Aritzia: Competitive Analysis and Brand Innovation
Aritzia is a Canadian clothing retailer targeted towards young North American women based in Vancouver, British Columbia. It positions itself as a design house with an innovative global platform.
More than forty years ago, the Hill family pioneered a special product called "Aritzia" in a 70-year-old department store in Vancouver, Canada. In 1984, Brian Hill then opened the first independent Aritzia boutique in his hometown's upscale shopping center, Oakridge Centre, with a simple idea: offer beautiful clothes in aspirational spaces with exceptional service. A few decades later, the idea was renamed to Everyday Luxury.
Below is Canada apparel retail industry value for the past five years. The overall growth trend remains steady except for a sales decline in 2020 due to COVID-19.
Aritzia was ranked fourth in FY2023 revenue with sales revenue of 1.07 million US dollars. It is now one of the major domestic apparel retailers who also have a strong operational presence in the US according to a Canada Apparel Retail industry profile released by MarketLine last September. Unlike Walmart, TJX and HBC, which are large chains in the general category, Aritzia specializes in the apparel has its own original sub-brands.
What makes Aritzia a leading player in the apparel field? The answer is its distinct brand value, which is also the secret of Aritzia's success that is highly favored by the consumer market.
Research Method
This essay will discuss Aritzia's brand competitiveness through historical research,Porter's Five Forces model and social media analysis.
As a homegrown Canadian brand, Aritzia's brand positioning and strategy in the consumer market is very unique. This paper will begin with a historical study to reveal Aritzia's brand development strategy, which will lead to further detailed case study by Porter's power of buyers versus its supply capacity on its internal inventory strategy. Last summer Aritzia experienced a significant drop in sales due to inventory issues, which became the focus of major news. At this sensitive point in time, in conjunction with the current strategic layout of Aritzia, this paper will further identify the problems that the company has and make relevant recommendations.
Furthermore, social media forum analytics will be used to bring in reviews, comments and suggestions about Aritzia from a consumer perspective.
Competitive Analysis
Aritzia defines its brand values as Creativity, Loyalty, Excellence, Good Judgement, Integrity, and Teamwork.
| Core Value | Meaning |
|---|---|
| Creativity | Creativity is at the core of everything we do. |
| Loyalty | We count on each other. |
| Excellence | We relentlessly pursue world-class results. |
| Good Judgement | We think smart. |
| Integrity | We always do what we believe is right. |
| Teamwork | Individually we are great, together we are exceptional. |
The founder Hill family who started business with a department store has a keen market insight and market strategy layout, making Aritzia different from other brands. The Hill family applied the concept of the department store to the brand design, making Aritzia more varied and differentiated from its apparel competitors, making it unique in the marketplace.
Historical Research
The Hill family, which started out in department stores, has extraordinary business talent, and from the opening of the first boutique in 1984, a luxury brand was born and began its layout.
Below is a timeline of the brand's development, and it's clear to see that every historical process has been well thought out.
Over the past four decades, the history of brand development has been characterized by events that can be broadly divided into two categories: product expansion and geographical expansion.
Aritzia's first sub-brand was created in the tenth year after the opening of the boutique, and another decade later, TNA, a sports-focus brand was born. Later, it took only four years for the next Wilfred to meet the consumer. The craftsmanship of these brand segments and a decade of product study and consumer market positioning have made Aritzia a leading player in the market. These brand categories have not been eliminated by the flood of time, but rather seems to be particularly active and competitive in the market and loved by consumers!
Besides, Aritzia seems very patient. Its expansion was relatively slow at the beginning, and as the brand became more mature, more and more stores were opened. The chart below shows the trend in the number of stores in the U.S. and Canada from FY15 to FY23.
Since FY2020 (2019), Aritzia has almost stopped expanding in the Canadian market, while the number of boutiques in the U.S. has instead been on the rise. Aritzia then became the market leader but the brand is becoming increasingly saturated in the Canadian market. In such a case, opening up new territories to expand sales and marketing footprints is imperative. There is no doubt that the U.S. market has a greater market share and growth prospects, especially for Aritzia, a brand that has existed for two decades in local Canada. Its latest YTD2024 earnings report shows U.S. sales revenue of 875million, capturing 51.9% of the market share, overtaking Canada with a store count of 46, 22 less than that of Canada. It has also boosted his cash flow and assets by leaps and bounds, as the opening of boutiques and flagship stores in the U.S. has sucked in investors.
Conclusion
Aritzia is a homegrown Canadian brand that has excelled and been loved by consumers for over forty years with a deep commitment to quality control, innovation and marketing strategy. However, supply chain issues within Aritzia last quarter resulted in a significant decline in sales. In a highly competitive market, it is important to respond and maintain the brand's purity and innovation. The brand's future plan is to quickly enter the U.S. and capture the market.
This paper summarizes Aritzia's development strategy and brand positioning through historical research, and analyze its pricing strategy. In terms of Aritzia's performance last quarter, this paper identifies the dilemmas currently faced by Aritzia and proposes recommendations of its internal data track, external marketing approach and strategic level rebranding by comparing its branding and positioning with Zara,. The paper also analyzes the development of its A-ok brand, as well as a comparative analysis of Aritzia's sales in the U.S. and Canadian markets, comprehensively demonstrating Aritiza's competitiveness in the market.