Running Head: E-COMMERCE BUSINESS
E-commerce Business
Amber Fox
05/02/2021
BUS402
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E-COMMERCE BUSINESS
Executive Summary
Belle Boutique is a new upscale online store dedicated to making every woman feel
beautiful by offering a wide array of stylish, high-quality clothes catering to women of all shapes
and sizes. This business is especially needed due to the fact that so many women in the
professional arena are busy to the point that they do not have time to shop for clothing; an online
boutique would therefore solve this problem and cater to this niche market. Belle Boutique will
offer services such as style assessment, personal shopping, and special ordering to meet the
particular needs of our customers within store hours and through special appointments. Research
indicates that women’s time is stretched too thin, especially when they have to balance a career
and family time; as such, they have very little time for shopping and hence need assistance in
determining the right clothes and styles to wear. With over 61 million women aged between 2554 in the US, about $34 billion is spent every year on women’s apparel (Cao, 2018). This market
is therefore very lucrative.
Competition
In the e-commerce market, Amazon has to be the biggest competition one could have. In
the last couple of years, the company has surpassed Walmart to become the world’s largest
retailer. Even though Belle Boutique is considerably smaller, Amazon is still a major competitor
due to the fact that they sell almost everything and control about 45% of the e-commerce market
in the US (Simmons & Kang, 2018). Despite Amazon’s superiority, however, some customers
will always prefer niche e-commerce stores and brands such as Belle Boutique due to the fact
that they are higher in quality and have more specialized knowledge when it comes to particular
products. As such bigger stores such as Amazon are unable to compete when it comes to this
specific market segment
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More closely related competitors in the fashion apparel market include Tabitha Simmons, Verge
Girl, The Pink Lily Boutique, Natori, and Yala Designs.
Strengths of Natori as a competitor
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Elegant and beautiful fashion apparel
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A diverse collection of products including clothing, accessories, loungewear, bras, and
lingerie
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The site updates customers on all the new collections available
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Affordable prices on its products
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The company uses beautiful images for marketing its products
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An excellent shopping experience for the customer on the site, including a search feature
that makes it easy to sort products, multiple reviews that help guide customers’ decision,
detailed customer descriptions, recommended accessories for particular products, a size
guide, and a responsive live chat
Weaknesses of Natori as a competitor
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The site lacks a dash button, and hence ordering of products is not as fast and easy as it
could be
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The company is also at times unable to maintain its catalog as well as updating its apparel
and accessories to meet the trends in the market (Cao, 2018)..
What Makes Belle Boutique Unique?
Belle Boutique is different from other companies in the market due to the fact that the
company provides services that others in the market do not. These services include style
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E-COMMERCE BUSINESS
assessment, personal shopping, and special ordering. Due to its smaller size, Belle Boutique will
be able to offer customers a more personalized shopping experience. Style concierges who are
properly trained will be available to customers on a daily basis, and by building the company
brand through helping women develop their personal style, Belle collective will become a force
to be reckoned with in the industry. In order to accomplish this, the company will start small then
expand as the customer base grows. More so, the company will offer unmatched customer
service in order to be able to attract and retain customers. Competing with well-established
brands will not be easy, but Belle Boutique is committed to carving out a niche in the market.
Mission Statement
Belle Boutique will be committed to providing unique, elegant, and luxurious fashion for
the modern woman in a manner that is sustainable and at affordable prices. It is our goal to make
every woman feel beautiful and look her best as she traverses the concrete jungle.
Ownership
The business will take the form of a general partnership with two partners. Within this
agreement, the partners will equally share the profits, assets, and all financial and legal liabilities.
However, each partner will be responsible for their own tax responsibilities, including their
partnership earnings, since taxes do not pass through a general partnership. More so, the primary
partner will be in charge of management while the second partner will be more of a silent partner
and not participate in the day-to-day running of the business.
Cost of formation
The start-up cost for the business, including inventory, is projected to be about $120 000.
Financing, including the working capital, will be $60,000 from the primary owner, $60,000 from
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a family investor, and a $90,000 BA loan. The total cost will add up to $210,000, and the loan is
to be paid by year 4 of operation.
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E-COMMERCE BUSINESS
References
Simmons, A., & Kang, J. H. (2018, January). The Strengths and Weaknesses of Amazon. Com
and Macy’s as Fashion Retailers. In International Textile and Apparel Association
Annual Conference Proceedings (Vol. 75, No. 1). Iowa State University Digital Press.
Cao, H. (2018). The growth of e-commerce and its impact on the fast fashion retailers.
FEASIBILITY ANALYSIS
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Feasibility Analysis: Belle Boutique
Amber Fox
Bus402
05/16/2021
FEASIBILITY ANALYSIS
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Industry and Market Feasibility
More than 50 large fashion retailers suffered from decreased revenue of more than one
million dollars in 2020. These included retailers with an established, loyal customer base such as
Nike, H&M, and Levi’s. However, because of rising globalization, increased digital innovation,
and changes in consumer spending habits, e-commerce clothing businesses have experienced
increase profits. Although the e-commerce fashion industry was expected to fall from $531.25
billion in 2019 to $485.62 billion in 2020, the e-commerce market is expected to recover from this
hit by 2023 with an expected industry value of $672.71 (Cullinane et al., 2019). In the United
States, the e-commerce fashion industry made up almost 30 percent of all retail fashion sales in
2020 alone. It was projected that the value of the US market would grow rapidly to reach
$100 billion by 2021. This growth will be brought about by various opportunities, including:
Expansion of global markets
Technological innovations that create experiential e-commerce
Increase in smartphone penetration and online access
The ability to harness the power of influencer and celebrity culture
Emergence and growth of middle classes with disposable income around the world
However, the business will be threatened by:
Market fragmentation that decreases brand loyalty
The ability of fast fashions to create and release new styles on demand
The increasing costs of combating online return sales, which are sometimes as high as 50%
Increasing pressure by consumers to use green manufacturing and ethically sourced
materials.
Financial Feasibility
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Today, many clothing merchants face limited barriers to entry into the e-commerce
clothing business. Belle Boutique will have opportunities to market, sell and fulfill any orders it
gets from around the world. It has been estimated that in Europe alone, the average spending on
fashion-related items per consumer will be $921 every year. However, even as the overall absolute
numbers of the worldwide revenue from the e-commerce clothing business grows, the compound
annual growth rate (CAGR) is slowing down from 15.3% in 2018 to a projected 7.6% by 2022
(Cullinane et al., 2019). The CAGR of the e-commerce fashion business has been projected to total
approximately 3.3% between 2017 and 2024 (Sheikh et al., 2017). However, this slow growth is
mainly present as a result of western-market saturation. Looking at the growth rates in the US,
China, and Europe, it is evident that there is still room for growth:
8.8% in the US
14.1% in China
8.7% in China
The COVID-19 pandemic has caused great havoc on the predictions made about the
fashion e-commerce business. Approximately 30 percent of US consumers stated that they would
spend less than they had budgeted for as a result of the lockdown. However, these predictions have
been proved to be wrong. Most brands have reported increased growth. Zalando reported growth
ranging from 32 to 34 percent in the second quarter of 2020, and some brands reported up to 45%
percent revenue increase (Sheikh et al., 2017). The market growth and revenue potential have
increased so much that more than half of all global fashion retailers have not needed to make any
adjustments in their e-commerce plans since the beginning of the pandemic.
One branch of the e-commerce fashion retail has taken off more than others, athleisure. The market
size of athleisure had the value of $155.2 billion in 2018, which is estimated to keep rising. This
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branch is expected to have a 6.7% CAGR from 2019 to 2026 reaching the value of $257.1 billion
(Macchion et al., 2017).
Product Feasibility
The e-commerce fashion business is highly profitable accruing approximately $90 billion
in revenue annually. According to Statistica, the apparel and accessories e-commerce retail sector
in America is expected to generate an estimated 138 billion in revenue by 2022 (Sheikh et al.,
2017). The key to success in the clothing business is to select a niche, choose the appropriate ecommerce solution, and provide high-quality customer service. Belle Boutique already has a niche
as it provides its customers with services they cannot find anywhere else. The store provides; style
assessment, personal shopping, and special ordering. Additionally, the small size of the boutique
will allow it to offer all its customers a customized shopping experience that will increase sales and
encourage customers to come back to the online store. Moreover, customers will have the services
of well-trained concierges who will work with them to ensure they leave with the clothes they
wanted and are satisfied with their shopping experience.
Entrepreneurial Readiness
All the steps needed to ensure the success of Belle Boutique have already been undertaken.
The ideas implemented in the store are innovative, all the risks have been assessed, and solutions to
mitigate the risks have been put in place. Moreover, we are always searching for more
opportunities to grow the business and seeking new information to improve the online boutique.
The business will be available 24/7 and can be run without taking any days off, holidays, or even
lunch breaks (Macchion et al., 2017). Additionally, we will be able to track how the shoppers
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interact with the store on different platforms in order to analyze customer behavior. This analysis
can then be used to personalize consumer experiences.
Adjustments
All businesses need to consistently make changes in order to generate significantly higher
gains. Belle Boutique needs to decrease the rate of returns by putting limits on the number of items
a customer can buy in various sizes. There is also a need to avoid discounting unwanted items by
establishing another effective strategy. For example, it may be more effective to encourage
customers to return any unwanted items quickly before the season ends.
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References
Cullinane, S., Browne, M., Karlsson, E., & Wang, Y. (2019). Retail clothing returns A review of
key issues. Contemporary Operations and Logistics, 301-322.
Macchion, L., Moretto, A. M., Caniato, F., Caridi, M., Danese, P., & Vinelli, A. (2017).
International e-commerce for fashion products: what is the relationship with performance?.
International Journal of Retail & Distribution Management.
Sheikh, A. S., Guigourès, R., Koriagin, E., Ho, Y. K., Shirvany, R., Vollgraf, R., & Bergmann, U.
(2019, September). A deep learning system for predicting the size and fit in fashion e-commerce.
In Proceedings of the 13th ACM conference on recommender systems (pp. 110-118).
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