Upper Street

Market

Target market

The Upper Street customer is confident, individual and independent. She knows what she wants, and is stylish but not a slave to fashion. She researches her purchases, values high quality products and outstanding service, and is loyal. When it comes to shoes, she has an idea in her head but she just can’t find what she’s looking for, whether it’s particular style, colour, heel height, finish or fit she has in mind.

She enjoys playing a part in the creative process, feels the buzz of anticipation as she waits for her shoes to arrive, a flurry of excitement as she opens her beautiful shoebox, and a genuine sense of pride as she wears her own shoe creation and is complemented on her sartorial choice.

• Upper Street targets affluent women aged 27-45 who are looking for individuality in their style.

• Product particularly relevant to Large / Small feet segment (6% of women have small / large feet and this represents 9% of the business) and the Bridal market (240,000 women get married in the UK each year, and bridal shoes represents 9% of the business).

• Predominantly focused on UK market, but secondary business in the US following the acquisition of competitor Milk & Honey Shoes in 2014.

Characteristics of target market

Upper Street operates in the global luxury footwear market, specifically online, with the short-term focus on building the business predominantly in the UK.

• The global footwear market grew 6.1% in 2013, and is forecast to hit $500bn by 2018 (Euromonitor March 14).

• UK luxury sector forecast to double in five years to £12.2 billion in 2017 (Walpole July 13), 27% of market is leather goods / shoes: the UK luxury footwear market is therefore expected to be £3.3 billion by 2017 (Bain & Company Oct 12).

• Luxury ecommerce 25% annual growth. Consumers seek different experiences, uniqueness, 24/7 access and entertainment (Bain & Company Oct 12).

• 25-30% of consumers are interested in customisation options (Bain & Company 2013). We therefore estimate the potential size of customised luxury footwear in the UK alone to be £0.825 billion by 2017.

• With nearly 5 years of trading, and no known competitors in the UK, Upper Street has a significant head-start in this market.

Marketing strategy

Customers are acquired through online and offline marketing strategies, including PR, search, social media, affiliates and word-of-mouth.

PR – Upper Street offers key fashion journalists the chance to experience the design-your-own shoe product and service. Key fashion campaigns are based on creative collaborations e.g. award winning designer Jasper Garvida created shoe designs with Upper Street for his London Fashion Week catwalk shows in 2011, and a very successful campaign was run with SaveTheChildren in 2012 where high profile celebrities designed their dream shoes, auctioned for the charity. We aim to do more creative collaborations in the future. We feel that business and personal profile pieces are also very effective at generating awareness.

Word of mouth – this has always been a key driver for Upper Street, particularly as 91% of customers are happy to refer the brand, and they act upon this. As the business grows, word of mouth is expected to accelerate in-line. A referral scheme is being created for later this year.

Search marketing – traffic from organic search against key relevant search terms has historically been an area we focus on. There are 18,000 searches online for ‘design your own shoes’ on Google, so a large opportunity to increase paid search advertising for customer acquisition.

Affiliates – key partners like Times+, Amex and Amazon Local have driven significant revenue for Upper Street in the past, and this strategy will be continued with major brands, and also through an online affiliate scheme.

Social Media – Twitter, Facebook and Pinterest have been used to good effect in the past, and Upper Street plans to increase media spend on these platforms to drive more business.

eMail Marketing – Sophisticated email marketing campaigns work to convert prospective customers through targeted content and promotions. A more sophisticated programme is planned for 2015, to include an online loyalty scheme.

Competition strategy

Upper Street is uniquely positioned to service the premium / luxury end of the market with a fully customisable shoe and high level of service.

Design-your-own shoe brand Shoes of Prey from Australia offers a similar service to Upper Street, but targeted at a younger / mid-market customer with a lower price point, lower quality product and less emphasis on customer service.

Major luxury shoe brands like Jimmy Choo, Louboutin, Manolo Blahnik and Prada target the top end of the market with a beautifully designed product and commensurate price point. These brands have started to offer small levels of product customisation, limited to selection of a single material, selection of heel height, or embossing of customer’s initials. There is little opportunity to customise online, most customisation has to be done in-store, and products can take a long time to be delivered, with no refunds possible. These brands do not truly allow the customer to design their shoe, as they are design-led brands with business models that are based on volume production of designs, and back-end systems that are not set up to deal with individual customer orders.

Entry level ready-to-wear designer shoe brands like Charlotte Olympia and Sophia Webster that have grown fast in recent years, and operate at a similar price point to Upper Street, offer no customisation options for customers. Their proposition is to be design-led.

Leading high street brands like Kurt Geiger, Dune, Office, Reiss and TopShop offer no customisation, lower levels of service, with mid-quality product quality and price.