider is if these cultural and availability limitations might be hindering Kappa as it could lose it relevancy in other parts of the world.
33 34 COMPETITORS ANALYSIS 35 Canada
Australia
Ireland
US
UK
Dublin
Manchester
London
Wigan
WHO’S IN THE KAPPA CLUB? WHO’S IN THE KAPPA Leeds
LOCATION 36 PRIMARY CONSUMER RESEARCH 37 Male GENDER
Female
6
5
4
% 3
2
1 AGE
-16 1 -19 2 -24 25-29 3 -34 35-39 4 -49 5 -59 6
38 PRIMARY CONSUMER RESEARCH Job
Musicians
Consultants
OCCUPATION Journalist
Sales
Manager
Student
Under ,5
,5 - 14,999
15, - 22,499
22,5 - 29,999 INCOME 3 , - 39,999
Over 4 ,
1 2 3 4 5
% 39 PSYCHOGRAPHIC PROFILE GRAPH
This data was plotted according to research from trend websites LSN and Mintel, as well as my own primary data - a survey conducted using a range of participants of different ages, genders, and backgrounds around London.
40 PRIMARY CONSUMER RESEARCH 41 Kappa’s main issue is that they don’t have any branded stores in the UK. Their decision to only stock in department stores has limited their customer interaction and gives people no base/ home for the brand which could cause customers to forget about Kappa. JD Sports is their biggest distributor, and it’s located on Oxford St, Soho, London. Central London is the main shopping area so good for making lots of sales, however, with neighboring brands being River Island and Zara, Kappa may not fit into the style of people who shop in
LOCATION this area. Perhaps it would be more suited to a younger area, such as Hackney.
This particular JD has 3 floors which are all sectioned according toa brand. As JD sells many different brands it took me at least 10 minutes to find the Kappa section, which was hidden on the top floor at theback, surrounded by their biggest competitor FILA. With the shop floors filled with other competitors, Kappa is placing itself beside brands that make exactly the same products as they do, for example, their iconic Omini logo was lost to all the copycat tracksuits with a notably similar strip of logos. THEMES/ TRENDS
Kappa’s prices online range from £10-£200. In comparison, due to the limited selection of Kappa products in JD the price range is only £10 - £125. This drop in selection has lowered the brand into the realms of fast fashion. Kappa needs to consider how this affects the reputation of the brand. Their own store would allow for a much bigger collection and price range. PRICE
42 SHOP REPORT SPORT EQUIPMENT (FOOTBALL)
LUGGAGE
SWIMWEAR
ACCESSORIES (SOCKS)
SPORTWEAR
FOOTWEAR
DIRECTIONAL
STANDARD
CLASSIC PRODUCT CATEGORIES
43 PRICING ARCHITECTURE FOOTWEAR
2 5
SPORTSWEAR
25 65 1
ACCESSORIES
2 5 44 SHOP REPORT SWIMWEAR
35 5
LUGGAGE
25 3 5
SPORTS E UIPME T
25 8 1 45 SHOE DISPLAY ADIDAS FILA ELLESSE CALVIN KLEIN
NIKE
CHAMPION KAPPA PAY POINT PAY POINT PAY
ENTRANCE SHOE DISPLAY NICCE
SHOE DISPENSER ESCALATOR ESCALATOR
SHOE DISPLAY
46 JD’s shop floor is divided into brands, which are clearly highlighted
OFFICAL FOOTBALL OFFICAL FOOTBALL through visual merchandising, such as big branded signs, however, OFFICAL FOOTBALL Kappa was the only brand that did not have this. This made it hard to even find the brand, I had to ask a shop assistant where theKappa
KITS KITS products were. When I finally found the Kappa section, I was disappointed KITS with the lack of branding. With only two tracksuits with the iconic logo, hidden tags and items hung with standard JD hangers, Kappa was swallowed by the branding of neighboring competitors: NICCE and FILA. BRANDING
OFFICAL FOOTBALL KITS
This JD had 3 three floors all with a fitting room. As for the visual merchandising, it will never be representative of Kappa because it’s OFFICAL FOOTBALL a sports department store. It felt like a chaos of logos, colours and KITS random pop music, which was not helped by the harsh bright lights. If Kappa had its own store in London it would boost the brand’s image. It would give them an opportunity to create a space that reflects its Italian origin, but also communicate it’s connection to British youth culture through imagery, music or even integrative experiences e.g. VR.
ESCALATOR PAY POINT VISUAL MERCHANDISING 47 Kappa is one of the leading brands in sportswear. It’s a technical, nonconformist, colorful, flexible, competent, global and Italian brand.
The brand’s aim is to provide consumers with revolutionary sportswear products on the market at an affordable price and trendiest styles.
Due to Kappa‘s good prices and high-quality products and high technical performance consumers feel loyal to the brand because it gives them confience when doing sport and wearing everyday clothes.
Kappa is a reliable sporting product so the clothes are always of a high standard and practical sense. Especially due to their in-depth research on making the best sportswear for football and rugby.
Kappa is most known for its practical sportswear, especially as they sponsor professional teams too. However, their famous logo as also become a pinpoint in Britsih streetwear, with other brands copycatting it nowadays, the brand has lost its sense of respect, however, this could simply be saved by some new and exciting collections
48 SHOP REPORT REPRESENTATIVES AND CLIENTELE
The representative and clientele were hard to judge because they are not typical of the clientele of Kappa as JD stocks other brands too. However, I was able to make an informed idea as many of the brands they stock are competitors of Kappa.
Nationality - British Gender - Male Age – 21 Status - Single Occupation - Student Income – Under £7,500 Interests – Sports, Fashion, Electric music Most used social media – Instagram Psychographics – Outspoken, unique, expressive, happy
Nationality - British Gender - Female Age – 25 Status - Single Occupation – Store assistant/ Student Income – Under £12,000 Interests – Sports, Fashion, Social Activities Most used social media – Facebook Psychographics – Seeks excitement, confident, hard working
49 T O NEXT TO COMPETIORS, SMALL RANGE OF PRODCUTS W GOOD QUALITY PRODUCTS, HELPFUL STAFF, LOTS OF JD STORES IN THE UK GOOD QUALITY PRODUCTS, HELPFUL STAFF, S
50 SHOP REPORT SIMILAR BRANDS, CHANGE IN LAWS, CHEAPER ALTERNATIVES OVERTAKE CHEAPER ALTERNATIVES SIMILAR BRANDS, CHANGE IN LAWS, OPEN A KAPPA STORE, PROMOTIONAL CAMPAIGN/EVENTS OPEN A KAPPA 51 The main cause for Kappa no longer holding it’s leading title in sportswear in Britain. is because it doesn’t have a store in London. A flagship store in the capital will put Kappa back at the forefront of sports fashion because it could allow for a base for the brand in people’s minds. This would allow the brand to creatively display their garments, for example, Kappa could use this opportunity to express its forgotten origins such as a store that flows you through its Italian history starting with its classic items and chronologically moves through the development into more expressive products. Futhermore consumers nowadays are into personal/ interactive experiences, therefore this flagship store would allow for store representees to become the face and rapport of the brand. While consumers can dive into innovative promotional techniques while in store, such as a VR allowing customers to play in the world cup in a Kappa football kit.
The next recommendation I would make is to host a well overdue promotional event. A party would allow for new influencers to connect with the aesthetic and people of the brand, which could lead to new collaborations as well as the publicity they would gain if they wore and supported the brand. Since it’s important to keep a 360-degree image, I think it would be appropriate to host a British rave party, because what is more British than sportswear and raving? Although I must state the importance of promoting this event using an omnichannel strategy, for example, a video, a lookbook, ‘upcoming event’ posts on all social media and email and even leafleting to encourage word of mouth.
Finally, Kappa needs to look a developing their social media. Instagram is where brands gain recognition. Even though Kappa isnt a new brand, it is still vital to keep on top of what you look like online, as brands can easily be forgotten due to the sheer mass of newer brands. I would recommend hiring a content producer for social media accounts. This would allow for constant posts from shoot shots to relatable memes to interviews to upcoming event posts. The other beauty of social media is that with the ability to tag, influencers and the public are creating new content for the brand all the time, but they won’t tag unless the brand gives them a reason to. CONCLUSION AND RECOMMENDATIONS
52 CONCLUSIONS AND RECOMMENDATIONS 53 54 Kappastore.eu. (2018). [online] Available at: https://www.kappastore.eu [Accessed 15 Oct. 2018].
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Alexdemora.com. (2018). Kappa SS18 - Alex de Mora. [online] Available at: http://alexdemora. com/kappa-ss18 [Accessed 16 Oct. 2018]. the con•cept. (2018). KAPPA EDITORIAL — the con•cept. [online] Available at: http://www. theconceptny.com/kappafw17 [Accessed 16 Oct. 2018].
Kappa Futur Festival | Torino Summer Music. (2018). Who we are | Kappa Futur Festival. [online] Available at: https://www.kappafuturfestival.it/en/who-we-are/ [Accessed 22 Oct. 2018].
K-Way. (2018). K-Way. [online] Available at: https://www.k-way.co.uk/kappakway [Accessed 30 Oct. 2018].
HYPEBEAST. (2018). Kappa & WHIZ LIMITED Showcase Their Collaborative Capsule in This Tokyo-Set Editorial. [online] Available at: https://hypebeast.com/2018/9/kappa-shadow-whiz- limited-fall-winter-2018-tokyo-editorial [Accessed 4 Nov. 2018].
Frue, K. (2018). PESTLE Analysis Of The Fashion Industry. [online] PESTLE Analysis. Available at: https://pestleanalysis.com/pestle-analysis-of-the-fashion-industry/ [Accessed 19 Oct. 2018].
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Fashionmonitor.com. (2018). Fashion Monitor. [online] Available at: https://www.fashionmonitor. com/login [Accessed 23 Nov. 2018].
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