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Pitch

Our proposal will offer a revolutionary garment collection and app service as a plug-in on the already popular App such as NIKE plus running


Description

Summary

Infinity Collection is both B2B and B2C business model that aims to create a culture of caring for prolonging lifespan, and recycling of garments. Through a subscriptions service for a new collection of smart garments (in partnership with NIKE and other Athletic brands) connected to a premium App service with incentives for both physical and environmental performance (that plugs into existing wearable communities such as Nike +) to create a trend, culture, and lifestyle of caring. Partner with influencers to inspire people to care about their performance in health, exercise, and environment.

We joined together to form MiKaSu Inc. as a creative agency to create a package proposal for Nike. Our proposal will offer a revolutionary garment collection and app service as a plug-in on the already popular NIKE plus running. Our App leverages the existing platform of NIKE+ Running which includes 18 million active users. We will also develop a collection of smart garment alongside the App called "Infinity Collection". New features will consist of sustainable performance apparel with embedded solar panel technology to instantly monitor vital biological data. In order to increase popularity of the new product, a subscription system will also be introduced with an affordable monthly payment plan.  

With an advancement in solar power technology today, our product will undergo the most rigid test on durability and also to fulfill the needs of our customers.  Our primary strategy is to introduce Nike Infinity as the most for the thousands who crave for high-tech sportswear to complement their exercise activities on the NIKE platform.

https://drive.google.com/file/d/0B1xKYEkBZotiNUkyQTNUUWRzb2M/view?usp=sharing

 


What actions do you propose?

Our Goal

Our goal is to create a win-win-win situation for environment, business and human by the followings:

  • Encourage outdoor exercise by a seamless App service to create users’ environmental awareness and reduce GHG emission from indoor exercise
  • Smart sportswear collection made from sustainable materials and improve people's HEALTH and exercise PERFORMANCE
  • A Subscription business model to encourage consumers to reuse and recycle, and fulfill people's ASPIRATION to enjoy the premier technology & service at a reasonable price.


Once underway we will expand our scope and take advantage of high-margin new garment sales and leverage our existing connections with the manufactures to sell and service these products.

Our Solution


 

The Plugged in App Service includes two main features - gear wardrobe and city journey. The gear wardrobe helps users to prolong the clothes lifecycle by understanding and managing the clothes they have. Connected with gear wardrobe, the city journey is a running app service with sightseeing in different cities, it can also suggests outdoor exercise outfits under current weather conditions.   

 

Targeting on mass market, Infinity Smart Sportswear Collection measures vital signs for users’ daily activities and provides emergency notifications/call. The smart garments will design with solar fiber, recharging the clothes, and sustainable materials such as bamboo and hemp.

We believe the currently popular bands and watches are interim products which will soon be replaced by smart garments like ours.  People will enjoy the convenience of an all-in-one smart garment instead of wearing excessive devices.

The Subscription Business Model can benefit not only the users but also the apparel companies. It locks the user into a closed-material-loop system naturally, and also relieve the pain of consumers who can’t constantly afford the high price of latest wearable tech.

 

Company and Management

MiKaSu Inc will be headquartered in Manhattan, NY, a location providing extremely high accessibility to the fashion industry as well as an innovative center. The owners of the company, Mika, Kaveh and Shuharn, have collectively over twenty years of experience in fashion, manufacturing and logistics businesses. 

Based on the founders' connections in the garment manufacturing industry, initial R&D cost can be absorbed by the manufacturer and inventory can also be reduced to its minimum.  A shared profit scheme will also be introduced to alleviate the risk of excess overhead cost.

 

Opportunity

There has been a dramatic growth in the market for garments using smart textiles and other wearable technologies. Trends in the sports and clothing industries towards manufacturing of specific products for dedicated uses (running, skiing, snowboarding etc.) has not only led to the introduction of products with integrated functions using smart textile technologies, it has also seen the development of virtual communities and widespread apps which offer consumers entirely new experiences and bind them closer to brands.  They also provide manufacturers with opportunities to gain direct feedback as to how consumers use their  products.

The performance apparel industry is one of the fastest growing sectors of the global textile industry. This growth of performance apparel market can be attributed to the changes in the lifestyle of the majority of people today.  The global market for performance apparel is growing day by day and performance apparel will soon outperform all sportswear.

 

Competitive Advantage

MiKaSu is headquartered in New York with strong affiliation with Parsons School of Design. Our competitive advantages are innovative ideas as such re-design of smart garments, subscription system with cost control mechanism through collaboration with the manufacturer and integratable plug-in app with NIKE plus Running.  

Innovative design ensures us to become a leader in the industry not just as a follower, but the supreme leader. Beauty, revolutionary and practicality are among the ingredients that we injected into our collection.  Pioneering an industry first, subscription system, to allow more exercise lovers to join the platform further drive our cost down on all levels.

Our Integratable and interchangeable electronics (such as solar panels) among garments would be an industry first. By reusing and upgrading the solar panels, we can ensure the minimum amount of materials are used to produce new garments.

Our interaction with customers is 24/7 with endless tasks and options that one can choose to participate based on the NIKE Infinity platform.  The more people involved in our program the more we attribute to the environment to close the industrial loop as a circular economy. 

 

Financials

MiKaSu Inc. expects to earn a modest profit by year two based on projected sales. Our projections are based on the following key assumptions:

  • Initial growth will be moderate as we establish awareness in the market
  • Initial equipment purchases will stay in service for an average of three to four years; after two years we will begin investing in "new" equipment to replace damaged or obsolete equipment
  • Marketing costs will not exceed 30% of sales
  • Residual profits will be reinvested in expanding the product and service line

 

We project first-year revenue of USD 4,500,000 and a 10% growth rate for the next two years. Direct cost of sales is projected to average 20% of gross sales, excluding 10% for the purchase of equipment and 5% for the purchase of ancillary items. Net income is projected to reach USD 34,600 in year three as sales increase and operations become more efficient.


Who will take these actions?

Smart clothing design requires a team of artists, designers, scientists and engineers bringing their individual talents together to create garments that are as appealing as they are functional.  At MiKaSu, we are connecting the dots to make affordable revolutionary sportswear through innovative platform to make exercise more enjoyable.  As a result, we not only stimulate and promote healthy lifestyles, we were able to close the manufacturing loop to form a circular economy.    

The four major stakeholder groups that can influence change in this sector are consumers, government, business and media. We propose here a set of actions which would support a move towards the ideal consumer behavior: 

  • Consumer education is vital - to ensure that fact based information on the individual impacts of a product are made clearly available and then to support consumer understanding of the consequences of this information. 
  • Legislation could be used to outlaw specific undesirable components - such as particular toxic chemicals, but this would be difficult to impose on imports due to the complex range of chemicals involved.
  • New business models with growth in profit inversely related to the increased use of material are possible where consumers pay for services - such as repair, other maintenance services, remanufacturing or "fashion upgrades".  "Closed-loop" business models in which retailers take back end of life clothing, for instance, could promote reclamation and so reduce demand for new materials.
  • Through various media outlets - promote environmental and social responsibility in supplier countries, while fairly acknowledging the economic consequences of imposing improved behavior on otherwise cheap suppliers.


Where will these actions be taken?

To become successful in smart garment industry involves working in new, unfamiliar areas. Bringing textile, clothing, electronics hardware and software expertise under one roof is one strategy that has proved successful, but also represents a high-risk and high-cost option, especially if you select the wrong partner. It also often tackles only the creative solution not the supply chain problem.

Hence, many successful startups still struggle to grow because of the lack of manufacturing support when they are ready to transition from their in-house or local small-scale production facilities.  This is, indeed, the strength of MiKaSu where we provide a "one-stop shopping" solution to connect the manufacturer to the vast consumers globally.  

Finally, wearable success requires similar business "ecosystems" - offering open (but not always unlimited) access for app developers and makers of other smart devices (including other wearables) to encourage mass connections and uses.  Products which connect easily and seamlessly to other useful devices, combining to make users' lives better, easier, healthier or more fun, are more likely to be successful than those which adopt proprietary or closed systems and offer limited uses. Those requiring their own chargers, connectors and cloud services may struggle to gain mass acceptance.  Finding and developing collaborative ecosystems and learning to work with such divergent industrial partners is challenging, but the proliferation of wearable technology and smart fabric conferences, events and online communities are all making it easier to locate and understand new partners and what they can offer.

With the above being said, MiKaSu will offer a revolutionary open source solution concept (similar to the Android system) to all vendors who wish to contribute to the upgrade and development of the software.  Even though it’s based off the the NIKE app at the beginning, it will certainly NOT limited to one service provider in the future.


What are other key benefits?

Sportswear market has been developed and advanced to a point where the collaboration between designers and scientists could bring about incredible innovations that could alter a person's life, prolong life, prevent harm and accidental death.  In our case, a fully solar-powered and recycled garment could provide all the benefits of an ordinary garment plus safety features like emergency call out and location services.  Having a smart garment is no longer only a fashionable way of living, it becomes a necessity for every individual.   


Infinity Smart Sportswear Collection 

A revolutionary collection of smart garment aims to improve people's health and exercise performance. Create awareness, in order to have make a behavior change.

Plugged in App Service

Increase fun of outdoor exercise experience by seamless App service.   

Subscription Business Model

Through a subscription model to fulfill people's aspiration to enjoy the premier service at a reasonable price. 

 

 

 

 


What are the proposal’s costs?

This study demonstrates the sales projection of MiKasu Inc. for the first 5 years of operations, with basic assumptions and key financial indicators. The basic assumptions are based on the strategies and the plan of actions, the operative and commercial policies to be developed by the management and its business plan. These assumptions are the base to construct financial projections.

  • Number of Units SOLD: 180,000 per annum
  • Unit sales price: $250
  • Unit cost: $50
  • Sales commission: 10%
  • Monthly subscription cost: $30
  • Annual sales growth rate for 1st and 2nd year: 10%
  • Annual sales growth rate after 3rd year: 20%
  • Initial paid-in capital: $150,000

 

The sensibility analysis is realized to find out how the operations would end up if MiKaSu is exposed to a different scenario to the previously evaluated. For that, the main variables will be modified and the sales projection will be adjusted.  To evaluate the sensibility and the model of MiKaSu, it is assumed that an expected slower growth, a reduction of the managed assets per client, an increase in production cost, and a salary increase. We summarize that the main affected variables in the analysis are:

  • Annual sales slows down to 0% growth
  • Costs of materials are up another 10%
  • Salary increase of 5%
  • Short term loan facility is no longer available

 

Under extreme circumstances stated above, our sales projections still show a healthy positive number.  With our ultra conservative sales projection of 50,000 units per year (NIKE + running currently has 18 million active users), we have a huge buffer should the overall economy goes into recession.  

Our break even cost is at USD 25 a month versus the USD 30 that we are charging which translates into a 20% profit margin .  This is based on our assumption that subscribers will likely to exchange 3 sets of garments annually.  We will continue to monitor the consumer behavior as the time progresses and make necessary adjustments accordingly.  

 


Time line

Short Term 

Our customer segmentation includes direct customers who are the business to business clients and indirect customers who are the end-users. 

We will start from partnering with Nike and providing the product and service for 180,000 potential Nike+ paid users to cultivate the culture of caring and close material consumption loop. 

  • Promotion plan of Nike Infinity Collection

 

 

  • Milestone


Medium Term

70% of the sportswear companies will execute the subscription business model. They will also implement the real value of CSR by taking full responsibilities on their products from design, manufacture, to recycle.  

Long Term

With the technology by that time, all clothes will be made by recycled materials and with the low environmental impact production. The clothes will have the innovative sustainable features such as automatic weather adjustment, color change, growing clothing by stature, reducing the material consumption.

 


Related proposals


References

BOOKS

LOUISE VALENTINE, PROTOTYPE - DESIGN AND CRAFT IN THE 21ST CENTURY

Andrew Polaine, Lavrans Løvlie, and Ben Reason, Service Design: From Insight to Implementation

Marc Stickdorn and Jakob Schneider, This is Service Design Thinking

Jennifer Visocky O'Grady and Ken O'Grady, A Designer's Research Manual,

William Lidwell and Kritina Holden, Universal Principles OF DESIGN

WEBSITE

Sportswear in the US (MAR 2016), Euromonitor International

Athletic Lifestyles Keep Apparel Sell Healthy (OCT, 2015). Morgan Stantly, Retreived from http://www.morganstanley.com/ideas/global-athletic-wear-geared-for-growth

Apparel 10 2015: The Most Valuable Apparel Brand of 2015, BrandFinance. Retrieved from http://brandirectory.com/league_tables/table/apparel-2015

Hayley Fitzpatrick, The Top Ten Clothing Company in America (JUL, 2015), Business Insider. Retrieved from http://www.businessinsider.com/the-10-biggest-apparel-companies-in-the-us-2015-7

James A. Martin,13 Wearable Tech Trend to Watch in 2016 (DEC, 2015), CIO.com. Retrieved from http://www.cio.com/article/3017995/wearable-technology/13-wearable-tech-trends-to-watch-in-2016.html

Aldrin Calimlim, Popular Fitness APP Runkeeper Acquired by Sportswear Company Asics ( Feb 2016), Retrived from  http://appadvice.com/appnn/2016/02/popular-fitness-app-runkeeper-acquired-by-sportswear-company-asics

New Balance Launches Technology Division Dedicated To Improving Athlete Performance  (Jan 2016), Retrieved from http://newbalance.newsmarket.com/LATEST-NEWS/new-balance-launches-technology-division-dedicated-to-improving-athlete-performance/s/9C08A31D-5601-4C73-A584-A8DD476C2910

Mark Gurman, Nike CEO Discusses Future of Apple Partnership, Existing Wearables, & Apple Watch (MAY 2015) . Retrived from