Introduction
Kate Spade is a renowned fashion brand that mainly specializes in selling women’s handbags (Loeb 1). Its Pasadena store is the subject of this paper. It is also the chosen channel for this report.
Why I Chose to Report on this Channel
I chose Kate Spade’s Pasadena store because it is among the company’s fastest growing distribution channel (Loeb 1). Moreover, the store is in a highly vibrant market (California) where many inhabitants understand fashion. Although Kate Spade has defined women’s fashion for more than a decade, it is interesting to see how this channel fairs in the highly competitive Californian fashion industry.
Reason for Wanting to Report on the Channel
The Pasadena store is an important channel for Kate Spade. It contributes to the company’s profitability and plays a key role in sustaining its market presence on the west coast. I chose to report on this channel because many people talk about the excellent customer services offered on this platform. For example, my friends have talked of its wide array of innovative products, its friendly employees, and Kate Spade’s dominance in women’s fashion. Being a fashion-conscious person, and a keen follower of ongoing developments in this industry, I find that these views conflict my understanding of Kate Spade’s place in the fashion industry. For example, I believe the company’s fortunes are “unknown” because its founders left the company and sold it to a different player (Fifth & Pacific Company). To me, these are signs of “dwindling fortunes” for the company because if it were doing well, this move would be unnecessary. However, I found that my views contradict popular perceptions of the brand’s strength. Therefore, this paper investigates these issues further by understanding the company in more detail.
Background of Channel
- A New York-based entrepreneur, Kate Brosnahan Spade, started the Kate Spade brand (after her name) in 1993
- She created the company’s image as a leading lifestyle brand and opened the first store in New York. The New York branch often oversees most of the activities of its global and local outlets (Kate Spade New York is the biggest store and the company’s headquarter)
- Kate Spade’s mission statement underscores the main activities of its Pasadena outlet (customer focus). Women are the focus of the channel, and the company strives to appeal to their needs. This preoccupation has defined the company’s mission, for a long time. It reads, “To develop a well-edited line of fashionable, but not trendy handbags” (LAF 2)
- Kate Spade’s locations (both locally and globally) subscribe to the above mission statement. The company has different outlets around the world. In America (alone), the company has more than 80 retail stores in almost all states. These stores are in major cities around the country, including Los Angeles, New York, Boston, Chicago, and San Francisco
- Globally, the company operates about 100 retail stores (KSPD 1). Its global outlets exist in six continents around the world. Again, its market presence is in major world capitals, such as Kyoto (Japan), Hong Kong, London (United Kingdom), and Singapore (among others)
- Kate Spade Pasadena is a franchise of the Kate Spade brand and is located in Pasadena city, Los Angeles County, California, which has a population of about 137,222 people (Yen 4)
- In California, Kate Spade has 22 stores (KSPD 1). Its Pasadena store is among the most important stores in the region
- Liz Claiborne (the company’s CEO) started the Pasadena store in a nationwide expansion of Kate Spade’s branch network. She started the store in 2009, after taking over the company’s leadership, three years before (Yen 1). This leadership change occurred after Kate Spade (the original owner of the brand) left the company (cashed out in 2007)
- Fifth & Pacific Inc., which bought Kate Spade in 2007, owns the Pasadena store as a business portfolio (Yen 1)
- Kate Spade offers different kinds of products to its customers, including “handbags, clothing, jewelry, shoes, stationery, eyewear, baby fragrance, tabletop, bedding and gifts” (KSPD 5)
Customer Service
Kate Spade’s customer service philosophy aims to serve its customers diligently. By doing so, the company strives to create a strong brand loyalty. This goal hinges on building and maintaining new and existing customer relationships. For example, the company maintains an “open-access policy” that provides its customers with adequate access to its stores, seven days a week. For example, during weekdays, the company’s stores are open to customers from 10am to 9 pm (KSPD 1). On the weekends, the stores are open from 10am to 8pm (Saturday) and 11am to 7pm (Sunday) (KSPD 1). The company’s employees are the main drivers of the company’s customer care goals because they communicate the brand’s image to prospective and existing customers. Moreover, armed with adequate knowledge about the company’s products, they address all customer needs. Since the company acknowledges their contribution to its customer service philosophy, it offers them good pay packages and achievable sales targets. Overall, Kate Spade’s customer philosophy hinges on two main pillars – providing the best customer experience and customer involvement (as shown below).
Providing the best Customer Experience
Addressing customer needs is one part of Kate Spade’s customer care philosophy. Understanding the customers’ fashion needs and the current fashion trends are critical components of the company’s customer service regime. The company applies this model to all its stores, including the Pasadena store. This model aims to surpass customer expectations and give them the best experience at its outlets. Its uniform application (of customer service standards) makes sure that all customers get the same experience when shopping at any store (locally and internationally). To make this model more effective (like other successful global brands, such as Walt Disney), Kate Spade has invested many resources in understanding its customers’ needs and using them to develop products and services that appeal to them. For a long time, the management has undertaken this process with a high precision because the company strives to benchmark its products globally.
Customer Involvement
Kate Spade always appreciates the value of positive feedback. This is why the company always includes customers’ views in its product management processes. The company gets such feedback through different methods. However, it usually uses online assessment forms to sample the views of repeat customers, as its main information source. If such surveys show a poor score, the management puts more work on improving the performance of the stores. Most of these efforts aim to enrich the customer’s experience with the company, but, above all, they uphold the company’s customer service integrity.
Employee Relations
Kate Spade enjoys a mixed relationship with most of its employees. Some employees believe the company provides a “fun” work environment, while others experience the contrary (Indeed 1). Those who view the company favorably say Kate Spade provides a very “progressive” environment for employee growth. In a recent interview, one employee said, “It is almost like coming to a party every day” (Indeed 1). Furthermore, some of the company’s employees are friendly and help new employees to settle into their new roles as sales representatives. New employees say such colleagues are helpful in welcoming them to the workplace (Indeed 1). The management plays an instrumental role in creating this positive work environment because it adequately prepares them to handle work challenges. Similarly, to boost their self-confidence, the management gives employees a clothing allowance to help them dress appropriately (Indeed 1). This way, they effectively carry out their duties.
However, there are some negative employee reviews of employee-management relations. For example, some employees often complain of long working hours, with short breaks. To support this claim, in 8-hour shifts, the company only allows the employees to have 30-minute breaks, while, the rest of the time, they stand and wait for customers (Indeed 1). Employees have also complained of a “corporal” working environment where supervisors are insensitive to employee concerns (Indeed 1). Moreover, the company appreciates the contributions of the supervisors more than the contributions of lower-level employees. For example, many supervisors take credit for the work of their subordinates, while the subordinates get little or no recognition for their efforts (Indeed 1). If they do, the company fails to reward or compensate them well. Lastly, many employees also complain of limited job advancement opportunities. Consequently, there is a high turnover in its stores (Indeed 1). Overall, these insights show that Kate Spade has a mixed relationship with its employees.
Conclusion
Strengths
Kate Spade’s strengths are twofold. The first strength stems from the company’s brand name. Based on this strength, Kate Spade Pasadena may experience a lot of growth because its name is a strong brand, globally. This growth may easily happen because people associate good quality products and services with Kate Spade (Loeb 1). Moreover, based on the same strength, the store could equally attract more customers because strong brands often “sell” themselves. Besides the established brand name, the recent sale of the company to the Fifth & Pacific Company is also a significant strength of the company. Since Kate Spade is a subsidiary of this company, it enjoys increased capital inflows from the parent company. Consequently, the brand enjoys a huge capital pool. It is useful during periods of economic downturn and when the company intends to finance international expansions (as the company wants to do). Concisely, it acts as a financial “safety net” for the company. This advantage is likely to protect the company from external market shocks.
Weaknesses
Although Kate Spade is a strong brand, it relies on an unconventional business model – fashionable lines instead of trendy lines. This business model is risky because the fashion industry demands diversity and constant change. Relative to this fact, Marder (3) says few companies have succeeded by relying on the success of one brand. Furthermore, its parent company, Fifth & Pacific, does not have the required market knowledge to navigate the company’s success. The failure of the Juicy Couture brand demonstrates this weakness (Marder 3). Furthermore, Kate Spade’s departure from its core brand (women’s accessories) worsens this situation (the company now focuses on promoting men’s products alongside women’s products). Coach (its rival) tried this diversification strategy by departing from its core brand and failed (Marder 3). This (potential) weakness exists when industry competitors, such as Coach and Michael Kors, have learned their mistakes and are increasing their market shares (Marder 3). Therefore, Kate Spade should not lose its focus. Overall, the company should make sure its expansion strategy does not offset some of the gains it has made in the past.
Works Cited
Indeed. Kate Spade Employer Reviews. 2012. Web.
KSPD. The Company. 2014. Web.
LAF. Kate Spade Encouraging Women. 2010. Web.
Loeb, Walter. Kate Spade Is A Brand Ready To Boom Around The World. 2013. Web.
Marder, Andrew. What Kate Spade Needs in 2014. 2014. Web.
Yen, Brigham. Meet CCO of Liz Claiborne Inc. at Kate Spade in Old Pasadena. 2010. Web.