Consumer Profile

Female Pop. Total Zips 02111, 02114, 02116

5-10 yrs 10-15 yrs 15-20 yrs
9% 8%

Our key customer would be 18-25; we know however there are both younger and older women that will purchase items from our store as well. A younger demographic will be aspiring to own our products when they get older. The chart to the left shows the percentage of women in our key age groups in our and two other surrounding areas.

20-25 yrs

54%

29%

Data from www.zipskinny.com

Salary/Wage
This chart shows the average salary in our stores future zip code and also two additional surrounding zip codes. The salary range for this zip code is very high and we know that these figures are our clients, our clients parents, or other secondary buyers. These figures support our price line of $25$150, is very reasonable and that people in this area will have no qualms about purchasing items from our boutique. $140,000.00 $120,000.00 $100,000.00 $80,000.00 $60,000.00 $40,000.00 $20,000.00 $Zip 02111 Zip 02114 Zip 02116

Education Boston, Ma
45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Zip 02111 Zip 02113 Zip 02114 Zip 02116

High School Grad Associates Degree Bachelors Degree Graduate/Professional

Data from www.zipskinny.com

Prizm Consumer Profile

02114 Young Digerati
This segment is our primary consumer they are young to middle aged, and trendy. These customers would come into our boutique and easily buy several pieces for their jewelry collection.

02116 American Dreams

These customers could be either our primary or secondary consumers. They could be buying an item for themselves if you are on the young end of the 35-54 age range or be buying a gift for a child or grandchild if they are on the older side of the age range.

Median Income: $88,728 Age Range: 25-44 Presence of Kids: Family Mix Employment Level: Management Education Level: Graduate Plus Ethnic Diversity: White, Asian, Hispanic Median Income: $56,982 Age Range: 35-54 Presence of Kids: Family Mix Employment Level: Mix Education Level: Graduate Ethnic Diversity: White, Asian, Hispanic

Customer Profile
Market Segment
Geographic
City size Population Pop. Density Climate Boston, Mass approx. 90 sq mi 617,594 people 12,752/sq mi humid continental climate Primary Consumer 18-25 Female 1-2 people average $80,000 Mgt./Professional Bachelors or higher Bostonian/American 95% White, 2% Latino, 3% Other Catholic Middle, Upper Single, engaged Experiencer, Innovator Intermediate Prestige, Trending Positive Very brand loyal Branded merchandise, boutiques Visa cards, credit cards Internet, newspaper, magazines, TV Home, Work, On-the-go

Demographic
Age Gender Household size Income Occupation Education

Sociocultural
Culture Race Religion Social Class Marital status Psychographic

Affective & Cognitive

Degree of knowledge Benefits Sought Attitude

Behavioral
Brand loyalty Store Loyalty Payment methods Media usage Usage Situation

Buying Motivators

For our target customer our products are primarily self-actualization; accessories are things a customer would buy to complete their outfit. One buys jewelry and accessories when they have everything they need and have money to spare. With a price point of $25-$150 our customers are buying them for esteem. Esteem is our second Maslow category, when our customers buy our product they know they will look and feel good. They get a feeling of accomplishment when they shop and find items that they and their peers admire. For our younger customer our products are esteem, they will be overjoyed to be able to shop with the older girls. If a ten to seventeen year old were able to shop where the eighteen to twentyfive years olds shop they will feel accepted. They will have a feeling of accomplishment even if they only purchase a twenty-five dollar pair of earrings. We want our customers to feel this way because that means they will keep coming back to our store. If our customers feel elated and prestigious they will love shopping and they will continue shopping as they get older and become our primary customer. For our secondary customer our products could be self-actualization. If a secondary consumer was shopping for a girlfriend, for example, they may feel that they have reached their full potential. Someone that can afford a thirty dollar headband has enough money that that price tag would not deter them.

Company Profile
Mission Statement
Our goal at Peony is to offer our trendsetter customer luxury items that are as unique and fashion forward as they are. We combine our love of high fashion accessories with the great customer experience to create a passionate atmosphere with innovative style. We will measure our success by our consumers happiness and continued patronage of our boutique.

Customer Experience Our boutique will be serving an underserved market; there is currently not a hair accessory or fashion jewelry boutique in the downtown Boston area. With our location near Macys and other shopping stores we know we will easily get foot traffic and customers. The area we are locating in is called Downtown Crossing it is by numerous bus stops, subway stations, and is near parking garages for the customers that do drive to this area and there are more than 200,000 people passing through each day. 1 We at Peony want our customers to feel at home in out quaint shop they will experience
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a chic vintage vibe that harmonizes with the historic essence of Boston.

Market Location
The location of our Peony boutique will be on Winter Street in Boston Massachusetts. We chose this location because it is within Downtown Crossing. [Downtown Crossing] features large department stores as well as restaurants, music stores, souvenir sellers, general retail establishments, and many street vendors. The section of Washington Street between Temple and Bromfield streets (and portions of Winter and Summer streets) are closed to most vehicular traffic; pedestrians may walk freely in the

www.downtowncrossingboston.com

street 2 This location is classic Boston, brick buildings, lots of history, and cobblestone streets. We
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know that our customers will already in this location due to the fact there is a Macys, Wet Seal, and DSW within a few blocks of our future location. Even though there are the aforementioned stores we know that our boutique will still have its niche in the fashion accessories market because it is underserved in this area. We also think that the secondary consumer market can be beneficial to our business there are numerous restaurants and bars in this location. Customers may stop in while they are waiting for their reservation or before they meet their girlfriends at a bar. There are also nail salons and spas in the area, add our boutique and customers can have the perfect girls day.

Image Statement
We at Peony are here to offer trendy, high quality, fabulous fashion accessories. Our store has exclusive merchandise that cannot be bought anywhere else. We carry the full line of Jadore Couture and Tasha as well as items from Betsey Johnson, Marc Jacobs, and Juliet & Co. We are always looking for new products and new trends so we can have our customers looking great. Our staff is well trained and loves to help style and accessorize outfits. When our customers enter Peony they will immediately love the atmosphere of luxury and the exclusivity. We are located on Winter Street in Downtown Crossing, we love this location because people can simply walk in off the street and fall in love with our boutique. Our mission to create a kind of paradise for our customers, they can look around, relax, and just think of beautiful things while they are in our store. Accessories are our passion at Peony and we want our customers to feel that passion while shopping in our boutique.

www.downtowncrossing.org

Products
Headbands
Jadore Couture o Price Point: $24-$65 o Carrying full line Tasha o Price Point: $24-$48 o Carrying full line Cara o Price Point: $28-$38 o Carrying some pieces Cara o o Tasha o o Sequin o o Cara o o Tasha o o Sequin o o Cara o o Tasha o o Sequin o o Price Point: $50-$100 Carrying full line Price Point: $70-$100 Carrying some pieces Price Point: $80-$150 Carrying full line Price Point: $20-$40 Carrying full line Price Point: $30-$45 Carrying some pieces Price Point: $50-$90 Carrying full line Price Point: $20-$40 Carrying full line Price Point: $45-$60 Carrying full line Price Point: $50-$85 Carrying full line

Necklaces

Bracelets

Earrings

Vendor Information
Brand Headquarter Addresses
Company Address
Betsey Johnson 498 7th Ave., 21st Fl. New York, NY 10018

Marni

Piazza Filippo Meda 3 Milano, Milano 20121 Italy 181 Bank St. OTTAWA, ON K2P 1W5 Canada

Tasha

Marc

72 Spring St., 8th Fl. New York, NY 10012

Juliet & Co.

350 5th Ave Ste 6721 New York, NY 10118-6721

Brand Demographics
At Peony we are offering highly branded and brand loyal merchandise. We offer different products lines for the range of consumer tastes. In general however Peony want to express a feminine, high quality, and fun brand image. Our customers are young and trendy, very up and coming with the lines we offer they can grow up in our store, starting with the fun and crazy Betsey Johnson, or the ultra feminine Juliet & Co., then as they grow older they may take a liking to Marni, or Marc by Marc Jacobs, we even have Tasha a line that has products for a clients prom or wedding.

Betsey Johnson Betsey Johnson will be perfect for some of your teen and twenty something clients. Betsey Johnson is a very colorful, upbeat, and just all around fun brand. We will be carrying a very large selection of Betsey jewelry; we want our clients to accessorize with Betsey for fun nights on the town or a shopping trip with the girls. Betsey Johnson will add a note of eccentricity to our quaint feminine

shop. Below are the companies demographics, a majority of clients are 18-34 years old (38%), 63% are Caucasian, and the average income is 31% for both $60-100k and $100k+. Marni We will be offering a very select variety of Marni accessories and jewelry, the price point is higher but the products are also very exclusive and high end. Marni does still fit in to our product mix however, our customers have a propensity to buying luxury goods and our customers can see Marni as something to aspire to when they are younger and then something obtainable then they reach their mid-to-late twenties. The demographics for Marni are below.
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Marc by Marc Jacobs Marc by Marc Jacobs is a perfect brand for Peony. Their customer base grows as their customer ages with 21% being 13-17, 26% 18-34, and 29% 35-49 year olds. The same goes with amount of income their customers make, 29% make $100k and over.

Tasha Tasha does not have demographics published on Quantcast, below are the demographics for Nordstrom a store that sales Tasha. We have looked at their price and product mix and they will fit into our stores image. The products are of a lower price point which we at Peony think is perfect because the company has less brand awareness then some of the other brands we will be carrying. Tasha will add a greater variety to Peonys product mix and complement our stores image.
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Juliet and Company currently does not have demographics published on Quantcast, however looking at their product mix and price point, $40-$200 we believe that they will fix into our shops product mix. Their products have also been featured in Teen Vogue, Lucky, and many bridal publications.

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Trends and Forecasting

Peony is a jewelry boutique catering to clients in the Boston area that love brand name merchandise as well as ultra feminine and chic pieces. We at Peony are here to offer trendy, high quality, fabulous fashion accessories. We carry Tasha, Betsey Johnson, Marc Jacobs, Marni, and Juliet & Co. We are always looking for new products and new trends so we can have our customers looking great. Our staff is well trained and loves to help style and accessorize outfits. Our boutique is shabby chic, ultra girly, and a little vintage. The merchandise we will be buying to straight from the designers lines but we will also carry staple merchandise. The staple pieces we will always carry include simple chains in gold and silver, studs earrings, basic silver tennis bracelets, and of course lots of pearls from the chocker to the 40 necklace.

Planning & Forecasting

Shows
We will be attending Accessories The Show in New York o See what other retailers are planning for the next seasons o See what the competition is offering Chinas sourcing fair o For products o See factories o Materials Magic Las Vegas

Trend Analysis and Resources

Visit boutiques in Manhattan o New York is a heartbeat ahead of Boston so seeing what boutiques are offering will help us decided on what new products we think will be hot item Visit boutiques in our market scope o Wink o Epoch o The Fashion Accessory Bazaar o Plaza Too Visit the high end specialty stores o Henri Bendel o Bergdorf Goodman Research o We will be keeping up with the news and current events because they greatly affect the fashion world and the economy 12

o o

We will especially be keeping tabs on the precious metal and gem prices Keeping track of stock prices with MSN Money Business cycle forecasting sites

Subscriptions
Womans Wear Daily WGSN Seasonal Merchandise o We will have what is considered seasonal merchandise and we will buy it according to the seasons for example holiday themed hair accessories o If we still have pieces in stock after their period of salability we will mark them down to clearance

Buying Resources
Pantone Book o To be sure our colors will be correct no matter there we manufacture Reporting Service o Survey and analyze specific industry segments

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Tend Reports
Jewelry Reports Out Now
These are two of the few reports out on WGSN. We would reference them before our buying trips. For example this report is showing a trend called the chainlink fence. We like this trend because one of our brands, Marc Jacobs, does a lot of chainlink in his jewelry designs. The second report is about the choker trend, we would be buying merchandise to follow this trend for example vintage brooches necklaces, peachokers, and big statement pieces.

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These are two reports on WGSN about the way stores merchandise. The first is called just in case we will be using this in our store. We will be selling jewelry so we will have display cases, we will be using vintage furniture and armoires to display the jewelry in a fun way. The second report talks about a trend in stores called "eclectic eccentric. We will be using this trend in moderation in our store, we are selling high end merchandising so we dont what our store to seem cluttered, but we think being a little quirky and eclectic will add to the vibe of the store.

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We will also be looking at the In Stores Now on WGSN. We would look at this to see if we were on trend and also to possible order merchandise in to our store. Below are some images that are currently being displayed on WGSN. All of these items fit our stores image and they are things we would carry. The jewelry below are all things we would carry in our store, the combination of classic elements like pearls and jewelry are turned more edgy and fashion forward.

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Pricing Strategies/Objectives
Assortment Planning
Based on Price We are offering many different lines at Peony, each with a range of prices that can fit any consumers budget. Below is a chart of all our lines and the price points they offer.

Line Price Points

Betsey Johnson Tasha Juliet & Co. Marc Marni Based on Brand Our products are also going to the brand based. The lines we are carrying are all have very brand loyal customers. We did not want Peony to only carry branded merchandise however because we want to be known as trendy fresh boutique finding items that cannot be found anywhere else. The main bulk of our sales will be from our branded merchandise concentrating on Betsey Johnson and Marc by Marc Johnson. We will also be carrying the most variety in those two lines. $25-$175 $28-$158 $32-$195 $38-$158 $200-420

Strategies
Price Skimming
We will take advantage of price skimming at Peony. We will be located in an area where we will be the unique fashion accessories boutique, and we want to take in to consideration. The advantage we have here is to make some of our more exclusive items priced higher.

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Premium Pricing
We will also use the premium pricing strategy. We have unique products and they are luxury items. We will have new and trendy merchandise. Our customers are in a financial position to be able to pay a high price for luxury goods because that is part of their lifestyle. They will also want upcoming trends and items that are not readily available to the mass market; this will mean that price is not a deterrence from buying our merchandise.

Objectives
Obtain a Targeted ROI
This objective works well with both premium and price skimming methodologies. We know how important it is to make a profit as soon as possible after our doors open. Our prices are set so we can meet the breakeven point quickly.

Increase Dollar Sales

We want a high turnover rate on our entire inventory and using this strategy, it will ensure us that we are taking in to account all the products that we offer. We want our customers to see how different products can work together to make an even better result. This strategy works well with both premium pricing and price skimming methods.

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Floor Plan
Our store is a small quaint boutique in Boston. We will merchandise the store with vintage feminine pieces of furniture rather than the common store fixtures. The store will be ultra feminine and vintage and should feel like a cozy beautiful place to shop. Below is the floor plan and wall elevations of our store.

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The Ambiance
Peony will feel like our customers are stepping back in time, when glamour and beauty were everything. We will have vintage fixtures (see below), chandeliers, and plenty of feminine details. The store will be soft shades of pink and cream with chairs and settees for our customers to sit and enjoy themselves. We will have wardrobes as fixtures with jewelry and other accessories thrown around. Our products are luxury and we want our customers to feel that luxury when they are shopping with us. The store will also be available to book for parties and other private events.

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Merchandise Tag
Our merchandise will feature the manfactures tag. All of merchandise we are selling is heavily randed with brand loyal customers so we are not going to deter from that by taking off the vendors tage. We are going to add to the branding of our boutique by adding our own peony tag of the merchandise. We are offering prices slightly lower then the MSRP so our customers will be able to see the MSRP and know they are getting a good deal from us. Our tags fit with the image of our store, ultra feminine with a vintage twist. The tags will be printed in a script that looks like loose handwriting with both our price and the MSRP, a fun saying like :thins will go great with matching earrings (this will help upsell to customers) and finally a heats peony just a cute touch that one would see on a personal handwritten note.

If any merchandise goes on sale we will not cheapen out brand image with stickers on outr tags. Our sales people will take the time to change the prices by hand.

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Customer Service/Return Policies

Since Peony is a very small boutique we will be on the first name basis with almost all of our customers. If there are any problems with the merchandise on the customer end we will handle is in the following ways.

Returns
We be excepted within thirty days with a receipt and tag on the item No receipt with tag o Item has to have tag at that point o Return if salesperson knows the item is relatively new to the store Get manager to double check as needed With receipt no tag o Inspect to make sure the item has not been worn o Return for store credit Owner can override these rules in special cases

After Sale Problems

Refer to return guidelines Offer sincere apologies If a customer comes in with a broken piece within the 30 day period exchange the item o If the item was over $100 present a 10% off coupon o If the item was over $150 do a quality check on the item and others like it so we are not selling faulty merchandise

Referrals
For customers that bring a friend in and make a purchase $150 or over they will receive a 15% off coupon o Coupons expires three months from initial purchase If both customers purchase $150 or over they will both receive the 15% off coupon

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General Vendor Return Policy

We also found a general vendor return policy if the problem lies with the vendor rather than the customer. It follows. Claims and Returns If UPS deems an order undeliverable, the vendor must immediately contact the Vendor Direct Operations Office. Vendor is responsible for providing Proof of Delivery to the Vendor Direct Operations Office within 24 hours of the request. If Proof of Delivery is not provided, the vendor must replace the merchandise at no cost to the store or the consumer. If this condition is not met, the store will issue an expense offset to the vendor. If a consumer contacts Consumer Service stating they were short shipped against the packing list, the Vendor Direct Operations Office will contact the vendor requesting that the item(s) be shipped to the consumer immediately. If a consumer contacts the Customer Service department stating that they received the wrong merchandise (not the items they ordered), a call tag must be issued by the vendor (within 48 hours of the consumers complaint) to reclaim the merchandise. The store will charge back the vendor for the merchandise incorrectly shipped, credit the consumer, and reorder the correct merchandise. If a consumer contacts Consumer Service stating that the merchandise received is damaged or defective, the vendor will be contacted to provide a replacement item at no cost. Vendor Direct vendors to accept consumer returns for unwanted merchandise in saleable condition. Any changes or exclusions to return policies and procedures will be negotiated and agreed upon between the vendor, the stores merchant team, and the Vendor Direct program director. Vendor Direct Operations Office must be notified at (770) 908-3562 or via fax at (770) 908-3557 of any consumer returns within 2 business days.

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Number Rationale
Mark-up % Rationale
Our store has a 490% mark-up. We came across this number using a few difference sources. We used basic accounting math, knowing that our operating costs would be around $23,000 and that our projected profits would be around $34,000 and our total sales would be $57,000. That equals a markup of 490%. To back this up we researched other jewelry stores markup. Betsey Johnson has a markup of 500%. For example earrings that sell for $50 retail cost a little under $5.3 Other research found that jewelry has the 4th highest markup. The article says that mark-up ranges from 100% to 1000% or more. Brand name clothing is the 5th highest markup which is 500% to 1000% depending on the name on the label. Our store will be selling brand based designer jewelry so pour store is a mix of these two categories.4 The third and last article we referenced is an article titles Understand Jewelry Store Markups. This article says that a minimum markup on jewelry is 100% but that more retailers markup around 400%-600%. This is because there are lots of costs associated in selling jewelry. For example, each store has to pay rent, pay commissions, pay its sales staff, pay for advertising, and hold its own inventory. And because most jewelry retailers do not sell in high volume, their profit for each item must be high in order to stay in business.5

Six Month Buy Plan LY Rationale

The number we found for our buy plan was our total sales, we made feel like our sales would be around $200,000. We reached this conclusion mainly due to Hoovers.com. We searched for jewelry business in Massachusettes that have four or less employees, that make fewer then $1 million a year. There were four main results:
Interview with Betsey Johnson manager in Downtown Seattle http://www.toptenz.net/top-10-biggest-price-markups.php 5 http://www.home-jewelry-business-success-tips.com/jewelry-store-markups.html
3 4

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Joyce Jewelry, makes .2 million, located 22.5 miles from Boston Edelweiss Jewelry Co., .15 million, located 102 miles from Boston Levins Fine Jewelry, .19 million, 64.5 miles from Boston Andrew Adams, .13 million, 104 miles from Boston

We decided to that our sales would be approximately double these companies because we will be located in downtown Boston and we will be getting much more traffic then these companies. Also these companies sell jewelry that is not branded merchandise they focus on standard fine jewelry such as engagement rings. The nature of our merchandise allows us to sell in higher quantities then fine jewelry stores. BOM sales rationale by month We know that our sales will be highest in the winter holiday season October through December. This is standard for most retail businesses and jewelry follows the same rule. We will also have a spike in sales in February, due to Valentines Day. For the most part the jewelry business is fairly constant, jewelry is typically purchase3d on many occasions, not only holidays but also customers birthdays, anniversaries, and weddings.

LY Initial Buy Numbers Rationale

Based on our Six Month Buy Plan for August we knew our sales would be around $50,000. We divide sales up accordingly, Betsey Johnson and Marc by Marc Jacobs have a very high percentage of sales because they are the heavily branded merchandise people want the most. Betsey Johnson is 38% of our sales and Marc is 21% of sales. We are introducing a lower price point line, Juliet & Co., they have 21% of sales we do have a large part of sales from this vendor because the price point entices customers. Tasha is 11% of sales which will increase in the spring months when brides are buying the clips and hair things for their weddings and receptions. Lastly Marni is 9% of sales, the merchandise is a much higher price point but is purchased by brand conscious fashion forward women that may be older and have the money to spend on designer jewelry.

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References
"Betseyjohnson.com - Quantcast Audience Profile." Home | Quantcast. Web. 28 July 2011. <http://www.quantcast.com/betseyjohnson.com>. "Company Search Results - Hoover's." Hoovers | Business Solutions from Hoovers. Web. 1 Sept. 2011. <http://www.hoovers.com/search/company-search-results/1000037651.html?type=company>. "In Store Now." WGSN. Web. 11 Sept. 2011. <http://www.wgsn.com>. "Joyce Jewerly | Company Profile from Hoover's." Hoovers | Business Solutions from Hoovers. Web. 11 Sept. 2011. <http://www.hoovers.com/company/Joyce_Jewerly/scxfhffhs-1.html>. "Locate Here-Demographics." Downtown Crossing Boston. Web. 11 Aug. 2011. <http://www.downtowncrossingboston.com>. "Marcjacobs.com - Quantcast Audience Profile." Home | Quantcast. Web. 28 July 2011. <http://www.quantcast.com/marcjacobs.com>. McHugh, Jacob. "Top 10 Biggest Price Markups | Top 10 Lists | TopTenz.net." Top 10 Lists. Web. 3 Sept. 2011. <http://www.toptenz.net/top-10-biggest-price-markups.php>. "Nordstrom.com - Quantcast Audience Profile." Home | Quantcast. Web. 28 July 2011. <http://www.quantcast.com/nordstrom.com>. "Shop Downtown Crossing." Downtown Crossing Boston Is Now Boston BID. Web. 11 Aug. 2011. <http://www.downtowncrossing.org>. "Trend Reports 2013 Jewelry." WGSN. Web. 8 Aug. 2011. <http://www.wgsn.com>. "Understanding Jewelry Store Markups." Home Jewelry Business Success Tips. Web. 2 Sept. 2011. <http://www.home-jewelry-business-success-tips.com/jewelry-store-markups.html>. "Vendor Direct Standards." Macys.com. Web. 11 Sept. 2011.

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"Why Downtown Crossing." Downtown Crossing Boston. Web. 11 Aug. 2011. <http://www.downtowncrossingboston.com>.

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