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INFOSYS.110 BUSINESS SYSTEMS: DELIVERABLE 2: BUSINESS SECTION SUMMER 2014 Name NetID Group Number: Website Link: Tutorial Details Time Spent on Assignment: Yi Lin Huang yhua409 061 http://infosys1102014ssgroup61.blogspot.co.nz/ Tutor: Day: Time: Yvonne Hong Tues/Fri 3-4pm 25 hours Word Count: 1644

ONLINE CLOTHES SHOPPING REVOLUTION: MYFIT

INTRODUCTION

Nowadays, the problem of purchasing unfit fashion online is becoming more and more significant. Our solution to this problem is to develop an app that generates a 3D model of the user and provides personalised suggestions on fashion selection. Our business proposal starts with the vision statement, industry analysis and identification of customers, suppliers and partners. It is followed by the analysis of business strategy and value chain activities. Finally, we propose the information systems implemented to support our business processes.
3. BUSINESS SECTION 3.1 Vision

We intend to build the worlds largest virtual fitting room; to provide exceptional solutions and premium services for online clothing retailers in order to help them offer professional, customised and efficient fashion selection suggestions to every online clothing shopper; to make our customers happy and make our world a better place through the use of advanced technology.
3.2 Industry Analysis: Virtual Fitting Room Industry

Industry: virtual fitting room industry.

Force:

High/Low:

Justification:

Buyer power:

High

There are several large virtual fitting room companies in the market such as Metail, Fits.me and True fit (Lomas, 2013). Therefore customers have a lot of choices and high bargaining power.

Supplier power:

Low

There are a number of suppliers who develop 3D

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body scanning and modelling technologies. There are also lots of database management systems suppliers such as Oracle and IBM. The large number of suppliers in the market provides us with a lot of choices indicating that the supplier power is low.

Threat of new entrants:

Low

Low threat of new entrants is mainly because of the high cost and time barriers. For example, the early-stage funding for Fits.me Virtual fitting room was approximately 2.6 million showing the high cost barriers in the industry (Lomas, 2013). It takes a few years for a new entrant to build relationships with brand partners and collect reliable data indicating the existence of time barriers.

Threat of substitutes:

Low

As a substitute, clothes sizing chart is inaccurate because there is no universal sizing standards; as the other main substitute, trying on clothes in physical shops is very inconvenient (Leggatt, 2013). These two methods are not the perfect substitutes of virtual fitting room therefore the threat of substitutes is low.

Rivalry among existing High competitors:

This industry was described as a crowded market with several main competitors such as Fits.me, Virtusize and True fit (OHear, 2012). This implies the fierce rivalry among existing competitors.

Overall attractiveness of the industry: It is estimated that online sales of garments will be doubled over the next decade (Kramer, 2011). This indicates that the virtual fitting room industry may be very profitable due to the rapid growth of online clothing sales in the foreseeable future. Although the buyer power and rivalry among existing competitors are relatively high in the industry, the overall attractiveness is still thought to be high due to the low supplier power, low threat of substitutes and new entrants and the high profitability in the industry.
3.3 Customers and Their Needs

The main target group of customers are the online clothing retailers who face high rates of customer returns. According to a research, up to 40 per cent of garments purchased online are returned due to poor fit (How up to 40%, 2011). This serious problem costs those online clothing retailers offering free returns a lot of money in postage, re-warehousing and discounting for sales (Leggatt, 2013). Online retailers therefore need a feasible solution that can help online shoppers select the right sizes and styles of clothing. Online retailers also need this solution to be effective in increasing sales and customer satisfaction, overcoming customer hesitation and reducing customer returns.
3.4 The Product and Service

Our solution is to launch a virtual fitting room app called MyFit that provides some unique combination of features. The increased number of input choices offered by MyFit enhances the convenience of using the app. This feature can definitely help online retailers improve customer satisfaction. MyFit is capable of generating 3D body models of customers and providing a number of different brands and styles of virtual garments. This will satisfy the needs of our customers by improving customer experience and increasing sales. The advanced 3D body modelling technology we implement on MyFit and the data of garments we collect directly from our brand partners ensure the accuracy of fashion selection suggestions we give to our customers. This will help online retailers overcome customer hesitation, increase sales and reduce customer returns because of the accurate information provided.
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3.5 Suppliers and Partners

Our app requires a centre database that stores all information of the users. Therefore, companies like Oracle and IBM that provide database management systems are likely to be our potential suppliers. Our app also requires the use of 3D body modelling technology. Therefore companies like Bodylabs and Turbosquid that creates 3D body models could be categorized as another group of potential suppliers. Our potential partners may involve companies that develop operating systems and provide marketing and sales support such as Microsoft and Google. Our partnership with these companies may help us successfully publish MyFit on their app stores. Another group of our potential partners are likely to be the clothing companies that manufacture brand clothes such as Levis, Hugo Boss and Nike because our solution needs to collect data of garments from different brands and styles in the market.

3.6 Strategy: Focused High Cost

Our solution MyFit is mainly targeted at online clothing retailers. The limited number of potential customers shows that MyFit is targeted at a narrow market in terms of competitive scope. Our business aims to provide premium services for our customers which may be relatively expensive. The use of advanced 3D modelling technology and construction of a centre database to deliver a feasible solution to online retailers requires a large amount of capital. So in order to fulfil our vision, we determine to employ high cost strategy in our business.

3.7 Value Chain Activity: Market and Sell the Product or Service

Marketing and selling the product or service involves product demonstrations, provision of trial periods, customer order processing, etc. As a start-up business, marketing activities are important as they can help customers understand how MyFit solves their problems professionally and efficiently and make our world a better place by using the advanced
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technology. Marketing and selling activities focus on the targeted group of customers who are likely to buy our products and show them we adopt high cost strategy is because of the premium services we provide.

3.8 Business Processes

3.8.1. SALES ORDER MANAGEMENT PROCESS The sales order management process is one of

the most important processes in a business. It is not only about selling products to customers and receiving payments, but also building relationships with customers. Therefore sales order management process requires high speed of order processing and effective communication with customers. A good sales order management process helps the business improve customer satisfaction, retain customers and increase sales.
3.8.2. PRODUCT DEMOSTRATION DESIGN PROCESS -

The product demonstration design

process aims to produce a product demo that effectively introduces the product to our customers and stimulates their interests. The product demo design process becomes very important as it needs to incorporate the vision of our business, the concepts and functionalities of our product into one single product demo which may help the business attract more customers and increase sales.

BUSINESS PROCESS 1 MODEL

Start

Receive order

Customer Information complete and correct?

No

Customer to update information

Yes

Order confirmed by customer

Send invoice

Receive Payment

Accounting Send confirmation email

Bill Management System

Email received by customer?

No

Resend confirmation email

Yes

Any other inquires from customer?

Yes

Respond to customer inquiries

No End

BUSINESS PROCESS 2 MODEL

Start

Identify members of the design team

Identify features of the product

Brainstorm ideas

Marketing
Allocate tasks to team members

Knowledge Management System

Produce draft version of demo

Suggestions from team members?

Yes

Improve product demo

No
Publish product demo

Feedback from customers? No

Yes

Improve product demo

Publish final version of product demo

End

3.9 Functionalities
3.9.1. SALES ORDER MANAGEMENT PROCESS

Receive and process customer orders. Receive customer payments.

3.9.2. PRODUCT DEMOSTRATION DESIGN PROCESS

3.10 Systems

Manage work activities of team members. Gather and manage customer feedback.

3.10.1. ORDER PROCESSING SYS TEM

An order processing system supports receiving and

processing customer orders by capturing order data automatically from customers. The use of order processing system decreases the chances of making misreading or miswriting errors and increases the efficiency of business. Less errors and faster processing speed will certainly improve the quality of our services and make customers happy, which is part of our vision.
3.10.2. CONTENT MANAGEMENT SYSTEM

Content management system aims to gather,

store and analyse customer feedback so that improvements can be made in business processes. The use of content management system is an important way to increase the quality of our products and services, then increase customer satisfaction and fulfil our vision.
3.10.3. WORKFLOW MANAGEMENT SYSTEM

Workflow management system can successfully

define the tasks of each group member and ensure each member receives the correct data from the previous step in the workflow. The implementation of workflow management system can reduce the cycle time of business processes, improve the speed and quality of our services and finally make our customers happy.

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3.11. Summary Table: Value Chain to Systems

Value Chain Activity

Processes 1. Sales order management process 2. Product demonstration design process

Functionalities 1. Receive and process customer orders. 2. Receive customer payments. 1. Manage work activities of team members. 2. Gather and manage customer feedback.

Specific Information System(s) Order processing system

Broad Information System(s) Transaction processing system

Market and sell the product or service

Workflow management system

Collaboration system

Content management system

Collaboration system

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CONCLUSION

Our business intends to deliver a solution called MyFit which aims to help online clothing retailers deal with the problem of high customer returns rates. Our solution aims to satisfy customers needs by incorporating unique features and advanced technology into the virtual fitting room software. Because of the narrow target market and high production costs, we decide to implement focused high cost strategy. As a star-up business, marketing and selling the product is considered to be most important value chain activity which includes some key business processes. Several essential information systems such as order processing system, content management system and workflow management system are implemented in order to support our business processes and add value to our product by increasing customer satisfaction and reducing cycle time.

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REFERENCES

1. Chapman-Smith, B. (2013, April 22). Half of kiwis now shop online - Stats NZ. Retrieved from http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10879010) 2. How up to 40% of clothing bought online is returned... but internet trade is still on the rise. (2011, February 4). Retrieved from http://www.dailymail.co.uk/femail/article1353496/How-40-cent-clothing-bought-online-returned--internet-trade-rise.html 3. Kramer, A. (2011, May 2). The virtual fitting room Retrieved from http://www.strategy-business.com/article/00073?pg=all 4. Leggatt, H. (2013, January 28). 2013-the year of virtual fitting room? Retrieved from http://www.bizreport.com/2013/01/2013---the-year-of-the-virtual-fittingroom.html 5. Lomas, N. (2013, April 17). Fits.me Closes $7.2M Series A To Aggressively Expand Its Virtual Fitting Room Tech In Europe, Start Prepping For U.S. Push. Retrieved from http://techcrunch.com/2013/04/17/fits-me-closes-7-2m-series-a-to-aggressively-expandits-virtual-fitting-room-tech-in-europe-start-prepping-for-u-s-push/ 6. Odell, A. (2011). How Many Online Clothing Purchases Do You Return. Retrieved from http://nymag.com/thecut/2011/02/how_many_online_clothing_purch.html 7. OHear, S. (2012, November 5). Metail, The Virtual Fitting Room Youve Probably Never Heard Of, Partners With Warehouse, Shop Direct, Following Tesco Trial. Retrieved from http://techcrunch.com/2012/11/05/metail-the-virtual-fitting-room-startup/ 8. Shoppers shift online. (2012, August). NZ management magazine. Retrieved from http://www.management.co.nz/executiveupdate.asp?eID=426) 9. Thomasson, E. (2013, Sep 27). Online retailers go hi-tech to size up shoppers and cut returns. Retrieved from http://www.reuters.com/article/2013/09/27/net-us-retail-online-returnsidUSBRE98Q0GS20130927 10. Your right size without measuring for online shopping. (2012, Sep 25). Retrieved from http://phys.org/news/2012-09-size-online.html

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