RETAIL THEORY
First concepts of retail and the retail fashion industry
Retailing involves methods that ensure the sale of goods and services in a convenient, convincing, and comfortable manner (Kent and Blazquez, 2019). Retailing was formerly known as old business, commerce, and trade, but it has since taken new forms and shapes. The reason for the change is because of the adoption of new techniques of management, new marketing techniques, and the ever-changing consumer dynamics. Other economic scholars define retailing as a broader area of e-commerce. It is studied that there are increasingly educated and literate consumers that are entering the economy, which signifies the need for understanding and knowledge of consumers’ pulse. It is also understood that the retail market is undergoing restructuring because of the recorded number in the increase of gross domestic product, an increase in per-capita income, and the increase in the purchasing power of consumers. Research studies show that the evolution of retail marketing has been contributed by the emergency of plastic money, the use of ATM cards, credit cards, and debit cards. According to Kent and Blazquez, (2019), retail marketing does not only deal with buying and selling of goods but also the provision of services to consumers. It is resourceful to add that retail marketing is picking up that has made the fast-moving capital goods to have a new look. This new look has made consumers increase their demand for various products and services, doing retail marketing to be the second-largest source of employment after agriculture.
According to Kent and Blazquez (2019), the fashion retail industry involves the designing, manufacturing, and sale of clothes. Related concepts in the fashion retail industry describe how clothes move from manufactures to consumers. These concepts state that fashion retailing is the process of buying clothes from the manufacturers then later selling them to consumers. It is studied that in the retail fashion industry, retailers make the first purchases to be resold within six months, after which the consumers can buy the clothes in fashion stores. It is also studied that fashion retailing must be involved with management services of the flow of merchandise from the initial design selection to the final stage of customer presentation. These sequential processes are aimed at the maximization of the sales as well as profitability (Kent and Blazquez, 2019). It is pertinent to add that successful fashion retailing depends on the customer relationship of a specific fashion company. This customer relationship involves the fulfilment or satisfaction of the needs and desires of a customer. Marketers in the fashion industry are responsible for the identification and definition of the target customers of fashion producers and also respond to the preferences of specific customers. The fashion retail industry involves concepts such as marketing and merchandising. Merchandising is a concept that attempts to explain how fashion retailers can maximize sales and profits by the introduction of new customers in the market (Kent and Blazquez, 2019). The term generally means the selling of the right fashion goods, at the right price, right time, right place, and the right customers.
Selected and alternative Fashion Retail Company
The focus of fashion Retailer Company is Mark and Spencer that is located in the UK that has over 1380 stores in the world. The reason for the choice of the company is because of how it uses its strategic marketing capabilities to maximize sales and its profits. It is useful to add that the company operates through two segments, the UK and the international segments (Arnold, 2019). The UK segment of this company consists of retail businesses and franchise operations in the UK. The international segment consists of the businesses owned by the Marks and Spencer in Ireland, Europe and Asia, and global franchise operations. Interestingly the company deals in the delivery of brand food owned by the company, clothing, and home products.
Interestingly, the company delivers these goods both in its stores and its online platforms where orders are made. In the clothing sector, the company sells kids wear, menswear, and women’s wear (Arnold, 2019). It is useful to note that the focus on this fashion retail company is inspired by how it has used to survive recessions, public relations nightmares, dry periods, and still retain its formidable UK and international image. The motivation behind the focus on Mark and Spencer is based on the brand and success despite the ever-evolving consumer. Interesting facts about this company shows that it began by only selling British made goods in the early 20th century and later entered into long-term relationships with UK manufacturers in selling clothing and food items. Also, currently, the company has decided to be with its customers in that amid the outbreak of COVD-19, it has decided to venture in free door deliveries of clothing and other essential fashion items like flowers. However, the company has hit £145m of unsold stock with clothing sales fall to 75% amid this pandemic.
If the first option of the listed fashion retailer does not work, ASOS.COM will be the ultimate choice. ASOS.COM is a British online fashion retailer that mainly sells its products through its website. Fashion retailing in this company mainly occurs through digital marketing, where the company uses its social media platforms for advertising its products. The company has global expansion policies that aim in stabling markets in most parts of the world. In 2009, the company informed its clients that it was looking into ways that it can change its easy returns policy (Arnold, 2019). ASOS.COM operates as a company that has an individual investment that most of its services are mainly online, although it has stores. The products of the company are its brand and label that include women’s wear, men’s wear, jewellery, accessories, and beauty products. From previous annual reports of the company, the company’s website sells over 850 brands and has shipments to its 196 countries. The company, in its 2018 annual report shows that it plans to build circularity in its operations by 2025. The report states that 80% of the products’ impact is embedded at the design stage, where critical decisions like materials and shapes are made. According to Arnold (2019), the aim has made the company to partner with the Center for Sustainable Fashion from the London College of Fashion that will help in the training of design and product teams of the company. By the end of this year, the company aims at having a clothing take-back program that will be running in the UK and Germany. It means that the customers can return their clothing for recycling (not just denim and not only ASOS products). From the 2019 Annual report, the company reinstated that its mission is to remain the number one online Fashion retailer where customers will find loving fashion.
Macro-environmental factors on the fashion retail industry
Research studies by Abhijeet Pratap (2018), show that many macro-environmental factors affect almost all fashion industries and retail. Retails must, therefore, adapt for them to remain successful and competitive since most fashion industries don’t have significant control over this. The retail focus now shifts to its customers since no industry wants to lose its already hard-earned customers. Some of the macro-environmental factors include but are not limited to;
Demographic trends, which have great effects on the profitability and sales of a retail business and brands of fashion, affect the fashion industry (Abhijeet Pratap, 2018). Fashion preferences have, in the recent past, greatly changed according to the generational changes. Today’s generation, which makes the most abundant population composition, being the millennial, is now a massive market target group of the current retail fashion world with their preference being much different from the previous generations. The millennials love fast fashion and mostly like to shop online due to the improvement in technological fields and prefer customized products. Because the previous generation is ageing, this makes their needs a bit different from the millennial, which gives rise to new customer needs and demands (Abhijeet Pratap, 2018). Another macro-environmental factor is Political and legal factors. In the 21st century, these politico-legal factors have grown and developed into affecting businesses directly from work-related and environment-related laws together with country-specific laws for companies that impact directly on the fashion industry. Export and import laws directly affect the profitability, growth, and competitiveness of fashion industries.
Another environmental factor, as explained by Lauren Treadwell (2019), is the technological forces that change according to time and demand. Improvement in technology has dramatically improved the marketing sector due to the availability of social media, which the millennial, being the most significant market target group, have access. Fashion retails can quickly post and market their brands from the comfort of anywhere and will reach their maximum followers in a short period. The availability of online shopping has also changed the fashion industry since the customers can buy and customize their desired products for online buying, and the delivery can be done to the comfort of their location globally (Lauren Treadwell, 2019). Brands must also use the best technology available for them to remain competitive and increase their sales. Economic factors also affect fashion retail. Economic fluctuations in the environment globally affect the rise and fall in the sales of a fashion brand. People trying cost-cutting ended up in the reduction of the sales of their brand. When the economic condition of an economy is good, and people have a high level of employment, they tend to have extra cash in their pockets which makes them able to afford and buy brands and luxuries (Lauren Treadwell, 2019). However, in recent history, most countries have a struggling economy, which thus affects the fashion industry. The economic fluctuations and a stronger dollar also lead to the loss of profit in fashion retails and industries.
Another factor is the ecological factors, also knows are natural forces, as described by Maximilian Claessens (2015). Natural resources, found the environment, are very important to the marketers because of their use in the production process of the fashion brands. An increase in natural resources makes the production of the fashion brands to be more and hence decrease the price of the products (Maximilian Claessens, 2015). A decrease in natural resources makes the production of the brands to be minimal and rare and thus have an increase in the prices of fashion products. Socio-cultural factors also affect fashion brands. This factor contains how the brand affects the social values, preferences, and behaviour of a society. The basic consideration is that people are part of the community, and undermining their culture harms the fashion business. For example, symbols have different meanings in different cultures. Therefore, fashion industries need to understand foreign cultures, too.
Concepts and theories that could be useful
Retailing theories could be useful in the final summative report to explain the success of the chosen fashion retail company. These theories determine if the fashion industry will be successful by getting a large number of sales and high profits. According to Alam (2019), there is no theory in retailing that is universally applicable, which means that each theory varies from market to market, retailer to retailer, and the difference in socio-economic conditions in the market. The retail environmental theory mainly explains retailing changes as one moves from one environment to another. This theory borrows concepts of Charles Darwin of natural selection of “survival for the fittest.” It explains that organizations or retails that perfectly adjust to the operating environments have higher chances of survival (Alam, 2019). The major environmental factors explained in this theory include a change in the characteristics of consumers, demographic factors, social factors, economic factors, and technological factors (Alam, 2019). The theory will be of use in the explanation of how the fashion retail company is a commercial entity and how it confronts the environment that consists of consumers and competitors such that it makes the highest sales possible. Confrontation success in any environment determines the profitability of the retailers; thus, the birth, prosperity, and decline of retail enterprises are attributed to the business environment. This theory will be of use to explain the different environments that the choice of fashion retail firm above operates.
Another theory that will be used in the explanation or analysis of the fashion retail industry is the cyclical theory. This theory widely explains wheel retailing, which suggests that retail innovators, in most instances, always appear as low-price operators that have low-cost structure, low requirements in profit margin, and offer some real advantages (Alam, 2019). In particular, this theory will be used to explain how the fashion retail company chosen evolved or passed through various stages until it reached international markets. The stages of evolution that will be applied from cyclical theory include entry phase, trade-up phase, vulnerable phase, and maturity phase. The entry phase is a stage that involves the start-up of the business or the initial business operations in the selected fashion retail company. The trade-up phase is a stage where a retail company offers its full range services and range of merchandise full prices without any discounts. The vulnerable phase will be used to explain the evolution of the company on how it got itself in competition. At this stage, the different stages employed to survive competition will be explained. The maturity stage deals or describe how the company expanded to international markets, and the initiatives were undertaken to diversify the operations.
Apart from the theories of retailing that could be useful, fashion shows could be used in the explanation of how the chosen company promotes its business operations. Fashion shows involve the promotion of products by fashion designers and manufacturers to the media and directly to customers. Media and marketing will also be a useful concept that involves different media that a company uses to reach a large number of customers. Some of the media that could be useful include the use of newspapers, blogs, cinema newsreel, and visual media that involves promotion by different celebrities. Another concept that could be useful in writing the report is world fashion. According to Alam (2019), this concept describes what most people in the world prefer to wear. The concept could explain how the fashion retail company has employed it to ensure that it attracts the attention of different consumers in the world. This concept also explains how different cultures design their clothing to ensure that they act within the norms. It could be useful in explaining how the fashion retail company diversifies its designs to ensure that every culture is attracted to the designer operations of the selected company. The fashion system concept could also be useful that mainly embraces the business of fashion, art, and craft of fashion, production, and consumption. This concept will explain to the different fashion designers that the fashion retail company uses or employs. In the fashion retailing industry, a fashion designer is an essential factor in that he is an individual consumer that contributes to imagery view of the related fashion.
Resources to be used in the planning and writing of the report
One of the resources that will be used in the planning and writing of the report is the annual reports of the chosen company. These reports will be selected not only for the latest year but also for the other successive years to determine the progress the company has made within a specific period. The reports will also be useful in determining if the company has fulfilled the set goals or has accomplished the mission statement. Apart from annual reports, existing books that talk about retail theory will be consulted in detail. These books will give detailed explanations of the retail theory, the history of retail theory, and elements for its success. One of the books that could be used or consulted is “Retail geography” (Dawson, 2012). The book is a volume seven publisher, and it contains diverse content that will be useful. The book will be useful in explaining the different behaviours of consumers in the retailing industry. It will go ahead in explaining the different behavioural approaches in the retailing industry. An alternative book will be used in case the other does not provide enough content. The alternative book that can be useful is “Retailing environments in developing countries.” (Dawson et al. 2005). This book will provide the different environments that retailers go through to ensure that they internationally expand their businesses. The book will explain the environmental theory discussed above in detail without giving brief information. The book will be useful in describing how different developing countries practice retailing and the challenges encountered. It is useful to add that the book will help get knowledge of the retailing structure in developed countries.
Business magazines could be useful in consulting when planning and writing the report. The main focus company and its alternative are in the UK; therefore, the magazines will be preferably UK based. Since either of the company has expanded to international markets, it will be appropriate also to consult some of the famous international business magazines. The UK based magazines will be selected from its top ten rankings because of the perception that they contain quality and detailed data in explaining or discussing fashion retailing in the chosen company. The Insider magazine could be useful for consultation in determining and explaining how it promotes fashion retailing. The magazine will also help get information on different retailing environments in the UK and even the different cultures or fashions that UK citizens prefer in most cases. The knowledge of the fashion culture will then be linked back to the specific fashion retailer company on how it designs its clothing to meet the demands of consumers. Other UK magazines that could be alternatives if the Insider does not provide adequate data are Real business magazine and the Business matters magazine. Government reports could be useful also in the planning and writing of this report in that they will help to gain knowledge of the policies related to retailing and how the government supports fashion retail companies to ensure constant profits throughout each financial year. Organizing reports of fashion shows could be useful in explaining the relevance of fashion shows in this industry and how it can ensure a fashion retailer company has its maximum sales in a fiscal year. Another resource that could be useful in planning and writing is media reports to ascertain how journalists and other related celebrities enter into contracts to support the fashion retail companies.
Reference list
Abhijeet Pratap, (2018). Macroenvironmental Factors Affecting Fashion Retail. [online] notesmatic. Available at: https://notesmatic.com/2017/07/macroenvironmental-factors-affecting-fashion-retail/
[Accessed 21 May, 2020].
Alam, J., 2019. Revisiting the retail change theories: A quest for a contemporary model of retail change (CMRC) in Bangladesh. Asian Journal of Multidimensional Research (AJMR), 8(12), p.7.
Arnold, R., 2019. British Fashion Design, Rag Trade, or Image Industry? Angela McRobbie. Fashion Theory, 15(1), pp.135-137.
Dawson, J. ed., (2012). Retail geography (rle retailing and distribution) (Vol. 7). Routledge.
Dawson, J. et al. (2005). Retailing environments in developing countries. Routledge.
Kent, A., and Blazquez, M. (2019). OMNICHANNEL AND CONSUMPTION EXPERIENCES IN FASHION RETAILING. Global Fashion Management Conference, 2019, pp.471-471.
Lauren Treadwell (2019). The Role Of Macro Environment In The Retail Industry. [online] Small Business – Chron.com. Available at: https://smallbusiness.chron.com/role-macro-environment-retail-industry-33419.html
Maximilian Claessens, (2015). The Macro Environment – Six Forces (DESTEP). [online] Marketing-Insider. Available at: https://marketing-insider.eu/macro-environment/
[Accessed 21 May, 2020].