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Who is the
K a t e S pa de G i rl ?
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Bill McComb
Immediate Past Chief Executive Officer and Board Member
Sarah Payne
Former Manager, Investor Relations and FP&A
Mary Beech
Chief Marketing Officer
Lindsay Knaak-Stuart
Senior Director of Marketing
Trey Maxham
Associate Dean for Graduate Programs, Farish Entrepreneurial Research Professor

Kiki Bandlow
Kylie Philbin
Brittany Morgan
Mai-Vi Nguyen
Stephanie Tso

4/17/15

Meet our team:

Kiki Bandlow
o Concentrations: Marketing and Media Studies
o Hometown: Nashville, TN
o Studied Abroad in Singapore in Spring 2014
o Interned at PricewaterhouseCoopers in the Customer Impact group within
Management Consulting; will return to work full-time for PwC in Fall 2015
in the Atlanta office.
o Loves traveling, swimming, and cats

Brittany Morgan
o Concentrations: Marketing and Management; Global Commerce Track
o Hometown: Cold Spring Harbor, New York
o Studied abroad in Barcelona, Spain during Spring 2014
o Interned for NASCAR and BDO Consulting
o Loves running, any activities involving the water, and reading
Mai-Vi Nguyen
o Concentrations: Marketing and IT; Leadership Minor; Business Analytics
Track
o Hometown: Springfield, VA
o Studied abroad in Mendoza, Argentina during January Term 2015
o Interned as Social Media Intern at Vince Camuto and Event Production
Intern at Factory PR in NYC
o Loves fashion, traveling, trying new foods, and going to concerts
Kylie Philbin
o Concentrations: Management and Marketing; Global Commerce Track
o Hometown: Norfolk, Virginia
o Studied abroad in Copenhagen, Denmark in Spring 2013; studied
international advertising and created a marketing pitch project for
Carlsberg Brewery and H&M
o Interned at Erwin Penland Advertising Firm in NYC Summer of 2014
o Loves cooking, traveling, running, and yoga
Stephanie Tso
o Concentrations: Finance and IT; Business Analytics and
Entrepreneurship Tracks
o Hometown: Fairfax, Virginia
o Interned for PwC
o Loves eating, swimming, snowboarding, and dogs

Table of Contents
EXECUTIVE(SUMMARY(............................................................................................................(2((
SITUATIONAL(ANALYSIS(&(BRAND(INVENTORY(.......................................................................(4((
BRAND(EXPLORATORY(..........................................................................................................(25((
CONCLUSIONS(AND(RECOMMENDATIONS.............................................................................(50((
END(NOTES............................................................................................................................(61((

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Kate Spade differentiates on brand uniqueness in highly competitive industry

The Accessible Luxury industry is a highly competitive space marked by numerous brands,
giving consumers countless choices. However, consumer demand for Accessible Luxury has
increased, presenting significant opportunities for brands operating in the space. Kate Spade will
need to navigate this space carefully in order to reach its growth potential without overexposing
its brand and consequently losing the meaning of its brand. Kate Spade has built a unique brand
that needs to be maintained while working toward the companys primary goal of growth. Kate
Spade can leverage its brand authenticity, partnerships, and CRM capabilities in order to
accomplish this goal. In recent years, Kate Spade has seen significant growth through expanding
its product and channel offerings and expanding overseas. By pursuing its growth objectives
while developing customer loyalty through the maintenance of its brand meaning, Kate Spade
can become the $4B lifestyle brand that it aspires to be.
Kate Spade continues to develop itself as a lifestyle brand

In order to grow in a highly competitive industry, Kate Spade focuses on establishing a unique
lifestyle brand. Kate Spade strives to be a brand that caters to all different needs and life phases
of the Kate Spade Girl. With the repositioning of brands like Jack Spade and development of
new product lines, Kate Spades brand portfolio initiatives mirror its aspiring lifestyle brand
image. Kate Spade also differentiates itself with its playful, bold, and colorful personality as seen
through its products and marketing campaigns. Through ZMET studies, we found that there was
a gap between customer perception and Kate Spades intended brand image. However, through
analysis of brand elements, brand associations, and marketing efforts, we found Kate Spade has
been taking an initiative in bridging the gap between consumer perceptions and the companys
intended vision as a true lifestyle brand. A difficulty in achieving this lifestyle brand will be
overcoming consumers perception of the brand as more formal and contrived. However, by
using the strengths and learned lessons from Kate Spade Saturday, Kate Spade can leverage this
knowledge of casual apparel and integrate it into the lifestyle brand that Kate Spade is striving to
become.
Data and insights reveal that Kate Spade should focus on mobile and digital
platforms

We guided our Brand Exploratory research with the following question: How do we convert the
Kate Spade customer from a Familiarity to Affinity level of brand equity? Through survey
analysis, it was found that Kate Spade has had a majority of survey respondents who shop online,
thus showing that Kate Spade should focus efforts on its e-Commerce business. Furthermore,
through demographic data from 2015 surveys, we have found three specific clusters of customers
that Kate Spade should target in order to increase affinity with these customers. Moving forward,
management should use marketing strategies that will distinguish the different lifestyles and
interests of customers. It is important to consider the different lifestyles of potential Kate Spade
customers in order to increase engagement through all aspects of customers lives. The final
report and presentation will discuss in more detail potential recommendations and strategies to
instill customer affinity.

! !

Focus on changing product and user perceptions to grow customer affinity to

brand
In order to convert Kate Spade customers from familiarity with the brand to affinity for the
brand, Kate Spade needs to build a stronger story for the Kate Spade Girl, emphasizing how the
Kate Spade Girl uses the products from the brand and how her experience is shaped by the brand.
Our research on Kate Spade detailed has shown that customers who are most involved with the
brand are also the customers who purchase the most Kate Spade products. It is therefore crucial
for Kate Spade to create this affinity for the brand through an emotional connection to the Kate
Spade Girls story. We believe that in order to create this story, Kate Spade must implement a
two-part approach, focused on (1) changing the product perception and (2) changing the user
perception.
Kate Spade can change these perceptions by creating story shops across website, mobile, and
iPad platforms to provide product ideas and editorial-like content that customers can engage
with. Launching the story shops in electronic spaces, Kate Spade can also establish these
story shops in stores to create a seamless and creative omni -channel experience for the
consumer. To change the user perception, we propose launching the Who is the Kate Spade
Girl? campaign to gather user-generated content and intertwine products with experiences to
hook customers attention and grow their affinity to the brand. The live feed of social media
content from across the world allows customers of all ages to engage with the brand and show
how they live the Kate Spade lifestyle. These recommendations will grow customers affinity to
the Kate Spade brand and allow women to show how they live colorfully as the Kate Spade
Girl.
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S i t ua t i ona l
A nalysis &
Brand Inventory
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S i t ua t i ona l A na l y si s

A. Industry Analysis
Demand for Accessible Luxury strengthens brand competition to meet consumer needs

Social changes in millennials and women's tastes are driving Accessible Luxurys popularity.
Accessible Luxurys ability to grant status and membership to followers at an affordable price is
stimulating brand loyalty and industry growth. Due to the progress in womens disposable
incomes and education levels, accessible luxury brands created the market for young female
consumers to exercise their luxury demand in a way that the luxury industry has not seen in
decades past.1As women are shaping the demand for luxury goods, millennials have $200
billion in direct purchasing power and will outpace baby boomers in spending by 2017.2 Higher
levels of taste, education, and worldliness are influencing young and middle-class consumers to
seek Accessible Luxury brand status. Harvard Business Review asserts that more sophisticated,
adventurous, and educated American middle-class consumers are demanding products that
engage with their curiosity and imagination.3 To meet shifting female and middle-class,
millennial demands, the Accessible Luxurys segment is witnessing increased brand
competition.
Several brands compete to differentiate themselves in the Accessible Luxury industry

Catering to shifting demand towards accessible and affordable products, Kate Spade, Tory
Burch, Burberry, Michael Kors, Coach, and Ralph Lauren compete to influence consumers
brand loyalty. According to Barclays, U.S. companies will outperform in the luxury category
with 8% to 10% growth while the overall global luxury industry will grow 3% to 5% from 2013
to 2016.4 Figure 1 shows the range of revenues and profit margins in the competitive Luxury
Accessories market to show the financial diversity in the Luxury Accessories category. To
further visualize the forces shaping the Luxury Accessories market, Exhibit 1 (Porters)
illustrates the risks and potential of becoming a main contender in this competitive segment.
Figure 1: Competitions Financials
*Yahoo Finance

To differentiate from other Accessible Luxury

brands, companies must have structured
expansion strategies to maintain exclusivity for
their loyal customer base. Coach and Michael
Kors rapid expansion strategies overexposed the
company and cannibalized brand image.
$4.80B
16.31%
According to The Washington Post, Michael Kors
$3.58B
19.78%
became a victim of its own success, because the
$7.45B
10.41%
brand lost its exclusivity factor that is key to
luxury brand success. Mirroring Michael Kors,
Private
Private
Coach blanketed the country with outlet stores
that brought the handbags to the less-affluent shopper to deteriorate the brands image and
growth in the 2000s.5
Competitor
Name
Kate Spade
Michael
Kors
Coach
Burberry
Ralph
Lauren
Tory Burch

2014
Revenues
$1.26B
$3.31B

Profit
Margin
5.8%
19.96%

! !

In contrast, Tory Burch and Kate Spade are harnessing the uniqueness of their brands to secure
customer loyalty and exclusivity as they grow. To differentiate from Coach and Michael Kors
whose brand attractiveness deteriorated, Tory Burch and Kate Spade remain prominent in the
accessories market, such as jewelry, perfume, and watches to allow for various touch points with
the brand, and in turn are seeing steady growth in the accessories category.6 Kate Spade can
strategize ways to balance product and channel mix with brand exposure limits.
Invest in digital innovation and reinforce exclusivity to tap new growth opportunities

To capture industry growth opportunities, Accessible Luxury brands should strategize ways to
connect with consumers in the digital space. According to HBR, successful new-luxury goods
connect with consumers on technical, functional, and emotional levels to generate perceived
value for the consumer and build brand loyalty.7 Accessible Luxury brands, like Kate Spade,
must invest in digital platforms and reinforce exclusivity to build relationships with target
customers. Maintaining a unique brand persona and technological presence is key in expansion
strategies to prevent brand cannibalization as witnessed in Michael Kors and Coaches growth
strategies. According to Euromonitor, Tory Burch and Kate Spade are poised to grow rapidly if
they invest in the proper distribution channels and advertising campaigns.8 To sustain growth
investments, companies must also consider risks in the Accessible Luxury market.
Overexposure and market conditions pose risks for expansion strategies

Overextending brand footprint and entering new markets could face cost and brand identity risks.
In 2014, the Accessible Luxury segment saw the first signs of rapid maturation as some luxury
brands declined due to overexposure.9 Additionally, Accessible Luxury companies should
consider recent macro headwinds that are expected to continue in 2015 for the Chinese,
Japanese, Russian, and European markets that could affect the luxury consumer.10 Adding to
these risks, expanding into developing markets faces more costly operations and insufficient
sales to make up the difference.11 While companies must respond to these expansion and market
risks, Kate Spade and other smaller brands have the capacity to accelerate in and target positives
in new markets, especially Asia. Expanding into the Chinese market is key to companies
growth, because the rising Chinese middle-class is driving demand for Accessible Luxury
goods.12 As of February 2014, Kate Spades international footprint consisted of only 13.8%
revenues, which is small relative to competitors.13 Thus, Kate Spade can invest in new market
strategies to expand internationally.

B. Internal Analysis
Kate Spade builds empire off strong brand authenticity

Kate Spade has positioned itself well for continued success in the Accessible Luxury category.
Beginning as a handbag company in 1996, Kate Spade has transformed itself into a leader in not
only handbags, but also other small leather goods, fashion accessories, jewelry, and now apparel,
all while remaining true to its spirit of curiosity and living colorfully. Accessories have proven
to be a particularly profitable category with many high margin products.14

! !

Kate Spade has created an authentic experience for its customers. Its unique experience shines
through in small touches such as hand-written notes to customers after purchases. Other strengths
of the company can be found in Exhibit 2.The spin-off of Juicy and Lucky Brands allows Kate
Spade to focus its efforts on the authenticity of its mono-brand Kate Spade New York.
Partnerships and brand extensions strengthen Kate Spades resources and capabilities

Kate Spade has successfully entered licensing agreements and partnerships in order to expand its
product lines beyond what it would be capable of alone. Kate Spade already conducts business in
multiple sales channels (brick and mortar stores, wholesale, e-commerce, and outlets), and
licensing agreements will add to Kate Spades capabilities by connecting them to new customers
and points of sale. These resources and capabilities are outlined in Exhibit 3. Recent agreements
include a global licensing contract with Fossil Group Inc., which will allow the company to
design, develop, and distribute Kate Spade New York watches through 202515, in addition to a
partnership with Walton Brown, an Asian retail leader, which will allow Kate Spade to leverage
the companys expertise in China, Hong Kong, Macau, and Taiwan16. Additionally, successful
partnerships with Keds and New Balance have given Kate Spade the resources to enter the active
wear arena.17
Kate Spade works to build its CRM capabilities

Kate Spade focuses on its Customer Relationship Management (CRM) capabilities in order to
evolve its customers experience.18 With CRM, Kate Spade will be able to predict customer
behavior based on purchase history and therefore better satisfy its customers.19 The company
plans to invest more heavily in marketing that leverages these capabilities in the future.20

C. Current Strategy
Kate Spades current strategy works to accomplish its primary goal: growth

Kate Spade has publicly set the goal of becoming a $2 billion dollar company in retail sales by
2016 and a $4 billion company in the long term.21 The companys current strategy is completely
focused on reaching this goal through aggressive growth. Kate Spade plans to grow its brand
through diversifying its business model, using a multi-channel approach, and expanding
internationally.
Kate Spade aims to be a lifestyle brand in order to accomplish increased growth

Kate Spade has continued to expand its product offerings in order to create a truly lifestyle
brand. CEO Craig Leavitt has said that apparel is what gives Kate Spade the true lifestyle status,
because consumers shop more frequently for apparel than they do handbags and are more likely
to spend time in-store and buy across product categories when shopping for apparel.22 Kate
Spade has further balanced its business model in attempts to become a lifestyle brand by entering
into dishware, electronic accessories, home dcor, bridal, and fragrances. Kate Spade seeks to
enter into every facet of the Kate Spade customers life in order to truly accomplish its lifestylebrand goal.23

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Kate Spades omni-channel approach allows more customers to shop anywhere

Kate Spades multi-channel approach is a multifaceted effort to grow the brand. The company
focuses not only on growing its direct-to-consumer business but also its wholesale channels.
Leavitt notes that a really important part of [Kate Spades] business is to allow the consumer
to shop wherever she wants to shop, and whenever she wants to shop.24 Kate Spades licensing
agreements, including its most recent partnership with Fossil Group, Inc., will work to this end.25
Additionally, Kate Spade considers its extensive efforts in e-commerce to be particularly
important to the ability for Kate Spade shoppers to be able to access the brand wherever they
want. The brand attributes over 20% of its sales to e-commerce channels, a top tier performance
in the industry.26 While Kate Spades mens brand, Jack Spade, will be closing all physical
stores, it will be expanding its e-commerce platform in its effort to be more online-centric.27
Kate Spade will engage in new international ventures to expand its business

Finally, Kate Spade believes that international expansion is the biggest growth opportunity that it
has.28 While 20-25% of Kate Spades business is outside the United States, its goal is to raise
that number to one-third by the end of 2016 and two-thirds in the long term.29 Japan, for
example, has seen 20% year-on-year growth, and Kate Spade is making multiple efforts to grow
business all around the world. Leavitt has commented, We also have meaningful business in
China and big opportunities in Southeast Asia, in places like Hong Kong, Macau and Taiwan.
Additionally, in Latin America we launched a subsidiary two years ago based in Brazil,
distribution in the Middle East, and now really a focus in Europe also.30 Kate Spades
international expansion is comprised of company-owned and operated stores, franchises, and
joint ventures, in keeping with the companys multi-channel approach.31
Kate Spade needs to maintain the uniqueness of the brand while expanding

Kate Spades aggressive growth strategy poses a potential problem for the company diluting
the essence of the brand that gives it meaning for consumers.32 The company has made
significant strides to maintain its uniqueness and meaning throughout its simultaneous growth
efforts. Kate Spade prioritizes brand consistency above all else in its international initiatives in
order to be clear about its brand proposition and convey its meaning everywhere Kate Spade can
be found.33 In January 2014, the brand announced its name change to Kate Spade & Company
and quickly sold off Lucky Brands and Juicy Couture to reflect its mono-brand focus.34 Most
recently, Kate Spade announced that they will be folding its label Kate Spade Saturday into its
Kate Spade New York business in order to focus its resources and priorities on the potential of
Kate Spade New York.35 Kate Spade is pulling back in order to move forward.36 In an industry
marked by high competition and little product differentiation, Kate Spade will need to continue
to focus on the meaning of its brand in order to successfully become the $4 billion brand that it
has the potential to be.

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Exhibit 1: Accessible Luxury Industry is highly competitive

Medium Threat of New Entrants:

Large Capital Requirements: large investments
for supply chain
o Must coordinate suppliers or build infrastructure
o Invest in brick-and-mortar and/or website
platforms
Incumbency advantages independent of size:
reputation is very important; intangibles/experience

Medium Supplier
Power:

Large supplier
concentration relative
to growing retail
industry

Strategic
importance of industry
to the suppliers
boosts local
manufacturing
economies

High industry
switching cost to
change suppliers

High Buyer Power:

High Competitive Rivalry:

Established lifestyle brands and

new-luxury brands are competing in
same space

High industry growth in

domestic and international markets

Incumbents understanding of
each others goals and motivations

Some product differentiation,

but many brands share similar
brand identity and expansion
strategies

Challenge to balance expansion

Buyer concentration:
diverse pool of buyers in
multiple markets
Women and
Millennials are driving
taste preferences
Medium Product
Differentiation
Low Buyer Switching
Cost: multitude of brands
to choose from
Medium Price
Sensitivity: target

Investment
required to sustain

High Threat of Substitutes:

Customers can choose cheaper or more
expensive retail brands to match their budget and
preferences
Low Buyer Switching Costs

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Exhibit 2: Kate Spade has opportunity in global expansion, but risks overextension

Strengths:!
Well established brand
Offer a variety of quaity products, while still remaining true to their core
Multi-channel sales: brick and mortar stores, wholesale, outlet stores and
online sales
Playing in a high-margin category: accessories
Personal relationship with customers: hand-written notes after purchases,
friendly associates, CRM system to personalize customer experience

Weaknesses: !
Currently heavily dependent on domestic market
Reliance on 3rd party manufacturers. Kate Spade does not own any
manufacturing facilities and has no long term arrangements with
raw materials suppliers
Recent spin-off of Kate Spade Saturday may leave customers
confused and missing the lower price point
Excess promotional sales create an unprofitable consumer segment
Opportunities:!
Investment in digital platforms
Connect with consumers on technical level to build brand level and
exclusivity
Strong demand from Millennials and female consumers
Untapped potential in Asian market to harness middle-class
consumer demand
BCG predicts 7% growth in luxury market in the next year (CNBC
2)
Companies can provide fresh and unique branding to differentiate
from overexposed brands
Threats:!
Overextension of brand footprint due to rapid growth strategies
Capital costs and political risks of entering a developing market
Turmoil on macro level in European, Asian, and Russian markets
Counterfeit goods deteriorate brand image

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Exhibit 3: Kate Spade has an authentic brand with high potential for growth

Capabilities:!

Resources:!
An established and wellknown brand image
Strong history of the brand
creating authenticity
Multiple sales channels:
online, wholesale, retail, and
outlet
Email campaigns and
promotions
A succinct repeat customer
segment
Ownership of Kate Spade
company stores gives them
control of associates, sales
process, etc.
New CRM System
4 flagship stores

Defined Kate Spade woman

and an understanding of her
lifestyle
Strong vision to guide future
design and direction
Strategic partnerships with
brands for brand extensions,
licensing, etc.
Growing presence in
international markets
Knowledge gained from Kate
Spade Saturday
Social media presence across
multiple platforms
New CEO Craig Leavitt and
his strategic plans for global
expansion

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Brand Invent ory

Kate Spade operates in the Accessible Luxury market aspiring to be a lifestyle brand

Kate Spade currently operates in a unique target segment as seen through Kate Spades product
portfolio and pricing strategy. Currently, Kate Spade continues to develop its image as a
lifestyle brand. A lifestyle brand is a brand that touches on all parts of the customers life. Kate
Spades product portfolio includes fashion products37. As mentioned earlier, the products that
Kate Spade offers range from a wide varietycasual to formal clothes, home goods to
accessories. Furthermore, Kate Spade also announced several new product lines in order to
solidify its image as a powerful global lifestyle brand geared towards attracting customers at all
life phases38.
While Kate Spade is branded as an Accessible Luxury brand, Kate Spade also has accent pieces
that are priced lower in order to attract millennial customers who cannot afford the luxury
Madison Avenue Kate Spade price tags of $600 to upwards of $1300. For example, Kate
Spade offers high quality cross body bags for $148, a price that is much more affordable for
millennials39. However, beyond Kate Spades Madison Avenue collection, Kate Spades price
ranges between $200 to $600, incorporating flash sales in their online and physical stores. Given
the product portfolio and pricing strategy, as seen in Exhibit 1, the range of products and
scattered prices illustrate that Kate Spade is attempting to support its image as a lifestyle brand.
Kate Spades brand portfolio focuses on growing its Kate & Jack Spade lifestyle brands

Kate Spades recent changes to its Saturday and Jack Spade lines and recent addition of
childrens wear indicate its focus on enhancing the lifestyle aspects of its core brands. At the end
of January 2015, Kate Spade announced that it was repositioning Jack Spade, its mens brand, to
become a more diverse lifestyle brand and that it was discontinuing its lower-priced sister brand,
Kate Spade Saturday, as a standalone business to focus on Kate Spades growth.
Jack Spade is focusing on expanding its product offerings and reaching a larger customer base to
become a more robust lifestyle brand. The collection will now offer tailored clothing and dress
furnishings in addition to sportswear and bags. Since brick-and-mortar stores are not as relevant
to a broader customer base, it is closing its 12 stores and will focus on selling merchandise
through retail partners and ecommerce 40. With these changes, the Jack Spade guy will no longer
be viewed as the annoying little brother, but rather a sophisticated, yet quirky guy that the Kate
Spade girl wants to date or marry41. Repositioning Jack Spade as a lifestyle brand with a
distinguished brand image will serve as a strong male counterpart to the Kate Spade brand.
Although Saturday was not profitable on its own, Kate Spade will absorb key successes of the
Saturday brand to enhance its long-term growth as a lifestyle brand42. Saturday was created as
the casual, lower-priced offshoot to Kate Spades more special occasion offerings. Through
Saturday, Kate Spade now has a better grasp of their customers casual style and will likely add
more casual offerings, a key area that the current brand lacks.
Similarly, the Kate Spade brand is now catering to its customers kids as well. Following the
success of Kate Spade and Jack Spades collaboration with Gap Kids in 2014, Kate Spade

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launched its own childrens wear line at the end of February43. A Kate Spade baby and layette
line will also launch later this year44.
Kate Spade targets the playful, bold, and colorful consumers

Kate Spade does not silo its consumer into specific demographics, but rather targets specific
mindsets. Kate Spade targets women of all ages who lead interesting lives. As seen through the
Customer-Based Brand Equity (CBBE) customer profile in Exhibit 2, the Kate Spade consumer
is not entirely price conscious because she values quality fashion that has a playful touch.
According to Pearsons archetypes, the Kate Spade girl is the explorer. She is more affluent and
feels free to take risks with her style45. When looking at competitors, Ralph Lauren also
represents the explorer archetype. However, Ralph Laurens abundance of casualwear offerings
also categorize it into the regular guy/girl archetype, unlike Kate Spades more special occasion
offerings. Another competitor is Michael Kors who also embodies the explorer archetype, but in
a different way. As seen in Exhibit 3, the Kate Spade girl is exploring who she is and where she
wants to be in life, whereas the Michael Kors customer is exploring the world and leading a
jetset life46.
After analyzing points of parity and differentiation, we found that Kate Spade is different from
competitors in a compelling way. As seen in Exhibit 4, Kate Spade differentiates against
Michael Kors, Tory Burch, and Ralph Lauren as a more democratic brand. It does not appeal to a
certain demographic like those who can afford to jetset around the world or those who were
born with a silver spoon. Rather, the Kate Spade brand appeals to a wider set of consumers
who embody its fun, playful, and bold mindset and personality. These points of differentiation
are compelling to customers because Kate Spade parallels the greater social movement of female
empowerment. In looking at points of parity, Ralph Lauren and Tory Burch are seen as more
versatile than Kate Spade because both brands offer more casualwear.
Consumers actually perceive Kate Spade as younger and too narrow of a market

While Kate Spade views itself as a lifestyle brand and mindset for women of all ages and
backgrounds, some consumers actually perceive the brand as having a very specific demographic.
According to our five ZMET studies in Exhibit 5, two main areas of discrepancy occur between
consumer perception and Kate Spades own brandingfeminine image of the girl and the Kate
Spade girls age.
Given the five interviews, we can create two separate consumer perceptions: 1) younger
customers who buy Kate Spade products for themselves and, 2) older customers who may buy
Kate Spade products for related youths (e.g. daughters). Kate Spade identifies itself as a lifestyle
brand appealing to all demographics. We found that the younger customer perceives the brand as
mature, but young because of very feminine styles accented with bright, youthful
colors.47 On this note, the younger consumer perception matches Kate Spades own feminine,
playful brand image. However, older interviewees did not view Kate Spade as a lifestyle brand
with wide appeal and thought that it attracted only a small segment of very girly customers.
Older interviewees noted that Kate Spade isnt effortless or versatile and more contrived than
competitors like Tory Burch, making it too narrow of a girly brand48 49.
Lastly, Kate Spade strives to be an ageless brand. On the contrary, older consumers noted that
Kate Spade is too cute, too young50 and she is not attracted to the bubblegum youth of Kate
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Spade51. This greatly contradicts Kate Spades lifestyle brand image that intends to hit the
consumer at all phases of her life52. The Kate Spade image may be too young, thus excluding
older customers. Since older consumer perceptions do not match those of Kate Spades intended
lifestyle brand image, we conclude that Kate Spade as a brand may be pushing too far towards
the younger customer.
Kate Spades marketing centers on social and traditional media and brand associations

Kate Spades most effective marketing efforts are its social and traditional media and various
brand associations with celebrities and other brands. Their current breakdown is 45% social and
55% traditional/print media. Kate Spades various social media platforms all serve distinct
purposes. Facebook is the most commercial platform, so Kate Spade will post about new
products to drive sales. Although Pinterest focuses 100% on building brand awareness by
pinning posts that inspire the Kate Spade team, it is also the second-best platform for driving
sales to ecommerce. Instagram and Twitter both enhance the Kate Spade lifestyle by providing
glimpses into the daily life of the Kate Spade girl53. As a whole, Kate Spades digital marketing
has been so effective that L2, a digital research firm, ranked Kate Spade 5 out of 90 brands in its
annual Fashion Digital IQ Index, which can be viewed in Exhibit 654. Traditional media is still
Kate Spades major marketing force and ad campaigns have been very successful. Ad campaigns
are particularly important for Kate Spade because they represent an opportunity to visually show
the Kate Spade lifestyle and mindset by showing multiple product categories. Also, the diversity
in models in the campaigns shows that theres no one Kate Spade girl but rather Kate Spade is
a mindset that anyone can embody55. For example, in the current Spring 2015 ad campaign,
Karlie Kloss, a 22 year-old supermodel, and Iris Apfel, a 93 year-old fashion icon, star alongside
an ethnic female model, older male models, and two younger girls56. Examples of the campaign
are in Exhibit 7.
th

In addition to partnering with Kloss and Apfel, Kate Spade has recently collaborated with Anna
Kendrick and West Elm. The Spring 2015 campaign had people buzzing positively because
people love Kloss and Apfel and they are both fashion icons57. In addition, their age differences
and contrasting personal styles appeal to a wider audience. Similarly, partnering with Anna
Kendrick, an adored actress, for its holiday film, the waiting game, resulted in creative
brilliance [on] a whole new level and a staggering 1.8M views on Facebook58 59. In terms of
brand alliances, another successful one is Kate Spade Saturdays collaboration with home dcor
retailer, West Elm. Aligning with a similarly contemporary, high quality brand like West Elm
produced a very stylish, on brand collaboration that had publications from Today to InStyle
raving 60 61. Although the Saturday brand is folding, Kate Spade could leverage this positive
relationship to create a Kate Spade collection at West Elm too.
Kate Spade is improving its in-store and omni-channel shopping experience

As Kate Spade continues to expand its retail footprint, it is working to standardize its stores to
provide the same shopping and customer experiences. As seen in Exhibit 8, the current Kate
Spade stores have very different storefront designs. Inconsistency confuses customers, which
will prevent brand recognition and deteriorate the potential equity of brand elements. Consistent
service between associates and customers at all retail locations is also very important to the instore experience. In order to continue building upon the Kate Spade lifestyle brand, new stores
should all be consistent in design and service62.
!

! !

13

In addition, Kate Spade is enhancing its omni-channel retail operations to provide a more
seamless shopping experience for customers. By Fall 2015, Kate Spade plans to enable
customers to purchase items online and pick them up at the store, or to purchase items at the
store and ship them home. Also, updating its inventory technology will allow stores to check
other stores inventory and allow online shoppers to see if particular items are available in stores.
Since the most frequent Kate Spade customer spends part of his/her purchase journey in a Kate
Spade store, these omni-channel improvements will likely boost sales63.
Marketing will bridge the gap between consumer perceptions and lifestyle brand

While one of Kate Spades goals is to become more of a lifestyle brand like Ralph Lauren64, we
found through ZMET studies that some consumers currently perceive Kate Spade as too young
and girly. However, through analysis of brand elements, brand associations, and marketing
efforts, we found that Kate Spade has been taking an initiative in bridging the gap between
consumer perceptions and the companys intended vision as a true lifestyle brand. A difficulty in
achieving this lifestyle brand will be overcoming consumers perception of the brand as more
formal and contrived. However, by using the strengths and learned lessons from Kate Spade
Saturday, Kate Spade can leverage this knowledge of casual apparel and integrate it into the
lifestyle brand that Kate Spade is striving to become.
!

! !

14

Exhibit 1: Kate Spade to target Aspirational luxury shoppers

Product
Upscale and fashionable goods
Mainly bridge bags
Accessories
Apparel

Promotion
Traditional/print
and social media
Brand alliances
Celebrity
endorsements

Target Market
Aspirational
luxury
shoppers

Price
Aspirational
high quality
product
$200-600
More
affordable
accent pieces
for the
millennials

Place
Retail, outlet, department stores
Ecommerce

! !

15

Exhibit 2: The current customer base is familiar with the brand but must build affinity

Loyalty

May shop at other brands

True KS girl is brand loyal and shops at all levels of the
brand

Rational Feelings

High quality apparel and accessories

Superior products

Affinity

Fun, excited emotional association

Certain amount of self-respect for themselves; social
approval when wearing the KS product

Emotional
Judgments

Primarily formal but some products secondarily

casual or going out
Durable, practical use for products
Range of prices: $8 for stationery to $1600 for
luxury bags

Functional Associations

Familiarity
Emotional Associations

Some buy for events; others for everyday

Sophisticated and put-together girls

Market identified colorful,

bold, playful girl
Professional woman between
25 and 44

Brand Awareness

! !

16

Exhibit 3: Kate Spade mainly operates as the explorer archetype

Ralph Lauren

KS's goal
as THE
lifestyle
brand

Explorer archetype
Kate Spade Regular guy/girl
(i.e. casual wear)
Explorer
archetype
Pioneer and
Michael Kors explore
new
Explorer
lifestyles
archetype

Jet-setter

! !

17

Exhibit 4: KS differentiates itself amongst competitors in a compelling way

Points of Parity

Points of
Differentiation

Kate Spade is different

and more compelling
than competitors

Ralph Lauren and Tory

Burch are more versatile

Kate Spade has a more

youthful aura

DIFFERENT: Kate
Spade girl is much more
youthful and playful

Coach and Ralph Lauren

have a longer history

Kate Spade has stronger

digital marketing

COMPELLING:
marketing and branding
accentuates sophisticated
yet playful lifestyle

! !

18

Exhibit 5: ZMET study shows some inconsistencies with customer perception and KS
aspired brand image

KS intended
lifestyle brand

Consumers actual
perceptions

Targets a mindset;
does not silo itself
Not to any
specific age group

"[KS girl] is just

coming into
career"
Targets a "very
narrow market"
Too young,
"bubble gummy"

Analysis of competitor, Tory Burch: Interviewee profile

Female with children
Aged 48-55

Associates Audrey
Hepburn with TB
because [TB is]
timeless and put
together in a tasteful
fashion

Enjoys TBs
storythe
empowerment
of women

! !

19

Analysis of standalone brand of Kate Spade: Interviewee profile

24 year-old female just beginning career

Frequent shopper of Kate Spade; even more so frequent with Saturday
Playful patterns
(polka dots) and girly
icons (bow)

Adds pop of trendy colors

and bold words on store
fronts to draw in that
younger crowd; without
doing so [KS] would only
draw in older crowds

Preppy, youthful, but

also very mature. Mainly
for those wanting to look
mature in the work place

! !

20

Analysis of Kate Spade within the realm of its competitors: Interviewee Profile

21

Female between 45-55

Frequent shopper of Cole Haan

Kate Spade is a
little bubblegumish, like a classy
Katie Perry. Very
young

[KS] is cute but

not for
everyone. Too
young and too
cute, too narrow

Michael Kors and

Kate Spade are the
most differentnew
money vs. old money

! !

21

Exhibit 6: L2 ranks Kate Spade 5th on its Fashion Digital IQ Index with mobile site as its
strongest dimension

"Digital IQ Index Fashion 2014." Fashion 2014. December 1, 2014. Accessed March 4, 2015.
http://www.l2inc.com/research/fashion-2014.

! !

22

Exhibit 7: Kate Spades Spring 2015 ad campaign shows the diverse KSNY lifestyle

! !

23

Exhibit 8: Kate Spade retail stores currently lack a consistent storefront design

!
!
!
!
!
!

! !

24

!
!
!
!
!
!
!
!
!

Brand
E xp l ora t ory
!

Introduction
The following report outlines some key findings from our analyses of the 2015 Kate Spade
survey results incorporated with our qualitative understanding from our Kate Spade Situational
Analysis and Brand Inventory. We guided our research with the following question: How do we
convert the Kate Spade customer from a Familiarity to Affinity level of brand equity?
This overarching theme emerged as a combination of project questions number 3 (is there a
customer who can be converted into a 2x or 3x buyer?) and number 6 (who is the heavy Kate
Spade customer versus prospective customers?). From these guidelines, we divided Kate Spade
customers into three general categories that we wanted to explore: the prospective customer, the
infrequent customer, and the heavy customer.
Affinity became our goal for Kate Spade customers. How do we turn the customer who is
familiar with the brand into one who has an affinity for the brand? We define affinity as a deeper
connection or relation to the brand that is beyond the simple quantitative measure of customer
loyalty (frequency). Since affinity is emotional, we wanted to direct our research towards the end
goal of converting customers to affinity.
Our analysis was aimed to answer the specific questions below:
1.
2.
3.
4.
5.
6.
7.

Who is the typical Kate Spade customer?

How has customer behavior changed (if at all) over the past year?
Do our Brand Exploratory insights align with the survey data?
What are the demographics of the Kate Spade online user?
How are visitors interacting with digital and social media platforms?

25

Kate Spade Consumer Survey Research Report

1. Customer Profiles: Analyzing the Typical Kate Spade Customer

Demographic data illustrates trends of respondents in the 2015 Customer Survey

Spade consumer, we performed frequency analyses on descriptive data. Highlighted in Exhibit

1, overwhelming majorities of respondents (98.7%) were female and Caucasian (66.7%). The 2534-age range (41.6%) comprised the largest customer segment, and most marked themselves as
married (49.2%) or single (33.3%) with zero children (70%). Analyz
and income, we found that the majority of respondents earned at least a college degree (84.7%)
and fell in the $125,000+ income bracket (28.5%) to suggest that the respondent has the
disposable income to purchase Accessible Luxury products. We also found that our survey
respondents typically live in either a suburban (48.4%) or urban (38.8%) location and our top six
geographic locations they reside in are California, international, New York, Texas, Illinois, and
Massachusetts.
To
involvement with the brand. These respondents are just as likely to label themselves as a loyal
customer (45.7%) as they are a brand owner/wearer without loyalty ties (44.1%). As we question
the ability of moving Kate Spade customers from familiarity to affinity levels, we can focus on
the above user levels to understand Kate Spade consumers. Lastly, the majority of respondents
shop online (57.7%) versus in stores (45.7%) to echo the growing popularity of e-Commerce.
The demographic data helped us shape an understanding of the average 2015 Survey respondent
and likely Kate Spade consumer. These statistics and frequency charts in Exhibit 1 will help us
target, connect with, and influence Kate Spade consumers in our future strategies and
recommendations.

2. Customer Clusters: Segmenting the Kate Spade Customer Pool

Cluster analysis was used to segment Kate Spade customers

In order to deduce effective marketing strategies for Kate Spade, our group sought to better
understand distinct demographic groups that comprise the Kate Spade customer pool. In addition
to better understanding the customers in the various demographic groups, we also wanted to
interaction with the brand, in particular involvement with the brand
and quantity of products owned. By gaining a better sense of who the Kate Spade customer is
and how different types of customers interact with Kate Spade, we will be able to construct
marketing strategies in order to encourage positive buying behavior.
Using cluster analysis, we segmented customers by demographic variables as well as variables
related to interaction with the brand. Respondents who chose not to answer survey questions
were eliminated from the sample after it was discovered that they were skewing demographic
information. After eliminating insignificant variables, the cluster analysis used 14 variables in
order to differentiate among customers:

26

1) Number of children
2) Marital status
3) Racial/ethnic identity
4) Household income
5) Population density of area in which the customer lives
6) Age
7)
8)
9) Degree to which the customer considers herself a bargain shopper
10) Likelihood the customer will buy Kate Spade at full-price
11) Likelihood the customer will only purchase Kate Spade on-sale
12) Degree to which the customer is willing to pay more for Kate Spade than other
brands
13) Degree to which the customer considers Kate Spade a good value
14) Degree to which the customer perceives Kate Spade as superior quality to that of
its competitors
Using these 14 variables to segment Kate Spade customers resulted in three distinct clusters,
ANOVA tests were then run on the three emerging clusters in order to better understand the total
brand, the two variables that were of particular interest to us when attempting to understand
differences between the familiarity and affinity level of brand equity. The three segments of
customers exhibited different backgrounds, sentiments toward the brand, and interaction with the
brand.
Customer profiles include Urbanite Uma, Housewife Helen, and Sorority Samantha

and is also the most racially diverse group. After comparing descriptive statistics of this group to
the international respondents, it was discovered that the international set largely fell into this
segment. Urbanite Uma is in the middle in terms of both age, averaging about 30 years old, as
well as income. She is most likely to be single and not have children. Concerning interaction
with our brand, Urbanite Uma is typically a bargain shopper and will most often only buy Kate
Spade on-sale. She is the most likely to view Kate Spade as lower end, perhaps because of her
tendency to buy on-sale. Urbanite Uma also typically only owns a few Kate Spade items rather
than acting as a loyal Kate Spade customer. This group is the smallest segment within the
respondent data.
Spade consumers, averaging about 40 years old, and also comprises the largest proportion of
respondents. She is typically married and has children. She is also largely Caucasian and
typically lives in the suburbs. Importantly, Housewife Helen has by far the highest household
income. Perhaps because of this, she is not as much of a bargain shopper and is willing to buy
Kate Spade at full-price. She is most likely to view Kate Spade as a good value and high quality
and will therefore pay a premium for the brand. Housewife Helen is the most involved with the
brand; she considers herself a loyal customer and also owns the most Kate Spade products.

27

ha is the youngest segment,

averaging about 25 years old. She is the least likely to be married and also the least likely to have
children. Sorority Samantha is also usually from the suburbs, is white, and has the lowest
income. She is the most likely to be a bargain shopper and typically does not buy at full-price.
She will spend the least for a Kate Spade product. Perhaps consequently, she is also the least
likely to think of Kate Spade as high quality and does not see the brand as of good of a value as
the other two segments. Sorority Samantha is similar to Urbanite Uma in terms of loyalty to the
brand and also the number of products owned, owning only slightly more than Urbanite Uma but
not nearly as many as Housewife Helen. Specific profiles are depicted in Exhibit 2.
Customer profiles reveal important values and resulting behaviors

Through these three customer profiles, a few patterns became apparent. First, different customers
view the Kate Spade brand very differently in terms of quality and value. Second, some shoppers
will only buy on sale while others are more willing to buy full-priced products. While these
findings seem fairly intuitive, the most noteworthy finding was the interaction between these two
tendencies. It seems as if customers who view Kate Spade as a good value and high quality are
also the customers that feel a sense of loyalty to the brand and are likely to buy at full-price.
Finally these customers who will buy at full-price are also the customers who will purchase the
most Kate Spade products. Marketing strategies should be distinguished to target to the varying
customer lifestyles and interests. They should also be tailored in order to solidify and capitalize
familiarity to affinity.

3. Analyzing Longitudinal Data to Detect Consumer Trends

Trend data reveals stable customer loyalty yet decreasing purchase frequency

ANOVA analysis in SPSS on the longitudinal data to search for any relevant trends. From our
analyses, we discovered some important findings with regard to customer purchases, frequency
of handbag purchases, and popularity of online shopping.
Between 2014 and 2015, there was an increase in total Kate Spade items owned, from an average
of 3.5 items to about 5 items. This surfaced the question if this was due to the same customers
buying a few more items consistently or more customers accessing the brand through lower price
points, such as accessories. To follow up, we then looked at the longitudinal data for customer
involvement with the Kate Spade New York brand. The results from this indicated customers
were no more loyal to the brand than they were in 2014, having a similar customer mix. The
increase in total items owned cannot be attributed to an increase in loyalty of current customers,
but perhaps a combination of customers consistently buying each year and new/current
customers increasing their access points to the brand.
Another trend that emerged from the analyses links to the question concerning the average time
since customers last purchased a Kate Spade handbag. Between 2014 and 2015, the time between
purchases increased from consumers purchasing a bag every year to not having purchased a bag

28

in over 2 years. We were interested to see if this increase in time was Kate Spade specific or
consistent across the industry, so we examined the survey data for how often consumers buy a
new handbag (in general, not specific to Kate Spade). This analysis confirmed that, in general,
consumers were decreasing how frequently they purchased handbags. It is unclear if this insight
is due to actual or perceived quality of handbags has increased to cause people to hold onto bags
longer or a slightly decreased demand for handbags.
Trend data also suggests a significant spike in online shopping

The final trend to note from the ANOVA analyses of the longitudinal data pertained to online
shopping. Kate Spade online saw a 148% jump in consumers purchasing goods online. This is
attributed to the overall growing popularity of online shopping, as opposed to increased spending
habits. Going forward, Kate Spade should focus marketing efforts on this increasingly popular
online platform.

4. Aligning Survey Data with Previous Insights

Kate Spade survey shows data to support our Situational Analysis & Brand Inventory

To expand upon our previous research and insights in the Situational Analysis and Brand
Inventory, we ran analyses on the Kate Spade survey to confirm or deny our research findings.
Honing in on survey questions revolving around the competitive landscape, customer loyalty,
and consumer purchases, we found that 2015 survey data confirmed many of our Situational
Analysis and Brand Inventory research. Additionally, the survey data provided a deeper analysis
on consumer behavior that strengthened our understanding of the brand.
Data and insights reveal perceptions of high quality compared to competitors

To better understand the competition, Question 39 (Which

brands do you currently own?) showed that respondents owned
the following brands in Figure 1.

Figure 1:
Ownership (2015 Survey)

Kate Spade
64%
Coach
46%
These survey results complemented our Situational Analysis on
Tory Burch
23%
Kate Spade competition, as our research designated Coach,
Michael
by
21%
Michael Kors, and Tory Burch as main brand competitors. Two
Michael Kors
other competitors, Ralph Lauren and Burberry, did not exist as a
Michael Kors
20%
checkbox item and lacked larger percentages of respondent
Louis Vuitton
19%
ownership respectively. To better understand consumer
perception of Kate Spade amongst its competitors, Question 25 (Kate Spade is superior in terms
of quality versus competition) highlights consumer views on a 1 to 5 scale, with 1 as Strongly
Disagree and 5 as Strongly Agree. Positive results surfaced with 17.6% of respondents at a 5
level, 39.8% at a 4 level, and 36% at a 3 level.
Survey data and past insights analyze degree of brand loyalty among customers

After gaining a greater understanding of the competitive landscape, we analyzed frequency

results on survey questions related to brand loyalty. As our Brand Inventory highlights the

29

unique traits and lifestyle quality of the Kate Spade brand, survey results highlighted the top
three reasons consumers purchase Kate Spade products (Question 42):
1) I liked the style
2) It caught my eye as I was shopping
3) It was within budget.
rdable
Accessible Luxury price point, the ability to view Kate Spade products in a variety of channels,
and the connection to the bold and colorful brand. To access consumer loyalty levels in negative
ntent to purchase Kate Spade products
to 5 scale with 1 standing as Strongly Disagree, 37% of respondents who had intent to purchase
Kate Spade after a negative Kate Spade interaction stood as a 3 level and 30% stood as 4 level
(Question 29). Additionally, for the respondents who would recommend Kate Spade to others,
40% stood as a 4 level and 36% stood as a 5 level on the same scaling system (Question 26).
Purchasing patterns suggest disproportionate interest in handbags

Finally, to assess Kate Spade consumer purchasing patterns, we analyzed the top products that
respondents already own from the brand. As described in our Brand Inventory, Kate Spade offers
av
brand. Evaluating Question 11, respondents had the opportunity
Figure 2: Top 6 Kate Spade
to check as many applicable product categories to produce the
categories that respondents
following results in Figure 2.
own (2015 Survey)
72%
Handbags
With a goal of becoming a lifestyle brand, Kate Spade, with the
44%
Jewelry
use of its marketing strategies, needs to emphasize other product
41%
Wallets
categories besides handbags.
34.3%
Accessories
30%
Tech
Assessing the most popular products as well as customer loyalty
Accessories
and the competitive framework in the 2015 survey, we have a
29.2%
Shoes
stronger grasp of consumer brand perception and familiarity and
affinity with the Kate Spade Brand.
Survey data insights will aid Kate Spade in constructing effective marketing
strategies

These insights can be used to recommend ways for consumers to grow brand affinity with the
Kate Spade brand. Now that we have evaluated the Kate Spade customer through the survey
data, we will continue to analyze her use of digital platforms.
Kate Spade Digital/Social Analytics Summary

5. Key Visitor Demographics: Analyzing Age and Gender Trends in Visitors

-34

30

According to data extracted from comScore, an estimated

25-34 and a whopping 82% of online visitors were females,
as seen in Exhibit 3A. Figure 3 displays further breakdown
in visitors. Ralph Lauren and Michael Kors have about 26%
and 24%, respectively, of online visitors in the younger age
groups. Furthermore, while Michael Kors has about 20%
and 24% of customers in the middle aged visitors groups,
Ralph Lauren has about 20% and 17% in the same group, as
seen in Exhibit 3. Compared to competitor Michael Kors and
lifestyle brand Ralph Lauren, as seen in Exhibit 3B, Kate
Spade is not as evenly distributed amongst different age
groups with only about 11% of online visitors from the older
customer segments (i.e. 55-64 age group) and 13% of online
visitors in the millennial age group (See Exhibit 3C). The
lack of online visitors from a variety of ages points to a key
area of improvement
By
focusing on increasing reach to older segments, Kate Spade
will develop into a that is ageless and pertinent to not just a
demographic of women, but a mindset.

Figure 3: Kate Spade age

demographics
Age segment

Persons: 50+
Persons: 55+
Persons: 2-17
Persons: 13-17
Persons: 13-24
Persons: 13-34
Persons: 13-49
Persons: 18-34
Persons: 18-49
Persons: 21-34
Persons: 21-49
Persons: 25-34
Persons: 25-49
Persons: 25-54
Persons: 35-44
Persons: 45-64
Persons: 55-64
Persons: 65+

%
Increase
2014-15
-57
-24
7
7
57
68
108
72
115
71
115
73
127
54
129
6
-2
-77

Older customer segments stray away from Kate Spade online

While online visitors from younger age groups (i.e. 18-29 and 21-34 year olds) saw an increase
of about 132% and 129% from February 2014 to February 2015, older segments did not see as
drastic increases in online daily visitors. For example, age groups that included older aged 35
years and older only saw a 38% and 12% increase (See Exhibit 4). Furthermore, 55-64 and 65+
year olds remained with zero average daily visitors in both February 2014 and 2015.
Additionally, 45-64 year olds saw a 2% decrease in online traffic from February 2014 and 2015.
The spike from the younger segments may be bymedia campaigns and ad campaigns featuring fresh celebrities like Anna Kendrick in 201465.
However, Kate Spade must be cognizant of the fact that despite overall increase in online
visitors, the older segments of online visitors are still lagging. The slow growth and decrease in
interaction with Kate Spade online.

6. Behavior of Online Visitors: Analysis of Online Visitor Trends and Data

Kate Spade online saw an increase in visitors but a decrease in sales per visitor

By utilizing IBM digital analytics, it was found that Kate Spade online experienced difficulty
converting online visitors into purchases. From March 2014 to March 2015, both total unique
visitors and repeat customers (i.e. customer who also visited the desktop or mobile site last
period) increased by 58% (See Exhibit 5). From 2014 to 2015, total unique visitors increased by
over one million
31

to competitor Michael Kors who only saw a 45% increase in total unique visitors from February
2014 to 2015, Kate Spade is outperforming Michael Kors as a competitor on web based
platforms. However, Kate Spade is slightly trailing behind Ralph Lauren who outperformed Kate
Although unique visitors and repeat visitors substantially increased, as mentioned earlier, sales
from those customers were not proportionally increasing. Total sales from both online visitors
and repeat visitors increased from March 2014 and 2015, however the ratio of total sales per
visitor decreased. From March 2014 to March 2015, Kate Spade saw a staggering decrease of
7% and 77% in online sales per visitor and online sales per repeat visitor, as seen in Exhibit 6.
The decrease in sales per visitor indicates that Kate Spade should focus on converting these
online visitors into buyers. Furthermore, the drastic 77% decrease in total sales per repeat visitor
points to an issue with converting repeat visitors into repeat buyers. The decrease in total sales is
depicted in Exhibit 7.
Website activity reveals that customers still view Kate Spade as a handbag brand

Through IBM Digital Analytics, data on sales, keyword searches, and visited pages indicate that
customers still primarily view and interact with Kate Spade as a handbag and accessories brand,
descending order were: handbags, jewelry, and clothing. Handbags accounted for 11.30% of
sales, jewelry for 6.38%, and clothing for 5.92%. Accordingly, analyzing cross sold products
showed that the products that were most likely to be purchased with a certain product in a single
order were from handbags and accessories. For example, if someone bought a handbag, they
were likely to buy a matching wallet, and if someone bought earrings, they were likely to buy a
bracelet and necklace too, as seen in Exhibit 8.
In addition, what customers were looking for and visiting the most also showed a strong
inclination toward handbags and accessories. The top 10 onsite searches were all keywords
related to accessories, as shown in Exhibit 9
re a keyword not
product not from handbags or accessories. However, there were also lifestyle keywords in the top
visited pages showed that handbags, wallets, and tech were all in the top 10, but clothing was
12th, seen in Exhibit 10.
Although handbags and accessories are the bread and butter of the company, customers who only
see Kate Spade as a handbag and accessories brand will less likely move from familiarity to
is. This particular customer will only understand one segment of the brand

not encapsulating

women in the survey said they have not purchased a handbag in over 2 years.

7. Digital and Social Media Platforms: Comparing Performances of Each

32

Lower conversion rate for mobile visitors suggest an increased focus on mobile
website

Using IBM Digital Analytics to compare

desktop visitors, mobile phone visitors,
and tablet visitors during March 2015
showed that conversion rates across all 3
channels were lower than industry
averages (Figure 4).

Figure 4:
-Commerce Conversion
Rates Are Lower than Global Averages
Kate Spade
(March
2015)

Global ECommerce
Average (Q4
2014)

Percent
Difference

Mobile
0.69%
0.92%
-0.23%
Although all three channels
phone
underperformed, it is more important to
Tablet
2.00%
2.86%
-0.86%
focus on mobile visitors (i.e. tablet and
Desktop
2.36%
3.41%
-1.05%
mobile phone) than desktop visitors since
66
Sources:
IBM
Digital
Analytics
&
Monetate
desktop visitors accounted for 69% of ecommerce sales, and global and US retail industry trends show increased mobile commerce in
the future (Figure 5). Graphs of these trends
Figure 5: Increased Mobile Commerce in Global
are in Exhibit 11.
and US Retail Industries
2013
2018
Percent
Customers are always connected through their
(actual)
(projected)
Diff
mobile devices, so mobile is an accessible,
Global
mobile
$133B
$626B
+371%
effective way to engage with customers. With
retail revenues
mobile retail expected to grow so
US mobile
$42B
$133B
+217%
exponentially, Kate Spade should strategize
retail revenues
ways to increase mobile usage and convert
US mobile
16%
27%
+11%
mobile visitors to buyers.
retail revenues
drive customer engagement

as % of retail ecommerce
revenues
Source: Statista

Across Facebook, Instagram, Twitter, and Pinterest, Kate Spade has proved its recurring role as a
social media fashion industry leader. A key finding that applies to Facebook, Twitter, and
Instagram is that videos drive more engagement than pictures, meaning they receive more
comments, tweets, likes and shares per post67. It should be noted that Instagram videos only
receive more comments, not likes, than pictures. However, comments require more time and
Exhibit 12.
In terms of Facebook, it is the second highest source of incoming traffic with 6.6% of entries
following Google, according to comScore Media Metrix. Facebook not only drives more visitors
promotions of email-gated flash
sales68
ranked Instagram
best performing social media platform69. In addition, an
Instagram user report from SimplyMeasured states that Friday from 10-11am is the top day and
time for engagement based on percent of comments70. This finding could be taken into account
to maximize engagement for future posts. In terms of Twitter, Tweet Sentiment Visualization
showed that the majority

33

Exhibit 13.
Pinterest. With 250,000 followers, it has far more followers than competitors like Tory Burch
(153,000), Michael Kors (164,000), and Coach (45,000). Although Kate Spade continues to be
an innovative social media leader, it can strategize ways to leverage social media even more to
increase user engagement, drive more sales, and convert customers from familiarity to affinity.
Conclusion
Kate Spade should focus efforts on mobile and digital platforms

Through survey analysis, it was found that Kate Spade has had a majority of survey respondents
who shop online, thus showing that Kate Spade should focus efforts on its e-Commerce business.
Furthermore, through demographic data from 2015 surveys, we have found three specific
clusters of customers that Kate Spade should target in order to increase affinity with these
customers. Moving forward, management should use marketing strategies that will distinguish
the different lifestyles and interests of customers. It is important to consider the different
lifestyles of potential Kate Spade customers in order to increase engagement through all aspects
recommendations and strategies to instill customer affinity.

34

Exhibit 1: Demographic data displays trends in 2015 survey respondents

(Q55):Which do you consider

yourself?

(Q49) You are:

1%

5%

Male
3%

99%

I prefer not to
answer

(Q56): What's your current

marital status?
Single

16 or younger

0%

6%

17-24

14%

33%

25-34

14%

49%

35-44
18%

Mixed Racial

68%

(Q50): Which of the

following categories
includes your age?

10%

Black/African
American
Asian or Pacific
Islander
Hispanic

8%

15%

Female

2%

Caucasian

1%

42%

Single with
significant
other
Married

12%

45-54

I prefer not
to answer

55-64
65 +

(Q54): Which of the folowing categories includes

your approximate income level?
11%
22%
15%

12%
28%
12%

35

Exhibit 1 Continued: Demographic data displays trends in 2015 survey respondents

How many children

under 18 live in your
home?

(Q53): How would you

describe the area you live?
Rural

4%
7%

None
One

43%

44%

Suburban

40%

Urban

Two

49%

Three

7%

I prefer not to
answer

6%

(Q52): What is the highest level of

education you completed?
Some High School or
less

3% 3%
8%

38%

High School Graduate or

Equivalent

Vocational School or
some college
48%

College Graduate
Graduate
Degree/Advanced
Degree

(Q1): How involved are you with

the Kate Spade brand?
Loyal customer

(Q2): Where do you shop

most for your clothes and
accessories?

4%
6%

46%

Owner and wearer

but not considered
loyal
Gift buyer

44%

In a store
42%
58%

I've considered
purchasing but
have not

Online
With a
catalog

36

Exhibit 2: Kate Spade customers can be segmented into three cluster groups

Urbanite
Uma

Housewife
Helen

Sorority
Samantha

Age: 30
Marital Status:
Single
Children: No
Race: More
diverse
Income: Moderate
Population
Density: Urban
Bargain Shopper:
Yes
Perception of
Quality: Lower

Age: 40
Marital Status:
Married
Children: Yes
Race: White
Income: High
Population
Density: Suburban
Bargain Shopper:
No
Perception of
Quality: Higher

Age: 25
Marital Status:
Single
Children: No
Race: White
Income: Low
Population
Density: Suburban
Bargain Shopper:
Yes
Perception of
Quality: Lower

37

Exhibit 3: Kate Spade customer demographics are mainly youthful, explorer types

Ralph Lauren
Kate Spade
Explorer
archetype
Pioneerer
Michael Kors
and
Explorer archetype explore
new
Jet-setter
lifestyles

KS's goal as
the lifestyle
brand

Explorer
archetype
Regular guy/girl
(i.e. casual wear)

38

Exhibit 4: Kate Spade has a weaker customer base in older customer segments

170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0

2014 Daily
Visitors
2015 Daily
Visitors
% change
in Daily
visitors

Age Group

Exhibit 5: Kate Spade saw an increase in online visitors in the past year

Repeat visitors and total visitors increased

from 2014-2015
3,500,000
Unique Visitors

Daily Visitors

Kate Spade saw a decrease in 45-65 aged online visitors but

high increases in 25-49 aged online visitors

3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0

All Visitors
Visitors who also visited last
period

Unique Visitors(03/2014)

Unique Visitors(03/2015)

1,934,591

3,055,640

404,318

637,473

39

Exhibit 6: Kate Spade did not experience an equal increase in sales and visitors

Sales per Unique Cust

Sales per visitor decreased compared to last year, especially in

repeat visitors
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00

Sales/Unique
Visitor(03/2014)

Sales/Unique Visitor
(03/2015)

All Visitors

$3.30

$3.08

Visitors who also visited last

period

$6.51

$1.50

Exhibit 7: Kate Spade online should focus on improving repeat buyers

Kate Spade online sees significant less repeat buyers

All Unique
Visitors

Unique Visitors

120,000
100,000

Previous
Unique
Visitors

80,000
60,000
40,000

Previous
Unique Buyers

20,000
0
Visit

View
Product

Add to Cart

Buy

Buy 2+
Times

40

Exhibit 8: Cross sold products typically belong to same product category

Item

Buyer Overlap %

Shopping Cart Overlap %

CEDAR STREET MAISE ( 13283 Buyers )

CEDAR STREET STACY
CED STRT MINI MAISE
CEDAR STREET LACEY
CED STRT PERF MAISE
CEDAR STREET MAISE

1.97%
1.84%
1.79%
1.45%
1.42%

1.29%
0.85%
1.35%
0.17%
0.26%

*Cedar Street is an accessory (handbags and wallets) of Kate Spade

Kate Spade online sees high overlap between product categories

Shop Cart Overlap %

1.50%-2.00%

%
Overla
p

1.00%-1.50%
0.50%-1.00%
0.00%-0.50%

Buyer Overlap %

Ced Strt Lacey

Ced Strt Mini

Maise

Cedar Street
Maise

Ced Strt Lacey

Product Type

Ced Strt
Perfor. Maise

Ced Strt Maise

Cedar Street Stacy

Cedar Street
Lacey

41

Exhibit 8 continued: Cross sold products typically belong to same product category
Item

Buyer Overlap %

Shopping Cart Overlap %

KATE SPADE SMALL SQUARE STUDS ( 8162 Buyers ) Product Id: : WBRU5734-P
SMALL SQUARE LEVERBACKS
KS SMALL SQUARE STUDS
HEART OF GOLD IDIOM BANGLE
KATE SPADE SMALL SQUARE STUDS
CAUSE A STIR MINI PENDANT

2.08%
1.98%
1.83%
1.63%
1.48%

1.57%
1.54%
1.25%
1.13%
1.14%

Kate Spade online customer buys heavily from accessories

4.00%

Buyer Overlap %

Shopping Cart Overlap %

3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
Small Square
Leverbacks

Small Square
Studs

KS Small Square
Studs

Heart of Gold
Bangle

KS Small Square
Studs

Cause a stir mini

pendant

Heart of Gold
Idiom Bangle

Cause A Stir Mini

Pendant

42

Exhibit 9: Top on-site search keywords emphasize accessories and handbags

Ranking

First keyword that

is a product not
from accessories
or handbags

Keyword

Searching Sessions

1 AGENDA
2 WALLET

59,068

3 PASSPORT

32,260

4 PLANNER

29,370

5 WALLETS

28,459

6 SALE

26,116

7 IPHONE 6

23,838

8 LAPTOP

22,487

9 WATCH

18,752

10 IPHONE

18,492

11 COBBLE HILL

17,827

12 WRISTLET

17,602

13 CEDAR STREET

17,483

14 BABY BAG

14,327

15 WATCHES
16 WEDDING

12,825
12,470

17 BACKPACK

12,123

18 UMBRELLA

12,067

19 KEY
20 MAISE

11,766
11,709

21 MUG

11,182

22 IPAD

11,000

23 BABY

10,921

24 TRAVEL

10,630

25 LEMON

10,308

48,887

26 PLATTER

9,758

27 BOW

9,362

28 DIAPER BAG

9,335

29 IPHONE CASE

9,221

30 KEDS

8,998

First keyword not

related to
accessories and
handbags

43

Exhibit 10: Handbags, wallets, and tech are in top 10 visited pages, but clothing is 12th
Ranking

Page Name

Page Views

KATESPADE HOMEPAGE

19,302,963

HOME PAGE : HOME : LANDING

16,728,595

CATEGORY: SALE

12,194,254

SHOPPING CART

8,042,147

CATEGORY : HANDBAGS : VIEW ALL

7,507,372

CATEGORY : NEW ARRIVALS : VIEW ALL

7,449,356

CATEGORY : SALE : HANDBAGS & WALLETS

6,853,841

CATEGORY : SHOP : SALE

3,756,632

CATEGORY : ACCESSORIES : WALLETS

2,960,389

10

CATEGORY : ACCESSORIES : TECH

2,943,708

11

CATEGORY: HANDBAGS

2,049,964

12

CATEGORY : SALE : CLOTHING

1,955,179

44

Exhibit 11: Mobile commerce in global and US retail industries expected to increase

45

"Global Mobile Retail Commerce Revenue 2012-2018 | Statistic." Statista. Accessed April 9, 2015.
http://www.statista.com/statistics/324636/mobile-retail-commerce-revenue-worldwide/.
2

"U.S. Mobile Retail Commerce Revenue 2013-2018 | Statistic." Statista. Accessed April 9, 2015.
http://www.statista.com/statistics/249855/mobile-retail-commerce-revenue-in-the-united-states/.
3

"U.S. Mobile Retail Commerce as Percentage of E-commerce 2011-2018 | Statistic." Statista. Accessed April 9,
2015. http://www.statista.com/statistics/249863/us-mobile-retail-commerce-sales-as-percentage-of-e-commercesales/.

46

Exhibit

ngagement than pictures

Engagement
Per Photo

Engagement
Per Video

19,875.4
250.0

13,753.7
423.5

tweets

1.9

3.3

Likes

6.8
0.6
2.5

8.3
4.0
5.7

Likes
Comments

Comments
Shares

"Instagram User Report | Simply Measured." Simply Measured. Accessed April 9, 2015.
https://freereports.simplymeasured.com/viewer/85ee5jsgi2jxeut68s9f3p4pcki52l/2270326?id=1214694#.

47

Exhibit 13: Tweets related to Kate Spade show overall pleasant sentiment

"Tweet Sentiment Visualization App." Tweet Sentiment Visualization App. Accessed April 9, 2015.
http://www.csc.ncsu.edu/faculty/healey/tweet_viz/tweet_app/.

48

Appendices
Appendix 1: SPSS output of cluster analysis

Appendix 2: SPSS output of ANOVA descriptives showing means with the brand and
number of items owned

49

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C onclusions and
S t ra t egi c
Recommendations
!

Strategic Recommendation
Building a stronger Kate Spade Girl story will increase affinity for the brand

In order to convert Kate Spade customers from familiarity with the brand to affinity for the
brand, Kate Spade needs to build a stronger story for the Kate Spade Girl, emphasizing how the
Kate Spade Girl uses the products from the brand and how her experience is shaped by the brand.
Building a stronger story around the brand will give the brand more meaning to our customers,
and hence a deeper emotional connection. Past studies have proved that consumers brains are
far more engaged by storytelling than facts, because stories activate multiple parts of our brains
that we only use when directly experiencing something, enabling consumers to better remember
the branding messages they are consuming71. Our research on Kate Spade detailed in this report
has shown that customers who are most involved with the brand are also the customers who
purchase the most Kate Spade products. It is therefore crucial for Kate Spade to create this
affinity for the brand through an emotional connection to the Kate Spade Girls story. We believe
that in order to create this story, Kate Spade must implement a two-part approach, focused on (1)
changing the product perception and (2) changing the user perception.
Kate Spade should add storylines to it products in order to build a lifestyle brand

In order to instill a deeper brand story in consumers, Kate Spade needs to alter the perception of
its products. Specifically, Kate Spade should weave Kate Spade Girl stories into its products in
order to tie its products together and tie these products to the meaning of the brand. Borrowing
from the feel of editorial magazines, Kate Spade should redevelop both its website and its mobile
website to promote different shops, each with a different Kate Spade Girl story. These shops
would serve as a look-book for prospective customers in order to demonstrate not only Kate
Spades products, but also how these products can be worn together and under what
circumstances. Story shops could include the Kate Spade Girl going on vacation and what she
would pack for the airplane and to wear at the resort, the Kate Spade Girl on a casual day,
featuring Kate Spade jeans and the products through their partnership with Keds, the Kate Spade
Girl at the office, and the Kate Spade Girl going out for a night on the town. Exhibits 1 and 2
depict our proposed desktop website and Exhibits 3 and 4 depict our proposed mobile website
with the story shops.
The Kate Spade Girl represented in these stories will be comprised of many different types of
Kate Spade Girls, emphasizing the versatility of the brand and the brand as ageless. The stories
should in particular target the three customer segments defined above and tailor to their tastes
and lifestyles. Urbanite Uma and Sorority Samantha are largely familiar with the brand but do
not yet have affinity. The digital focus of this initiative will be useful in targeting Urbanite Uma
and Sorority Samantha. Housewife Helen is the most likely to have an affinity for the brand
already, but this affinity can be strengthened through representation in the story shops. The focus
on these groups will bring them closer to the affinity goal.
These Kate Spade shops will help promote the brands products aside from handbags, bringing
the brand closer to a lifestyle brand. Both survey data and digital analytics have suggested that
customers largely think of Kate Spade only for its handbags. By promoting its other products and
demonstrating to the customer how to style these products and when to wear them, consumers

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50

!
will understand the meaning behind the brand, rather than just one segment of the brand.
Especially given the declining frequency of handbag purchase revealed in the analysis of Kate
Spade survey respondents, this emphasis on other products will prove to be particularly
important. However, more significantly, seeing these products as a collection through story
shops, rather than individually, will enable customers to understand the Kate Spade Girl and the
brand as a whole. With the reinvention of the Kate Spade product perception, Kate Spade can
push customers toward affinity for the brand and reach its goal of becoming a true lifestyle
brand.
Mirror story shop theme through changes in brick and mortar stores

To fully change the product perception, we recommend a two-part approach. Beyond the website
and mobile platform makeover, we want to mirror these improvements with changes in the Kate
Spade New York brick and mortar stores. As Kate Spade strives towards a more complete omnichannel approach to sales and distribution, the marketing efforts should match this omni-channel
mindset.
The interactive story shops seen in the upgraded mobile website should come to life in stores.
This would be done by relying heavily on an asset Kate Spade already possess, their associates,
and an asset they would need to acquire, iPads.
Utilize iPads to enhance Kate Spade store experience and communicate story shops

Although many retail stores are shifting towards using iPads, Kate Spade will use them to go
beyond administrative purposes and enhance the customer interaction with Kate Spades brand
story. Specifically iPads will serve the following purposes to differentiate Kate Spade from
competitors:
Provide easy access to the Kate Spade story themes to increase customers interest in
Kate Spade product and editorial material - and provide more ideas on how and when to
use different products
Customers can look at other products online. This is important because stores have a very
limited inventory (especially in apparel) and it will break the stereotype of Kate Spade as
solely a handbag brand.
Offer customers in the fitting room iPads to use with the assistance of an associate to find
other products to compliment their outfit.
Leaves opportunity for future innovative uses and experimentation with brand
campaigns.
Mary Beech, CMO, stated that a new technology rollout will occur in the fall that will allow a
more seamless buy-online/ship-to-store or ship-from-store experience. These iPads will aid in
informing customers of their product options and increase browsing, hopefully leading to an
increase in sales. A further depiction of the iPad usage in-store is in Exhibit 5. Oftentimes Kate
Spade customers are surprised to see the variety of products offered; this will help move away
from the perception of Kate Spade as solely a handbag company.
Kate Spade Saturday stores did begin to utilize iPads in some of their stores as a replacement for
paper signage, before they were absorbed by KSNY. The engineers behind the KS Saturday
!

! !

51

!
software [Control Group] told CNET that the entire process of getting the software built for
Kate Spade Saturday was less than eight weeks, from the initial meeting to production ready72.
Considering KSNY already wants to use the learnings from Saturday in their core brand, using
the technology of these iPads from Saturday stores would be a great way to meet this goal and
speed up the learning curve.
Furthermore, iPads will play an important role in the new Kate Spade social media campaign,
which will be addressed later.
Have Associates create a unique personality for the local Kate Spade Girl

The role of the Kate Spade Associate is very important because they will be furthering the story
shops seen on the mobile site by adding the personality of the city that store is located in. For
example, if one of the story shops is A spring picnic in the park, an associate in the
Charlottesville Kate Spade store can create an outfit from inventory in their store that mirrors
this theme and reflects the personality of that location. For instance, the associate may choose to
take a Foxfields spin on it or tweak the story to A picnic at Monticello. This outfit would be
displayed on a mannequin and customers would be enticed to go to brick and mortar stores to see
how the mobile story shops are personalized in their local stores.
Kate Spade stores already provide a personalized experience through details such as hand-written
thank you notes. This additional local flair will enhance that sense of customization and show
that the Kate Spade Girl can transform to fit the personality and people of multiple cities.
This idea of telling the stories of Kate and her lifestyle will create a lasting impression on our
customers. Mirroring these themes in retail locations will not only create consistency, but also
add a personality to each location that customers will be excited to discover. Currently loyal
customers will enhance their connection and customers stuck in the range of familiarity will be
pushed towards our end goal of affinity.
Leveraging social media to change user perception of Kate Spade Brand

To strengthen our goal of converting customers from a familiarity to affinity level, we propose
leveraging social media channels. As our first recommendation targeted changing product
perception, our second recommendation addresses changing user perception of Kate Spade. To
change user perception, we can expand our Kate Spade brand stories in creative ways to
showcase Kate Spades focus on standing as a premier lifestyle brand. We recommend that Kate
Spade launches a social media campaign entitled, Who is the Kate Spade Girl?
The Who is the Kate Spade Girl? Campaign will gather user-generated content and intertwine
products with experiences to hook customers attention and grow their affinity to the brand. The
campaign will stand as a live feed of Kate Spade customers social media content. Imagine a
quilt of compiled Twitter feeds, Instagram photos, and Facebook photos that showcase Kate
Spade customers in their daily routines embracing the Kate Spade brand. Encouraging the The
Kate Spade Girl to post social media images that encompass all aspects of the product lines will
highlight the variety of product access points that consumers have with the Kate Spade brand.
Most importantly, the campaigns live feed will show the diverse range of Kate Spade users.

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52

!
Establish the Kate Spade Girl as unique and diverse to show the lifestyle brand image

To make the Who is the Kate Spade Girl campaign as inclusive and reflective of the Kate
Spade lifestyle image as possible, we envision the campaign as an ageless reflection of Kate
Spade fans. Addressed in our survey data, we have a range of age segments between 17-65+ who
are purchasing Kate Spade products; thus, our Kate Spade Girl campaign must encompass the
variety of customer types. Additionally, our Brand Inventory and ZMET interviews highlighted a
lag time between Kate Spades branding and older generations perception of the brand as too
young, bubble-gummy, and narrow of a label. Our campaign will tackle this issue by
showing that Kate Spade consumers transcend a multitude of generations and can highlight
customers unique and different lifestyles and interests to create a united Kate Spade Girl
brand image.
Who is the Kate Spade Girl? uses a live feed to connect all markets to brand

The collage of live feed campaign materials will appear on the website, mobile platforms and
other social media marketing materials. A universal hashtag #katespadegirl, will connect users
Kate Spade content to the live feed, while a local hashtag will allow stores to collect live feed
material that reflects popular products in their area. Store Associates from around the world can
put together lookbook items that reflect their store and customers story in their area. For
example, #katespadecville will create a live feed that shows Charlottesville customers and UVa
students in their daily lives as The Kate Spade Girl. An illustration of the campaign feed on the
website homepage is depicted in Exhibit 1 and an example of the social media campaign is
depicted in Exhibit 6. To leverage additional technological resources, we suggest implementing
iPads in every store that engage the customer with the Who is the Kate Spade Girl? campaign.
iPads can address the following ideas:
1. Showcase the stores unique hashtag live feed to highlight the story of the local customer
2. Allow customers to browse the universal live feed that showcases Kate Spade fan content
from around the world
We believe that Kate Spade has the capabilities to launch a successful Who is the Kate Spade
Girl? campaign across various social media channels and platforms. L2, a digital research firm
highlights Kate Spades high engagement Instagram and ranked Instagram Kate Spades best
performing social media platform73. Additionally, Kate Spade ranks first among competitors in
its Pinterest following, with 250,000 users and won the 2015 Fashion 2.0 Award for Best
Pinterest. Using these strengths, Kate Spade can launch a creative and inclusive marketing
campaign to place the Kate Spade Girl mantra in consumers minds every time they interact
with the brand.
Invest in the Kate Spade Girl story to grow customers affinity toward the brand

By creating the Kate Spade Girl story books on the website, mobile platform, iPad, and social
media channels, Kate Spade will strengthen consumers connection to the brand. We believe that
connecting with consumers emotions will inspire customers to become more loyal to the brand.
Changing the website, mobile, and iPad platforms to showcase the Kate Spade Girl story shops
allows Kate Spade to give customers creative touchpoints to the brand. Kate Spade customers
will be able to see all product lines, gain ideas for outfit purchases, and interact with the brand
!

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53

!
virtually and in-store. Our Who is the Kate Spade Girl? Campaign tackles the static view of
the Kate Spade brand as too young and narrow. Our live feed of social media will connect
with all customer ages across the globe to create a united Kate Spade Girl image. Through our
recommendations, Kate Spade can leverage its capabilities and take advantage of opportunities
in order to showcase Kate Spade as a lifestyle brand and convert women from familiarity with
the brand to an affinity for the brand. Everyone will be able to see just how the Kate Spade Girl
lives colorfully.

! !

54

Exhibit 1: New Kate Spade Website Homepage Displays Story Shops and Who is the Kate Spade Girl? Campaign Feed

! !

55

Exhibit 2: New Kate Spade Website Story Shop Mixes Editorial Content with Products

! !

56

Exhibit 3: New Kate Spade Mobile Website Homepages Features Various Story Shops

57

Exhibit 4: New Kate Spade Mobile Website Story Shop Displays Full Outfit Idea

58

Exhibit 5: The use of technology in stores can bolster omnichannel retailing and enforce
lifestyle branding

IN-STORE IPADS HIGHLIGHT

NOT IN STORE

IN-STORE IPADS HIGHLIGHT DIFFERENT

KATE SPADE OUTFIT CHOICES FROM
DIFFERENT GIRLS

59

Exhibit 6: Implementation of a universal hashtag to connect users across all platforms

and locations

#katespadeDC #katespadegirl

#katespadeChina #katespadegirl

#katespadeCville #katespadegirl

60

Endnotes
1

Euromonitor Passport, February 12, 2015, Accessed February 27,

2015, http://www.portal.euromonitor.com/portal/analysis/tab.
2
Krystina, Gustafson, "Millennials Redefine Luxury and the Stakes Are High," CNBC,
February 18, 2015, Accessed February 26, 2015.
3

Michael Silverstein and Neil Fiske, "Luxury for Masses," Harvard Business Review, April 1,
2003, Accessed February 27, 2015. https://hbr.org/2003/04/luxury-for-the-masses.
4

Jennifer Booton, "Coach, Kors Poised to Lose Ground to Kate Spade," Fox Business, March
18, 2014, Accessed February 24, 2015.
http://www.foxbusiness.com/industries/2014/03/18/coach-kors-poised-to-lose-ground-to-katespade/.
5

Sarah Halzak, "Michael Kors Handbags Are Everywhere - and That's a Problem for the Brand,"
Washington Post, February 5, 2015, Accessed February 26, 2015.
http://www.washingtonpost.com/news/business/wp/2015/02/05/michael-kors-handbags-areeverywhere-and-thats-a-problem/.
6

Euromonitor Passport
Michael Silverstein and Neil Fiske
8
Euromonitor Passport,
9
Euromonitor Passport
10
Krystina Gustafson, "The Biggest Threat to Luxury Brands' Rapid Growth," CNBC, January
28, 2015, Accessed February 27, 2015. http://www.cnbc.com/id/102373911.
7

11

"Fashion and Luxury: Riding a Strong Recovery," BCG Customer Value Series, December 13,
2014, Accessed February 24, 2015.
https://www.bcgperspectives.com/content/articles/consumer_products_value_creation_strategy_f
ashion_luxury_riding_strong_recovery/.
12

Scott and Krasik and Kelly Halsor, "Fifth & Pacific Companies, Inc." BB&T Capital Markets.
February 13, 2013, Accessed online via Blackboard 23 Feb 2015.
13

2014, "Kate Spade & Company SWOT Analysis," Fifth & Pacific Companies, Inc. SWOT
Analysis 1-7, Business Source Complete, EBSCOhost (accessed March 1, 2015).
14

"Kate Spade & Company SWOT Analysis." Fifth & Pacific Companies, Inc. SWOT Analysis
(June 2014): 1-7. Business Source Complete, EBSCOhost(accessed March 3, 2015).
15

"KATE SPADE & CO (KATE:New York): Insider Trading & Share Prices." Bloomberg.com.
Accessed March 3, 2015.
http://www.bloomberg.com/research/stocks/ownership/ownership.asp?ticker=KATE.
16

"Kate Spade & Company and The Lane Crawford Joyce Group Announce Partnership to
Expand Kate Spade New York Brand Presence in Greater China." MarketWatch. Accessed
March 3, 2015. http://www.marketwatch.com/story/kate-spade-company-and-the-lane-crawford-

61

joyce-group-announce-partnership-to-expand-kate-spade-new-york-brand-presence-in-greaterchina-2015-01-29-81734538.
17
Beech, Mary. "." Lecture, Kate Spade Video Conference from Kate Spade & Company,
Charlottesville, February 27, 2015.
18

"Summary of FIFTH & PACIFIC COMPANIES, INC." Yahoo! Finance. February 25, 2014.
Accessed February 27, 2015. http://biz.yahoo.com/e/140225/kate10-k.html.
19

Beech, Mary.

20
21

"Kate Spade Plots Path To $4 Billion." WWD: Women's Wear Daily 207, no. 22 (February 3,
2014): 1. Business Source Complete, EBSCOhost (accessed February 27, 2015).
22

Robin Mellery Pratt, "Can Kate Spade Become a $4 Billion Business?" The Business of
Fashion. N.p., 28 Nov. 2013. Web. 05 Mar. 2014.
<http://www.businessoffashion.com/2013/11/can-kate-spade-become-a-4-billionbusiness.html>.
23
Euromonitor Passport
24
Robin Mellery Pratt
25
"Fossil Group and Kate Spade & Company Announce Global Licensing Agreement for Kate
Spade New York Watches." GlobeNewswire News Room. February 17, 2015. Accessed
February 27, 2015. http://globenewswire.com/newsrelease/2015/02/17/707210/10120589/en/Fossil-Group-and-Kate-Spade-Company-AnnounceGlobal-Licensing-Agreement-for-Kate-Spade-New-York-Watches.html.
26

Walter Loeb "Kate Spade Is A Brand Ready To Boom Around The World." Forbes. March 22,
2013. Accessed February 27, 2015. http://www.forbes.com/sites/walterloeb/2013/03/22/katespade-a-brand-that-will-grow-globally/.
27

"Kate Spade Scales Back Saturday, Jack." WWD: Women's Wear Daily 209, no. 20 (January
30, 2015): 2-1. Business Source Complete, EBSCOhost (accessed February 27, 2015).
28
29
30

Robin Mellery Pratt

Euromonitor Passport
Euromonitor Passport

31

Walter Loeb
Robin Mellery Pratt
33
Walter Loeb
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