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HHL Final Recommendations v11
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- 3. What PRODUCT MIX should Hen House Linens offer? Can innova6ve PROMOTIONS increase sales? How can Hen House Linens increase sales through effec6ve marke6ng?
- 4. Product Mix 1 2 Do people like the solids and pa@erns that Hen House currently offers? How do customers use table linens? 4
- 5. PromoHons 1 2 Can Hen House Linens implement a referral program to increase sales? Would creaHng user generated content campaigns increase sales? 5
- 6. INTRODUCE IMPROVE IMPLEMENT Introduce solids without ruffles to the product line Improve seasonal selec6ons by adding holiday-‐specific paDerns Implement a referral program to acquire new customers Hen House Linens should adopt the 3 I’s approach to grow sales 6
- 7. INTRODUCE IMPROVE IMPLEMENT 7 Introduce solids without ruffles to the product line
- 8. 103 customers like mixing solids and paDerns vs. 72 that like mixing paDerns with paDerns Customers like mixing solids and paDerns Source: Qualtrics Customer Survey "Customers are much more willing to mix a pa@ern on top of a solid or neutral“ Sales Associate, PoDery Barn “I would suggest adding solids to the product line and that the paDern on paDern can be overwhelming,” Homemaker “Neutral or solid linens typically sell more oRen compared to paDerned linens,” Sales Associate, Southern Season 8 5 12 103 17 28 72 0 20 40 60 80 100 120 Dislike Indifferent Like Mixing solids and pa@erns (n=120) Mixing pa@erns with pa@erns (n=117)
- 9. CompeHtors offer solids and paDerns Po@ery Barn Crate & Barrel Compe6tors offer a larger variety of solids in bold and neutral colors Source: Compe6tor Websites 9 6 out of 8 compeHtors we researched offered solid linen products “Oen customers looking for a base table linen set look for neutral or solid linens,” Sales Associate at PoDery Barn “Neutrals or solids make it easier to mix and match, change out centerpieces and redecorate a room,” Sales Associate at Crate & Barrel West Elm Juliska Bed Bath & Beyond Ballard Design Po@ery Barn Crate & Barrel Pomegranate Pehr
- 10. Introduced Solids with Ruffles in Fall 2014 Source: Hen House Linens Website≈ 10 Hen House Linens is headed in the right direcHon with the Mallory Co@age CollecHon
- 11. More customers do not like ruffles than do Source: Qualtrics Customer Survey 11 Dislike 59% Indifferent 27% Like 14% (n=111) “The solids with ruffles may seem too Southern and not appeal to women outside of the South” -‐Homemaker Only 14% of respondents like ruffles Offer solids without ruffles to the product line so customers can layer, mix and match table linens
- 12. INTRODUCE IMPROVE IMPLEMENT 12 Improve seasonal selec6ons by adding holiday-‐specific paDerns
- 13. Linen shoppers want holiday pa@erns "Younger couples oen look for holiday themed opHons“ Sales Associate, Crate & Barrel “Southern Living will be full of table linens for the holidays“ Marke6ng Fellow, Southern Living “For holiday linens, customers look for classic looks combined with a differenHaHng factor“ Sales Associate, PoDery Barn “During the holiday season, I use linens with seasonal prints“ House Mother, ADPi Source: Team Interviews 13
- 14. Holiday prints are present and featured on compe6tor websites Compe6tors feature holiday products Source: Compe6tor Websites 14 15 out of 18 compeHtors feature holiday-‐specific pa@erns
- 15. The most popular Holiday is Christmas, followed by Thanksgiving Percent of ‘Holiday Only’ customers usage by holiday Source: Qualtrics Customer Survey 15 13% 25% 40% 65% 78% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Halloween Other Easter Thanksgiving Christmas
- 16. Strengthen holiday presence by developing holiday line 1. Develop Holiday Items Source: Hen House Linens Website 16 2. Reflect Items in PromoHons
- 17. INTRODUCE IMPROVE IMPLEMENT 17 Implement a referral program to acquire new customers
- 18. 65% of new business comes from referrals 77% of consumers are more likely to buy a new product when learning about it from family or friends Referred customers are about 25% more profitable per year than their non-‐referred counterparts Source: hDps://symphonycommerce.com/blog/turn-‐loyal-‐customers-‐into-‐a-‐referral-‐engine/ , Google images Referred customers add value to businesses 18
- 19. 53% of Hen House Linens customers have par6cipated in at least 1 referral program Customer Par6cipa6on in Referral Programs “I have parHcipated in referral programs when incenHvized by discounts or free gis“ -‐Customer No 47% Yes 53% Source: Qualtrics Customer Survey 19 Your customers are likely to try a referral program N=115
- 20. 1st Choice Customers would be best incen6vized with 30% off their next purchase Source: Qualtrics Customer Survey 20 2nd 3rd 4th
- 21. 21 How It Works Share a personalized URL with friends Your friends become new Hen House Linens customers You get 30% off your purchase the first Hme a friend places an order The best things in life are shared I N V I T E F R I E N D S, G E T 3 0 % O F F Source: Team Analysis
- 22. New Customers Are Acquired Current Customers Make More Purchases A referral program would help grow sales Sales increase exponen6ally Source: Team Analysis 22
- 23. INTRODUCE IMPROVE IMPLEMENT Introduce solids without ruffles to the product line Improve seasonal selec6ons by adding holiday-‐specific paDerns Implement a referral program to acquire new customers Hen House Linens should adopt the 3 I’s approach to grow sales 23
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- 25. Appendices Appendix A: Solids 1. Style Preferences 2. Crate & Barrel -‐ Table Linens 3. Guide To Solids & Colors Appendix B: Holiday Offerings 1. Crate & Barrel Website 2. Pomegranate Website 3. Product & Promo6on Survey Appendix E: UGC 1. Current Promo6ons 2. UGC Research 3. UGC Examples 4. UGC Customer Data 5. Instagram Usage Appendix E: Primary Research 1. Store Visits 2. Industry Experts 3. Other insights 25 Appendix C: Referral Programs 1. Marke6ng Research 2. Referrals Research: Rue La La 3. Referrals Research: Drop Box 4. Referral Program Par6cipa6on 5. Symphony Commerce Ar6cle Appendix D: Other Data 1. Market Size 2. Survey Demographics 3. Compe6tors
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- 27. 80% of customers prefer or strongly prefer mixing solids and paDerns. "Customers are much more willing to mix a pa@ern on top of a solid or neutral“ Sales Associate, PoDery Barn “I would suggest adding solids to the product line and that the paDern on paDern can be overwhelming,” Homemaker “Neutral linens typically sell more oRen compared to paDerned linens,” Sales Associate, Southern Season 0 20 40 60 80 100 120 140 160 180 200 Bold solids Bold paDerns Mixing solids and paDerns Mixing paDerns with paDerns Mixing solids with solids Ruffles Other Strongly Avoid Avoid Indifferent Prefer Strongly Prefer Style Preferences Source: Qualtrics Customer Survey & Interviews 27
- 28. Solids Table Linens Secondary Research “The quickest everyday table sepng starts with a casual tablecloth in a solid or seasonal paDern with coordina6ng napkins. We also suggest layering in woven fiber placemats to add natural texture.” – Crate & Barrel Source: hDp://www.crateandbarrel.com/Resource-‐Guide/Table-‐Linens.aspx 28
- 29. Solids Table Linens Secondary Research • The first purchase. A solid-‐color tablecloth is suggested for the first purchase, one that matches the dinnerware or accents the dinnerware in a contras6ng color. • Color mixing. Add a light-‐hearted touch to dining with a colorful mix of tablecloths and napkins, in complimentary hues and intensi6es. Source: hDp://www.e6queDescholar.com/dining_e6queDe/table_sepng/table_linens/tablecloth.html 29
- 30. Appendix B: Holiday Offerings 30
- 31. The home page consists of Crate & Barrel holiday items Compe6tor Website: Crate & Barrel Source: hDp://www.crateandbarrel.com/dining-‐and-‐entertaining/table-‐linens/ 31
- 32. The first items listed are Pomegranate’s holiday items Compe6tor Website: Pomegranate Source: hDp://pomegranateinc.com/collec6ons 32
- 33. Product & PromoHon Survey 0 1 2 3 4 5 6 7 8 9 None LiDle Some A Lot To what extent do the products fit with the images Source: Single Ques6on Survey 33 N= 16
- 34. Appendix C: Referral Programs 34
- 35. 26% of respondents saw referral marke6ng as an effec6ve digital marke6ng channel 56% 37% 32% 26% 13% 12% 8% 7% 6% 4% 0% 10% 20% 30% 40% 50% 60% Email marke6ng Social network marke6ng Content marke6ng Referral marke6ng Search engine op6miza6on Display ads Mobile ads Digital video ads Affiliate marke6ng Paid search Share of respondents Most effecHve digital markeHng channels for customer retenHon in the US in Q2 2014 Marke6ng Research Source: hDp://www.sta6sta.com.libproxy.lib.unc.edu/sta6s6cs/316104/effec6ve-‐digital-‐marke6ng-‐ channels-‐customer-‐reten6on-‐usa 35
- 36. Rue La La offers customers a $10 credit when the referred customer makes their first purchase Referrals Research: Rue La La Source: hDps://www.ruelala.com/ 36
- 37. Dropbox increased users from 100,000 to over 4 million in just 15 months with the launch of their dual referral program According to founder and CEO Drew Houston, referrals increased signups by 60% permanently. Referrals Research: Dropbox Source: hDp://blog.referralcandy.com/2014/01/21/referrals-‐built-‐dropbox-‐empire/ 37
- 38. 53% of Hen House Linens customers have par6cipated in at least 1 referral program 47% 14% 30% 5% 4% None 1 Between 2 and 5 Between 6 and 10 More than 10 Number of Referral Programs Respondents Have ParHcipated In Referral Program Par6cipa6on “I have parHcipated in referral programs when incenHvized by discounts or free gis“ -‐Customer Source: Qualtrics Customer Survey 38
- 39. Key Ar6cle: Turn Loyal Customers Into A Referral Engine “The best and greatest companies actually use their customers to bring in new customers. These brands deliver an amazing experience to their customers across the en6re lifecycle, so the customer ends up referring more customers. That is the most powerful way to grow a brand, and it is also why the most cost effec6ve way to grow a brand is to service your exis6ng customers.” Effec6ve referral marke6ng leads to lower customer acquisi6on costs, faster growth, higher profits and a reduced reliance on paid adver6sing. Source: hDps://symphonycommerce.com/blog/turn-‐loyal-‐customers-‐into-‐a-‐referral-‐engine/ 39
- 40. Appendix D: Other Data 40
- 41. Hen House Linens has a $3.9B total addressable market. 4.7 3.9 1.8 1.2 1.2 0.5 0 1 2 3 4 5 Bedroom linens Kitchen & dining room linens Window coverings Curtains and draperies Bathroom linens Slipcovers and decora6ve pillows in ($) billion hDp://www.sta6sta.com/sta6s6cs/255515/us-‐consumer-‐expenditure-‐on-‐home-‐ tex6les-‐by-‐category/ Kitchen & Dining Room Linens Market Size Source: hDp://www.sta6sta.com/sta6s6cs/255515/us-‐consumer-‐expenditure-‐on-‐home-‐tex6les-‐by-‐category/ 41
- 42. 32 Females 36 Males Friends & Family Survey Demographics 35% 47% 1% 12% 4% Under 20 21-‐30 31-‐40 41-‐50 51-‐60 Over 60 n = 68 Source: Qualtrics Customer Survey 42
- 43. 5% 19% 28% 30% 18% Under 20 21-‐30 31-‐40 41-‐50 51-‐60 60+ 167 Females 1 Male Customer Survey Demographics n = 168 Source: Qualtrics Customer Survey 43
- 44. • Other compe6tors: • Compe6tors include big box stores that carry linens, such as PoDery Barn and Bed Bath and Beyond • Chief compe6tors: Compe6tors 44
- 45. Hen House Linens Pehr Pomegranate Dinner Napkins ü ü ü Placemats ü ü ü Cocktail Napkins ü û ü Napkin Rings ü û ü Quilted Charger ü û ü Tablecloths and Runners ü ü ü Cocktail Aprons ü û û Cook’s Aprons ü û ü Oven MiDs and Potholders ü û ü Guest Towels ü ü û Pillows ü ü ü Compe6tor Product Mix Source: Compe6tor Websites 45
- 46. Appendix E: Primary Research 46
- 47. Stores Visits: • Lake Norman, NC: – Difficult to locate Hen House Linens items in store – Store owner was not familiar with brand • Dewey’s Bakery, NC: “I have personally owned an apron for over a year, and the colors remain vibrant aer washing because it is a high quality product,” Sales Associate, Dewey’s Bakery 47
- 48. Store Visits: • A Southern Season, Chapel Hill NC: spoke with Liz and BeDy, both Sales Associates – Hen House Linens products are made out of a lighter material, machine wash friendly and on the casual side – Neutral linens sold more oen compared to paDerned op6ons – Hen House Linens did have a high purchase rate but recommended offering more solids or neutral paDerns – Said customer age group (she guessed 40-‐55) aren’t used to purchasing home goods online and may want to go to brick and mortar stores to compare and physically see the products themselves – Said that Hen House Linens has a niche customer following 48
- 49. Store Visits: • The Teacher Box, Gastonia NC: Spoke with Liz, Owner – Customers experiment with other linens that have more color and design aer they buy a good base linen set that they likely use every day (neutral color scheme and said Pomegranate was a good example) – Linens with a variety of textures are popular for layering – Hen House Linens customers are customers who like to change or rotate linens throughout the year – Main selling point for Hen House Linens is that they are durable and will last for a long 6me 49
- 50. Industry Experts • PoDery Barn: Spoke with Tammy, Sales Associate – Best selling placemat is a beige/ neutral color – Placing a paDern on top of a paDern may be overwhelming and that customers oen have a hard 6me visualizing it without physically seeing how it looks in stores – Customers are much more willing to do a paDern on top of a solid or neutral – Variety of texture is important to customers as layering has become popular with linens (want to layer with different textures and not all the same material or texture) – Offered extensive Holiday linen collec6on that sales associate described as “classic looking” 50
- 51. Industry Experts • Crate & Barrel: spoke with Laurie, Sales Associate – Saw that more people tend to purchase neutrals/solids to make it easier to change out center pieces and redecorate a room – Said that there are two types of linen customers-‐ the customer that uses linens every day and the customer that uses linens for entertaining – Said that oen customers are brides looking for a beginning set of neutral like linens and experienced customers look to change out their table linens – The store oen stocks the same base solids/neutrals every year but completely changes out paDerned linens – When looking at the linen display in store, there was a mul6tude of seasonal linen op6ons ranging from mainly solids (red, gold and green) with liDle addi6onal design to linens that have Christmas trees – Said younger couples are oen looking for Holiday themed linen op6ons 51
- 52. Industry Experts: • Ellen Buoyer, Interior Designer: – Liked product mix, especially the runners – Uses placemats everyday but only linen napkins when entertaining – Thought the pricing of Hen House Linens was very agreeable • Cameo Edwards, Founder of Migrate Media: 52
- 53. Customer Interview • A Southern Season: Spoke with Kirkland and Mike who was a couple in late 20s • Said that Hen House Linens offers bolder colors and paDerns than other compe6tors • Preferred bold versus neutral table linens but said they could see how neutral colors could resonate with a wider range of customers • Said they were more likely to purchase paper napkins and use linens for special occasions • Recommended to visually pair paDerned pieces online to show customers how to pair linens since some customers may be hesitant to purchase online due to not being able to see the bigger picture of the product and what the en6re place sepng would look like 53
- 54. Insight from Homemakers • Helen Kang: – Hen House Linens gives a southern, homey and hospital feel – The linens would fit well in a country or Nantucket type of home • Kathy Busby: – Uses 6-‐8 sets of placemats for various occasions including everyday, outdoor, 4th of July, Christmas, etc. – Doesn’t use tablecloths unless rented for par6es – Uses throwaway napkins for everyday use and reusable napkins for entertaining – Said that she is not concerned with the brand on table linens as long as she liked the look and would not hesitate to purchase online if she was confident in the color 54
- 55. Insight from Homemakers • Victoria Beyer (UNC Adpi’s House Mother): – “I like all of the zig zag and stripes that are popular right now, I just don’t know how to mix paDerns together.” • Jamie Hill: – I like the product line, especially the colors and paDerns and the way you can mix and match items – I would suggest adding some solid colors to the product line – I would associate casual and southern to the product – If you are not from the south, the product and company may seem too southern and not necessarily appeal to a broad range of women outside of the south – Adding paper op6ons may draw in customers who are hesitant to use linens 55
- 56. Insight from Friends • Rachel Glock (College Female): – Thinks that her demographic would tend to like these products – These products have a light and informal feel – Said promo6ons would drive her to make small purchases on the website – Really likes the blog as a marke6ng channel and thought that this was a good way to show how the product influences every day life 56
- 57. • How they work – Promo6ons are adver6sed in the direct email, as a slide on the website, and as a post on Facebook and Instagram – Direct emails go to email campaign list (2900 emails collected through ordering from website or signing up for newsleDer) – Of those 2900, only about 500-‐800 open the emails (open rate of approx. 30%) – Get less than 1% responding to promos, but orders add up to 25% of web orders • Email Analysis – Show the products of the holiday/season in use and has a call to ac6on ex. Pick up a tablecloth perfect for the season’s first BBQ…) – Email has direct links to specific parts of the website • Recent PromoHons – Dog Days (15% off tablecloths) – Memorial Day (free shipping) – End of summer bash (15% off) – July 4th (20% off) – Made for everyday (15% off) – Easter (25% off DNs) – Valen6ne’s Day (free shipping) • PromoHon Analysis Hen House Linens Current Promo6ons
- 58. User-‐generated content is taking off with the rise of mobile and social pla}orms. 92% of consumers around the world say they trust earned media above all other forms of adver6sing. -‐Nielsen Over 65% of consumers are seeking out some sort of user generated content before making a purchase. -‐Elon University Study Successful UGC’s on Instagram must have tac}ul verbiage and instruc6ons, and incen6ves for par6cipa6on. UGC Research
- 59. UGC campaigns help build a following on social media and increase brand and product recogni6on and awareness. Burberry created a website where exis6ng customers could share photos of themselves wearing their Burberry trench coats, giving them ‘15 minutes of fame’ as models on the site, and allowing other customers to admire their sense of style. Results: Twi@er followers increased to 1 million, revenue doubled, and stock growth reached over 300%. Dunkin Donuts encouraged Facebook fans to upload a photo of themselves with a CoolaDa beverage to be entered into a daily giveaway. DD followed the simple process “Grab it, Snap it, Post it, Win it”. Results: Built up social network following, increased brand and product recogniHon with the mass of Coola@a-‐related images flying around web, and increased brand and product awareness. Burberry – “Art of the Trench” Dunkin Donuts – “Keep It Coola@a” UGC Research
- 60. Par6cipants upload a photo of their baby in the cloth AMP diapers and include a contest specific hashtag. A winner is chosen every month and the winner receives 2 cloth diapers. AMP Diapers photo contest • Lots of real, authen6c UGC of their product in use • Easy to enter contest through Instagram • Prize is brand related – it is their product • Contest graphic easily shows par6cipants what they need to do to enter • Prize offering could be increased to get more moms to enter What they did well: What could’ve been be@er: UGC Research
- 61. *Awards given for most likes on photo, most crea6ve photo, and randomly selected via raffle 100 customers said they were Very Unlikely or Unlikely to par6cipate in the hypothe6cal Hen House Linens Photo Contest shown on the le. 59 41 21 33 15 0 10 20 30 40 50 60 70 Very Unlikely Unlikely Neutral Somewhat Likely Likely How Likely To ParHcipate in a contest like this for a $50 dollar giRcard? UGC Survey Results
- 62. 62% of customers ‘Don’t have an Instagram account’ or ‘Never use Instagram’. Cameo Edwards, Founder • Suggested user generated content via email newsleDer and social media • UGC can enhance customer par6cipa6on with the brand • In social media campaigns, providing an example for customers to imitate works best 62% 2% 3% 8% 9% 16% Never/Don't have account Other Annually Monthly Weekly Daily How ORen Respondents Use Instagram Instagram Usage "The Hen House Linen customer is not going to be as tech savvy compared to the younger customer“ -‐Sales Associate, A Southern Season