Case Study : E-Commerce Apparel Startup

New Business Support

Market Research & Business Planning for an E-Commerce Apparel Startup

Ardinal Strategy Group Business Consulting

Overview

An ex-data scientist sought our expertise in fulfilling their life-long desire of entering the health & wellness industry via an e-commerce apparel startup. Their end goal was to build a sustainable and reputable brand that captures the essence of wellness, while adhering to the environmental principles they have advocated for. This apparel brand is intended to target a niche population of at least 35M people in the US who would consider themselves to be of the following characteristics:

Introverts
Nature lovers
Mental Health advocates
Travel enthusiasts

Our team leverage the following assessment tactics to analyze the luxury apparel market in connection with health and wellness sector:

Approach

Our overall approach incorporated a few focus areas such as Business Planning, Industry Research, and Financial Modeling to provide key insights for sustainable plan and launch strategy. Our approach was as follows:

Market Research & Due Diligence: our team conducted a full scale research and feasibility study into to e-commerce online luxury industry. The US luxury apparel market is roughly $27B, with 10% of the market being attributed to e-commerce. luxury apparel. Our approach to included an analysis of the industry 5-year financial performance, supple chain, competition, consumer behavior, and the current and future growth prospects. Additional analysis was conducted as follows to determine competitive pricing and product design & development:
- identify industry trends and purchasing patterns driving the overall sale of online luxury apparel, including changes in consumers' average spending levels

Competitor Deep Dive Analysis: The next phase on our work encompassed a deep dive in to the operations and current business strategies on some of the most well-known and influential brands across the globe. our team:
- analyzed their success level or operational challenges spanning the last 5 years
- analyzed their business development history and rationale for post and present M&A pursuits including rationale and impact if successful
- gain insights into the brand strategies that has elevated their global reach and sustained longevity
- assessed their CAGR and pricing strategies across apparel type and online channels

Project Management: We established a project management governance and plan to streamline the execution of key tasks needed to support launch and post launch activities. This was divided into 2 phases, whereby phase 1 was focus on analysis of luxury apparel and data gathering from research into marketing, finance, supply chain and e-commerce strategies. Phase focused on task execution of across in scope business operational areas for day 1 readiness. Work streams included R&D, Marketing, Finance, Legal, Supply Chain & Technology. This was managed via the Monday.com platform.

Pricing Strategy & Valuations: Deep scenarios analysis was leveraged to test different pricing strategies based on factors such as competitor pricing strategies, market demand, USP, and quality of apparel. Price ranged from $250-1000 per apparel and varied based on design, embroidery, pattern, and/or patches. The operating expenses margin were estimated at around 0.3x revenue, in line with industry standard for first year startup expenses. Leveraging this pricing model with estimated projections for COGS and expenses, we developed 2-year revenue projects of $1M with business valuation of $3.4M.

Execution & Implementation

Comprehensive Industry Research

We compiled a detailed research on the online luxury apparel and the health & wellness industries to determine the business' potential to success, growth prospects, and current product demand. Key insights were leveraged using the standard strategy and industry analysis frameworks such as SWOT, Porters 5 Forces, and PESTEL.

Business Plan Development

We supported the development of a full scale business plan which include brand identity, product, marketing, pricing and operational strategies that can be implemented. we supported early financial projection to give our client an early insight of revenue potential with different sales goals.

Brand Strategy

We worked extensively to develop a strong brand identity for our client's business that blends both their business objectives with their goal of reaching wealthy millennials into health and wellness. This strategy includes creating the brand's vision, purpose, mission, values, and visuals that appeals affluent millennials.

Implementation Planning

We implemented a plan that divided the launch process into 2 phases; with Phase 1 focused on brand and product development. Phase 2 entailed the implementation of business operation processes needed for launch. This flexible plan for a 6-month execution timeline.

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