Vera Bradley is a fashion company that focuses on the “modern woman.” Recently, they decided to target new customers by offering free vera bradley cases for iPhone 5. They had one vera bradley case per customer and no other vera bradley products were purchased or given away. This vera bradley case study will examine how this campaign affected their conversion rates and profits. The vera bradley case study concluded that the offer of free vera bradley cases for iphone 5 increased their conversion rates by 13%.
Vera Bradley is a women’s handbag and leather accessories company based in the United States that specializes on the production and marketing of luggage bags, women’s handbags, and accessories. This market is worth approximately $96 billion (Han, Nunes, and Dreze 3). The United States accounts for 36 percent of all industry sales; Europe has 21%; Japan has 16%; and China comprises 11% of sales (12).
Prices start at $12
Prices start at $11
Prices start at $12
In the United States, as well as other markets worldwide, Vera Bradley competes with similar successful handbags and leather goods producers such as Coach, Michael Kors, and Kate Spade. In addition to direct department store and specialty retail channels (Vera Bradley 5), the firm sells its items through a variety of distribution methods including indirect department store and specialty retailer channels.
Vera Bradley’s first years were spent solely on the production and sale of duffel bags, handbags, and sports bags (Vera Bradley 4). However, by 2014, Vera Bradley had made considerable progress in diversification, selling a wide range of products including luggage bags, wallets, purses, jewelry, cell phones and computer covers. A wide range of bags Lunch sacks , scarves , baby clothing , and beach accessories are among other things offered (Vera Bradley 5)
The company’s main strategic concerns revolve on expanding into new areas without the required distribution capability to service its clients. Due to this approach, it has experienced numerous shortages and delays in its specialty shops.
The company’s additional approach is to leverage internet platforms as key tools for selling its goods. Finally, slow automations and technology adoption have hampered production and resulted in sluggish growth over the past several years.
Implementable Recommendation and Justification
The company’s facility has allowed it to improve its productivity as a result of the development of enormous warehouses and the automation of operations. In addition, as a result of eCommerce adoption, the firm has established a new platform through which it may reach new consumers from across the world.
Industry and Competitive Analysis
- The worldwide market for handbags and leather accessories is valued at $96 billion.
- There is a growing demand for high-quality, yet inexpensive luxury handbags and leather goods.
- Vera Bradley has 96 full-price retail locations in the United States, 29 factory outlets throughout the country, and seven full-price retail stores in Japan.
- With annual sales of $5 million, this company is one of the most successful small businesses in its sector.
Degree of Product Differentiation
Vera Bradley is in the business of selling luggage and duffel bags, which are not distinguished by many other companies. However, at first, the firm was inspired by the desire to offer duffel and luggage purses that were not presently available on the market.
It was founded by the same man who created Coach, and subsequently hired a number of his employees. The company initially concentrated on providing high-quality and fashionable goods to fill a niche in the market that wasn’t being met at the time (Vera Bradley 6). In addition, the firm has thrived through product sales tactics such as those used with other major retail chains like Wal-Mart and others in the United States and across the world.
The business, for example, has over 3100 indirect specialty retailers in 145 countries. The firm has also prioritized the sale of high-quality goods at reasonable rates as opposed to its competitors’ comparable products.
Vera Bradley is a vertically integrated firm since it handles every aspect of production in its businesses. The company has its own factories, distribution networks, and retail outlets in the United States and Japan (Vera Bradley 4). However, the business’s items are also available in specialty shops not affiliated with the company.
Vera Bradley has a headquarters, major operations, and market in the United States. As a result, it must comply with the labor laws and regulations that govern its employees’ employments in the United States. Furthermore, Vera Bradley has offices in various foreign nations such as Japan. As a result, to protect itself from political retaliation, the firm must make sure that its actions are above board.
Since the start of the global financial crisis in 2007/2008, Kering has seen an increase in growth in its mid-range and low-cost luxury goods category. An industry-wide transition from costly luxury items to more affordable luxurious products was observed at that time to ensure that the sector continued to develop, unlike other industries that saw a significant decline in sales as a result of the economic downturn.
The firm has recently witnessed an increase in competition. In 2015, sales for the company fell as opposed to 2014. For example, in the first quarter of 2015, the business recorded revenue of $101.1 million, which was lower than $112.2 million in the same period last year (in millions).
That’s $11.1 million less in revenue (Vera Bradley 32). Leather goods have gotten more expensive throughout the world, reducing profit margins for Vera Bradley’s items. In Japan, high taxes on luxury items have resulted in significant operational expenditures for the company, which has seven stores there.
Customers of luxury leather items are loyal to specific brands for a variety of reasons, including the desire to feel as if they belong (Beard 449). Furthermore, since fashion and leather goods serve as markers for sociocultural classes, they are essential products in the eyes of consumers.
As a result, a firm that sells goods that satisfy consumer demands has an advantage. Vera Bradley was able to satisfy the client’s wants by positioning itself as a designer of high-end-low cost items.
In any organization in the twenty-first century, technology is a major component of success. Vera Bradley has invested in new ERP and supply chain systems to improve efficiency and effectiveness in its operations in line with its goal of achieving effectiveness and efficiency in its operations. In order to broaden its client base, the firm has also implemented eCommerce into its plan.
The use of leather products is part of the luxury industry’s luxe products and fashions. As a result, it is impossible to avoid environmental harm. Vera Bradley is dedicated to being environmentally friendly as part of its obligation to ensure that it is ethical. The firm has so far donated more than $50 million to various projects, including cancer research, in the United States (Vera Bradley 45).
This firm operates in a highly regulated industry. As a result, it must follow all applicable legislation and policies. The company must also follow fair competition rules, labor regulations, and tax laws among others in the sector.
Bargaining Power of Supplier
Companies in the luxury goods sector place a high premium on the quality of the ingredients since such materials have a significant influence on the end result. To guarantee the quality of their raw materials, important luxury goods companies have vertically integrated and established leather product farms and factories (Moore et al. 139).
Vera Bradley, on the other hand, prioritizes long-term and dependable working relationships with material suppliers. Leather suppliers, however, are not well organized to reach the ultimate client since they do not provide finished goods (Han et al. 12). As a result, they are entirely dependent on luxury goods manufacturers. Suppliers have little bargaining power over Vera Bradley as a consequence of this.
Bargaining Power of Buyers
Individual consumers’ brand loyalty in the luxury market is a key factor in determining who has the most influence (Doole and Lowe 36). For example, many high-end specialty shops, such as Saks Fifth Avenue, Harrods, Selfridges, and Neiman Marcus among others, have powerful channels and brands.
In this scenario, luxury goods or new entrants may appeal to a wide range of luxury consumers. Loyalty, on the other hand, is more directly linked to the brand in well-known luxury leather goods companies. If specialty shops don’t carry such brands, their reputation among customers is damaged (Moore et al., 142). In developing nations where specialty stores have greater power since they are necessary for allowing luxury products from luxury manufacturers to enter the market. Many clients have strong emotional connections to their companies at the personal level. As a result, they have a limited bargaining power (Teece 174). However, due to the fact that no single client has a big wallet-share, such customers have little influence over luxury items.
The Vera Bradley company’s approach is concentrated on three key areas: distribution, sales, and personal selling. Vera Bradley recognizes that distribution is one of the most important elements of company performance. As a result, it has prioritized developing a comprehensive and operational distribution network with regional warehouses for future shipment.
The firm places a high value on sales strategy, with the goal of ensuring that its goods are accessible through several channels such as specialty shops, company-owned retail outlets, and eCommerce. Finally, to reach many consumers and minimize costs that are seen in its specialty warehouses.
The majority of individuals had the same simple and uninteresting luggage design at Hartsfield Atlanta Airport thirty-four years ago, when Barbara Bradley and Patricia Miller noticed it. These two friends saw an opportunity to develop a new market for colorful and patterned baggage patterns, which is how Vera Bradley was born. Vera Bradley began producing bright and distinctive pattered handbags, luggage, sports bags, and purses; and after the success of the initial product line.
Limiting the firm’s access to high-quality handbags, purses, and other accessories while choosing goods with a higher demand will have a significant impact on their success. The most popular items in the company’s accessory area during the previous two years were cosmetic cases, eye-glass cases, wristlets, wallets, and gifts; while paper was the most popular item in the category of travel and leisure. Rolling luggage, garment bags, duffel bags, and travel cosmetic cases were among the most popular products in the company’s accessory sector over the last two years.
Figure 4 shows a reflection of Vera Bradley’s revenue data on its most profitable items and their progress/decline over time. Vera Bradley should remember that their core product is travel bags, so they should continue to focus on that area since it is what they are best known for and why they started the company. Adding handbags was not necessarily a bad idea, but it is not Vera Bradley’s strong suit.
The market is crowded with rivals who are more well-known, such as Kate Spade, Michael Kors, and Coach. Vera Bradley’s goods, on the other hand, aren’t yet as globally competitive as those of these other firms already mentioned, making it difficult to compare and compete with them. There are two issues the firm is facing: perceived product quality and brand name recognition. This is because certain groups perceive Vera Bradley to be inferior to the accessible luxury category.
Vera Bradley is a young firm that began in a homeowner’s basement and has since evolved into an industry leader in the production of fashionable handbags and luggage. Vera Bradley, which was founded by Barbara Baekgaard and Patricia Miller, is currently facing several challenges, one of which will be discussed in this paper. About Vera Bradley The company was established by Barbara Baekgaard and Patricia Miller.
They wanted to create practical bags that were both useful and affordable for a wider audience. They needed market research to figure out who their target market was. They created their first design and showed it in a trunk show, which elicited good results. It was evident that middle-aged women liked their company, based on the success of the performance. Vera Bradley needs to increase its volume in order to work with wholesalers. This article is dedicated to the final issue on the list. I believe Vera Bradley should expand its target demographic by targeting the younger generation.
When you’re trying to figure out how much damage has been done, the best approach is to carry out an exit survey of current customers. Vera Bradley should first do some market research. They may engage a professional organization to conduct surveys and discover what kinds of features they require, what colors they enjoy etc. This is because young social movements are known to vary. They can also conduct informal study with their college student children and their friends about their demands. It’s important to understand your clientele’s needs in order for the plan to succeed.
After this, Vera Bradley can create new designs to meet the demands of the target audience. I believe new items should be differentiated from the original Vera Bradley line in order to avoid branding confusion for college females. * A distinct brand: The market has already recognized Vera Bradley, and it’s quite probable that young girls think of her as a middle-aged person. It is critical that you may change people’s minds about you.
One of the most essential elements that a firm can do in order to succeed is marketing. It might just make or break a company’s success. Vera Bradley is one brand that uses marketing in a number of ways. They generate, communicate, and provide value in an effectively represented way.
The goal of Vera Bradley is to “design, manufacture, and globally market a distinct collection of high-quality handbags, travel gear, stationery, sunglasses, and other accessories that personify the Vera Bradley lifestyle. We now release new colors and styles each season.” To appeal to a wide audience, Very Bradley sells to both men and women. They focused their target market on demographics. They wanted women to buy their products.
The marketing mix is made up of four components: product, pricing, promotion, and place. The item is simple to spot. Vera Bradley offers a range of products ranging from luggage to handbags to flip flops. These goods have a distinct design and high quality. The price of the merchandise is determined by the size of the object you are purchasing. Vera Bradley provides discounts on items that do not match current seasons’ designs.
They also have outlet shops where items are sold at significant reductions. Vera Bradley is constantly looking for ways to increase sales and promote the brand. They target a certain demographic with their marketing efforts. Salespeople who work in Vera Bradley outlets and are advertised all around the world will be hired. The territory of Very Bradley is quite broad. It’s available in many cities throughout the country. In some cases, there will be a Vera Bradley section at a local shop specializing on very expensive goods.
Because they are relatively new to the market, many of them will only have a small number of items. Vera Bradley has shops in malls and shopping centers in larger cities. This makes it simple for consumers to acquire the goods. Ordering the item online is, without a doubt, the simplest method to do so.
A promotion mix is used by Vera Bradley to promote products. Sales promotion, personal selling, and public relations are the characteristics of this mix. Advertising is both paid and non-personal. Vera Bradley employs this strategy in a variety of ways. They’ll frequently utilize print advertising to place ads in publications that their target audience will read.
They also utilize product placement, which is a form of promotion. Vera Bradley goods were seen in certain episodes of the TV show Modern Family. This is an example of television advertising. Consumers who watch the program will be enticed to purchase the item since it was featured on TV. Sponsoring a university sports team, for example, is another type of product placement. Many universities’ sprit teams would be provided with a Vera Bradley bag to use when traveling, for example.
The main thing distinguishing the bag from other bags is the fact that it was designed for dancers. The design of this bag would appeal to young ladies, and they’d want a dancer’s bag like it. The next component is sales incentives. Sales incentives are non-personal communication tools that can assist customers simulate faster and more frequent purchases of a firm’s goods. Vera Bradley makes use of this element to help improve profits and attract new consumers by giving out free Vera Bradley gift cards on time on The Talk, America’s favorite talk show. Promotional emails are another popular technique.
An analysis of the Vera Bradley company’s case, which makes long-term policy and strategy recommendations to the firm. Barbara Bradley and Patrick Miller started Vera Bradley in 1982. The accessories industry is where the company operates. Women’s unique fashion demands are central to the business’s mission.
The firm’s primary source of income is derived from two parts: direct and indirect. Brick-and-mortar retail shops, as well as e-commerce sales, are considered direct revenues. Department stores are examples of indirect channels. Vera Bradley has encountered challenges in Asia when attempting to develop products that would be appealing to those countries.
It is not enough to follow behind the competition. Vera Bradley must innovate and be distinct from competitors’ product lines. Customer service should be Vera Bradley’s first priority. In order to cater to the demands of its clients, Vera Bradley should have a creative approach. Competitive advantage against other firms due to innovative design.
Customers who pay a premium price expect their items to be flawless. Vera Bradley’s brand recognition and loyalty improve as a result of its popularity. Overall, the company is not competitive other than in terms of pricing. Michael Kors has the highest sales among all brands, according to Forbes. Vera Bradley does the majority of its business in North America, Europe and Japan.
Competitiveness—the firm’s competitive position is poor. The company requires a strong brand reputation/awareness. External and Internal Analyses Summarized—Branding reputation is one of the company’s major concerns. Consumers must be aware of the brand in order for the product to succeed. Once a consumer buys a product, the second aim is to develop an innovative design and high-quality production.
The firm has a competitive disadvantage because it is behind in nearly every area, including creative design, innovation, high-quality goods, best pricing, brand reputation, brand awareness, and internationalization. The Michael Jacob line of products has the most sales and poses the greatest challenge to Vera Bradley.