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Introduction
Only You is a mobile app that allows its users to have quick access to the digital copies of their clothes from a mobile device. The central idea of the application is that it lets the user scan or enter barcodes of the clothes and store them in a digital wardrobe for easy access in the future. Only You helps always to be aware of what clothes one has without looking inside a physical closet at home. Moreover, people will be able to buy clothes from partner stores, such as H&M, Zara, Bershka, and Pull&Bear, if the customer decides that she or he needs a new outfit. The central feature of the application is to create outfits from scanned barcodes at any convenient place and time.
The application is meant to be designed for Android and iOS, which means that it will be distributed through Google Play and App Store. It has a significant development potential since it can be used by fashion consultants to give advice about outfits and suggest clothes from partnered stores. The application can make money out of sales, advertising, and fees from fashion consultants. It is an innovative idea that has little competition, which promises fast growth.
Paper’s Objective
The purpose of the present paper is to evaluate the competitive position of Only You and seek investment opportunities in exchange for a share in the business. The initial investment is estimated at €35,000, which includes creating the mobile platform and initial advertising. The paper also aims at describing the proposed features, benefits, market opportunities, and market strategy. The analysis is expected to confirm that the investment product is compatible.
Problem Definition and Solution
Today, women from developed countries are obsessed with clothing and looks. A modern woman has 103 items of clothes in her wardrobe, and 25% of females feel that their wardrobe is disorganized (DailyMail, 2016). According to a study of 1000 American women, 47% of females struggle to pick an outfit for work, and 50% plan their outfits in advance (DailyMail, 2016). A study of 2000 office workers revealed that people spend 14 minutes a day to decide what to wear, and 76% find it difficult to decide what outfit is appropriate for the occasion (Elsworthy, 2017). In other words, modern women experience an increased amount of stress from creating appropriate outfits due to the increased amount of clothes in their wardrobes.
The matter can be improved significantly by a high-tech decision introduced in the present paper. Only You keeps the photos of all the clothes one owns or wants to own and helps the user create new outfits at any place and time. Moreover, the application can help to plan outfits in advance and create insertions in the calendar concerning the planned outfit. If a customer is not sure that her or his clothes fit a certain occasion, the person can browse different stores in one app and buy new clothes that will be delivered at a desirable time. Moreover, fashion consultants can help to pick the right outfit for any occasion for a small fee. Only You is expected to decrease the stress of its users and improve decision-making about buying new clothes together with creating and selecting outfits.
Features, Benefits and Market Opportunity
Gap Analysis
Table 1. Gap Analysis.
The gap analysis provided in Table 1 reveals that there five problems that the proposed application aims to address. According to Mara et al. (2018), gap analysis is vital for planning actions and improvements. The analysis revealed that the highest priority is to let the customers store the digital copies of owned or desired pieces of clothing and combine them into outfits. The second priority is to partner with online clothing stores and fashion consultants to help the targeted audience to overcome the stress from buying new clothes or creating new outfits. Finally, compatibility with calendars on Android and iOS devices should be added to plan future outfits. The gap analysis helps to realize that the target audience is from developed countries aged between 18 and 50, which is vital for planning an appropriate marketing strategy.
Features and Benefits
Table 2. Feature Benefit Matrix.
Table 2 provided above helps to understand the central features of Only You and their benefits. The table identifies seven distinctive features, which help customers to manage their looks more efficiently. The primary functions are adding, storing, and combining clothes into outfits. These functions aim at helping the customer manage the existing or desired clothing. The secondary functions, such as buying new clothes and consulting fashion specialists, aim at improving the quality of existing looks using different approaches. The supplementary functions, such as sharing and scheduling outfits offer only minor benefits while may be recognized as distinctive features of the application. The described features and their benefits are expected to facilitate the marketing of the product.
Market Opportunity
Only You is designed to enter the fashion e-commerce market, which promises its steady growth. According to Amed et al. (2019), the global fashion market has been characterized by cautious growth in 2018. In 2019, the market entered a period of stagnation, especially in Europe and the United States (Amed et al. 2019). However, the fashion e-commerce market is expected to grow rapidly for the next five years. Figure 1 demonstrates the projections of global revenues published by Orendorff (2019). According to the projections, the market size is expected to almost double during the next five years.
Projections published by Marketing Charts (2018) are more optimistic, especially considering the projections concerning the e-commerce share of total fashion sales. These projections are demonstrated in Figure 2 below.
The total number of customers of the e-commerce fashion market is projected to surpass 1.2 billion people (Orendorff 2019). While the number of people shopping for clothes online is growing rapidly in China and India, the target region is identified to be Europe and the US, since it has the largest share of online shoppers (Orendorff 2019). Therefore, the application will be initially available in App Store and Google Play in these two regions.
Only you is also expected to enter the narrow market of digital closet applications. These applications are positioned as outfit planners, wardrobe organizers, and shopping assistants, and they have 10,000-40,000 downloads per month. The overall market size of the category is difficult to estimate; however, the review of apps form the category using Sensortower.com revealed that the total number of downloads is around 500,000 per month. Only you is expected to receive 70,000 users within the first year, and the total number of users during 3 years is estimated to be 300,000.
The prognosis is made on the basis that today people are forced to use different tools for organizing wardrobes, buy new clothes, and receive advice from fashion specialists. Moreover, the ratings and reviews of the applications suffer because of low investments into usability and rare updates to meet the needs of Only You is expected to combine all the functions. Therefore, the application is predicted to have higher user count and revenues.
Market Strategy
Porter’s 5 Forces Industry Analysis
In order to conceptualize and visualize the attractiveness of Only You for investors, Porter’s 5 Forces diagrams are presented in Table 3 and Figure 3 below.
Investment threat and attractiveness analysis revealed that Only You is associated with moderate investment threat, and its attractiveness is fair. The primary risk is associated with intense rivalry between competitors. It is estimated at 4 because the application enters two markets. Competitors in fashion e-commerce are numerous and aggressive (which may is estimated 5 out of 5), while competition between wardrobe applications is low (1 out of 5). At the same time, there is a moderate threat of new entrants in the digital wardrobe market due to low initial investments. At the same time, Only You can be substituted by other applications; however, its combination of features remains unique. Supplier Power Barrier and Customer Power Barrier are low since the number of suppliers is high, and the buying power of customers is high. While arguments concerning the estimations of values in the analysis can be made, the attractiveness is not likely to be affected.
Competitive Positioning
The competitors of Only You can be divided into two separate sectors according to the market. The competitive position of the applications is visualized in Figure 4 below.
First, fashion e-commerce websites are to be considered, among which are branded stores (such as H&M in the diagram) and clothing marketplaces (such as AliExpress in the diagram). Stores like H&M, Zara, Bershka, and Pull&Bear, however, can be viewed both as competitors and potential partners, as they can use Only You to sell their products. These shops are from large to medium sizes with various target audiences depending on brand positioning. These stores only sell clothes and provide suggestions for outfits from experts in blogs and automatically generated recommendations. These suggestions, however, rarely individualized and are based on statistics. The marketplaces, such as eBay, Amazon, and Aliexpess, are large websites specializing in selling everything, including clothes. These websites are valued for a large selection of goods, but they do not offer fashion-related services or wardrobe organization.
More attention is to be paid to digital closet applications, such as Getwardrobe, Smart Closet, and Stylebook. This group of competitors has a core idea similar to Only You, which is creating a digital copy of one’s closet and helping her or him create looks or outfits.
Stylebook is most profitable among the three identified competitors, with 5,000 downloads and €20,000 in revenues in December 2019 (Sensor Tower, 2020c). The application has a fixed price (€3,99) and allows adding and storing clothes, creating and scheduling outfits, receiving expert opinions about fashionable looks and trends, and packing for traveling (Sensor Tower, 2020c).
Getwardrobe provides the same functions without the ability to receive advice from experts (Sensor Tower, 2020a). The application has a free and a full version, and the cost of the subscription is €3.99 per month or €19.99 per year (Sensor Tower, 2020a). The number of downloads was 10,000, and revenues were less than €5,000 in December 2019 (Sensor Tower, 2020a).
Smart Closet is the most popular among the identified competitors, with 30,000 downloads and €5,000 in revenues in December 2019 (Sensor Tower, 2020b). The application has options similar to Getwardrobe; however, its paid subscription is cheaper with the cost of €0.99 per month and €9.99 per year (Sensor Tower, 2020a). The application cannot add outfits to the calendar.
The primary advantage of Only You against competitors is that it will have a balanced number of functions. The proposed product will be positioned carefully in the middle between two groups of its competitors to provide the users with the unique ability to combine experiences from two of the spheres.
Marketing Strategy
Only You’s marketing mix will consist of strictly internet advertising in different media channels. The primary source of downloads will be featuring commercials in other applications and games to increase awareness about the product. At the same time, Only You will be promoted by beauty bloggers and other leaders of opinions in YouTube videos, which is also expected to attract attention to the application. Finally, the product will be described in fashion-related written media, such as blogs and magazines, which will allow a thorough description of the product, all its functions, and plans for future development. The application will be sold at a fixed price of €4.99 because it is identified as the most profitable option after the review of the competition. The product will be promoted in Europe and the US with a marketing budget of €10,000 per month.
Generic Go-to-Market Strategy
The product will be positioned to bring comparatively high benefits at a moderate price. Figure 5 below demonstrates the position of Only You against other digital closet applications using Bowman’s clock, which is most effective for defining pricing strategies (Bhasin, 2019). As seen in the figure, Only You will have the highest price among its competitors and the highest perceived benefits. However, the price is high, only considering one-month use. If the application is used for a year, it will be positioned between Smart Closet and Stylebook.
Fictional Persona
Table 3. Fictional Persona.
| Persona Name | Mea Rose |  |
| Background | Single. 23 years old. Works in an office and studies psychology. Plans to become an HR manager. | |
| Demographics | Female. Lives in Marseille, France. Annual income €30,000 | |
| Identifiers | Open in conversation. Prefers personal communication. Frequently makes Instagram posts with new looks. | |
| Goals |
Primary: become a valued professional in the sphere. Secondary: Find a suitable partner for life. |
|
| Challenges |
Primary: Does not have time to plan what to wear. Secondary: Has wardrobe organization problems. |
|
| What can we do? |
Goals: We can help Mea to be more confident at work and dates since her outfits are carefully created and scheduled. Challenges: We can facilitate wardrobe organization and outfit scheduling at any place and time. |
|
| Real quotes | “I have nothing to wear!” “My mornings are full of stress about what to wear.” “I have no idea what I am wearing tomorrow.” |
|
| Common objectives |
There are free-of-charge analogs. It is like buying a pig in a poke since no trial is available. |
|
| Marketing messaging | Reduce your morning stress at a price of a latte with a cinnamon bun! | |
| Elevator pitch | Only You is a mobile app that helps to organize your closet, plan and create your outfits, shop for new clothes, and get advice from fashion consultants at any place and time. You no longer need several apps to manage your looks – everything is in one place! | |
Financial Model
Only You will make money from two sources, including B2C and C2C sales. The primary source of income will be direct sales to customers using the App Store and Google Play. The secondary source of income is fashion consultation sales, which will be provided by the professionals. The professionals will be free to choose the charge for their clients; however, the registered consultants will need to pay a commission of €0.50 for every order. Since the service is innovating, the initial sales are expected to be minimal. By the end of the first year, it is expected to sell only 15,000 consultations, while the total number of application sales is expected to be 70,000. Sales Projections are demonstrated in Figure 6 below.
During the first year, it is expected to make over €350,000 in sales with €345,000 attributed to direct sales and €7,000 attributed to consultation commissions. Due to the low cost of application maintenance, the expected revenues for the first year are €80,000. The advertising expenses, cash flow projections, and income statement can be viewed in Appendices A-C.
The break-even analysis demonstrated in Figure 7 above demonstrates that Only You is expected to break even after 5 months of sales. The period is short since the costs do not grow considerably with the increase in sales. However, after the first year of operations, additional costs may be implied due to the growing needs of users.
Conclusion
While Only You is not an innovative idea, the combination of services provided by the application is unique. The product will help its users to create looks from clothes they have or plan to have, schedule outfits, get consultations from fashion professionals, and even buy new items in one place. While women between 18 and 45 are the target audience, the application will benefit both males and females aged between 18 and 50. The initial investment is comparatively low, while attractiveness is fairly high. The product is carefully positioned in both markets it is entering, including fashion e-commerce and digital clothes applications. Low maintenance cost and cost per unit sold to ensure that the breakeven point will be reached within 5 months, while the sales are expected to grow steadily. In conclusion, the product is expected to bring high revenues in a relatively short time with minimal risk, which makes the investments attractive.
Bibliography
Amed, I. et al. (2019) ‘Ten trends for the fashion industry to watch in 2019,’ McKinsey & Company.
Bhasin, H. (2019). ‘What is Bowman’s Strategy Clock?’, Marketing91.
DailyMail (2016) ‘The struggle is real! Infographic reveals the average woman has 103 ITEMS in her closet while laying out the REAL reasons she can still never find anything to wear,’ Mail Online.
Elseworthy, E. (2017) ‘The average woman spends four months of her life deciding what to wear to work, study finds,’ The Independent.
Mara, M. et al. (2018). ‘A gap analysis methodology for product lifecycle management assessment,’ IEEE Transactions on Engineering Management 65(1), pp. 155-167.
Marketing Chart (2018) E-commerce grows in the fashion industry.
Orendorff, A. (2019) ‘The state of the ecommerce fashion industry: Statistics, trends & strategy,’ Shopify Plus.
Sensor Tower. (2020a). Outfit planner – Getwardrobe.
Sensor Tower. (2020b). Smart closet – Fashion style.
Sensor Tower. (2020c). Stylebook.
Appendices
Appendix A: Advertising Expenses Budget
Appendix B: Cash Flow Projections
Appendix C: Income Statement
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