PLEASE READ AND FOLLOW ALL INSTRUCTIONS THOROUGHLY
Assignment: The Retail Analysis is designed to allow each student to learn, develop, and apply the key fundamentals of the retail, marketing, and pricing concepts they learned in this class. This will allow the student to demonstrate their mastery of the strategic brand development process (Discover, Analysis, Conclusions, Implications, and Recommendation). This is an individual assignment.
Deliverables: CEO Memo (limited to maximum 5 pages, 12 pt. type, single-spaced (all-inclusive of charts, graphs, title page, references, etc.).
- Title Page (1)
- Body
- Charts Graphs (Please leave suggestions where I can insert a graph myself in your writing)
- Reference page (5)
Each student will write a memo from themselves (as CMO) to the CEO of their company. The memo will provide a strategic retail and pricing analysis and recommendations.
Each student will identify a retailer that has gone out of business or declared bankruptcy within the past 3 years. Company of choice: Charlotte Russe
Please follow-
Part One: Analysis
Provide an in-depth analysis of the company’s retail and pricing strategies, customer base, competition, category, value proposition, 4P’s, What’s Working, What’s Not, What’s Missing, and What’s Needed
Part Two: Conclusions and Implications
Have a clear Conclusions Section where you draw from your analysis and a formally frame your point-of-view on what is the problem to be solved, what was the strategy in place vs. what strategy needs to be put into place. What are we going to do, Why are we doing it, How will we do it, Who will we win with, What does winning look like.
Part Three: Recommendations
Your Recommendation(s) needs to flow out of the research, analysis, conclusions, implications, and strategy recommendations developed in your two previous deliverables. Your Recommendation(s) needs to tightly align, and bring to life, your analysis and strategy; it should demonstrate continuity of thinking and strategy.
Your Recommendation(s) needs to be a “plan of action.” Does your Recommendation address the business issues you raised in your initial Analysis? Have you “framed” the issues in such a way that your business strategies will drive solutions and get the company to a better place (strategically). Your Recommendation(s) is (and needs to be) a sales presentation. You are trying to convince the CEO to spend significant company dollars to support your analysis, conclusions, strategies, and recommendations. Your Recommendation(s) is the path you are advocating. Your Recommendation(s) needs to be fact-based, strategic, logical, impactful, purposeful, believable, and ultimately persuasive.
PLEASE READ
Grade Criteria:
20%: Quality of Thinking – Student has successfully completed in-depth research and analysis of the topic.
- 20%: Relevance – Student has successfully identified key content specifically relevant to helping a non-marketing executive understand how to use and apply the brand book standards and guidelines
- 20%: Depth of Thinking – Student has successfully demonstrated depth of research, analysis, thought, application. This assignment isn’t a checklist, the content needs to ladder up to a larger brand strategy with clarity
- 20%: Use of Class Concepts: Student successfully demonstrates application of concepts and tools covered in the readings and lectures (Use business language- marketing terms)
- 20%: Quality of Presentation – Presentation is engaging and involving, the brand comes to life.
TO: Peter Jeffery, CEO Charlotte Russe
FROM: Jonathon Fitzgerald, CMO
DATE: March 20, 2021
SUBJECT: Retail Analysis: Charlotte Russe
Part One: Analysis
Charlotte Russe is a retail chain store based in the United States. The company specializes in women’s clothing, particularly for women in their teens and 20s. Charlotte Russe’s headquarters is in San Francisco, California, but operates in 45 states across the United States and Puerto Rico, mostly in malls and shopping centers, displaying its clothes for customers to buy. Since it was established, the company has been a mall-based specialty retailer, selling under concepts, such as “Charlotte Russe,” “Rampage,” and “Charlotte’s Room.” The company has always taken advantage of its fashionable products, interesting layout, and merchandise mix to attract consumers from diverse demographic, socioeconomic, and cultural backgrounds. Charlotte Russe’s retail strategy includes brick-and-mortar retailing through exhibiting its products for customers. While the approach has been effective over the years, it affected its sales due to a decline in in-store traffic that affected its sales revenue and contributed to its downfall. The retail strategy is one factor behind its Chapter 11 bankruptcy filing on strategies, customer base, competitive advantage, product category, and value proposition on February 4, 2019.
Regardless of taking a keen interest in its retail and pricing strategies, customer base, competitive advantage, product category, and value proposition, Charlotte Russe filed for bankruptcy on February 4, 2019, revealing that its strategies have not been working effectively. The company attracted customers by using a Low Price or value-priced ($00 MAX) strategy, especially since its market segment include teenagers and young adults. The strategy has worked for the company because it has appealed to the customer segment since it was established. The customer base has also been great for the company, especially considering its promise to inspire girls to be and feel amazing every day. The firm prides on listening to the customer and creating products that meet their needs. Charlotte Russe operates in a highly competitive market, creating a need for a competitive strategy to retain its market share. The management adopted the “fast fashion” retail model to provide real one-on-one customer service as a source of its competitive advantage. The leading competitors include American Eagle Outfitters, Forever 21, Rue21, and Zara. Besides product, place, and pricing, the company capitalizes on promotion to market its value proposition: “a dynamic, creative, and intensively collaborative environment that believes an open, honest, and supportive approach empowers our people to be their best.” The company uses an integrated communication approach, including new and conventional media, to market its product. Although its 4ps have worked in the past, the bankruptcy reveals the need for considerable changes to improve its future performance.
(Insert a graph of Charlotte Russe sales performance over the years)
Part Two: Conclusions and Implications
Charlotte Russe had a suitable strategy targeting teenagers and young adults with fashionable products. The company inspired young girls to feel amazing as they stepped outside every day. During the time it was founded, and decades after, the brick-and-mortar business model was appropriate since they targeted girls and young ladies who went out shopping. Besides, the company had created a reputation that would allow the target customers to visit the mall looking for the Charlotte Russe. Besides, placing the customer at the center allowed the company to gain a considerable market share due to value addition and appealing directly to young people seeking fashionable products. Furthermore, the value-priced strategy was appropriate for the company since the target audience could afford it. However, the management should have recognized the changing times and change the business model and brand strategies.
Charlotte Russe is among the mall-based companies that have recently filed for bankruptcy due to a decline in sales and profits. The company joined the list of others, including Gymboree, Claire’s, and Mattress Firm, which has failed due to ineffective retail strategies. The management cited a decline in sales and in-store traffic as the primary reason for its failure. Charlotte Russe has struggled with the burden of maintaining a huge physical business, leading to a growth in debts and unsustainable business. Low sales and increasing debts are the primary challenge for retailers. Thus, as Charlotte Russe emerges from the financial crisis, the incoming management should reconsider the current retail strategy and implement an e-business model to overcome the drawbacks of the brick-and-mortar mall-based business. From the 4ps analysis, the company should change the place to increase online presence during the modern age when customers have increased their social media activity, pricing to create a strategy that will balance between the company’s need for profits and customer interests through value-addition, and promotion by increasing digital marketing to create awareness around the new retail model. Generally, the company needs to create a new winning strategy to overcome the improved sales and profits.
Part Three: Recommendations
Charlotte Russe’s management should recognize that the brick-and-mortar business model is no longer effective and was one reason for the sales decline that led to bankruptcy in 2019. Although the company will maintain the mall presence, it should integrate other platforms to address its problem and restabilize it with a global presence. Therefore, the firm should change the retail strategy to be more effective and suitable for the modern consumer. Charlotte Russe requires implementing an e-commerce model similar to Amazon to increase its customer base and sales. The new approach should include a social media strategy to build and nurture relationships with current and new customers. Facebook, Instagram, LinkedIn, and the company’s website provide Charlotte Russe’s important tools to connect with its customers. The strategy is appropriate for the company since it targets teenagers and young adults, the majority of social media users.
The e-commerce model that integrates social media will increase the market reach and change the company’s 4ps. The management will sell the quality product at a more competitive price on social media. Furthermore, marketers will use social media platforms to market the business. The promotion will focus on customer relationships instead of simply creating awareness about its products. Besides social media marketing, the management should use influencers, individuals with considerable social media following. When such individuals post information about the product, current and potential customers view it, translating to sales. Charlotte Russe should have a website that allows customers to make online purchases and deliver products to customers at their convenience instead of waiting for them to visit the mall. The current COVID-19 pandemic period has witnessed an increase in online purchases, increasing the sales for companies that use the platforms compared to brick-and-mortar businesses. Thus, Charlotte Russe will benefit from an increased online presence to counter the decline in physical stores’ performance.
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