Week 10: Final Project: UGG Australia

UGG Australia (UA) is a lifestyle brand that is known for their natural sheepskin boots and cold weather accessories. Summer is the season when UA receives the slowest business and with market research, hopefully sales and in-store traffic will increase for the rest of the season. To prove that customers prefer to purchase UA product specifically for friends and family and not for personal fulfillment, I performed secondary research to see where UA stands financially in the company and how well they have communicated their brand to their target customers this season. Primary research was conducted in-store by surveying 50 customers asking them fixed alternative questions determining their needs and knowledge of the brand.

Financial statements reported May 2015 that UA’s sales had increased 15.6% to a record 340.6 million paralleled to last year’s 294.7 million and a report of 16% revenue growth despite ridiculous foreign exchange rates. In 2014, UA opened 30 stores in the United States and renovated their e-commerce site to improve customer satisfaction. However, individual concept stores like in Caesar's Palace in Las Vegas, Nevada are suffering. Two retail stores opened in Barstow, California and North Premium Outlets in Las Vegas, which has contributed to a 48% decline in sales compared to last year because of how closely located the stores are to each other. U.S News reported in March 2015 that “traffic is consistently down in shopping malls due to the decimation of the middle class. American households that bring in at least 100,000 annually account for 65%, and those who make 150,000 account for 28% of entertainment and apparel spending.” I have kept in mind during my research that there are factors that cannot be changed or manipulated and that it is important for a company to be flexible toward these issues. U.S. news also stated that “e-commerce’s share of total domestic retail sales has expanded for 11 consecutive quarters” with the help of smartphones and tablets, making it more convenient for people to shop on the go.  87% of smartphone users utilize their phones to shop, but only 59% like using their phones to shop; therefore, retailers have to find creative ways to convert lookers into shoppers.

After conducting the in-store survey, I received interesting feedback. 58% of my surveyors were women and 41% were men, meaning more women tend to shop at UA. 35% of my surveyors were between the ages of 35-44, most individuals at this age are considered to be established, working, and have families. 48% of surveyors lived somewhere that has consistent rainy, wet weather, therefore extracting the need for our product that provides warmth and dryness. 58% of surveyors wear UGG product during the winter, which is when most product is sold. 64% of surveyors had no idea that UA sold more than just UGG boots, which is a marketing issue for the company. 78% of surveyors are satisfied with the quality of UA products, therefore quality control is not an issue. 65% claim to relate to the brand but a 21% of surveyors didn’t know what the brand was or what it stood for, which an issue regarding the training of associates to communicate what the brand is during selling periods.  46% of surveyors said that they buy more for their friends and families, and only 34% said they rather buy for themselves.  

I believe with proper training by having associates casually talk to each customer about UA products will help improve brand awareness. People who buy for others is good business because they usually buy more than one item which should allow the associate to build up commission, average dollar sales, and units per transaction. To improve awareness of product diversity in UA, store merchandising should display men’s, youth, summer footwear and apparel toward the front of the store for easier viewing. 

U.S. news article:  http://www.usnews.com/news/articles/2015/03/10/shopping-malls-middle-class-face-a-bleak-future
Deckers Outdoor Corporation (UGG Australia): deckers.com> investor information> financial information