Allen Solly: Customization-Based Differentiation

Allen Solly: Customization-Based Differentiation

“This offering for the core segment, which is not a major chunk of a brand’s revenue, could work well as Madura already has a good back-end in place. This will appeal to the fashion-conscious consumer who is willing to wait for the product to be customized.”

–Kiran Kothekar, Promoter, Vector Consulting Group

Allen Solly, introduced in the Indian branded apparel market in 1993, was the first in the country to introduce the concept of relaxed formal wear. It became a trend-setter in the formal wear segment. Over the years it brought in innovations in the relaxed formal wear segment like ‘Friday Dressing’, introducing bold colours, etc. The company began to face heat from its competitors as they too started offering relaxed formal wear and experimented with colours. Allen Solly, then identified a shift in trend – men increasingly experimenting with bold colours for their formal wear. However, the stores lacked the range of colours preferred by the customers. To bridge this gap, in 2013, Allen Solly introduced the Colour Lab application. The application enabled customers to design their own shirt or trouser with their choice of colours and pattern and Allen Solly promised to deliver the customized product at the customer’s door-step within 15 days. However, this supply chain-led innovation also needed the company to develop the supporting reverse supply chain to enable the timely delivery of the customized orders. While the industry experts opine that the brand would be able to differentiate itself from its competitors, they express doubts in terms of delivering customer satisfaction, and the feasibility and sustainability of the model for Allen Solly.......................

Indian Branded Apparel Market

India has access to abundant raw materials such as cotton, polyester, silk and viscose. This advantage has helped the Indian apparel and textile industry become one of the largest growing industries in the world. The industry contributes 4% to the country’s Gross Domestic Product (GDP) and employs over 35 million people. Supported by strong domestic consumption and export demand, the industry is set to grow rapidly over the next few years...........

Madura Garments and Allen Solly

Madura Fashion & Lifestyle (earlier Madura Garments), a division of Aditya Birla Nuvo Ltd., acquired in 2000, is one of India’s fastest growing branded apparel companies and a premium lifestyle player in the retail sector. The company had its own brands and also few premier international labels, offering prestigious global fashion wear and accessories to the Indian consumer........

COLOUR LAB AND ALLEN SOLLY’S DIFFERENTIATION

The variety/choices available for ready-to-wear apparels are usually limited in sizes and colours. Allen Solly followed the co-creation model to meet the expectation and requirements of customers. An apparel company’s core offering usually remains constant with 10%-15% of its shelf space dedicated to the core segment (shirts and trousers). Allen Solly changed this concept by giving customers the ability to co-create or customize the core segment..........

CHALLENGES AND SUSTAINABILITY

Allen Solly’s Colour Lab although novel poses several challenges for Madura Garments. By using the application, it is questionable as to what extent a customer would savour the experience of designing their own apparel. For example, the shade of colour displayed on the tablet may differ from the shade on the dyed garment. This may lead to mismatched expectations and disappointments among customers..............

Exhibit

Exhibit I: Indian Apparel Market

Exhibit II: Textile and Apparel Industry in India 2011

Exhibit III: Allen Solly Competitor Brands

Exhibit IV: Allen Solly – Milestones

Exhibit V: Allen Solly – Logo Change

Exhibit VI: Allen Solly’s Earlier Product Innovations

Exhibit VII: Allen Solly’s BTL Activities

Exhibit VIII: Allen Solly Colour Lab Application

Exhibit IX: Alley Solly Store with Colour Lab Display

Allen Solly: Customization-Based Differentiation

Synopsis

This case study enables a discussion on the role and importance of an efficient supply chain in branded apparel retailing using the instance of Allen Solly’s product differentiation through its Colour Lab initiative. The company through this initiative was trying to co-create customized products along with end-customers. The brand, in its stores, provided an interface through which customers could select and design the garment of their colour choice and fit. The company promised to deliver the product within 15 days of receiving the customized order, thereby creating a reverse supply chain. This case study also enables a debate and discussion on the challenges that would arise in sustaining this supply chain-led innovation.

Prerequisite Conceptual Understanding

This case study presupposes a conceptual understanding of the following. A working knowledge along with the business implications of the following concepts would enable an effective discussion leading to more practical solutions than a mere intellectual exercise.

• • A conceptual knowledge and the working and business implications of the various kinds of differentiation – STP (Segmentation, Target Customers and Positioning)
• • A conceptual understanding of differentiation
• • A conceptual understanding of supply chain and reverse supply chain
• • Mark W. Johnson, “Reinventing Your Business Model”, Harvard Business Review, December 2008 – To understand when a business needs change
• • Miklos Sarvary and Anita Elberse, “Market Segmentation Target Market Selection and Positioning” (Module Note), Harvard Business Review, April 17^th 2006 – To understand the three prerequisites for designing a successful marketing strategy, i.e., Segmenting, Targeting and Positioning
• • Theodore Levitt, “Marketing Success Through Differentiation of Anything”, Harvard Business Review, January-February 1980 – To understand that a company needs to differentiate its product from the rest of the products available in the market to stay ahead of its competitors

In addition, the participants were asked to visit any of the Allen Solly stores and find out more about its stores, the Colour Lab initiative and the process of placing an order and its delivery

Expected Learning Objectives

• • Overview of Indian Branded Apparel market and understand the critical success factors
• • Role and importance of supply chain efficiency in branded apparel retailing, especially with customization value proposition
• • Analysis of the challenges in sustaining Allen Solly’s supply chain-led innovation to customize product design

 ......................

Exhibits

Exhibit (TN)-I: CSF’s of the Indian Branded Apparel Market

Exhibit (TN)-II: Allen Solly’s Differentiation