Banana a few personalized customizations done by Patricia.

Banana Republic
was co-founded by Mel and Patricia Ziegler in 1978. Banana Republic, at that
time was one of the most unusual clothing store Beverley Hills, California had
seen. It had a jungle theme with life-size elephants and giraffes in the store
with a focus on safari clothing. Banana Republic was founded when Zeigler
bought a Burma jacket on his trip to Sydney, Australia. The look of the jacket
inspired the Ziegler’s to resell excess military clothing with a few personalized
customizations done by Patricia. With a working capital of $1,500, Zieglers
laid the foundation of Banana Republic. Later in 1983, Don Fisher, co-founder
the Gap Inc., offered to buy Banana Republic, who were thriving to stay in
business. The reason why Zieglers agreed to be bought was because they would
have the needed funds to thrive as well as expand and also because they would
still have the creative liberty. The safari fad of the 1980s faded by 1987 and
the stock fell. This compelled Fisher to bring in Mickey Drexel, who wanted to make
banana republic more mainstream than theme oriented and this is when the Zieglers
walked out. Being a classic, high on quality line, Banana Republic fit
perfectly into Gap’s vision of market expansion. 1990 saw the new look of
Banana Republic which was nothing like it used to be. It was all about
minimalistic and modern clothing. (adweek.com) by early 1998, Banana Republic
was transformed into a store with modern interior, super-sleek fixtures-their
signature feature, lots of polished metal, and much more. Banana Republic is a
specialty store offering apparel and accessories. They offer products
on-line(e-commerce) as well as in stores (brick and mortar). They offer a
variety of merchandise like denim, khakis, t-shirts, winter wear, shoes, fashion
apparel, bags, belts, accessories, jewelry, intimates, personal care products
for men, women, and children.

            “Banana Republic’s niche is with
high-income, over-25, white collar professionals, 32 percent of whom have an
annual household income of more than $100,000. Another 22 percent of the
company’s customers earn at least $75,000, and yet another 19 percent are in
the $50,000 to $75,000 range.” (Whiteley, 1999). According to an article in Men’s
Health Magazine, “the primary age that shopped Banana Republic ranged between
25-34 (31%) and 35-44 (28%). Average household income ranged from $100k to
$150k (36%). Their consumers gender weighed slightly higher with female (57%)
than males (43%). Most consumers who came into Banana Republic had an education
level of college. The Psychographics of the Banana Republic consumers included sophisticated
and fashion forward females and sharp looking regular males.” Heriford (n.d.)  Their target market are individuals looking
for work and leisure attire at the same time. The ones who are full of
possibilities and would want to experiment and make the most of every moment
and opportunity. These working-class individuals are value seeking consumers
who wouldn’t mind paying for luxury. However, in 2015 they expanded their
segments to target the millennials and young professionals as well. This segmentation,
however lead to Banana republic losing their old target market. Banana Republics competitors include Amazon, J.
Crew, Talbots, Ann Taylor , Bonobos, J. Hilburn and Gilt Groupe. This initiative lead to a
decline in 12% of its sales in 2015. After this point, they never really got
back on track. The consumers got confused with the kind of apparel they were
offering. According to Andi Owen, former president, Banana Republic, “Tailored pants,
sweaters that fit just right, and classic outerwear that brings the whole outfit
together are Banana Republic’s bread-and-butter products.” (Adams, 2016). However,
now when you walk into the store, you’d find more denim culottes, floral
rompers, drop-waist dresses, and a sales rack stuffed with merchandise. Banana
Republic’s highest sales in a decade was marked in 2014 was $2.4 billion. This
lead to a change in creative directors, which also was of no use. The skirts
got shorter, and the fittings were disappointing and made it difficult for its
target consumer to pull it off with ease. Instead the former loyal consumers
revolted and the sales went down. These changes confused the consumers and they
started going to different brands. As per the investors report, “Net sales recorded
in fiscal year 2015 was $2,211 million, in 2016 $2052 million and in fiscal
year 2017 for until the 3rd quarter is $1,396 million”. A clear
decline is seen in sales over the past three years. (Hoovers.com)

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            According to Gale
report 2017, “Median household income is $50,000. Median age of US is between 30-40
years. USA population comprises of about 17.90% Hispanics, 5.7% Asians, about
12.9% Blacks, 70.4 % Whites and around 10% of other race and ethnicity. About
60.7% of the population has a white-collar job while the rest 39.3% are
blue-collared. Total consumer apparel expenditure in 2017 is $1,845 and is
predicted to be about $2,178 by 2022, of which women apparel expenditure
comprises of about 37%.

            Consumers nowadays have
become more value seeking rather that luxury seeking. They are willing to pay
for luxury fashion but not as steep as they used to earlier. Further they
prefer true to fit apparels, and plus and petite size have become a major trend
and many brands are expanding their lines into plus sizes. Department stores
are thriving and e-commerce is trending. Luxury department stores aren’t creative
enough for the consumers any longer. Consumers feel that they aren’t getting the
quality they are paying for. Consumers are willing to trade down, in spite of
high income and affordable luxury is becoming the new upscale. With technology,
people and brands have started personalizing clothing, footwear and
accessories. Rental clothing is also on a rise. (Mintel.com).

            The change in consumer behavior
has affected the retail market. Consumers have become value conscious and
expect good quality. With the available resources, consumers have access to a
huge database of information and are not easily misled. Ecommerce is on the
rise and now Amazon has become a competition for almost all retail markets. The
consumers going into the stores are mainly going for the experience. Personalization
and Customizations of merchandise is trending. Virtual reality and technology has
made everything graphic instead of the traditional  signage  and trial rooms.

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