Introduction
Laura Ashley is a British textile design company that manufactures home furnishings and clothing and sells them worldwide. It was founded in 1953 by a fashion designer who gave her name to the company and grew to prominence in the 1970s and 1980s. In the 1990s, it was acquired by the Malaysian firm MUI, which has held the firm until events that will be described below. However, recently, the company has struggled with declining sales as it struggled to compete with more affordable and youth-friendly fashion chains. Efforts to address the problem have proven unsuccessful, and the company continued to underperform financially. Moreover, in early 2020, the COVID-19 pandemic happened, along with the associated lockdowns. With neither MUI nor the British government ready to provide financial aid, Laura Ashley had to file for administration.
The administration process is an alternative to liquidation, in which the company’s control is given to an administrator, who aims to save the business and benefit the creditors more than a liquidation would. However, Laura Ashley did not complete it, as it was bought out by the investment firm Gordon Brothers shortly after initiating the administration (Jahshan, 2020). It now has a source of funding and may continue its operations as usual. However, the problems that the company had before the arrival of COVID-19 persist, and it has yet to discover solutions. Laura Ashley needs to reevaluate its marketing and target sectors that can generate sales and profits while also competing with other fashion and home furnishings brands. The purpose of this case study is to evaluate the current state of the company and its competition, identify threats and opportunities, and formulate strategies for recovery based on these findings.
Marketing Communications Audit
Current State of the Company
In recent years, Laura Ashley appears to be struggling with maintaining its operation due to a variety of factors. Starting with the financial crisis of 2008, the brand has had a significant amount of controversy associated with it, primarily centered on its operation in Ireland. The inability to appropriately respond to a high number of negative reviews has also damaged its reputation and sales to some extent. Since that point, the sales have been on the decline, culminating in 2016, when the Australian branch of the company went into administration. The action was performed at least two times, which was attributed to poor sales. The UK branch also experienced drawbacks in its operation, which saw the company closing 40 locations. Further passage of time saw more financial losses, connected with a decline in the need for traditional products. In terms of the most recent developments, Laura Ashley, like many other companies, has found difficulty in staying in business due to the devastating effects of the current pandemic. Covid-19 not only limits the customer’s ability to visit store locations but also severely restricts their buying power. In light of this development, the company filed for administration, putting the jobs of its employees at risk (Tingle, 2020). In March, 268 jobs were cut, with 721 more being left at risk of termination as well (Laura Ashley, 2020). The reasoning behind this decision was put on the spread of the pandemic and an inability to recuperate the losses. April of the current year saw Laura Ashley being purchased by the Gordon Brothers, an investment firm. This event has had a revitalizing effect on the store chain, giving it an opportunity to make a successful return to business. Overall, the company has faced great difficulty in attracting a stable customer base and securing sales in many of its shops. The losses were significant enough to warrant an acquisition by an investment firm. The arrival of new management gives the company the much-needed resources to secure its position on the market and offer potential customers the range of products they require. While the future development path is uncertain, the most recent events can be seen as a much-needed change in direction for the company.
In terms of marketing, Laura Ashley focuses on maintaining its brand image as the embodiment of traditional English values combined with small touches of modernity. Much of their website is centered on the character of their founder and the face of the brand, Laura Ashley, whose personal history is recounted there in extensive detail. The store gives its values and legacy a top priority, which is reflected in its marketing efforts. Their advertisements primarily feature women in long and traditional clothing, a variety of flower patterns, and calming colors. The brand embraces a classic-casual aesthetic and appeals to conservative English families. The brand also has a somewhat significant social media presence, managing a Facebook account that is updated at a consistent frequency. The page features their newest designs and patterns, providing exposure to new and seasonal products. The captions are formatted in a semi-formal tone, creating a calm and welcoming atmosphere. Some of the Facebook posts also feature their founder, Laura Ashley, as well as some old pieces of photography and media, which are used to further promote the vintage image of the brand.
SWOT of Marketing Communications
Table 1: SWOT Analysis of Laura Ashley’s Marketing Communications
Strengths
Laura Ashley is a powerful brand that is embedded in the consciousness of the British people. During its peak, its products were worn and used by many prominent personalities, including Princess Diane. As such, it has a reputation for quality, natural product usage, and durability as well as an association with femininity (Solomon et al., 2019). Moreover, with over 150 stores in the UK (Tingle, 2020) as well as various wholesale retail channels, it has a powerful platform with which to deliver its products to customers. Lastly, with its production of both fashion items and home furnishings, Laura Ashley can take different approaches to change its operations.
Weaknesses
Laura Ashley’s products are designed for British people and based on their traditions. As such, they may not necessarily appeal to people elsewhere, limiting the degree to which the firm can penetrate the global market and making such ventures risky. Moreover, as Reed (2019) asserts, the company’s clothes specialize in a vintage approach that appealed to the British sensibilities in the 1970s. Now that the relevant cultural factors, such as back-to-nature views and nostalgia, may not be as prominent, a downturn in popularity may be challenging to avoid. Lastly, Laura Ashley’s products appeal to the middle class and are priced appropriately, which makes them unattractive to a large segment of potential buyers.
Opportunities
Laura Ashley may be able to improve its performance by increasing the degree to which it is present internationally. As mentioned above, such a move would be risky, but the promise of appealing to previously untapped market segments with an interest in British culture should be considered. One way to alleviate the threat would be by creating new designs that suit modern or local sensibilities better and thus appeal to new consumer segments. Another would be increased internet usage and e-commerce, specifically, which Gordon Brothers sees as one of the two most significant expansion vectors for the firm (Biswas, 2020). It lets the company expand internationally with minimal costs and capture larger regions than a brick-and-mortar outlet can.
Threats
The primary threat to Laura Ashley comes from global fashion chains such as H&M and Zara. As Khan et al. (2019) note, they specialize in so-called “fast fashion,” capitalizing on fashion trends rapidly and quickly delivering items that follow these influences to all of their stores at affordable prices. As a result, should Laura Ashley create a popular product, there would shortly be a cheaper alternative available. Moreover, expanding into new clothing styles could cause Laura Ashley to lose the support of the customers who value its traditional approach. Lastly, social trends change over time, and Laura Ashley’s messaging may not be suitable for current circumstances
Competitor Evaluation
Zara will be the competitor chosen for the purposes of this analysis because of its prominence in the United Kingdom and worldwide.
Table 2: SWOT Analysis of Zara’s Marketing Communications
Zara is famous for its fast-fashion approach, quickly determining the current trends and delivering products that match them to customers before the sensation disappears. It achieves this goal by understanding its consumers, actively incorporating feedback, and monitoring worldwide fashion trends (Kotler et al., 2019). Other measures Zara takes include its positioning in prestigious areas that creates the corresponding association (Roll, 2020) and highly successful social media accounts (Ravi, 2018). However, the brand’s insistence on avoiding traditional advertising may be a weakness, especially when fewer visits to physical locations occur. Additionally, Roll (2020) claims that retailers such as H&M and Mango have challenged Zara’s price leadership, which can lead to either a loss of sales or reduced profits as it drops prices. Lastly, while Zara follows fashion trends closely, it does not create them, leading to an overall lack of originality.
The emerging e-commerce trend benefits Zara similarly to other brands, enabling it to sell items to customers in a more convenient manner than before. Additionally, Roll (2020) finds substantial opportunities for improvement in Zara’s social media management. While the company adopted it earlier than others and benefited substantially from doing so, its strategy has failed to evolve and stay on par with modern trends such as engagement. Lastly, the company can likely benefit from adopting traditional marketing in some fashion, especially as competition intensifies. However, Zara also has to deal with substantial threats, such as its various PR scandals involving both ill-conceived advertising moves and misconduct such as unpaid labor (Ravi, 2018). Moreover, with additional competitors targeting its customer segment and undercutting it in price, Zara’s lack of originality may lead to it losing its distinguishing features. Lastly, the business’s current focus on physical locations in its marketing is hurting it in conditions such as COVID-19, when store visits have declined massively.
Customer Groups
Laura Ashley still focuses on designs that made its products popular in the 1970s and 1980s, though it has made some changes to accommodate younger populations, as well. Moreover, as mentioned above, it has built an association between its brand and femininity, though the company offers garments for men, as well. As a result, Francis et al. (2019) confirm that its most significant customer segments are women and people who are over 40, particularly those in the middle class. Women are typically interested in appearing fashionable and feminine and choose their clothing carefully to match their style and satisfy their preferences. People over 40, in general, were likely influenced by the hippie movement and nostalgia for the 19th century. As a result, they prefer more classical designs and the usage of natural materials as opposed to synthetic fabrics and may do so for both clothing and home furnishings.
TOWS Matrix and Commentary
Table 3: TOWS Matrix for Laura Ashley
Internal Strengths and External Opportunities
Laura Ashley has a well-established brand that has a powerful association with the United Kingdom. While it is unlikely to become universally popular worldwide, there are several low-risk options for it to increase its market share. One is e-commerce, which was mentioned above and enables expansion with a relatively low investment. The other is partnerships with large wholesale retailers, which can then carry Laura Ashley products in their existing stores. Both of these approaches are promising, as they can reach large customer bases without requiring excessive investment.
Internal Strengths and External Threats
Laura Ashley is unlikely to be able to match its competition if it attempts to replicate the model due to large chains’ inherent advantages. However, it may be able to avoid a large portion of the difficulties by adopting a niche strategy and targeting its current customer base. As described by Gwilt, Payne, and Ruthschilling (2019), a sustainable fashion strategy is a possibility, as Laura Ashley already satisfies many of the criteria necessary to qualify for this description. An alternate opportunity is to continue the company’s attempt to attract new demographics and increase its sales in this manner.
Internal Weaknesses and External Opportunities
To reduce the high prices that make Laura Ashley’s products inaccessible to many demographics, the company can employ global sourcing. Many developing nations produce textiles at lower prices than the facilities located in the United Kingdom or near it. However, the resulting lack of support by Laura Ashley of local manufacturers may cause reputation damage, which has to be considered. The company can use crowdsourcing via social media to address the design problem, which is a promising approach for innovation (Information Resources Management Association, 2019). This method can help Laura Ashley connect with their buyers directly and satisfy their needs.
Internal Weaknesses and External Threats
Still, Laura Ashley’s weak global appeal has to be considered, especially because competing chains have already expanded into most potential entry nations. One option that avoids risk would be to focus on the United Kingdom, to which the company’s products are highly suited. As such, Laura Ashley may be able to capture a substantial portion of the market locally, stabilize itself, and prepare for further development. Another option would be to attempt to compete on price and create product lines that are lower in price than the company’s typical offerings. In doing so, Laura Ashley can also appeal to new demographics, but the strategy is risky because the company struggles to match fast fashion practices.
Marketing Communications Strategy
Ultimately, Laura Ashley currently relies on an approach that is increasingly failing as its target demographic ages and stops buying its products while the company struggles to attract new customers. As such, rectifying this tendency should be the primary focus of a strategy aimed at improving the company’s current situation. Forrester’s 5I model will be used to design and implement this approach. The target will be to increase sales by 10% within a year, satisfying the SMART criterion. The new target category that the company should target is young women, both in the United Kingdom and beyond. It can achieve this goal through increased adoption of Internet-based technologies with the purpose of connecting with younger audiences. In particular, it should focus on e-commerce and social media usage.
E-commerce can help Laura Ashley connect with its target audience of young adults by satisfying their needs. Melton (2019) finds a steady and rapid growth rate in the ratio of online purchases made by US millennials, from 47% in 2017 to 60% in 2019. With the various lockdowns and closures associated with COVID-19, this figure is likely to have accelerated more, and the change may be permanent. As such, if Laura Ashley focuses on its online outlets and successfully promotes them, young adults will likely visit its site in increasing numbers and start making purchases. However, it is first necessary to advertise the brand effectively and offer a selection of products that interest the customer segment.
Social media is a tool that can achieve both of these purposes simultaneously, satisfying all five of the 5Is if managed internally. Berry, Sikkenga, and Visser (2019) confirm that, depending on the type of user that the social media campaign is able to engage, it can help increase sales and generate new products. Perrin and Anderson (2019) find that Snapchat and Instagram are two social networks that are particularly popular among the 18-24 demographic, and Facebook is also consistently popular among most demographics. The first two networks are particularly pertinent because they both rely heavily on images, typically photographs. Laura Ashley can, therefore, leverage its clothing products when engaging with these networks by partnering with influential accounts to promote its brand.
Marketing Communications Plan
Central Proposition
Laura Ashley’s primary objective is to increase sales among young adults, especially women. The company intends to do so without jeopardizing its standing with existing customers. As such, it will retain its image as a brand that makes traditional clothing but also adapt the products it makes to modern needs and sensibilities. Moreover, it will promote itself as an environmentally friendly and sustainable brand that uses natural components in its manufacturing. As such, it will sell attractive, fashionable products with Victorian inspirations in different varieties and in a broad price range, available for easy online ordering and delivery.
Tactical Plan Outline
First, Laura Ashley will revamp its website to make navigation and purchasing more convenient, improving the visitor experience and increasing the intention to buy. Following this action, it will increase its online presence, expanding its existing platforms and creating new ones on social media where none are present yet. The accounts’ messaging will vary depending on the platform and the expected target audience, as different platforms’ users have varying expectations of brand accounts (Moriuchi, 2019). On Facebook, it will target older adults and focus on home furnishings as well as more traditional clothing items. On Twitter, the account will target young adults and interact with its followers, and on Instagram, it will partner with female influencers and retweet their photos in Laura Ashley attire as well as those of hired models.
The messaging of the brand will be that it is more traditional and environmentally friendly than the competition. The value proposition will be in its unique style, high quality, comfort, and green manufacturing practices, which customers in the UK have started valuing more in 2020 (Mintel, 2020). It will focus on the timeless aspect of Victorian fashion while also adapting it to modern sensibilities. This messaging will be consistently applied across all of the nations where the brand operates and those to which it expands with minimal adjustments. The brands foreign messaging will attempt to translate the same style into a local environment and show that it still applies. The all-natural element of the clothing will be particularly emphasized to appeal to environmentally conscious customers, which are increasing in number substantially (Genchur, 2020). At the same time, the company will invest in online advertising and the promotion of its accounts. Additionally, it will continue using its brick-and-mortar outlets and traditional advertisement media. The effectiveness of the plan will be evaluated through the amount of customer engagement with its various platforms and the number of sales that the e-commerce aspect of the business generates.
Reference List
Berry, M., Sikkenga, B. and Visser, M. (2019) Digital marketing fundamentals: from strategy to ROI. Abingdon: Taylor & Francis.
Biswas, S. (2020) ‘Gordon Brothers sees opportunities in retail brands like Laura Ashley’, The Wall Street Journal.
Francis, J. B. et al. (2019) Laura Ashley demographics. Wonder. Web.
Genchur, N. (2019) ‘Six consumer trends to watch in 2020’, Groundtruth.
Gwilt, A., Payne, A. and Ruthschilling, E. A. (Eds.) (2019) Global perspectives on sustainable fashion. London: Bloomsbury Publishing.
Information Resources Management Association (2019) Social entrepreneurship: concepts, methodologies, tools, and applications. Hershey, PA: IGI Global.
Jahshan, E. (2020) ‘Laura Ashley rescued from administration’, Retail Gazette.
Khan, M. H. et al. (2019). Contemporary business. 3rd edn. Toronto: Wiley.
Kotler, P. et al. (2019) Marketing management. 4th edn. London: Pearson Education Limited.
Laura Ashley (2020) Marketline.
Melton, J. (2019) ‘Millennials now do 60% of their shopping online’, Digital Commerce 360.
Mintel (2020) British lifestyles: a look ahead to 2021.
Moriuchi, E. (2019) Social media marketing: strategies in utilizing consumer-generated content. 2nd edn. London: Business Expert Press.
Nazir, S. (2019) ‘How does Zara survive despite minimal advertising?’, Retail Gazette.
Perrin, A. and Anderson, M. (2019) ‘Share of US adults using social media, including Facebook, is mostly unchanged since 2018’, Pew Research Center.
Ravi, K. (2018) ‘How Zara built an engaging brand on social media’, Unmetric.
Reed, P. (2019) Fashion evolution: the 250 looks that shaped modern fashion. London: Octopus Books.
Roll, M. (2020) ‘The secret of Zara’s success: a culture of customer co-creation’.
Saxena, S. B. (Ed.) (2019) Labor, global supply chains, and the garment industry in South Asia: Bangladesh after Rana Plaza. Abingdon: Taylor & Francis.
Solomon, M. R. et al. (2019) Marketing: real people, real decisions. London: Pearson Education Limited.
Tingle, R. (2020) ‘Fashion chain Laura Ashley files for administration after rescue talks are thwarted by coronavirus outbreak putting 2,700 jobs at risk’, Daily Mail.
Appendix: Print Advert
A model is in the centre of the advert, wearing Laura Ashley clothing.
The clothes have been selected to reflect Laura Ashley’s traditional aesthetic and still look suitable for the modern age.
The background is a modern English street, reinforcing the associations with the United Kingdom and showing that the clothes fit well for such an environment.
The Laura Ashley logo is at the bottom, followed by the tagline “Beauty is timeless.”
The company’s social media are at the bottom to help consumers find them.
Overall, the ad is minimalistic in nature to reflect the message of the Laura Ashley brand, which does not pursue trends and delivers consistent high quality without anything unnecessary.