Digital Transformation Strategy Report: Calibre Clothing Analysis

This report analyzes the digital transformation of Calibre, a prominent Australian menswear and fashion label. It begins with an executive summary and an introduction to Calibre, followed by an external environmental analysis encompassing demographic, political, economic, technological, social, and legal factors. The report then delves into an internal analysis, including a SWOT analysis and the company's mission and problem statements, which highlights the need for digital transformation to address issues like customer experience and inventory management. It identifies strategies for success in the industry, focusing on Calibre's online store launch and the implementation of RFID technology. The report proposes and evaluates three growth options: virtual and augmented reality, AI-powered product recommendations, and clienteling point-of-sale software, ultimately recommending AI-powered software for personalized product recommendations to enhance customer experience and drive sales. The report concludes with references.

Running head: DIGITAL TRANSFORMATION
Digital Transformation: Calibre
Name of the Student
Name of the University
Author’s Note:

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Executive Summary
The main aim of the report is to learn about digital transformation in Calibre clothing
organization in Australia. Digital transformation is quite important to ensure major success in
the respective organization. Any business can easily encounter the various options for
relatively providing new practices. Calibre is one of the most popular and significant
organizations in menswear and fashion label in Australia that has decided to involve digital
transformation within their business. Recently, they have opened an online store, which ships
products to both internationally and domestically. The total turnover of this company is quite
high in respect to others. This report has identified three significant growth options for
developing this strategy with relevant justifications. The three growth options for Calibre are
involvement of virtual reality and augmented reality, artificial intelligence or AI powered
software and point of sale software. Amongst them, the recommended growth option is AI
powered software for delivering personalized product recommendation.

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Table of Contents
Introduction................................................................................................................................3
External Environmental Analysis..............................................................................................3
Company or Internal Analysis...................................................................................................6
SWOT Analysis.....................................................................................................................6
Mission Statement and Main Problem Statement..................................................................7
Strategies for Success in the Industry....................................................................................7
Current Progress of Calibre on Digital Transformation.........................................................8
Growth Options..........................................................................................................................9
Option 1: Virtual Reality and Augmented Reality for Customers in Store...........................9
Option 2: Artificial Intelligence Powered Software for delivering Personalized Product
Recommendations................................................................................................................10
Option 3: Clienteling Point of Sale Software for Customer Assistance both Online and
Offline..................................................................................................................................12
Comparison and Recommendation..........................................................................................12
References................................................................................................................................14

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Introduction
Calibre is one of the most popular and significant men’s clothing company and multi-
channel menswear as well as fashion label in Australia that was being launched in the year of
1989 by Gary Zecevic. They have mainly specialized in casual wear, tailored suiting as well
as menswear accessories with an urban design edge (Calibre.com.au. 2019). Calibre has more
than 17 stores and eight concessions. The following report outlines a brief discussion on the
impact of digital transformation on Calibre. Recently they have involved digital
transformation in their business and this report will be describing about the details of this
organization.
External Environmental Analysis
For completion of an external environmental analysis, it is required to involve six
distinct factors, which are as follows:
i) Demographic Factor: Since, Calibre mainly focuses on menswear, the demography
of their customer selection is mainly for men and boys (Matt, Hess and Benlian 2015). They
have products and services for all categories of men irrespective of their age and they have
gained utmost popularity in a short period of time.
ii) Political Factor: Australia does not have face huge political disturbance and
turbulence and hence the globalized political conditions are affected. Decrease of tax and lack
of corruption are two major political factors in Australia.
iii) Economic Factor: With the rich and significant organizational strategies, Calibre
can align their business with the inflation rate and monetary fiscal policies of the country
(Kane et al. 2015). The economic condition of Australia is much stronger for their national
income. A combination of rising commodity exports and government expenditure is ensuring
that the growth in economy is continuing at steady pace.

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iv) Technological Factor: Calibre has been serving their customers from the year of
1989 and this is mainly because they are extremely advanced and upgraded to the technology.
Technological factors and innovative technological platforms like automated process and
RFID retail technology are responsible for bringing to help them in reaching top position in
market (Hess et al. 2016). RFID technology has enabled them with automated administrative
tasks such as stock counting.
v) Social Factor: Being a top brand in menswear and fashion label, Calibre has also
focused on their social factors. The cultural implications, social lifestyles, connected
demographics and few others are the major social factors that impact their business.
vi) Legal Factor: There are some legal factors that help in understanding the overall
external environment of Calibre, which include product regulations, competitive regulations,
health and safety regulations and employment regulations (Hansen and Sia 2015).
On the basis of Porter’s five forces model, it is analysed that the bargaining power of
customers is much higher for clothing retail market. This ensures Calibre should be able to
fulfil their customers’ demands so that they can maintain better relationship with these
customers.
i) Bargaining Power of Buyers (High): It is the ability of customers to decrease the
prices they pay. For Calibre, the competition is highly increased and availability of products
can be obtained from various similar businesses (Rogers 2016). Due to the presence of
several substitute products, Calibre has reduced their products’ prices to a low level in
comparison to others and hence attracting more customers. Moreover, brand loyalty and
customer information ability are responsible for increasing this bargaining power.
ii) Threat of New Entrants (Low): It is the threat is posed by the new entrants in any
specific market. Although, the new entrants in a market can decrease profitability for other

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firms in the same industry, Calibre does not face any such issue in their business (Westerman,
Bonnet and McAfee 2014). A business takes time to set up and it is not easy to set an entire
new customer within limited time. On the other hand, Calibre is already in top position, thus
huge market potential is enhanced in Australian market of clothing. Moreover, the cost of
entering into the new market is quite high and hence threat to new entrants is lower for
Calibre.
iii) Bargaining Power of Suppliers (Low): It is the ability of suppliers to increment
the prices of the products and services. Calibre, being a popular and significant retail clothing
company, has options for several suppliers and hence the supplier competition does not
majorly affect their business (Fitzgerald et al. 2014). Moreover, they have alternatives to
select suppliers as per their choice and cost effectiveness for ensuring that extra costs are not
incurred in their business.
iv) Threats of Substitutes (High): There are multiple similar clothing organizations in
Australia that provide similar products that could be a major threat to the business of Calibre.
This type of substitute product utilizes a separate technology for trying to solve their
economic needs. The main factors involved in this scenario are relative price performance of
substitute, switching costs of buyer and finally product differentiation. Calibre emphasizes on
high end market where exceptional services are tough to be substitutes and for this reason,
they have selected the demography of men and boys.
v) Rivalry amongst Existing Competitors (High): The final factor of rivalry amongst
the previously existing competitors is extremely high for Calibre (Majchrzak, Markus and
Wareham 2016). The positioning pertains for public perceiving products and then
distinguishing from competitors. The large number of clothing products providers is
extremely threatening for the business of Calibre. There are several similar organizations that

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have acquired their positions in the Australian market and for various reasons like digital
strategies as well as advancements in technology, this type of rivalry is increasing
subsequently.
Company or Internal Analysis
SWOT Analysis
The respective SWOT analysis of Calibre is as follows:
Strengths Weaknesses
i) Futuristic and updated design of cloths.
ii) A good image and brand name in market.
iii) The quality of the production and fabric
used is quite high.
iv) Proper reaction to the new fashion trend
and also automization of production
processes.
v) Calibre maintains ecological
requirements and takes less time for
developing a new model.
vi) Providing online shopping facilities to
their customers.
i) Provide products and services to men and
hence they are often termed as gender
biased.
ii) The cost of the products is quite high.
iii) Although, they are ruling the domestic
market, foreign market is not covered
properly (Henriette, Feki and Boughzala
2015).
Opportunities Threats
i) Higher and innovative demand of
customers.
ii) Marketing of the products to new and
international markets.
i) Import of similar clothing products at
extremely low prices.
ii) There are multiple competitors like
Zimmermann, BY JOHNNY, Camilla and

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iii) Cheaper labour forces and obtaining
lower price goods.
iv) Accessing of raw materials like thread or
fabric from international vendors due to
popularity.
Marc in Australian market that provide
products and services in extremely low
prices.
iii) Zimmermann has a better distribution
strategy than Calibre and hence more
popularity and brand name.
Mission Statement and Main Problem Statement
The vision statement of Calibre is “to design the most premium fashion products for
men”. The mission statement of Calibre is “to be passionate and remain committed to hold
their position as the leading men specialist for designing the best menswear available”
(Calibre.com.au. 2019). For obtaining this above mentioned vision and mission, they have
incorporated new digital technologies in their business. These digital technologies are
expected to reduce complexities of growing consumerism, inventory management, creation of
a unique experience and many more (Sebastian et al. 2017). As per the CEO of this
organization, they should involve digital transformation in their business for fulfilling
customer demands every day without failure. The consumers had several options from which
any product could be selected. These customers even had access to few channels apart from
the retail stores such as mobile commerce or electronic commerce platform. Calibre, being
the main player in the Australian fashion industry often find it difficult to create a unique
experience for the customers and then obtain customers’ attention (Westerman, Bonnet and
McAfee 2014). The main issue identified for these causes was the lack of complete digital
transformation.

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Strategies for Success in the Industry
Calibre has started to involve digital transformation by opening their online store.
This was their first strategy towards success. The digital transformation is the proper
integration of digitalized technology to several significant areas of Calibre, majorly changing
how they could operate and then deliver subsequent value to the customers (Horlach, Drews
and Schirmer 2016). This type of transformation was also considered by as a basic cultural
change by them, which needs their business to continuously challenge the experiment, status
quo and finally get comfortable with the failure faced.
For coping up with their competitors and substitute products, this online store played
a significant role. They even provide constant customer support within their website and
hence trying to get into the online market for a longer run. Moreover, this particular strategy
is also required for them to get recognition internationally (Piccinini et al. 2015). They want
to expand their business beyond Australia and this can only be possible with digital
transformation. Their next strategy is this transformation is to implement a technology for
both of their online and offline stores so that the customers do not face issue while surfing
through the website and store as per their demands.
Current Progress of Calibre on Digital Transformation
Calibre has implemented digital technology like RFID technology for inventory
management and stock counting. They track the tags of products that are attached to several
objects. These tags comprise of electronic stored data and even collect energy from
interrogating radio wave of a nearby RFID reader (Nagy and Koles 2014). Moreover, product
security is also enhanced in this process. Since, recently they have opened their online store,
digital transformation has been a major need for reducing the complexities of stock
management to a high level. The website is being upgraded so that they are able to attract
more customers to the business. Since 2006, the Australian speculated the organization and it

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turned over about 20 million dollars. The online store was launched in the year of 2011. For
their unique strategies, Calibre even won award of 2015 Vogue Fashion Laureate for the best
men fashion.
With this digital revolution trend in the existing Australian retail clothing industry,
Calibre has completed their first step towards digital transformation by opening online store
for their new as well as existing customers. However, it is then evaluated that for maintaining
their leading position in the market, they have to completely transform themselves digitally
(Hars 2015). Moreover, currently they are leading Australian market only, however it is
expected that with an involvement of complete digital transformation, they would be able to
lead the international market as well.
Growth Options
Option 1: Virtual Reality and Augmented Reality for Customers in Store
The first and the foremost growth option for Calibre is to implement virtual reality
and augmented reality for engaging customers with enhanced experiences in store. The
fashion brand would gear up for a digitalized makeover when the shopping experience would
be powered by VR and AR technologies (Cherry 2016). Augmented reality or AR is a
technology, which covers a computerized image of cloths and clothing materials on the
customer’s view of the real world. Hence, it has the ability to provide a composite view. The
customers while visiting the stores of Calibre, would be getting a real world experience of the
cloths that would be purchased by them (Iansiti and Lakhani 2014). Virtual reality, on the
other hand, entirely replaces the real world environment perception to a simulated one.
Currently, several popular fashion labelled organizations like Zara, GAP and Gucci are using
AR and VR in their stores and campaigns for providing a real world experience to their
customers.

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Figure 1: AR in Fashion Store
(Source: Demirkan, Spohrer and Welser 2016)
i) Advantages: AR and VR systems are extremely interactive in nature and they
operate simultaneously with the real time environment for customers. Calibre would be able
to reduce the line between virtual world and real world. Since, it enhances interactions and
perceptions in the real world, the customers would be extremely satisfied. With such
implementation, precision marketing and behaviour analysis of customer would be easily
understood. Sales are expected to rise more 40% every year.
ii) Disadvantages: AR and VR are extremely expensive and often it becomes difficult
to implement this technology (Korpela, Hallikas and Dahlberg 2017). Another risk that this
technology comprises of is lack of privacy and lower performance level. Calibre will not be
able to secure their products and synchronization with online store would be lost.
Option 2: Artificial Intelligence Powered Software for delivering Personalized Product
Recommendations
Calibre can also use machine learning and AI powered software for delivering
personalized product recommendations for both online and in store. The customers’

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requirements would be anticipated and Calibre will not lose their customers. With a stronger
personal recommendation in hand, the store staff would have the tools to not only personalize
as well as entirely impress the customer. This would lead to greater loyalty, higher than
average order value and increased conversion rate.
Figure 2: AI in Fashion Industry
(Source: Matt, Hess and Benlian 2015)
i) Advantages: Since AI would provide personalization to the customers, Calibre
would be gaining better competitive advantages. Predictions would be enhanced and search
functionalities would be improved on their website. A set of largely consistent and recurring
parameters regarding customer behaviour would be analysed.
ii) Disadvantages: Personalization may not turn feasible unless data of every
customer is being considered (Hansen and Sia 2015). It can be extremely time and cost
consuming to note down the data of each and every customer for Calibre.