Ed Williams Mens Wear

BACKGROUND Ed Williams Mens Wear was located in the northwest sector of Calgary, Alberta. With a population of over one million, Calgary’s major industry was the oil and gas business, but finance, banking, tourism, and entrepreneurship were also important to the city’s economy. Due to the reliance upon the oil and gas business, the local economy experienced defined business cycles that were dependent upon the price of these commodities. Calgary had a relatively young population for a fast-growing large city (average age 35 years) and a strong entrepreneurial spirit, with many success stories in the Calgary business community stemming from employees of large firms leaving to create their own start-ups. Ed Williams had been in business for over 20 years. Run by its founder, Ed Williams, the store had been successfully selling high-quality apparel to businessmen in the growing city. Prior to opening the store, Ed had extensive experience in the menswear business. His son Lowell had basically “grown up in business,” working at the store since he was a teenager, and was becoming increasingly involved in the running of the business. While Ed Williams had long been profitable, Ed and Lowell were considering how to meet the needs of the changing marketplace. At 64, Ed was considering stepping back from the business to a certain extent. At 32, Lowell felt ready to take on the management of the store. However, they needed to look at the options available to stay competitive in their growing market. With growth came an increasing number of competitors. Calgary was an attractive retail environment and many new retailers considered it a very good location for expansion. This document is authorized for use only in MRS. NOR PUJAWATI MD SAID's MARKETING MANAGEMENT course at Universiti Utara Malaysia, from January 2017 to July 2017. Page 2 9B16A019 COMPETITIVE ENVIRONMENT The menswear business was highly competitive in Calgary. Smaller independent high-quality players included stores such as James & Dickson, O’Connors, Forman’s, Supreme, David Colonna, Gios, Joseph’s, Umberto’s, Latitude, Urban, Mansours, and Thomas Jeffrey. Major players, such as Holt Renfrew, Henry Singer, Brooks Brothers, and Harry Rosen, were also present. All carried high-quality men’s attire, with many of the same brand names. While most of these competitors were located in downtown Calgary, a few were represented in the northwest sector. These included James & Dickson, located in a major regional mall about five kilometres from Ed Williams, and Mansours, located about four kilometres away in a community-planned centre. Moores Clothing For Men, a large chain of menswear stores, was located in the same general sprawling centre as Ed Williams, only a couple of blocks away. Yet Moores had a much lower price point and quality level than Ed Williams, and was not considered a direct competitor. Major malls in Calgary also offered a number of middle-of-the-road competitors, such as Banana Republic, Mexx, Macleod Brothers, and Tip Top Tailors. Their average price point was much lower than Ed Williams. However, since these competitors were not selling the top brands, Ed felt that these midrange competitors were not a direct threat to his business. Many shifts had occurred in the marketplace since 1990. “Dress-down Fridays” became popular in many workplaces, leading to fewer suit sales and more sales of upscale casual wear suitable for the work environment. Ed Williams kept pace with these changes by changing the assortment of products it offered. Products carried included suits, sport coats, leather jackets, trousers, casual slacks, jeans, shirts, sweaters, ties, and shoes. In the summer months, polo shirts and shorts were added to the collection. Ed tried to carry only high-end brands that were not widely available in run-of-the-mill stores or mass retailers. This reinforced his positioning as a specialty menswear retailer. Calgary was home to a large number of head offices, second only to Toronto in the Canadian marketplace. The economy was vibrant. Population growth continued at a good pace in Alberta, and in Calgary in particular. A large portion of this growth consisted of younger professionals in the workplace. Further, with this growth came an increasing interest in Calgary as a destination for Canadian retailers looking to expand into Western Canada. Calgary also attracted a large number of American retailers interested in the city’s positive economic forecast. Williams-Sonoma, a high-end kitchenware chain based in the United States, opened to phenomenal success in Calgary, which sparked the interest of an increasing number of American chains. It seemed clear that more competitors could be expected in the near future in the menswear business as well. CURRENT CUSTOMERS Ed Williams catered to customers looking for high-quality men’s fashion combined with a high level of personalized customer service. Although the company’s customer base ranged in age from early 20s to early 80s, the majority of customers were over 35. As was historically typical in the menswear business, customers were very store loyal. Many had been Ed’s customers since he first opened his own store. Yet this loyalty had its downside as well, as the store’s market was aging. Ron Greene typified the current Ed Williams customer. Ron was a family man in his mid-fifties, lived in the northwest sector of the city, and was a successful vice-president of finance at a major oil and gas company. He wore a suit and tie to work about half the time. Other days required a sports jacket, dress This document is authorized for use only in MRS. NOR PUJAWATI MD SAID's MARKETING MANAGEMENT course at Universiti Utara Malaysia, from January 2017 to July 2017. Page 3 9B16A019 pants, and a dress shirt, but no tie. On casual Fridays, Ron liked to dress more informally, but was cognizant of his role in the company and ensured he looked the part, wearing high-quality casual shirts and trousers. On the weekends, Ron was busy with family activities, golf, and socializing with friends and business colleagues. He needed polo shirts, casual pants, and dressy shorts for his social life. Generally, Ron only visited the store when he needed new clothing. He was often accompanied by his wife. Since he did not particularly enjoy shopping, Ron was very open to the suggestions made by both the retail staff and his wife. He was inclined to stock up on each trip in order to reduce the need to shop to an average of three major trips per year. His wife stopped in alone several more times a year to pick out gifts and ensure that Ron’s wardrobe stayed up to date. When Ron’s son Corey graduated with his accounting degree from the University of Calgary, he needed a suit and tie for job interviews. Ron brought Corey to Ed Williams to shop for these items. Corey was somewhat reluctant, thinking that clothing suitable for his father was not going to work for him. He was therefore surprised that he was able to purchase well-known, fashionable brands at Ed Williams. Although the store’s prices were a bit high for Corey, he was willing to pay for the quality tailoring the store offered. An interview suit, after all, was an important purchase. Lowell had noted that many of his customers were becoming increasingly transient. Since winters in Calgary were very cold, many customers vacationed in warmer locations, often in the United States, where outlet malls were very popular. Canadian customers frequently shopped when on vacation, especially if the deals were good. When the American retail economy was suffering, many top brands were available at substantial discounts at the outlet malls. Customers also shopped at these malls when on business trips to the United States. Lowell stated that “they would take an afternoon out of their business meetings, go to an outlet mall, and stock up on Boss suits at half price.” Canadian retailers like Ed Williams simply could not compete with those prices. With the increase in the number of competitors in retail menswear, Lowell saw more sharing of the customer base. The company’s younger customers were more likely to shop at several different stores. Obviously, building a good relationship with customers increased the odds that they would return to buy from that store, even if they did buy some products elsewhere. One of the challenges Ed William faced was its aging customer base. Younger consumers seemed to feel that the store catered to customers of their fathers’ age, not them. Hence, they were reluctant to visit unless their parents brought them in to buy a suit. The brand had a very traditional feel, and although many of its product lines were aimed at casual/younger buyers, suits still dominated the store.