CoolMi by CooLook - Business Plan

Team 1 Iannotta, Pappalardo, Volpe
CooLooK
December 2017

CONTENTS
1 Executive summary 7
2 Overview 11
3 Product Description 13
4 The Business 17
4.1 Business Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.2 Business Model Canvas . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.3 Business Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5 Business Organization 21
6 Market Analysis 23
6.1 Industry Description and Outlook . . . . . . . . . . . . . . . . . . . 23
6.1.1 General Data . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.1.2 International Fashion Industry . . . . . . . . . . . . . . . . . 25
6.2 Italian Fashion Industry . . . . . . . . . . . . . . . . . . . . . . . . 27
6.2.1 Historical Evolution: Arts, Aristocracy, Hollywood . . . . . 27
6.2.2 Cultural aspects . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.2.3 Power of the Made in Italy Brand . . . . . . . . . . . . . . . 28
6.2.4 Legislative Support . . . . . . . . . . . . . . . . . . . . . . . 28
6.2.5 Use of Technological Advancements . . . . . . . . . . . . . . 29
6.2.6 Italian Apparel Market by Stats . . . . . . . . . . . . . . . . 30
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Contents
6.2.7 Italian Economy Classes . . . . . . . . . . . . . . . . . . . . 31
6.3 Diffusion of innovations . . . . . . . . . . . . . . . . . . . . . . . . . 33
7 Strategic Marketing 35
7.1 Opportunity Assessment . . . . . . . . . . . . . . . . . . . . . . . . 35
7.2 Target Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.2.1 PTM - Primary Target Market . . . . . . . . . . . . . . . . 36
7.2.2 STM - Secondary Target Market . . . . . . . . . . . . . . . 36
7.3 Main Value Proposition . . . . . . . . . . . . . . . . . . . . . . . . 36
7.4 Competitive Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.4.1 MemoMi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.4.2 StyleMe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.5 Definition of Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.5.1 First Year / First Milestone . . . . . . . . . . . . . . . . . . 39
7.5.2 Second Year / Second Milestone . . . . . . . . . . . . . . . . 39
7.5.3 Third Year / Third Milestone . . . . . . . . . . . . . . . . . 40
7.6 Ideal Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8 Operational Marketing 43
8.1 First Year / First Milestone . . . . . . . . . . . . . . . . . . . . . . 43
8.1.1 Technology Partnership . . . . . . . . . . . . . . . . . . . . 43
8.1.2 Retail Exclusive Partnership . . . . . . . . . . . . . . . . . . 43
8.2 Second Year / Second Milestone . . . . . . . . . . . . . . . . . . . . 47
8.2.1 Retail Partnerships . . . . . . . . . . . . . . . . . . . . . . . 47
8.2.2 Selling to the PTM customers . . . . . . . . . . . . . . . . . 47
8.2.3 Communication Strategy . . . . . . . . . . . . . . . . . . . . 47
8.3 Third Year / Third Milestone . . . . . . . . . . . . . . . . . . . . . 47
9 Swot Analysis 49
9.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.2 Weakness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.3 Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10 Financial Planning 53
10.1 Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.1.1 3-year profit & loss projection . . . . . . . . . . . . . . . . . 53
10.2 Budgeting Plan at December 31, 2020 . . . . . . . . . . . . . . . . . 55
10.3 Break-even calculation . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.4 Seek and use of capital . . . . . . . . . . . . . . . . . . . . . . . . . 61
4

Contents
11 Exit Strategies 63
5

CHAPTER
1
EXECUTIVE SUMMARY
Your mirror, reinvented
Have you ever been bored to go out and buy your clothes? Have you ever been
angry to receive something you liked in picture, but different? Have you ever been
so busy to not have time to think on what you should wear?
We are facing several problems, as you could imagine since here. Buying clothes
on the internet is like gambling, you will never know if it will fit good on you, and
if it will be the same as it appear in the picture. A lot of people have to waste
so much of their free-time just to try the clothes during the weekend, because of
the big amount of working hours per week. These people usually also can’t afford
high quality product and tailoring ones.
This is why CooLooK invented the CoolMi(rror). It will give you back all the
time spent in the past in every line at a clothing retail shop to try on the cloth
and to pay it! How?
Through the use of augmented reality, namely the introduction of a non-concrete
object onto the reality, it will help you buying clothes from your own room, looking
7

1 Executive summary
at how they ﬁt on you, virtually! You will have a lot of time to spend with your
friends, family and even to watch online movies. You will also earn time (because
time is a resource, don’t forget it) in the morning, or just before going out. CoolMi
will suggest you which t-shirt is better for that brand new jeans, or which pant
will suit better with that cool shirt.
Our market target is the textile and clothing industry, and our target customers
are the people that belong to the low income italian families and the blue collar
ones.
Now, maybe, you are using your smartphone just to ﬁnd out some other, better
or available, solutions. Don’t waste your time, here it is a comparison of CoolMi
with the other products in the idea phase and development, because there aren’t
on the market yet.
8

This idea will be developed by the CooLooK team, composed of three Computer
Scientists, with the passion for the innovation and marketing, that are studying
for a master degree to be the best.
There is no need to stay here and talk about a lot of mathematics, just look
at our forecast three years from now: this is the revenue for just the half of our
potential population.
Now, let’s talk about money. We need 500.000,00 e to make this dream alive.
What we propose is to let you have the exclusive on the product for the ﬁrst 12
months.
9

CHAPTER
2
OVERVIEW
Today the business of the clothing industry is concerned with the fast-growing
demand of just-in-time low-quality clothes. But there are many technologies and
opportunities that can reverse this trend, increasing the satisfaction of the cus-
tomer and the quality of the bought clothes.
The clothing industry is answering to customers that belong to different social
classes: working-class, middle-class and the upper-class. Based on this, there
are various types of clothing that are made with a different level of quality and
attention to details. In particular, the upper-class families rarely shop in a mall,
they usually prefer to go to fashion shows and buy the latest and trendiest novelty,
or to a craftsmanship tailoring shop: this because there they can find the best in
class tailors that measure, design and made clothes by hand around their shape
and style.
The working-class and the middle-class families instead tend to go to a mall to
have shopping. In particular, the first ones are accustomed to buying just-in-time
clothes and other clothes based on the amount of their markdowns, the middle-
class ones, instead, usually buy in malls that have flagship store of the preferred
fashions brands.
11

2 Overview
This creates some problems-opportunities: the working-class tend to never buy
clothes in a craftsmanship tailoring shop due to their lower income. For this reason,
there is a lack of knowledge related to the high-quality and long-life of the more
expensive ones.
The usual routine of the working-class shopping task is very awful: they go to
a shopping mall, they choose some clothes based not only on style preferences but
on discount prices, they peak for each clothes some different colours, and some
different sizes and then they go to the changing area where they usually find from
three to six changing rooms, they have to wait their turn, and finally they try the
clothes on, in a meter square foot. The waiting is caused by the fact that they
use to go shopping in the weekend because of the working shifts in the other days,
making them wasting also the small amount of free time that they could spend
with the loved ones.
So, after this analysis we can see how this kind of customer-experience has not
any appealing: they lost precious time, they get stressed and they are not
pleased enough because of the compromise, coming back home with less money
and low-quality products. This is an awful experience and we can think that we
can make a big difference and big impact on this industry by pleasing and educate
the customers.
12

CHAPTER
3
PRODUCT DESCRIPTION
CoolMi is a non-conventional mirror since it doesn’t simply reflect you in it, but
through the use of augmented reality, namely the introduction of a non-concrete
object onto the reality, it goes to introduce new functionality and give a new mean
to the classic concept of the mirror.
The final product will also affect and change the meaning of the existence of the
classical store, this because it will allow us to buy our clothes online without the
fear of how they can or cannot fit on us. This is a consequence of one of its main
feature: CooLooK allows us to see how the clothes will fit on in their different
shapes and sizes. In this way, we can make the concept of the physical store
obsolete, but not replacing it because since the first phase of our market strategy
we are going to put our product side by side to the old dresser mirrors, as defined
from our business strategy when talking about initial partnership to improve both
the customers’ experience and the reseller.
Now let’s go to see its feature and then the pro.
13

3 Product Description
Characteristics
· A classical mirror
· An embedded system for the informatics functionality
· A transparent display to overlap to the mirror that enable the touch func-
tionality
· A Kinect system for image capture and gesture recognition
· An Artificial Intelligence to support all the functionalities
Services
CooLooK wants to be as much compatible as possible with other technologies
and open to the development of other functionality. At the product launch, it
will have a basic system that will give the possibility to the customer to try on
also the clothes that are not physically in the store, in every available colour. In
addition, there will be also an artificial intelligence that will be able to suggest
to the customer what to try on and buy based on its worn garments, thanks to
the recognition and analysis of the big data and a preventive training phase. For
instance, our customer is a man and it’s trying a light blue jeans and we are
in Summer: the system will propose, based also on the fashion trend, the best
solution of shirts or t-shirts in the right colours.
Later, after reaching the customers in their homes and made the product buyable
from everyone, we will update our service through an affiliation with white-label
cloth producers in 3 kinds of quality, so that we can offer the possibility to choose
similar products but of different quality (economical, intermediate, high) at low
prices to reach the goal of our mission.
Today, CooLooK is almost unique, because there are just other two products in
the world that call themselves Smart Mirrors, but no one of them is complete with
high performance as this one. Here it is the product comparison between these
solutions:
· memomi, the memory mirror, subsidized from Intel and its only charachter-
istic is to register the the customer and let him see how the worn clothe fits
in different colours.
· StyleMe, an internal project from Cisco, that let the customer see how the
cloth fits on him, but with a slowly feedback in motion and a lower image
quality.
14

Advantages
For the customer, there will be some improvements to its life:
· No need to leave the house anymore
· Know how the cloth ﬁts without dressing it for real
· Higher level of hygiene, because no one else had tried what you are "not"
wearing
· Less waiting time into the store to try the clothes on, because CooLooK will
be installed side by side to the old dressers room to increase their availability
There will be advantages also for the retail store, such as:
· The reduction of exhibition space with breakdown of management and rent
costs
· An increase of the space warehouse so that it can hold more heads than the
past
· A better choice of products, as it has the opportunity to sell the entire catalog
available in the speciﬁc country
· A Larger assortment of shop-based products as it reduces space for exposure
and increases it for the storage, as bundled garments are packed occupying
less space, so there could be an increase in the availability.
15

CHAPTER
4
THE BUSINESS
4.1 Business Concept
CooLook is at the intersection of fashion arts and technology arts in order to ex-
plore, experiment and create new shopping experiences for working-class costumer.
17

4 The Business
4.2 Business Model Canvas
4.3 Business Goals
The business goals are defined thanks to the VMOKRAPI model:
Vision
To attain market leadership through unmatched shopping experiences, best in class
clothes quality suitable for each class of customers thanks to a phenomenal team
that has the highest ethical and professional standards.
Mission
The mission is the plan that directs the management in the daily’s work and it’s
subjected to periodic changes.
As a first step, we have analysed the product’s quality that we offer to the cus-
tomer. It’s proposed, a quality that is equal to sartorial quality, and it presents
an advantageous price respect to the great distribution. Furthermore, the quality
is guaranteed not only from sartorial technology but also from possibility to be
able to verify that the garment fits well respected the fees and the needs of style
18

4.3 Business Goals
and elegance, satisfying at 360 grade the customer’s needs. Later, we are concen-
trated on the customer’s need, which finds solution, thanks to use of interactive’s
interface equipped with visual sensor able to simplify the purchasing process and
trial process of apparel textile garment. The third step, is center on the focus
company business, that aim to simplify and speed up the distribution chain of
"fashion industry" allowing to reduce cost and guarantee at the end user more
quality.
After, this accurate analysis, we have drawn up a brief and clear business mis-
sion:
"Radiate the best in class clothes suitable to working-class customers through a
revolutionary shopping experience"
Objectives
The following objectives are being developed on the basis of the SMART Criteria
(Smart, Measurable, Achievable, Realistic, Time-bound)
Customer Outcome:
· At the end of Q2, 2018, working-class families have to deal with the product
and services experiences for at least sometimes;
· At the end of Q4, 2018 families have to start to associate our brand with the
experiences of the services;
· At the end of Q1, 2020 they have to know well how the product works and
should be part of the families’ daily routine and they are very satisfied with
the effortless experience.
Market Outcome:
· At the end of Q4, 2018, working-class families will prefer to use our solution
instead of the classical ones;
· At the end of Q4, 2020, we expect to cover nearly the half of the market of
the PTM.
Financial Outcome:
· We expect that we will have negative operating income in the first year;
· At the end of Q2, 2019, we expect to reach the break-even point;.
19

4 The Business
Key Result Areas
Customer Outcome:
· Awareness of the product;
· Brand and product loyalty;
· % satisfaction level.
Market Outcome:
· % of use, % return rate;
· % of market share.
Financial Outcome:
· Operating Income;
· Number of units sold.
Performance Indicators (KPI)
· Average users’ time;
· Number of bought clothes;
· Time spent in the store;
· Time spent using the AI.
20

CHAPTER
5
BUSINESS ORGANIZATION
CooLook SRL is an Italian fashion company, that was born in November 2017,
from the idea of 3 guys. It places in the textile clothing sector and it direct to
global user market.
The idea is conceived by Iannotta Erennio, Pappalardo Francesca, and Volpe
Alberto. They are master students of "Business innovation and informatics" de-
partment of Salerno University.
Their background is concentrated on technological knowledge with cute eye and
the open mind for passion inherently in the management, grow in this path of
master study, by providing the competencies that can support those already con-
solidate for a great development of an innovative idea.
Individually:
· Iannotta Erennio, that has previous work experience in the computer sci-
ence’s ﬁeld for an independent software team and a more important software
house as trainer and developer for mobile and web technologies. In this
industry segment can be a great contributor to the development of the arti-
ﬁcial intelligence and the service part of the product, trying to compensate
21

5 Business Organization
with this universities study his lack of knowledge in the management and
economical section.
· Pappalardo Francesca, who has no experience in other companies, but she
can help product performance from a technological point of view. further-
more, she tries to deepen her knowledge in the world of economy, the market
and the fashion industry.
· Volpe Alberto, a guy that came from an IT background, not new to the
startup world, he has been the Chief Technology Oﬃcer of a startup that
has developed a crowdfunding platform for events. He can help with his
previous experience in both ﬁelds.
Each kind of company or enterprise is composed of a "The complex of assets
organized by the entrepreneur for the operation of the enterprise" (art. 2555 Civil
Code). It’s important that is established "who does what?" creating a real work
organization. The CooLook organization chart is presented under this type of
organization chart:
22

CHAPTER
6
MARKET ANALYSIS
6.1 Industry Description and Outlook
We are in the world of the fashion industry, that is a multibillion-dollar sector
broader than just the well know high-fashion runways, indeed it ranges from high-
end luxury brands to fast-fashion retailers and even the thousands of companies
that produce and sell clothing, shoes and other textile products.
The value chain of this industry is composed of companies such as:
· Brands
· Retailers
· Importers
· Wholesalers of textile and apparel
· Service providers & consultants
· Custom brokers
23

6 Market Analysis
· Freight forwarders
· Law ﬁrms
· Logistics providers
· Steamship lines
· Testing and certiﬁcation companies
· Manufacturers & suppliers
· Supplier associations
· Business councils
· Promotional groups
· Fashion Agencies
· Academic institutions
6.1.1 General Data
Today, the global apparel/fashion industry is valued at 3 trillion dollars and is
the 2% of the GDP and the relative womenswear industry is valued at 621 billion
dollars:
· The menswear industry is valued at 402 billion dollars
· Children-swear had a global retail value of 186 billion dollars
· Sports footwear is valued at 90.4 billion dollars
· The bridal-wear industry is valued at 57 billion dollars
24

6.1 Industry Description and Outlook
6.1.2 International Fashion Industry
To cater to the large, 3,000 billion, textile and garment industry new companies are
entering the market daily. Yet, most of these companies remain rather unknown.
Worldwide only a few large fashion players exist.
Currently US-based athleisure and lifestyle brand Nike is the largest fashion
company worldwide. Nike had 2015 revenues of 30.6 billion and has a market value
of nearly a 105 billion dollars. Nike oﬀers its products worldwide and its largest
markets are the United States, accounting for 46 percent of the total revenues, and
Western Europe with a share 19 percent. Most of Nike’s income, a near 94 percent,
comes from the Nike brand. The remaining 6 percent comes from Converse, which
is a subsidiary of Nike. The brand’s best selling division is footwear, accounting
for 64 percent of Nike’s income.
Spanish fast-fashion giant Inditex is with a market value of nearly a 104 dollars
close to Nike and is therefore the second largest fashion company worldwide. This
company owns brands such as Zara, Pull&Bear and Stradivarius. Inditex’s 2015
annual revenue was around 24 billion dollars. With stores is every major city
worldwide, the company is able to reach lots of fans.
In third place comes ăLVMH, Louis Vuitton Moët Hennessy, a French luxury
25

6 Market Analysis
conglomerate. LVMH’s annual revenues reached 40.7 billion dollars in 2015 and
the company is currently valued around 87 billion dollars. The company operates
a chain of independent stores and shops-in-shops for fashion brands such as Louis
Vuitton,ăFendi and Dior. LVMH does not only stand for high-end fashion, but
provides for every aspect of a luxury lifestyle, from champagne (Moët) to sailing
yachts (Royal Van Lent).
The fourth largest fashion company is US-based TJX with a market value of
54.5 billion dollars and 2015 annual sales of 30.9 billion dollars. TJX operates the
majority of its stores in the United States and is best known for its fast-fashion
brand T.J. Maxx. Its US sales account for 86 ăpercent, with 26.7 billion dollars.
The company is also active on the Canadian and European market with its brands
T.K. Maxx, HomeSense, Winners and Marshalls.
Rounding oﬀ the global Top 5 is swedish fast-fashion giant H&M. H&M reached
annual net sales of 25.8 billion dollars in 2015, which has set its current market
value to 48.3 billion dollars. Currently, Germany is the the company’s biggest
market and accounts for 17 percent of H&M’s total sales. Other large European
markets are the United Kingdom with 8 percent, France with 6.5 percent and
Sweden with 4.5 percent. The United States (12 percent) and China (5 percents)
are H&M’s largest international markets.
On sixth place in the Global Top 10 of Largest Fashion Companies is the french
luxury brand Hermès, with a market value of 37 billion dollar and annual revenues
of 5.5 billion dollar.
Place 7 in the Top 10 is held by privately held luxury company Montres Tudor,
the parent company of Rolex, which has a market value ă34.9 billion dollars and
annual sales of 8.3 billion dollars. Fashion jewelry conglomerate Compagnie Fi-
nancière Richemont follows with a market value of 33.7 billion dollars and annual
sales of 11.8 billion dollars. Other large companies in the Top 10 are luxury brands
Dior and Chanel with market values of respectively 32.9 billion dollars and 32.6
billion dollars. Dior has annual sales of 2 billion dollars compared to 7.5 billion
dollars at Chanel. Montres Tudor and Chanel are the only privately held fashion
companies in the Global Top 10 of Largest Fashion Companies and their value is
an estimated 30 percent than comparable publicly traded companies because it is
harder to sell a share of these companies.
26

6.2 Italian Fashion Industry
6.2.1 Historical Evolution: Arts, Aristocracy, Hollywood
During the 11th-16th centuries Italy became a leader in the fashion sector: cities
such as Palermo, Venice, Milan, Naples, Florence, and Vicenza started to produce
luxury goods, hats, cosmetics, jewelry and rich fabrics.
Unfortunately, in the 17th-early 20th centuries, Italian fashion lost its impor-
tance and France started to gain more popularity until the World War II. In this
period the Italian fashion houses were following the direction of the French fashion
just like everyone else and they were mostly small and family-owned. After the
war, thanks to the Marshall Plan that provided aid for Italy’s textile businesses,
the Italy’s fashion Industry started to get the confidence of going forward indepen-
dently. During the ’50s and ’60s, thanks to this independence, they have chosen a
different direction when the French fashion labels like Christian Dior and Jacques
Fath turned their focus fully on couture.
The Italian fashion designers instead with the understanding of the needs of the
woman to have comfortable, versatile clothing that was also tailored and refined
choose to create the ready-to-wear collections. This choice made the Italian high
fashion labels stand on its own and be recognised all over the world. The strengths
were the designing process that was built based on elegant clothes with a strong
sense of reality: were practical and made for living in the contemporary world,
they allowed movement and warmth. Last, but not least, strength was the power
of the aristocracy women designers who understood the needs.
The Made-in-Italy fashion labels were empowered even more when, in the ’50s,
Rome became the Italy’s "Hollywood on the Tiber": Hollywood stars like Eva
Gardner, Audrey Hepburn, and Liz Taylor regularly wore Italian high fashion
clothes, while the Italian costume designer Danilo Donati frequently designed for
Italian filmmakers like Fellini and Visconti.
6.2.2 Cultural aspects
Because of this, in Italian culture to look good is a key aspect, in every social
class. Italians are well known to be the ones who dress well, because for them is
important to be perfect and look always the classiest ones. To reach this goal they
want to find in their shops high-quality clothes and also very sophisticated and
elegant ones.
There is no exception, in Italy this is not a thing only for girls or women, but
also men and boys care about being stylish.
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6 Market Analysis
6.2.3 Power of the Made in Italy Brand
Italian fashion can also be connected to the most generalized brand of "Made in
Italy". This brand is globally known and evokes in consumers’ minds attributes
of the image of Italy as a country of luxury, excellence, high quality, creativity,
aesthetics, sophistication, and elegance. It is used to indicate the Italian’s "Quattro
A" industries:
· Abbigliamento, that recognize the Clothes Industry
· Agroalimentare, that recognize the Food Industry
· Arredamento, that recognize the Furniture Industry
· Automobilistica, that recognize the Automobiles Industry
For the clothes industry, Milan is the fashion capital of Italy, reigning with Paris
and New York as the top three fashion centers of the western world.
Many French, British and American high-top luxury brands (such as Chanel,
Dior, Balmain, Ralph Lauren, to name a few) also refer to Italian craft facto-
ries, located in highly specialized areas especially in the North-Center of Italy, to
produce either part of their apparel and accessories.
The following fashion brands are part of the "Made in Italy": Agnonq, A.Caraceni,
Armani, Alberto Fermani, Bontoni, Bottega Veneta, Breil, Brioni, Buccellati, Bul-
gari, Calzedonia, Cesare Attolini, Cesare Paciotti, Damiani, Diesel, Dolce & Gab-
bana, E. Marinella, Emilio Pucci, Fendi, Ferragamo, Fiorucci, Franklin & Mar-
shall, Gas Jeans, Geox, Gucci, Harmont & Blaine, Intimissimi, Kiton, Liverano &
Liverano, Loro Piana, Marzotto, Max Mara, Missoni, Moncler, Moschino, Officine
Panerai, Pal Zileri, Persol, Piquadro, Prada, Rifle, Roberto Botticelli, Roberto
Cavalli, Rubinacci, Safilo, Tod’s, Trussardi, Valentino, Versace, Vitale Barberis
Canonico, and Zegna.
Thanks to the global recognition and powerful awareness of the Made In Italy
brand last year (2016) Italy exported clothes and accessories for a value of US 12.1
billion dollars.
6.2.4 Legislative Support
Since 1999, Made in Italy has begun to be protected by association such as "Isti-
tuito per la Tutela dei Produttori Italiani" and regulated by the Italian law.
In 2009, the Chamber of Deputies of the Italian Parliament approved a law
that stated that only products totally made in Italy (planning, manufacturing,
and packaging) are allowed to use the labels "Made in Italy, 100% Italia, tutto
italiano" in every language, with or without the flag of Italy.
28

This regulation is more restrictive compared with "Made in Germany" and
"Made in the USA" and each abuse is punished by the Italian law.
The products to be marketed with the 100% Made in Italy marks must meet
the following criteria:
1 Designed and Manufactured entirely in Italy
1.1 Based on company’s own project and design.
1.2 Fully manufactured in Italy
1.3 Made using only Italian parts and components
1.4 Complete work traceability in Italy
2 Made with Quality Natural Materials
2.1 Natural materials or Natural compounds
2.2 Quality, first choice materials
2.3 Full traceability of Raw materials’ origin
3 Made following traditional Working methods
3.1 Use of the company’s specific Workmanship
3.2 Use of traditional Workmanships techniques
4 Made in observance of Employees, Health and Safety Standards
4.1 In accordance with labor laws
4.2 Manufactured according to the Hygiene, Healthcare, and Safety
These criteria are the strength on which the brand Made in Italy is built upon.
6.2.5 Use of Technological Advancements
The textile sector has always been reluctant to create a combination of technology
and fashion, both because high fashion is a work entirely customized by the great
professionals and because they are accustomed to touch and feel to test the quality.
The first to give an input on this combination was Alexander Mc Queen who in
1999 showed on the catwalk the robots that colored the dress of the white model.
Another similar example is that of the Italian Marco De Vincenzo who showed
how tailoring combines with technology, in fact, his furs are created with laser-
degraded degraded ribbons.
In the last few years, in 2016, on the New York catwalks, WERE ABLE TECH-
NOLOGY was discussed. Techno-fashion represents the reflection of technological
evolution, where craftsmanship and high-tech come together to transform one of
the most powerful sectors in the world into an authentic and futuristic style. This
29

6 Market Analysis
introduction leads to a clear revolution in the fashion industry, entrusting absolute
monopoly to craftsmanship and tailoring. By now, most companies tend to keep
up with the reality, with technology increasingly satisfying the needs of consumers
who are increasingly lazy, so with our startup we aim to provide more of a service
that it interfaces with the technology while respecting the main rules of fashion
such as quality and price.
6.2.6 Italian Apparel Market by Stats
Industry Overview
Online Market
30

Consumption
6.2.7 Italian Economy Classes
The Italian National Institute of Statistics (ISTAT) has created a new socio-
economic map of Italy composed of 9 classes based on income, educational level,
and citizenship.
The groups that are in the low-income class are:
· foreigners families
· Italian families
· traditional families of the province
· widows & young unemployed guys
The groups that are in the middle-income class are:
· young blue-collar families
· workers in retirement period
The groups that are in the high-income class are;
· workers families
· "Pensioni d’argento"
· leadership families
31

6 Market Analysis
The ISTAT notes that there is a chance of 4 out 10 that a family has a house-
holder that is female.
32

6.3 Diffusion of innovations
6.3 Diffusion of innovations
A professor of communication studies named Everett Roger created the theory of
"Diffusion of innovations" that seek of explain how, why, and at what rate new
ideas and technology spread.
There are four main elements that influence the spread of a new idea: the inno-
vation itself, communication channels, time and a social system. The categories of
adopters of an innovative product are: innovators, early adopters, early majority,
late majority, laggards.
33

CHAPTER
7
STRATEGIC MARKETING
7.1 Opportunity Assessment
Currently, the modern Fashion Industry is mainly aimed at two types of con-
sumers, who distinguish themselves in "consumers of large retailers" e "high-end
consumers". Those two markets are clearly isolated from each other and this in-
volves the loss of market opportunities, in fact, the consumer of great distribution
enter or they are exposed to high quality, that is the result of experience and
professionality of great Italian sartorial masters and not. Occupy the commercial
sector left of all other competitors will allow to increase the objective quality of life
and bring up the client of great distribution to the recognition of quality oﬀered
by the sartorial market. Finally, thanks to the utilization of new technology, exist
the possibility of creating a new intermediate market that provides to consumers
a kind of quality clothing, major respect to just in time clothing an advantageous
price. Any company that responds appropriately to these needs would result in a
series of beneﬁts for consumers and would disrupt the sectoral composition of the
market, allowing the birth of a leader in a dominant position that would drive the
entire distribution chain.
35

7 Strategic Marketing
7.2 Target Market
In this paragraph will be analyzed the target market to profile the ideal customer.
7.2.1 PTM - Primary Target Market
In order to respect our mission and with the previously collected data, we have
chosen to assault the Italian market of the menswear sector with the target of
low-income and blue-collar families that are 4,8 millions families that account
for 14,5 million of customers of ages between 16 and 50, with and average school
level obtained through the compulsory education. They should also be that kind of
people who love the fashion world and loves to change their clothes frequently. ăWe
have chosen this sector of customers because of they already know the technology
usage and they can easily adapt themselves to new technologies. Finally, our
typical customer, lives in areas where the employment rate is higher and where
the work tends to consume the majority of the daily time.
7.2.2 STM - Secondary Target Market
The second target market is the retail distributions of the major fashion brands.
7.3 Main Value Proposition
CoolMi, the easiest way to buy brand new quality clothes, the fastest to try them,
the smartest to wear them.
7.4 Competitive Analysis
At this time there are no competitors that entered the market yet, but there are
some companies interested in entering this market in order to offer to the final
customer new shopping experiences and are building some show-case prototypes.
There are two main potential competitors:
· MemoMi
· StyleMe
36

7.4 Competitive Analysis
7.4.1 MemoMi
"A seamless, luxurious and undeniably beautiful fusion of digital and real life
shopping experiences."
MemoMi Labs Inc. is a company that is developing a smart-mirror in order
to offer an improved shopping experiences. Their focus is on the luxury market
that typically involves upper-class customers and their product is being developed
thanks to a partnership with Intel, IBM, Corning, and Adobe.
The smart-mirror is not yet sellable and they are in stealth-mode, working with
selected partners and brands in order to improve the product.
It offers the following basic features:
· compare, with their smartphone, all the clothes that the customer have tried
· change the color of the clothes that the customer is trying
7.4.2 StyleMe
"Cisco StyleMe Provides a Fun and Immersive Mashop Experience for
Customers."
StyleMe is a concept made by Cisco that offers a system in which the customer
can create a personal virtual collection of clothes by capturing photos of the user.
Then, the consumer can send the photos to their friends and families through
different social-networks and retrieve a feedback on how they look and based on
that choose what to buy.
37

7.5 Definition of Strategy
In order to define the optimal strategy for this type of market and product we
have to take into account the following risks and try to mitigate them:
· The slow curve of adoption of innovative solutions
· The potential entrance of new competition in the market
· The macroeconomic sentiment of the country
At the same time we have to take in consideration the opportunities that we
face:
· Power of the Made in Italy brand at international level
· Point of the market that is unexplored
· Advancement in the technology field
Our mission has little compatibility with the market of today, so in order to
achieve it we have to plan some milestones that prepare the market for our little
revolution:
· First Milestone
Let the customer have some experience without the need of buying the fi-
nal product, in order to build brand awareness and to create and push the
demand
· Second Milestone
Starting to selling the product to the primary target market
· Third Milestone
Introduce a line of clothing that helps choose higher quality products regard-
ing the normal shopping choices
This three milestones cannot be executed in one years, it takes time to be rec-
ognized by the customer and to acquire their confidence that will permit to buy
from us, so we have choose a strategy based on three years period in which we
achieve each milestone.
38

7.5 Definition of Strategy
7.5.1 First Year / First Milestone
Technology Partnership
From the product realization point of view, we need a great technology partnership
that supports us with the creation of the product through the offering of the
technology needed for this product in order to reduce the time-to-marke.
Retail Exclusive Partnership
To stimulate the demand and to introduce the product to the customers we need
an exclusive partnership with an organization of the secondary target market that
gives us the opportunity to place the product in their retail stores. The partner
should have many stores in Italy and overseas, should be compatible with our
vision and their store should be used and known by our target customers. This
partnership would give us the flexibility of a possible international expansion in
the indeterminate future and the opportunity to improve the shopping experience
by analyzing better the behaviors of our target prior to introducing it in the
primary target market.
7.5.2 Second Year / Second Milestone
Retail Partnership
We will open the partnership to others players of the secondary target market
in order to expand our share and to acquire resources to better support the b2c
operations. Last, but not in the least, we will add a virtual-commerce offering
bundled with the CooLooK product.
Selling to the PTM customers
At this time the product, the technology, the resources, the experience, the virtual-
commerce should be all ready and will be introduced and sold to the 4,8 millions
of families that live in Italy and are in our primary target market. Thanks to the
brand awareness built the prior year, and the experience that the customer had in
the store we will improve the adoption rate. The customers now will be able to
buy the clothes from the comfort of their home through the virtual-commerce and
with the security of buying something that fits well on their body.
Price Strategy
We are selling to blue-collars families and to the lower-class so we have to take
into account some financial aid in order to sell the product more widely.
39

Communication Strategy
We have to publicize the product in through the social, tv and with some fashion
bloggers.
7.5.3 Third Year / Third Milestone
Now we have all in place to accomplish our mission
Partnerships
In this last phase we will put in place our mission: through a partnership with dif-
ferent white-label industry we will oﬀer to the consumer a great variety of clothes,
subdivided into three quality range, suggesting them to improve it when they can,
trying to take bring to an always higher quality level.
Selecting the tailoring option, we will oﬀer to our customers the quality of the
best Italian handicrafter, at the smallest price as possible.
40

7.6 Ideal Positioning
7.6 Ideal Positioning
With this strategy we want to achieve the following position in the market. This
prepare us to the entrance of the potential competitors analyzed above.
41

CHAPTER
8
OPERATIONAL MARKETING
8.1 First Year / First Milestone
8.1.1 Technology Partnership
To ﬁnd all the support that we need for the realization of the product, we think
that the best possible technology partnership that we can have is with Microsoft
thanks to the BizSpark program. It is a Microsoft global program that helps
startups succeed by giving them free access to Azure cloud services, software and
support. Microsoft can help us giving the knowledge and support related to the
Kinect technologies.
8.1.2 Retail Exclusive Partnership
The apparel textile sector is changing dramatically in recent years. Both at the
national and international level, distribution channel management becomes the
critical success factor along with the shift in trade logic increasingly focused on
sell-out and less on sell-in. Distributing channels are extremely articulated and
43

8 Operational Marketing
interwoven and the advent of e-commerce complicates the management of delicate
existing balance between retail and wholesale. To this, we add the impacts arising
from the digital transformation that make channels more and more "liquid" and
end consumers more and more protagonists. After much research we have found the
Brand Finance, that is the largest company of "Business Valuation and strategy
consultant", it has establish a classify to point up the "Most Valuable Apparel
Brand" in the following order: Nike, H&M, Zara, Louis Vitton, Adidas, Uniqlo,
Hermes, Rolex, Gucci, Cartier. A depth analysis has permitted take over the
merits and defect of everyone and study the compatibility with our value in term of
percentage, drafting a classify for the purpose of respect the micro-objectives, our
mission and vision of our possible partners that can help in this path and, therefore,
they support the entry in the market, ensuring an exclusive of the product:
· NIKE
· Limit target mainly to sportsman
· Worldwide distribution
· Strong brand awareness
· H&M
· Problems with retaining
· Problems with market instability
· Social discrimination in employment
· Louis Vuitton
· High quality
· High prices
· Its main target is the upper social class
· ZARA
· Diﬀerent products (shoes, clothes, bags, etc. . . )
· Large distribution market
· Flexible prices subdivided into several price ranges
· Just-in-time production
44

8.1 First Year / First Milestone
To reach our micro-objectives, mission and vision, we have made a list of possible
partners, prioritized by a percentage of common values, that could help us to enter
the market, guaranteeing them an exclusive product:
· ZARA, 85% of compatibility
· Louis Vuitton, 55% of compatibility
· NIKE, 50% of compatibility
· H&M, 30% of compatibility
In this order they was contacted also to propose the partnership with CooLooK.
The choice has been made on ZARA because embrace the middle-consumers’ needs,
according to our values, it can help the construction of our brand awareness intro-
ducing the majority of the consumers to our product. Thanks to this, the customer
is encouraged to buy our product and use it simply from home, in comfort. As
introduced during the strategic market, after this step we will come inside the
consumers’ houses, we will bring the experience of the product to an higher level
through the active participation of the consumer in the value co-creation, which
comes from an education and a boost to buy products of an objective higher qual-
ity, transferring this value to the quality perceived and so to the perceived value
of the product from the consumer.
45

8 Operational Marketing
Leading 15 apparel retailers worldwide in 2017, based on net income (in million
U.S. dollars)
In order to choose the suitable fashion brand that has a retail distribution chan-
nel we need to analyze ﬁrst the best of them and it is ZARA.
46

8.2 Second Year / Second Milestone
8.2 Second Year / Second Milestone
8.2.1 Retail Partnerships
We will open a new partnership with the others apparel industry label that will
be open to our business
8.2.2 Selling to the PTM customers
Price Strategy The product will cost about 450 e to the ﬁnal customer and we
will have a partnership with Findomestic to make our product sellable to the
low-income families too.
8.2.3 Communication Strategy
Thank to the partnership with Microsoft they’ll support us with the marketing
too, but we would make some other partnership Chiara Ferragni in order to let
her sponsor our product and services to her 11 million followers. She is very know
to our Italian target market and can help us to reach the customers.
8.3 Third Year / Third Milestone
We will have tree partnership: one for each level of quality of the clothes that we
will sell on the virtual commerce. In order to accomplish this Italian’s partnership
we will ask the National Chamber of Italian Fashion to help us ﬁnding: one normal-
quality manufacturing, one for the medium-quality and the other for the high one.
47

CHAPTER
9
SWOT ANALYSIS
In this chapter we analyze the Swot Analysis that is a matrix, use for evaluate
what happen in the market in which work the business owner and for to evaluate,
what may be strength or weakness of your business, as well as evaluate the possible
opportunity offer from the market, or the threats that the same market present.
9.1 Strengths
· Simplified procedure for selecting the appropriate size to the physical consti-
tution, through an interface that uses a visual sensor to analyze the customer
measurement.
· Offer’s flexibility that allows the customer the selection of price range corre-
sponding to specify manufactured.
· Possibility to order comfortably from the home, without going physically to
the store to measure the size.
49

9 Swot Analysis
· Even at home, taking advantage of the visual sensors can be traced back to
the precise size without having to measure manually. Unlike the online store
on which each consumer must comply with the guidelines for achieving the
right size.
· Possibility to purchase a high-quality product at a reasonable price.
· Customer suggestion related to clothes that he has and can buy for to make
sure they match to the chosen garment if the consumer is at home. If the
consumer is in the store, the suggestion related to the garment to match are
oriented only on the new clothes, that produce from the brand that has the
store.
· Thanks for the use of artificial intelligence and the big data we can incorpo-
rate in the business system a huge amount of data on the preference and the
kind of consumers that allow to the company to set up efficient product and
marketing strategies.
· Possibility to undertake a chat, in case it would be helpful for both garment
matching and technical use with the use of the mirror.
9.2 Weakness
· Insecurity of transaction.
· Impossibility to measure the garment.
· The insecurity that the product does not correspond to what is seen and
described.
· Insecurity of the quality of the service received.
· Lack of excellent human contact
· Lack of excellent "touch and fell"
Furthermore, there is also a lack of resources:
· Funds to start as we have planned a search for partners to launch the product
for the first time on the market.
· Lack of knowledge about the world of fashion.
50

9.3 Opportunity
· Because of the collaboration with clothing manufacturing industries, there is
a waste of time and money as it affects our times in production and shipping
of third-party orders.
· Loss of revenue caused by a market restriction, also generated by a financial
collaboration with retailers who in the first phase of invasion in the market
will have the exclusive product.
9.3 Opportunity
· Opportunities for our current industry will be exploited in the phases of
product market launch, as some services such as online shopping, intelligent
cabinet management, the following suggestions on the outfit for wearing and
implementation of the chat will be included later.
· Young reference market covering a band of 16 and 55 years.
· The online shop and then from home, becomes more and more widespread
and useful, as people become increasingly lazy.
· In specific geographical areas where the employment rate is high, buying
from home could be easier both in terms of time and convenience.
· The market in Italy is easily achievable because for now there are no other
competitors.
· Implementation of a direct chat with a "salesman" with knowledge on both
the fashion and technical world.
· Achievement of new target audiences thanks to the versatility of the product
as it is presented as a mirror, which can be easily adapted for a target
consumer of cosmetics.
9.4 Threats
· The threats that arise are caused by our competitors who, to date, their only
strength is only to be already on the move on the study and development of
a technology that apparently can be defined as equivalent to ours, but that
in data made public by the same competitors, it is not yet at the levels that
we propose.
51

9 Swot Analysis
· The obstacles we are going to face are related to user insecurities and lack
of services and those arising from a market that could be suspicious due to
the fact that we could be a threat to the physical clothing market as we
could cause it to be destroyed or destroyed, however the suppression of small
commercial establishments.
· An age group over 50 may have diﬃculty using the product or lack of edu-
cation simply because they are not part of the technological generation.
· The possibility of inserting the product in other brands.
52

CHAPTER
10
FINANCIAL PLANNING
10.1 Income Statement
We are going to explain a 3-year profit & loss projection, and not a 12-months one
because of the strategic market plan.
10.1.1 3-year profit & loss projection
The following table will present the fixed and variable costs that we are going to
face in order to boot the production.
· For the physical mirror
· Mirror: 20,00 e(variable cost)
· Transparent touch-screen: 25,00 e(variable cost)
· Kinect: 20,00 e(variable cost)
· Electrical wire: 0,10 e(variable cost)
· Case: 12,00 e(variable cost)
53

10 Financial Planning
· Assembly machinery: 1.000.000,00 e(fixed cost)
· Plant buying: 500.000,00 e(fixed cost)
· Employee’s wage: 10,00 eper hour (variable cost)
· Warehouse employee’s wage: 9,00 eper hour (variable cost)
· Delivery: 2,00 eper finished good (variable cost)
· Business organization costs: 100.000,00 e(fixed cost)
· For the Service:
· Developer’s wage: 1.200,00 eper month (variable cost)
· Online storage and other costs: 2.000,00 eper month (variable cost)
· For the clothing production sector, in the third phase:
· Big-distribution cloth
· T-shirt: 3,00 e(variable cost)
· Pants: 3,00 e(variable cost)
· Intermediate-distribution cloth
· T-shirt: 8,00 e(variable cost)
· Pants: 8,00 e(variable cost)
· Tailoring piece
· One piece: 50,00 e(variable cost)
· Marketing and advertisement: 0,00 e(fixed cost)
Because of the Microsoft Biz Spark relationship.
The selling prices for the products will be the following:
· CoolMi: 450,00 e
· Big-distribution cloth: from 10,00 eto 30,00 e
· Intermediate-distribution cloth: from 40,00 eto 70,00 e
· Tailoring piece: from 120,00 eto 300,00 e
54

10.2 Budgeting Plan at December 31, 2020
The following budget is analyzed on a forecast of 2.000.000 of families ( 50% of
the target population ) and an average of 3 mirrors sold per store, for a total of
75.000 mirrors sold.
The Excel public ﬁle can be found at the link:
55

57

59

10.3 Break-even calculation
10.3 Break-even calculation
After this calculation, we can see how the break-even is reached after selling 4721
units of CoolMi. This mean that in the ﬁrst year we have a loss, because we will
sell only 300 units to our partner, as discussed before.
During the second year, when we forecast to sell the 75.000 units of CoolMi to
the other clothes retail store, we will have an active balance.
10.4 Seek and use of capital
To reach our goal, to materialize our mission in order to realize our Vision, we
need at least 1.500.000,00 e to face the ﬁxed costs relative to the buying of the
61

10 Financial Planning
assembly machinery and the plant. In addiction we need 500.000,00 e to produce
the first 300 mirrors to fill up the needs of the signing Brand retail stores in the
Italian territory.
Each of us is investing 250.000,00 e in the Society, in order to gain our majority.
We also have decided to apply for the "Campania: Bando Campania Start Up
Innovativa - POR FESR 2014-2020" to founds 500.000,00 e, because we respect
their conditions: in fact we want to raise the italian industry and we want to do
it for the south of the Italy, even if the fashion capital is in Milan, the best tailors
are in Naples, and we want to offer a collaboration with local tailors in our last
phase.
At this point we opened a Crowdfunding procedure on the web, offering to the
funders to be the firsts to obtain the mirror in the third phase, with a similar
procedure to the early access for the video-games’ preorders and a discount of the
70% for the first buy with our distribution channel.
The remaining 500.000,00 e will be obtained from the partnership with the
signing Brand, in exchange for the first year exclusive of the CoolMi product.
62

CHAPTER
11
EXIT STRATEGIES
Preferably we would remain independent and grow our company an prepare an
Initial Public Offering (IPO). But in case of inefficient implementation of the
strategy, sudden change of the market (some big new competitors, changing of
the consumers needs, . . . ), too many losses or macro-economic issues that we
aren’t able to face by our own we would accept possible merger and or acquisition
offers.
63

CoolMi by CooLook - Business Plan

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