Future Trends in the Retail Industry

This assignment tasks you with analyzing the emerging trends that are transforming the retail landscape. You will explore key areas such as sustainable practices, technological advancements (e.g., e-commerce, AI), and evolving customer expectations. The analysis should draw upon provided research papers and consider the impact of these trends on businesses within the retail sector.

Retail theory and practice

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of Marks and Spencer.................................................................................................1
Analysis of retail sector in UK....................................................................................................2
Competitors in the retail industry and strategy used to cope up with the same...........................3
SWOT Analysis...........................................................................................................................4
Issues faced by M&S in retail sector...........................................................................................5
Recommendations to respond towards the challenges................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Understanding the challenges, an organization is facing, becomes an important task that is to
be performed by the management, so that adequate steps can be taken by them with the aim to
cope up with it. The present report helps in making discussion regarding marks and Spencer and
the issues faced by it over a couple of years (Laudon and Traver, 2013). The report helps in
making a concrete discussion regarding current make up of retail sector and its performance in
UK. The report will also perform, SWOT analysis in order to ascertain strengths, weakness,
opportunities and threats of the organization so that adequate steps can be taken for its benefits
and increased revenue. In the end, various challenges are identified that are faced by Marks and
Spencer and recommendations are extended based on it.
Overview of Marks and Spencer
Marks and Spencer (M&S) is one of the major multinational retail brand which is
headquartered in City of Westminster, London. It has been listed in London Stock Exchange and
is a core constituent of FTSE 100 Index (Pantano, 2014). The company specialises in offering
clothing, home products and other luxury food products. The entity has been able to offer large
number of products and services to the customers and has become market leader in this field.
M&S is committed to provide high quality products under its brand so that it can easily satisfy
the requirements of the customers. It has been able to establish itself all around the world while
serving the consumers through mode online and offline modes. This has been the oldest and best-
known retailer that has been functioning in UK (Chen and Yang, 2012). It employs more than
60000 people in its stores situated worldwide. It is involved in operating more than 450 stores in
30 countries and generally serves around 10 million customers per week.
The financial objective of M&S is to deliver shareholder value in the form of increased
returns and enhanced sales revenue. Another form of enhancement is increasing the market share
in the retail industry. M&S is considered to be epitome of affordability, quality and reliability. In
order to serve this purpose, the company continuously work upon the market research
programme so that current taste and preferences of the customers can be ascertained (Pantano
and et.al., 2017). The branding and marketing strategies are used to strengthen the brand and
make it reach to the customers which are not aware of its quality yet. M&S have been focussing
upon fashion industry in order to expand itself in a manner that majority of the needs of the
customers are satisfied.
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Analysis of retail sector in UK
Retail sector of UK have been quite a growing economy where the companies have been
able to expand themselves in such a manner that the best practices are adopted by them to serve
the requirements of the customers. The UK retail sector estimated to worth £ 265 billion which is
considered to be 8% of the total GDP of the country. Hence, it can be ascertained that a large
part of growth comes from the sales of food and clothing to the country. However, the total of
retail sector comprises of food, clothing, electronic and other fast moving consumable goods.
The spending of the consumer over retail sector has been able to reach to £309,682 million
in Quarter 3 of 2017. It driven by expenses being made by the customers in all categories. It has
been able to enhance by 0.5% in Quester 3 (Zolnowski, Weiß and Bohmann, 2014). Moreover,
its increase by 1% is expected in quarter 4 reports of retail sector.
A sudden drop in revenues of retail sector has been analysed due to Brexit. However, the
companies belonging to this sector are not leaving any stone unturned to attract the customers
towards the store. In this manner, retail sector has been able to place itself quite well in 2018
after experiencing quite a bad weather in 2016. The two major companies, that are, M&S and
Next reflected their decreased market share due to decreased sales in 2016 (Vijayan and et.al.,
2014). However, the companies were able to pick themselves up by focussing up on online sales
with the help of websites or contracting with other ongoing online selling applications available
for the customers.
As per the reports being published by Deloitte, retail sector has been revolutionized. Due to
availability of large number of competitors, the companies are trying to strengthen their customer
base by focussing upon taste and preferences of the customers. Experiment with experience is
the right way that has been suggested where the retail organisation must innovate in the manner
where retail experience can be enhanced for the customers. The strategy has been adopted by
various retail stores online which have been able to satisfy the requirements of various
customers. The degree of challenge has increased for the organisations where they try to gain
their utmost efficiency that can satisfy the requirements of customers and objectives of the
customers both.
The retail sector of UK has also been experiencing disruption from the side of technology
as well which is bringing them under utmost pressure to innovate and create the best that is not
yet available in the market. Bringing changes in the supply chain management system and
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understanding the profitability aspect as well becomes quite an important task to be performed
by the companies. Keeping pace with the available technology is another action that is generally
performed by the top-notch brands of UK to remain in the race (Ashworth, 2012).
Competitors in the retail industry and strategy used to cope up with the same
Retail sector lies in perfect competition market where entry and exist of the companies is
quite easy due to which there are various companies that have been able to enter into the market
competing with M&S. One of them is Next Plc which works on almost similar model of M&S.
The company is involved in offering clothing and fashion accessories to its customers. It is
involved in providing products and services to the customers which are moderately priced. It has
been able to offer fashion products through its more than 500 stores in UK (Oliveira, Thomas
and Espadanal, 2014). It also has been able to franchise almost 200 stores in 37 countries in
Europe, Asia and Middle East. It generally targets people between the age of 20s and 30s for its
clothing range and help them in looking stylish. Sales generally come to the company by catering
its customers in about 70 countries. The gross total income of the company as per the data of
2017 is $1,738.51 million with its net income of $796.53 million.
Due to enhancement in the revenue of Next, M&S have been facing competitive issues in
the market. Major shift of the customers from M&S to Next have been degrading the overall
revenue of the company. Other challenge that have been faced by M&S due to large availability
of the competitors is constant up gradation in the technology which is constantly adding up to the
cost of the organisation. Other challenge is constantly enhancing the marketing and advertising
strategies that can help in attracting large number of customers towards it.
There are various types of strategies that are adopted by M&S as to remain competitive in
the market. These strategies are as follows:
 Constantly involving in market research: M&S, being a giant retailer, have to
constantly involve in market research so that clothing and other products can be offered
based upon the taste and preferences of the customers (Choudhary and Tripathi, 2012).
Another important aspect of the same is, it helps in keeping pace as per the customers
since they are the end users of products and services being offered.
 Evaluating marketing campaign: Advertising and marketing campaign plays an
important role in attracting large number of customers towards the organisation. It
helps in making people aware regarding new addition being made in the brands. It also
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helps in attracting the customers towards it and makes the brand more visible
(Hançerlioğulları, Şen and Aktunç, 2016).
 Up gradation in prices of the products: Next have been offering products at quite a
moderated price to its customers. It helps in attracting large number of customers
towards it. Therefore, to combat the price competition in the market, M&S is required
to take adequate steps that can help in competing with the prices being offered by Next.
SWOT Analysis
SWOT analysis helps in showing internal strengths and weakness of the organization and
opportunities and threats based upon external environment. It helps in calculating facts and
figures of the organization that can be quite fruitful in strategic decision making. In order to
understand the strengths and weakness of the company, it becomes important for the team to
perform SWOT analysis over it. In case of marks and Spencer, it can be performed in the
following manner:
Strengths
 High recognition of the brand: Marks and Spencer have been able to present itself as a giant
for UK retail industry. It is because of the quality of products that is generally offered by it to
its customers.
 Wide variety of the products: There are variety of products that are offered by the brand.
From selling clothing and fashion wear to fruits and vegetables, Marks and Spencer have
been involved in everything.
 Extensive spread of stores: Marks and Spencer have been able to mark its presence in the
market by establishing more than 900 stores all over the world. It helps in making the
products easily available to the customers (Kim, Kim and Nam, 2014).
Weakness
 Bad publicity: Some of the customers states that the products and clothing range being
offered by Marks and Spencer is out of fashioned and not trendy. Moreover, people have
made wrong assumption that men’s and women’s wear are only for aged people and not for
youngsters. The wrong perception of people towards the brand have really decreased the
business (Beske, Land and Seuring, 2014).
 Increased manual working: Marks and Spencer have been involved in adoption of old and
obsolete form of production rather than encouraging itself towards trendy and modern
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technique. It can help in reducing the overall cost of the organization. Moreover, the
company can also provide the products and services to the customers at affordable prices.
Opportunities
 Untouched international platform: Though Marks and Spencer have already been able to
make a mark in various countries. However, there are certain countries in which it is not
available yet. Making itself available in all the countries of the world can help the
organization to expand rapidly. A specific strategy for the same can help in fulfilling this
requirement.
 Market Segmentation: market segmentation is the process of splitting the customers present
in the market in different groups based on similar level of interest being shared by them. In
this case, Marks and Spencer have the opportunity to enhance the technique of market
segmentation so that interest of the customers can be served in a better manner.
Threats
 Availability of high degree of competition: There are various other competitors that
are available in the market who offer similar kind of products and services as that of
Marks and Spencer. It required adequate steps to be taken by the management of the
organization to deal with the same.
 Changing government policies for retail stores after Brexit: The government have
been involved in changing policies after Brexit. There are higher chances that marks
and Spencer sales will be hit badly by the same.
Issues faced by M&S in retail sector
There are various issues that are faced by Marks and Spencer due to the current market
scenario and the policies that are adopted by it in common. Some of them are:
 Increased competition in the market: Due to availability of large number of organization of
similar interest Marks and Spencer have to struggle in order to remain competitive in the
market. It also results in loss of market share (Turker and Altuntas, 2014).
 Fashion being a dynamic industry: Constant changes in the fashion industry makes it
difficult for the company to keep updating its stock. It also adds up to the overall cost of the
company. If any of the fashion goes out of date, it becomes difficult to deal with underlying
stock in the warehouses.
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 Difficulty in making the clothes available at all of their stores: The range of clothes made
available at various stores are quite different. IT becomes difficult to offer same type of
clothing range at each and every location. It can leave certain type of customers unsatisfied.
 Weak confidence from the side of consumers: There are various customers who have stated
that they do not believe on the quality of products and services being offered by Marks and
Spencer. Moreover, the type of fashion offered by it is generally not liked by all the
customers. In this case, it becomes difficult to attract other customers due to dark publicity
available in the market.
 Slow moving and unimpressive move towards e commerce: Marks and Spencer is available
online. But difficulty is faced where the company do not update its websites time to time. It
ultimately affects its overall revenue being generated by Marks and Spencer through e
commerce.
Recommendations to respond towards the challenges
Based upon the challenges being identified in the above section, following recommendations
can be extended to Marks and Spencer in order to deal with them:
 Enhancement in marketing strategy: In order to attract large number of customers towards
it, it becomes important for the organization to opt for effective and impressive marketing
strategy. Hence, in that case, it is advised to Marks and Spencer to opt for various medias for
publicizing itself, such as, television, newspaper, social media marketing techniques etc
(Retail Trends 2018, 2018). Understanding the requirements of the customers: It becomes important for an organization
to understand the requirements of the customers based on which they can ultimately be
served with the best. Hence, in that case, understanding the taste and references becomes an
important task to be performed by the management of Marks and Spencer. Becoming active on online platform: In the today’s scenario of digitalized world, it becomes
important for the organization to stay connected with the customers through online media. In
this case, it is recommended to Marks and Spencer to become active on its website so that it
can stay connected with its online customers. It will help the organization to increase its
market share.
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CONCLUSION
Based on the above report, it can be concluded that, Marks and Spencer have been able to
represent itself as a retailing giant. The company has been able to generate highest revenue so as
to retain its number one position as a retailer. The report outlined that UK retail sector
contributes 8% of the total GDP and hence considered to be the most important sector of the
country. The challenges of Marks and Spencer stated that the company is following weak
marketing strategy. Hence, it has been recommended that marks and Spencer must enhance its
advertising campaign so that large number of customers can be attracted towards it.
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REFERENCES
Books and Journals
Ashworth, C. J., 2012. Marketing and organisational development in e-SMEs: understanding
survival and sustainability in growth-oriented and comfort-zone pure-play enterprises in
the fashion retail industry. International Entrepreneurship and Management
Journal. 8(2). pp.165-201.
Beske, P., Land, A. and Seuring, S., 2014. Sustainable supply chain management practices and
dynamic capabilities in the food industry: A critical analysis of the
literature. International Journal of Production Economics. 152. pp.131-143.
Chen, C. Y. and Yang, C. F., 2012. The impact of spiritual leadership on organizational
citizenship behavior: A multi-sample analysis. Journal of business ethics. 105(1). pp.107-
114.
Choudhary, H. and Tripathi, G., 2012. An analysis of inventory turnover and its impact on
financial performance in Indian organized retail industry. Journal of services
research. 12(1). p.43.
Hançerlioğulları, G., Şen, A. and Aktunç, E. A., 2016. Demand uncertainty and inventory
turnover performance: an empirical analysis of the US retail industry. International
Journal of Physical Distribution & Logistics Management. 46(6/7). pp.681-708.
Kim, D., Kim, J. H. and Nam, Y., 2014. How does industry use social networking sites? An
analysis of corporate dialogic uses of Facebook, Twitter, YouTube, and LinkedIn by
industry type. Quality & Quantity. 48(5). pp.2605-2614.
Laudon, K. C. and Traver, C. G., 2013. E-commerce. Pearson.
Oliveira, T., Thomas, M. and Espadanal, M., 2014. Assessing the determinants of cloud
computing adoption: An analysis of the manufacturing and services sectors. Information
& Management. 51(5). pp.497-510.
Pantano, E. and et.al., 2017. Does innovation-orientation lead to retail industry growth?
Empirical evidence from patent analysis. Journal of Retailing and Consumer
Services. 34. pp.88-94.
Pantano, E., 2014. Innovation drivers in retail industry. International Journal of Information
Management. 34(3). pp.344-350.
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Turker, D. and Altuntas, C., 2014. Sustainable supply chain management in the fast fashion
industry: An analysis of corporate reports. European Management Journal. 32(5).
pp.837-849.
Vijayan, G. and et.al., 2014. Sustainability in food retail industry through reverse
logistics. International Journal of Supply Chain Management. 3(2).
Zolnowski, A., Weiß, C. and Bohmann, T., 2014, January. Representing Service Business
Models with the Service Business Model Canvas--The Case of a Mobile Payment Service
in the Retail Industry. In system sciences (HICSS), 2014 47th Hawaii International
Conference on (pp. 718-727). IEEE.
Online
Retail Trends 2018. 2018. [Online]. Available through <
https://www2.deloitte.com/uk/en/pages/consumer-business/articles/retail-trends.html# >
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