Paper Example on Fashion Retailing

Introduction

Retailing is the business of buying finished cloth products from manufacturers for sale to the final consumers. The business of linking manufacturers with the consumers is called retail trade and it involves a retailer investing in a stock of clothes from the manufacturers which are sold to the consumers in the market at a profit. Fashion retail business has become increasingly competitive due to the rise in the number of retailers and increase in fashion consumerism. The internet has increased the ability of fashion retailers to connect with consumers which has significantly expanded the retail market. Fashion retail business is a very active business with many players which has ensured that the business improve constantly as the retailers compete with each other for a market share. The price of products in the United Kingdom retail business are shaped by market factors and it is a perfect competition market type where there is perfect information on price of the clothes by the sellers and the buyers.

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Marks & Spencer Fashion Retail Company

Mark and Spencer group plc (M&S) is a fashion retailer based in the United Kingdom with 1380 stores around the world. The retailer was started by Michael Marks and Tom Spencer in a partnership in 1894 and Spencer contributed PS300 as a half share. Marks had ventured into the fashion retail business as a peddler ten years earlier where he owned a stall on a trestle table in Leeds market. On the other hand, Tom Spencer was a cashier in a local textile wholesaler whereas Isaac Jowitt Dewhirst was a bookkeeper. In 1903, the partnership was converted to a limited company and had PS30,000 in PS1 ordinary shares and 14996 of the shares were allocated to Marks and to Spencer. Spencer retired in 1905 and Marks died later in 1907 after which the business became dominated by William Chapman who was his executor at the time but was later ousted by Marks son Simon in 1916.

The retailer operates through two segments the UK and the International segments. The UK segment consists of the retail business and the franchise operations. The retailer sells fashion products in its stores and also online in the United Kingdom and the international market. In fashion products, M&S retailer sells womenswear, menswear, kidswear, home products, beauty and lingerie in 300 full line stores and through M&S.com with 910 stores in the United Kingdom. Amongst the stores in the United Kingdom, M&S owns 220 stores whereas 350 stores are franchises. M&S is registered in the London stock market under Marks and Spencer Group PLC (MKS.L). In 2017, the fashion retailer net income was PS115.7 million and had a net worth of PS2,642,400,000.00 in 2016. The company as at 2017 employed 84,939 employees.

Key Relevant Changes in the UK Fashion Retail

The United Kingdom fashion retail has experienced multiple changes recently. The fashion market is constantly changing in terms of products, consumers, retailers and government environment. This section will assess the most relevant changes in the United Kingdom fashion retail using PESTLE analysis.

Political

Brexit uncertainty and referendum are key political changes in the United Kingdom that have had a significant impact on the fashion retail. The UK is set to leave the European Union officially in 2019 and the Brexit uncertainty has significantly affected fashion business in the country. Brexit will have a significant impact on Mark and Spencer and other fashion retailers in the UK due to change in policies and trade agreements previously reached upon during the European Union era. The political referendum on Brexit significantly affected business and as the United Kingdom prepare for Brexit in 2019 the political environment is unsettled.

Economic Factors

Britain economy performed relatively well in the beginning of 2018 which was blamed on the snow but later on picked on as the weather improved. However, the gross domestic growth still remains below the historical averages. The UK economy has grown constantly from 2013 to post recession levels but the GDP per head has faced a slower growth despite reaching its pre-recession level in 2015. Post Brexit referendum the economy has experienced a significantly slow growth with the growing inflation being a major cause of concern. The sterling pound value has depreciated in post Brexit vote which has gone to 30 years low against the dollar. Besides, the sterling has also declined significantly against the euro due to the economic growth in the Euro zone (Strauss, Bernard, and Pearson, n.d.). Labor cost and the cost of living has also been rising between 2017 and 2018 which has significantly affected the fashion retailers cost of running business and the consumer buying habits. Globalization and the internet has improved fashion retail trade by enlarging the market which has been made possible by the internet and cheap and fast transport of goods.

Social Factors

The social factors refer to the elements that make the population lifestyle, family, community and the social economic factors. In the fashion retail business, there are many social factors that affect business at different levels.

Acceptance of Internet Commerce

The acceptance of internet commerce in the United Kingdom has significantly increased which has improved trade and the market share. Statistics shows that e-commerce in the UK in the past year has grown to PS15.6 billion as recorded in 2017 and the trend will increase even further in the near future as more people embrace new technology (Statista. 2018). In terms of online purchases per category clothing is the leading segment as at 2017 with 64%. This indicate that internet sales is a major segment in the fashion retail business but statistics show that those that shop online also shop in the stores. In terms of demographics, the highest number of clothing purchases comes from women at 59% whereas 50% of men shop online. 74% of the sales came from the group between ages 16 and 24 and declines from age 45 to 65 according to 2018 statistics (Ecommerce News. 2018).

Value Perceptions

Value perception in UK fashion retail business shows that consumers are keener on quality in their decision to buy clothes. Women have high quality perceptions compared to men and in addition women are more likely to consider the quality of the fabric, style, and the price of both menswear and womenswear (Castelo and Cabral, 2018). Clothing products are able to simulate sensory reactions and arouse the emotional and cognitive reactions which is a major consideration that retailers should make when buying their stock to ensure that their products meet the quality demanded by the consumers.

Technology Factors

Security and social networking are major technology factors that influence fashion retail trade today. The number of cybercrimes have increased and retail businesses that operate online segments are constantly at risk of hackers. Social networking has increased amongst consumers in the United Kingdom due to the easy access of data as well as smartphones which has made social networking especially amongst the young people very easy (Castelo and Cabral, 2018). Fashion retail businesses can be affected by this aspect in terms of publicity because negative business information can spread easily and destroy the business positive publicity in the market.

Legal Factors

The legal factors in retail business are arising due to the looming business which will significantly change the legal elements that regulate retail trade and fashion products in the United Kingdom. The workers' rights is one of the legal factors that fashion retailers should be able to understand to ensure compliance. Legal suits against organizations for failing to meet the legal requirements in the business are detrimental to the organization future. Retailers should be aware of the legislations that protect the consumers especially as the online fashion retailers sales grow. The Sale of Goods Act protects the quality of goods that consumers are advertising through the internet and the Consumer Protection from Unfair Trading Regulations ensures that retailer's practices are fair especially in social media and online adverts to protect consumers from deception (Jackson, 2018). However, the most important legal factor in the retail business is the protection of the consumer information which has become a significant challenge due to weak organizational policies as well as increase in cybercrime.

Environmental Factors

Corporate Social Responsibility, Ethical Sourcing, and Transportation

The climate change problems has significantly increased the CSR activities by organizations towards conservation efforts. Business organizations are using CSR activities to improve their public image rating of their brands. Retail businesses are increasingly getting their products from businesses that observe conservation efforts and regulations. In terms of transportation, the supply means should ensure that emissions by transport vehicles meets the minimum requirements (Wagner, 2015).

Relevant Changes Within the Micro Environment

Growing Consumerism Amongst Retailers

Consumerism refers to the protection of the consumer interests and in the fashion retail business decisions and actions are aimed at advancing the interests of the consumers. Consumers today have many options especially in terms of products as retailers try to keep a broad aspect of products. Retailers are also adopting online segments apart from the brick and mortar stores in streets. The aim of adopting online segment is to increase consumer convenience and promote sales. Greater access of products and variety is an aspect of consumerism that is on the rise in the fashion retail business. Consumers have also increased their demand on quality assurance another aspect the retail businesses are increasingly increasing their responsiveness in terms of product quality by ensuring variety of products and quality assurance by giving the consumers the opportunity to return products within a stipulated time after purchase for compensation. In addition, fashion retailers in the UK are listing their suppliers to meet the desires of the consumers to know the source of their clothes (Snowdon, 2018). Consumerism conscious has increased the demand by consumers to know the processes involved in the production of their services as well as raw materials involved. As such, fashion retailers are listing their suppliers to meet this critical consumer need.

Creating Consumer Unique Experience

Unique consumer experience in the fashion retail business has become a major competitive factor as retailers compete on creating unique products and experience to the consumers. Unique experience in fashion retail is a significant challenge because many retailers sell products from similar suppliers. Therefore, creating a unique experience at the retail level is a significant challenge that can be addressed through branding and unique services such as free delivery and responsive customer care at the retail level. Fashion retailers in the UK are using in store entertainment as well as deploying tablets in stores to make it easy for the consumers to search for their desired products (de Paiva, 2017). Interior store decoration is also an aspect of creating unique experience and the packaging of the products to ensure that they focus on creating a unique experience by providing packaging bags that are uniquely branded by the retailers to increase consumer appeal.

Strategies and Tactics to Meet the Macro-environment Changes

Improving Efficiency

Efficiency in business refers to the cost of doing business which has a significant impact in the success of any business and in this case fashion retailers. The macro-environment s...