Problems Facing Lifestyle Retailer Urban Outfitters
PURPOSE
This assignment builds on the entire course journey, focusing on a particular organization you select to assist by associating your learning from the course to develop your marketing, new product development, and innovation capabilities. The organization can be for-profit, non-profit, or a government agency located anywhere in the world, as long as you prepare for this assignment thoroughly, with the support of relevant literature and external sources, and preferably interviewing someone from the company.
The assignment aims to associate your newly captured insights with an organization of your choice. Choose an organization you are passionate about that could do with your expertise. Consider this an excellent opportunity to reflect and advise the chosen organization in growing its design thinking and innovation capacity in times of considerable uncertainty.
GUIDANCE
Please complete the following tasks:
Review all course materials and team assignment-related materials again.
Explore and decide on a target organization you are excited about and want to advise.
Make a deep dive market research based on published materials, observation, and personal email or live interviews to scope a significant problem worth solving in the organization context.
The problem could relate to something the organization could do significantly better.
Based on research findings, design a novel and intriguing solution by applying design and business thinking described in the course and other materials covered.
Write all this in an executive-level advisory report, which your target company can use as a base for action in their next leadership meeting.
Remember to reference actively written and interviewed sources.
DELIVERABLES
Cover with heading and name, max six pages of pure text with page numbering and subheadings as requested: professional document with APA references, unlimited number of complete appendices including relevant and readable tables, graphs, images, etc. Font 12, 1.0 spacing, and standard margins.
Note: executives are busy people who crave evidence to make sound decisions, so ensure you stick to the core, reference, and if you need more pages, refer to relevant appendices in the main text.
Before starting this assignment, check the rubric for what determines a quality contribution.
You are expected to submit a detailed description of your problem-solution set for the chosen organization by referring actively to relevant sources to strengthen your problem argument and then responding to the following critical areas of importance (use these headings):
Introduction and Problem Statement: Introduce the paper by leading the reading to the theme, the problem, and critical findings, along with a brief document flow overview. Remember to briefly introduce your chosen organization and any key stakeholders you plan to advise.
Market Research: Identify and define the problem area based on your research findings regarding currency, relevancy, and societal and business significance (actively referenced, both academically and professionally).
Associate to course learnings: Apply the skill of associating as described in the course materials by identifying critical insights from the course and your individual and small group work. Discuss these essential insights and use them as inspiration when describing how they can help develop a solution to the organization's current problem. As you may recall, associating is the idea that you borrow ideas from one area and then use them as inspiration in another.
The Problem-Solution Fit: Describe your solution and provide evidence to the extent possible that it solves the problem as defined in this paper.
Concluding Discussion: Conclude by arguing, based on your newly gathered research and analyzed intelligence, why solving this problem is worthwhile, especially from a business and data collection perspective. Why is it novel and fresh, despite potential competition / alternative solutions? Finally, list concrete actions for your client to proceed and succeed in building a state-of-the-art solution.
Personal Reflection: Discuss critical findings from this assignment and the course at large for yourself; what was most valuable learning? Discuss how you enhanced your knowledge throughout the course.
Reference List
Appendices
Applying Course Learnings in Business
Student Full Name
Institutional Affiliation
Course Full Title
Instructor Full Name
Due Date
Applying Course Learnings in Business
Introduction and Problem Statement
Lean philosophy is concerned with optimizing business processes to reduce waste and increase customer value. The concept requires businesses to continuously recognize the value of their customers and pay close attention to those business processes that need to be fine-tuned or eliminated entirely to reduce waste. Although the foundations of lean philosophy date back to Toyota’s car manufacturing process, the concept can be adapted to the retail sector where the same approach of eliminating waste and increasing customer value is central to business success. This essay will analyze Urban Outfitters, a lifestyle retailer that specializes in men’s and women’s clothing and shoes as well as home and apartment décor. Some of the problems facing the lifestyle retailer include unnecessary transportation and handling, excess inventory, over-processing, delays in the supply chain, and poor customer service. This essay will discuss these problems and apply the course concept of lean philosophy to develop a solution to the organization’s current problem. It will show that lean philosophy can not only help the retailer eliminate organizational waste but also increase customer value, and in doing so, drive brand loyalty and revenue growth.
Market Research
Based on the research findings, one of the biggest areas of waste identified in Urban Outfitters’ retail environment is the unwarranted movement of merchandise between its outlets or between the central warehouse and its chains. This unnecessary transportation and handling of stock is tied to customer quality issues, particularly product returns or exchanges, as well as unanticipated different outlet demands for particular items. Another area of waste is the excess stock in most outlets: Urban Outfitters is carrying more products than is necessary. The retailer is keeping large volumes of slow-moving items. Most of this excess inventory is in the form of merchandise in transit, items in back door storage, and merchandise that has remained unsellable for several months despite high discount rates.
Moreover, Urban Outfitters has been supplying merchandise in larger batches and at faster rates than consumer demand. Although the strategy of buying ahead of demand and in large volumes can be lucrative, poor market analysis can result in excess inventory or unsellable merchandise, particularly if the merchandise becomes out of season. Oversupplying stock without matching customer preferences or demand has negatively impacted the retailer’s bottom line (Shop-Eat-Surf, 2022). For instance, most of the excess stock can only be sold through fire sales and markdowns, which generally means lower revenues and profits. The third area of waste relates to poor brand marketing strategy. Urban Outfitters’ promotional activities are not only resource-intensive but are also not effective in generating sales or brand recognition (Campbell, 2022). For instance, despite investing in various promotional activities including social media advertising, photoshoots for ad campaigns, sponsored events, and influencers, the retailer has continued to record declining sales.
Urban Outfitters’ disappointing sales are the result of advertising waste such as fashion misses, off-pitch marketing, and poor creative execution. The retailer’s marketing strategy is not effective in reaching the target customers: Urban Outfitters is not creating brand content that can resonate with older customers, particularly customers in college and beyond. Another area of waste in the retailer’s environment relates to delays in the supply chain. There are significant postponements in the organization’s supply chain in terms of delivery of merchandise form central warehouse to outlets. The delays have resulted in some items going out-of-stock in the outlets when there is sufficient inventory at warehouses (Lutz, 2014). Urban Outfitters’ supply chain issues also include defects in the inventory or a mismatch between customer needs and product specifications.
A significant portion of the brand’s merchandise is either of bad quality or needs to be re-worked. Often, the company has to sell the defective inventory below cost price, which has a negative effect on revenues and profits (Maurer, 2020). Another area of waste relates to human resources. More than half of the retailer’s sales clerks are involved in activities relating to merchandising and internal house logistics rather than customer service. Shoppers often spend hours wandering around the store or looking unsuccessfully for a product without a clerk to help them in their purchase decisions. The retailer is also inefficiently using its floor space. For instance, there is a lot of unnecessary movement when picking ordered items from the storage room or the warehouse for in-store and outlet deliveries.
Association to Course Learnings
One of the concepts in the course materials that is critical to developing a solution to Urban Outfitters’ current problem of organizational waste is the lean philosophy. The concept addresses the issue of waste within organizational processes by stressing the importance of eliminating any expenditure of resources that does not result in the creation of value for the end consumer. Lean philosophy is a concept that originated from the Toyota Production System (TPS), which aims to optimize efficiency by eliminating all waste using a “lean” system. Toyota’s lean manufacturing system is founded on the concepts of “jidoka” and “Just-in -Time” to quickly and effectively produce automobiles that are not only of exceptional quality but also fully meet customer requirements. The concept of “Jidoka” essentially means that production is stopped immediately a problem occurs to prevent the production of defective products. On the other hand, the concept of “Just-in-Time” refers to the production of only those items that are necessary for the next process in a continuous flow.
On the whole, the lean philosophy focuses on removing all processes or practices that do not create value for customers. This concept is implemented by continuously improving work processes to generate more value. The course materials highlighted the 4P model in sustaining continuous improvement towards excellence: philosophy (thinking long-term), process (“Kaizen” or eliminating waste), people and partners (respect for people, strong leadership, and challenging employees to achieve more), and problem-solving (“Genchi genbutsu” or continuous improvement and learning) (Class Text, 2023). Although lean philosophy is often associated with manufacturing sectors, the concept has wide application in the services sector, and especially in the retail industry. In the retail industry, lean philosophy focuses on eliminating waste by improving operational flows and focusing on how consumers perceive value. Lean retail is widely recognized for its ability to remove activities that do not provide customer value while shifting resources to improve process efficiency and grow profit margins.
The concept recognizes the dramatic change in the retail industry, particularly the shift towards data-centric methods of product distribution and meeting customer needs. Lean retail practices extend throughout the supply chain and focus on organizational pain points. For instance, it eliminates waste by employing intricate forecasting technologies to prevent excess inventory. Lean retail involves using intelligent digital tools to ensure that just the right amount of inventory is bought and that there is no extra merchandise in the central warehouse, backroom storage, or shelves. It is also concerned with ensuring that retailer inventory gets where it is needed using the least amount of time or resources: for instance, lead retail involves using cross-dock techniques to improve inventory management. Lean retail is also concerned with fulfilling customer needs in the most effective manner while keeping operational costs low. For instance, lead retail encourages the use of modern order management systems to optimize order fulfilment and reduce shipping costs.
Moreover, lean retail is focused on improving warehouse and store efficiency to reduce unnecessary movements when fulfilling customer wants such as making room for fast-moving items so that they do not have to be replenished too often. On the whole, lean retail is focused on helping retailers establish responsive supply chains at the back end while increasing customer value at the store with excellent customer service and product offers (Marques et al., 2022). The lean philosophy is essential to solving the waste areas in Urban Outfitters’ retail environment including unnecessary transportation and handling, excess inventory, over-processing, delays in the supply chain, and poor customer service. More importantly, lean retail will help the fashion retailer reverse its declining sales and revenu...