Multi-Channel Business Model:
Along with their diversified retail segment brands, Urban Outfitters also operates in three main channels; retail, direct-to-customer, and wholesale operations. Their retail channel is diversified by their locations and product line. On average, each of their retail stores generally have around 60,000 SKU’s and generally located in metropolitan areas. Their retail segment contributes the most of their revenues and allows customers to experience each of their unique brands. Their direct to customer strategy allows customers to experience their brands through their e-commerce. By directing customers to their websites, this is a huge contributor to their sales and extends their customer base and online market share. By sending catalogs directly to their customer, this enables the customer to shop a wide verity of electric merchandise. The company plans on expanding their direct to customer strategy globally, to include a multi-currency checkout, multi-language, and country specific marketing. This direct-to customer approach increases the reputation and recognition of the brand, direct to customer sales increase to 23.7% of net sales in 2013. The wholesale operation segment was established in 1984 to develop an apparel line of younger women’s wear, to be sold at affordable prices. The Free People wholesale started selling to retailers in the U.S. and currently distribute the Free People products in department stores using a shop- within-shop sales model. The shop-within-shop model allows for more freedom in differentiating their products with further strengthening their brand image. This approach will create a larger customer base and this segment accounted for about 5.3% of net sales in 2013. The chart below is a breakdown of the percentage of revenues each of the company’s segments and each of the brands contributes to each year. As you can see, the retail operations segment contributes about 94% of the company’s revenues in FY 2014. The Urban outfitters brand retail store contributes the most of their revenues, at about 44% in FY 2014. This diverse and unique business model will allow urban outfitters to continue to grow and increase sales, as well as create a strong and extensive customer base. This approach gives them a competitive advantage over other specialty retailer and gives them opportunities to continue to capitalize on growth.
One of Urban Outfitters growth strategies is to expanding their presence globally. They currently have stores in the U.S., Canada, and Europe. Urban Outfitters plans to open around 10 new stores globally by the end of quarter 4 of 2014, along with 8 new stores in North America. They also have plans to open 38 new stores by the end of 2015. 13 New stores of urban outfitters globally which include 3 new European stores, 13 new Anthropologie stores that also includes 12 new Free People stores in North America. In addition to new stores, the company plans on expanding their wholesale segment, expanding a showroom into Europe and Japan. These opportunities will create an expansive customer base, increase brand awareness and gain market share for Urban Outfitters. Because of their competitive advantages from being a specialty retailer, the company will be…