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MARKET INSIGHT RESEARCH




                              April 14, 2013
Sarah White, Isaac Buwenbo, Pablo Prieto, Mariana Quiroga, Brian Schmierer
Topic Areas
• Executive Summary
• Industry Landscape
• Tellason Background
• Objectives & Methods
• Findings & Relevance
• Opportunities
• Recommendations
• Appendix
Executive Summary
Tellason Jeans is seeking to understand the current market
needs surrounding the high end, denim jean category.


Our investigation into the denim jeans category uncovered four user types:
      •  Denim jeans as Just Jeans
      •  Denim jeans as a Uniform
      •  Denim jeans as a Style Statement
      •  Denim jeans as an Extension of Me

The most relevant user types to Tellason are:
     •  Denim jeans as an Extension of Me
     •  Denim jeans as a Uniform.

Two additional insights were found around the female shopping experience:
     •  Many women do the shopping for their men - opportunity to direct the
        Tellason message specifically at them
     •  The industry lacks high quality, denim experiences for women
Executive Summary
We uncovered the following four experiences that people
look for in Denim jeans:


     •    UTILITY

     •    FREEDOM

     •    VALIDATION

     •    TRUTH


Based on our research, we recommend that Tellason focuses on FREEDOM and
TRUTH as the primary experiences for both men and women moving forward.
Industry Landscape
Denim Jean Market Size

    •    Global Market $75 billion
    •    US Market $13 billion
    •    Premium denim market $2 billion



Industry Trends
    •    Premium denim category affected by “return to craft” trend
    •    Focus on sustainability in material and manufacturing



Direct competition
    •    Increase in small batch, premium brands
    •    Mass market brands entering the premium denim category
Small Batch Crafting: Tellason was born in
                                       2008 and based around creating the
                                       perfect jean.

                                       To create a great fit, meant for 9 out 10
                                       body types, Tellason spent their first 6
                                       months producing one prototype.

                                       Made from custom loom woven fabric from
                                       Cone Mills' White Oak plant in Greensboro,
                                       North Carolina and cut and sewn right
                                       here in San Francisco, California.

                                       Tellason has an affinity for all things well
                                       crafted and authentic.

Owners Pete Searson and Tony Patella
Objectives
•    Uncover current and potential   •    Identify a clear brand story
     experiences within the denim         that will help them still be here
     jean category                        in 10 years


•    Identify opportunities for      •    Identify new markets Tellason
     Tellason to distinguish              might enter in the future
     themselves from competitors
Methods   24 Street Intercepts
            • targeted locations
            •  5-15 minutes each
            •  Even split (Men/Women)
            •  Age Range - 18+



          2 Expert Interviews
            •  30-60 minutes
            •  Ashley Holoquiste: Senior buyer at Armani
            •  Tim Smith: Marketing Director at Levis



          4 Secret Shoppers (in San Francisco)
            • A/B Fits
            • Self Edge
            • Mill Mercantile
            • Two Jacks Denim


          Survey of trend reports and
          publications on denim industry and
          Tellason + competitors
Findings
We identified four attitude segments surrounding denim jeans:


        denim jeans as   JUST JEANS
        denim jeans as   A UNIFORM
        denim jeans as   A STYLE STATEMENT
        denim jeans as   AN EXTENSION OF ME
JEANS AS JUST JEANS
  “ I don't care about form, but I am more
interested in function which can be served by
              any kind of pants. ”
JEANS AS UNIFORM
“ It’s about comfort, enables me to do what I
        want to do when I want to do it. ”
JEANS AS A STYLE STATEMENT
“ I feel good when I look good. I want to know
    what's popular and trending so I can know
          what others think of my style. ”
JEANS AS EXTENSION OF ME
“Honesty and integrity are important to me, I need to
  know how this fits into my life and want it to align
            with what I know of myself.”
Findings
We identified four key experiences surrounding denim jeans:


TRUTH
FREEDOM
VALIDATION
UTILITY
TRUTH
         feels like a
      trusted friend
     honesty and integrity in every
aspect of experience, transparency
   of methods and inner workings,
 brand story/history, they speak to
         your story/show the wear
FREEDOM
             takes you
           everywhere
freedom to choose between a well
    tailored suit jacket or your old
basketball t-shirt from highschool;
        take you from work to play
VALIDATION
fit in & still make a
          statement
   support, status, belonging, mostly
social validation, not about loyalty to
 the brand but exterior perception as
     motivation to stay "in the know”
UTILITY
value in enduring
           quality
   usefulness, longevity, endurance
recognizes the importance of being
able to stand up to life's challenges
    and still look/feel great without
                  having to do much
ADDITIONAL FINDINGS

  •  Many women do the shopping for their men

  •  The industry lacks high quality, denim experiences
     for women
Relevance
We discovered these insights related to the   Truth & Freedom experiences are
premium denim category. 
                                              what people are most looking for
                                              in the premium denim category.

                                              This insight closely relates to Tellason’s brand
                                              ethos but to realize the full potential of this
                                              customer segment the Tellason brand must
                                              focus on and leverage opportunities to
                                              evoke Truth & Freedom.




                                                                  Strength of
                                                     EXPERIENCE POTENTIAL
                                                      +                                  -
Relevance
We discovered these insights related to
the premium denim category.

                                             EXTENSION OF ME
Customers who see premium                    aligns most closely with TRUTH.
denim Jeans as an Extension
of Me & Jeans as a Uniform                   A UNIFORM
mapped most closely to the                   aligns most closely with FREEDOM

experiences of Truth &                       STYLE STATEMENT
Freedom respectively.                        aligns most closely with
                                             VALIDATION
This insight closely relates to Tellason’s
brand ethos but to realize the full          JUST JEANS
potential of this customer segment the       aligns most closely with UTILITY.
Tellason brand must focus on and
leverage opportunities related to these
attitude segments as they relate to the
experience of Truth & Freedom.
Opportunities
TRUTH - expand and educate                FREEDOM - bridge

Provide more for knowledge hungry         Provide a platform to better
customers on Tellason’s inner workings,   connect online and in-store
provide additional access to the brand    shopping experience
through alternative avenues




VALIDATION – celebrate                    UTILITY – demonstrate

Create social feedback and community      Find unique ways to demonstrate
gratification that celebrate the          quality and strength of denim
relationship between an owner and
their jeans
Recommendations
 We recommend that:

   •  Tellason focus on the segments who see
      denim jeans as:

      AN EXTENSION OF ME & A UNIFORM

   •  Tellason do so by evoking the experience of:

      TRUTH & FREEDOM
Recommendations
 We also believe that:

    •  With the goal of inspiring loyalty amidst the recent
       shift in trends, there is potential to educate and
       market towards those that view denim jeans as:

       A STYLE STATEMENT

    •  Women shopping for their men may be reached
       through:

       VALIDATION
Recommendations
Moving forward on the following strategies with a focus on the
experience of TRUTH & FREEDOM will position Tellason as a leader
in the premium denim jean category.



Improve customer           Cultivate long-term          Develop channel and
brand loyalty:             relationships:               image differentiation
                                                        strategies:
Identify key leverage      Identify partnership         Identify online and brick &
points for understanding   marketing opportunities to   mortar retail growth
and improving customer’s   build customer loyalty
      opportunities
assessment of the
perceived value of
the brand
Thank You
APPENDIX
Intercept Questions
★  How often do you wear jeans?
★  What does a high quality pair of jeans look like to you? (what’s the most you’d be
  willing to pay for that?)
★  How long do you typically spend looking for jeans?
★  Can you tell me about your favorite pair of jeans? (question about detail,
  attachment)
★  Do you know where your jeans are made?
★  How much of a difference would it make if you knew more about them?
★  What’s important to you when you’re purchasing jeans?
★  What do you love about finding a perfect pair of jeans? perfect fit?
★  What is a delight when you buy jeans?  
★  What is a great experience buying jeans?
★  What causes you buy new jeans?
Key Expert Questions
Ashley Holoquiste & Tim Smith
     1.  What are trends you see in denim today?
     2.  Is the current market of denim a trend or will it last longer than a few
         years?
     3.  How does Armani/Tellason/Levis view denim within their product mix
     4.  What are your thoughts around local production and the importance of
         “story”?
     5.  How important is location of manufacturing to your customers?
     6.  Why do you feel denim been such successful thru the decades.
     7.  How does Armani / Banana Republic help women find the right fit?
     8.  What factors does Armani consider when selecting which styles to
         include in their collections?
     9.  What makes a pair of jeans bad?
Research Sources
★  $200 Jeans? The Economics Of High-End Denim." Real Men Real Style. N.p., 12
 "
Sept. 2011. Web. 18 Feb. 2013.
★  The Rundown on Selvedge Denim â€nd What’s It All About." RawrDenim.com.
  "
N.p., 25 Mar. 2011. Web. 18 Feb. 2013.
★  The Story And Philosophy of Tellason." RawrDenim.com. N.p., 10 Feb. 2013. Web.
  "
18 Feb. 2013.
Goligoski, Emily,
★  The Jean Genies." The Bold Italic. N.p., 9 June 2010. Web. 15 Mar. 2013.
  "
Lipke, David.
★  Men's Denim By the Numbers." WWD. N.p., 18 Feb. 2013. Web. 15 Mar. 2013
  "
Centeno, Antonio.
★  $200+ Jeans? The Economics Of High-End Denim." Real Men Real Style. N.p., n.d.
  "
Web. 18 Feb. 2013.

Other stores references:
http://shop.imogeneandwillie.com/pages/womens
http://denimbar.com/
http://www.raleighworkshop.com/
http://www.millmercantile.com/
http://www.selfedge.com/
http://www.urbanoutfitters.com/urban/catalog/category.jsp?id=W_CUSTOM_DENIM
http://www.jackknifeoutfitters.com/about/

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Tellason Market Insight Research

  • 1. MARKET INSIGHT RESEARCH April 14, 2013 Sarah White, Isaac Buwenbo, Pablo Prieto, Mariana Quiroga, Brian Schmierer
  • 2. Topic Areas • Executive Summary • Industry Landscape • Tellason Background • Objectives & Methods • Findings & Relevance • Opportunities • Recommendations • Appendix
  • 3. Executive Summary Tellason Jeans is seeking to understand the current market needs surrounding the high end, denim jean category. Our investigation into the denim jeans category uncovered four user types: •  Denim jeans as Just Jeans •  Denim jeans as a Uniform •  Denim jeans as a Style Statement •  Denim jeans as an Extension of Me The most relevant user types to Tellason are: •  Denim jeans as an Extension of Me •  Denim jeans as a Uniform. Two additional insights were found around the female shopping experience: •  Many women do the shopping for their men - opportunity to direct the Tellason message specifically at them •  The industry lacks high quality, denim experiences for women
  • 4. Executive Summary We uncovered the following four experiences that people look for in Denim jeans: •  UTILITY •  FREEDOM •  VALIDATION •  TRUTH Based on our research, we recommend that Tellason focuses on FREEDOM and TRUTH as the primary experiences for both men and women moving forward.
  • 5. Industry Landscape Denim Jean Market Size •  Global Market $75 billion •  US Market $13 billion •  Premium denim market $2 billion Industry Trends •  Premium denim category affected by “return to craft” trend •  Focus on sustainability in material and manufacturing Direct competition •  Increase in small batch, premium brands •  Mass market brands entering the premium denim category
  • 6. Small Batch Crafting: Tellason was born in 2008 and based around creating the perfect jean. To create a great fit, meant for 9 out 10 body types, Tellason spent their first 6 months producing one prototype. Made from custom loom woven fabric from Cone Mills' White Oak plant in Greensboro, North Carolina and cut and sewn right here in San Francisco, California. Tellason has an affinity for all things well crafted and authentic. Owners Pete Searson and Tony Patella
  • 7. Objectives •  Uncover current and potential •  Identify a clear brand story experiences within the denim that will help them still be here jean category in 10 years •  Identify opportunities for •  Identify new markets Tellason Tellason to distinguish might enter in the future themselves from competitors
  • 8. Methods 24 Street Intercepts • targeted locations •  5-15 minutes each •  Even split (Men/Women) •  Age Range - 18+ 2 Expert Interviews •  30-60 minutes •  Ashley Holoquiste: Senior buyer at Armani •  Tim Smith: Marketing Director at Levis 4 Secret Shoppers (in San Francisco) • A/B Fits • Self Edge • Mill Mercantile • Two Jacks Denim Survey of trend reports and publications on denim industry and Tellason + competitors
  • 9. Findings We identified four attitude segments surrounding denim jeans: denim jeans as JUST JEANS denim jeans as A UNIFORM denim jeans as A STYLE STATEMENT denim jeans as AN EXTENSION OF ME
  • 10. JEANS AS JUST JEANS “ I don't care about form, but I am more interested in function which can be served by any kind of pants. ”
  • 11. JEANS AS UNIFORM “ It’s about comfort, enables me to do what I want to do when I want to do it. ”
  • 12. JEANS AS A STYLE STATEMENT “ I feel good when I look good. I want to know what's popular and trending so I can know what others think of my style. ”
  • 13. JEANS AS EXTENSION OF ME “Honesty and integrity are important to me, I need to know how this fits into my life and want it to align with what I know of myself.”
  • 14. Findings We identified four key experiences surrounding denim jeans: TRUTH FREEDOM VALIDATION UTILITY
  • 15. TRUTH feels like a trusted friend honesty and integrity in every aspect of experience, transparency of methods and inner workings, brand story/history, they speak to your story/show the wear
  • 16. FREEDOM takes you everywhere freedom to choose between a well tailored suit jacket or your old basketball t-shirt from highschool; take you from work to play
  • 17. VALIDATION fit in & still make a statement support, status, belonging, mostly social validation, not about loyalty to the brand but exterior perception as motivation to stay "in the know”
  • 18. UTILITY value in enduring quality usefulness, longevity, endurance recognizes the importance of being able to stand up to life's challenges and still look/feel great without having to do much
  • 19. ADDITIONAL FINDINGS •  Many women do the shopping for their men •  The industry lacks high quality, denim experiences for women
  • 20. Relevance We discovered these insights related to the Truth & Freedom experiences are premium denim category. what people are most looking for in the premium denim category. This insight closely relates to Tellason’s brand ethos but to realize the full potential of this customer segment the Tellason brand must focus on and leverage opportunities to evoke Truth & Freedom. Strength of EXPERIENCE POTENTIAL + -
  • 21. Relevance We discovered these insights related to the premium denim category. EXTENSION OF ME Customers who see premium aligns most closely with TRUTH. denim Jeans as an Extension of Me & Jeans as a Uniform A UNIFORM mapped most closely to the aligns most closely with FREEDOM experiences of Truth & STYLE STATEMENT Freedom respectively. aligns most closely with VALIDATION This insight closely relates to Tellason’s brand ethos but to realize the full JUST JEANS potential of this customer segment the aligns most closely with UTILITY. Tellason brand must focus on and leverage opportunities related to these attitude segments as they relate to the experience of Truth & Freedom.
  • 22. Opportunities TRUTH - expand and educate FREEDOM - bridge Provide more for knowledge hungry Provide a platform to better customers on Tellason’s inner workings, connect online and in-store provide additional access to the brand shopping experience through alternative avenues VALIDATION – celebrate UTILITY – demonstrate Create social feedback and community Find unique ways to demonstrate gratification that celebrate the quality and strength of denim relationship between an owner and their jeans
  • 23. Recommendations We recommend that: •  Tellason focus on the segments who see denim jeans as: AN EXTENSION OF ME & A UNIFORM •  Tellason do so by evoking the experience of: TRUTH & FREEDOM
  • 24. Recommendations We also believe that: •  With the goal of inspiring loyalty amidst the recent shift in trends, there is potential to educate and market towards those that view denim jeans as: A STYLE STATEMENT •  Women shopping for their men may be reached through: VALIDATION
  • 25. Recommendations Moving forward on the following strategies with a focus on the experience of TRUTH & FREEDOM will position Tellason as a leader in the premium denim jean category. Improve customer Cultivate long-term Develop channel and brand loyalty: relationships: image differentiation strategies: Identify key leverage Identify partnership Identify online and brick & points for understanding marketing opportunities to mortar retail growth and improving customer’s build customer loyalty opportunities assessment of the perceived value of the brand
  • 28. Intercept Questions ★  How often do you wear jeans? ★  What does a high quality pair of jeans look like to you? (what’s the most you’d be willing to pay for that?) ★  How long do you typically spend looking for jeans? ★  Can you tell me about your favorite pair of jeans? (question about detail, attachment) ★  Do you know where your jeans are made? ★  How much of a difference would it make if you knew more about them? ★  What’s important to you when you’re purchasing jeans? ★  What do you love about finding a perfect pair of jeans? perfect fit? ★  What is a delight when you buy jeans?   ★  What is a great experience buying jeans? ★  What causes you buy new jeans?
  • 29. Key Expert Questions Ashley Holoquiste & Tim Smith 1.  What are trends you see in denim today? 2.  Is the current market of denim a trend or will it last longer than a few years? 3.  How does Armani/Tellason/Levis view denim within their product mix 4.  What are your thoughts around local production and the importance of “story”? 5.  How important is location of manufacturing to your customers? 6.  Why do you feel denim been such successful thru the decades. 7.  How does Armani / Banana Republic help women find the right fit? 8.  What factors does Armani consider when selecting which styles to include in their collections? 9.  What makes a pair of jeans bad?
  • 30. Research Sources ★  $200 Jeans? The Economics Of High-End Denim." Real Men Real Style. N.p., 12 " Sept. 2011. Web. 18 Feb. 2013. ★  The Rundown on Selvedge Denim â€nd What’s It All About." RawrDenim.com. " N.p., 25 Mar. 2011. Web. 18 Feb. 2013. ★  The Story And Philosophy of Tellason." RawrDenim.com. N.p., 10 Feb. 2013. Web. " 18 Feb. 2013. Goligoski, Emily, ★  The Jean Genies." The Bold Italic. N.p., 9 June 2010. Web. 15 Mar. 2013. " Lipke, David. ★  Men's Denim By the Numbers." WWD. N.p., 18 Feb. 2013. Web. 15 Mar. 2013 " Centeno, Antonio. ★  $200+ Jeans? The Economics Of High-End Denim." Real Men Real Style. N.p., n.d. " Web. 18 Feb. 2013. Other stores references: http://shop.imogeneandwillie.com/pages/womens http://denimbar.com/ http://www.raleighworkshop.com/ http://www.millmercantile.com/ http://www.selfedge.com/ http://www.urbanoutfitters.com/urban/catalog/category.jsp?id=W_CUSTOM_DENIM http://www.jackknifeoutfitters.com/about/