Retail Network and Store Design Analysis

This assignment requires a comprehensive analysis of River Island's retail network and store design in the Belgian market. Students are expected to research and evaluate the company's business strategies, including its multi-channel approach, marketing efforts, and customer engagement. The assignment also involves assessing the principles of spatial competition between stores within a retail network, as well as analyzing the impact of industrialization on interwar British retailing. Additionally, students must consider the barriers to industrialization faced by Belgian retailers, such as River Island, in their analysis. The output should be a detailed report that provides insights into River Island's retail strategy and its implications for the company's success in the Belgian market.

Business Organisations and Environments
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Contents
INTRODUCTION..............................................................................................................4
INFORMATION ON RIVER ISLAND................................................................................4
DISCUSSION OF FASHION RETAIL BUSINESS ENVIRONMENT OF BELGIUM.........5
PESTLE ANALYSIS.........................................................................................................6
CONCLUSION................................................................................................................. 9
REFERENCES...............................................................................................................10
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Figure 1 River Island.......................................................................................................................4
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INTRODUCTION
Business environment can be defined as the sum total of all those factors (internal or external)
that places an impact on proper functioning of any company. They are inclusive of staff
members, customers, suppliers, government, competitors and local community where the
business activities are being carried out (Islam, 2016). Management must make an attempt to
assess the business environment of that nation where any firm carries out its operations in order
to aid in long-term business sustainability and overall survival (Murphy and Baker, 2017). Given
study has been carried out on River Island which is a London based high street fashion brand that
is trying to expand its outlets in Belgium (River Island, 2018). Currently the company has a
presence of just one store in Antwerp and management plans to open up a few more in the city as
well as overall nation. This will thus be done by assessing overall business environment of
fashion retail market in Belgium so as to aid in expansion plans of the store. This will be
followed by using of analytical frameworks such as Pestle and Porter’s five force analysis to
assess if the business environment is favorable for the operations of company or not.
INFORMATION ON RIVER ISLAND
Figure 1 River Island
(Source: River Island, 2018)
River Island is a UK based company headquartered in London that was set up in the year 1948 by
Lewis brothers. The company started its operations by selling fruits, vegetables and knitting wool.
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It was branded in year 1965 by name “Chelsea girl” that became first fashion boutique chain of
United Kingdom (About us, 2018). The company then converted into one single retail brand
under the name of River Island in year 1988. It has thus been in world for a time span of 60 years
and is known to provide stylish as well as affordable fashion to people. Consumers consider River
Island as one of most loved high street fashion retail brand in the world. It has all been made
possible on account of its aim which is to provide fashionable clothing to males and females
within budget (River Island, 2018). The mission statement is all about providing fresh and new
look clothing to the consumers. It is also recognized among clients for unique touches that make it
stand out from rest of high street stores. The customers love great looks, occasion wears,
attractive pieces of denim, fabulous shoes and bags that are provided by company. It is also
known to be a perfect store where a person can pick everything so as to generate a new head to
toe look (The Fascinating History of River Island, 2018).
The company has a presence of around 350 stores in UK, Ireland, Asia, Middle East as well as
Europe. This is followed by dedicated online sites that help to meet up the varied needs and
demands of consumers. As per statistical data, its sales figures have increased from 932.7 million
pounds to 970.5 million pounds for year 2017. There was also a 21 percent increase in online and
mobile sales as per the reports. This was however followed by a steep decline in operating profit
from 148.5 million pounds to 135.7 million pounds (Singh, 2017). The company has further won
an award for being Store Design of Year 2016 (River Island, 2016). This has been made possible as
River Island tries hard to bring in new as well as original fashion to people. All dresses are designed
in-house by a qualified and experienced design team. This helps the company to bring in fabulous
new fashion to store on a weekly basis (About River Island, 2018).
The above-mentioned areas are most likely to provide a competitive advantage to firm with respect
to other established firms within Belgium so as to have a strong control over retail fashion market.
The need here is to ensure that company is able to adopt strong marketing and advertising
strategies so that consumers can be lured at right point of time (Murphy and Baker, 2017).
DISCUSSION OF FASHION RETAIL BUSINESS ENVIRONMENT OF BELGIUM
During 1980s Belgium had no fashion brands of its own but then Ann Salens an Antwerp
designer generated international recognition for her brilliantly colour dresses, artificial silk etc.
and earned a title of Belgian Fashion's Bird of Paradise (Welters and et.al., 2017). Since then the
nation has become a real fashion hub in recent years and has attained success against powerful
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brands that are from Paris and New York. This has further promoted Belgian Government to
render support to local talent (McIntyre, Melewar and Dennis, 2016). The nation has further
become a case study for having established Made in Belgium as a high quality standard in just a
time span of 35 years. Brussels and Antwerp have been regarded as fashion capital of the country
on account of their convenient location as well as presence of a vast pool of talent (What is
Belgian fashion?, 2015).
Belgium is not one of largest nations in world but has got a respectable name in international
fashion segment. The country is a home to many designers as well as large lingerie companies.
Other than this, it also has a presence of many flagship stores and branches from retailers that are
present all over world (Scott and Walker, 2017). Next to big global names, there is a presence of
small and local boutiques that have a collection of designs from upcoming fashion designers.
The GDP per capita all over Belgium is of 19 percent which is quite higher than basic average all
over Europe. It has thus increased the purchasing power of people as well.
Revenue in fashion retail segment of Belgium is up to 2645 US billion dollars in year 2018.
These figures are also expected to show an annual growth rate of 7.6 percent that may result in
generating an overall volume of 3550 million US dollars by year 2022. The largest market
segment in fashion industry is of Apparel that has a volume of 2044 million US dollars in year
2018 (Fashion in Belgium, 2018).
In this respect, Antwerp were company wishes to open its stores has been regarded as the fashion
capital of Belgium. River Island thus has a presence of around 361 international chains and 5.6
million people that act as shoppers in 60 km of radius around Antwerp (What is Belgian
fashion?, 2015). The atmosphere around city is such that it is able to generate a good spending
potential from consumers on account of its relaxed and enjoyable atmosphere (McIntyre,
Melewar and Dennis, 2016). Other than Antwerp, main shopping streets are also present in
Brussels, Bruges, Liège, Hasselt as well as Ghent. On a negative note, there is a presence of less
shopping centre culture in nation as compared to other parts of Europe but still the future for the
same seems to be quite bright (Murphy and Baker, 2017). Overall fashion retail sector of
Belgium is witnessing a high growth rate which is a favourable sign for River Island to make its
expansion plans.
PESTLE ANALYSIS
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Figure 2 Pestle analysis
(Source: Islam, 2016)
In order to conduct any kind of business activity in the Belgium market, it is very essential to
develop an understanding about political, socioeconomic, legal and technological factors and
how they may impact operations (Quinn and Kristandl, 2014). This can help to judge overall
success rate of any company within nation and also aid in deciding over the ways by which
strategies can be developed (Welters and et.al., 2017). The same has been done in present case
by use of Pestle analysis of Belgium fashion retail marketing and how it may impact operations
of River Island.
Political – Belgium is a politically stable nation which has favoured growth of fashion industry.
The government also supports fashion retail sector so as to help designers in getting an
international presence.
Economic – There is an increase in the overall confidence of consumers with respect to
macroeconomic conditions present in nation. The expectation is also strong in context of global
economic climate of country. The confidence in business especially in area of fashion retail has
reached highest since July 2011 (De Beule, Van den Poel and Van de Weghe, 2015). Other than
this, presence of low average unemployment has made doing business quite attractive for market
players. But on a negative note, presence of high debt conditions, taxations and rigid labour
market may act as a negative force for retail fashion industry of Belgium during the coming
times. Hence River Island must keep itself prepared to face high tax rates and presence of rigid
labour market when it expands itself in nation (Murphy and Baker, 2017).
Social – with the change in fashion landscape of nation since 1980s residents of the country have
become fashion conscious as well. As of now there is a presence of many international students
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that are moving to Belgium for studies (What is Belgian fashion?, 2015). This has led to an
increased growth of fashion industry in the nation. A rise has also been seen in average
household disposable income since year 2014. The Belgian consumption growth in fashion
segment has also been higher than Europe.
Environment – this area plays a key role in overall working of Belgium fashion industry. The
horrors of same were observed in the year 2016 when bad weather both in summer and winter as
well as terror attack led to closure of stores such as Charles Vögele, MS Mode, JBC, LolaLiza as
well as C&A (McIntyre, Melewar and Dennis, 2016).
Technology – There has been an overall increase in technological usage in the fashion retail
sector of Belgium. This is with respect to consumer ordering, websites, advanced billing
techniques, software upgrades, marketing techniques among others (Welters and et.al., 2017).
This is most likely to favour overall growth of retail market in the nation. This is as consumers
are also technology friendly and wish to save time, money and resources by using up gradations
of technology (Quan and Shen, 2017).
Legal – there is an existence of liberal retail trade policies as well as a removal of trade
restrictions that has aided in overall growth of this sector in Belgium. The firm is required to
adhere with laws with respect to antitrust policies, advertising, employment related regulations
among others so as not to tarnish brand image. It must also adhere with the proper guidelines
with respect to online retail so as to avoid creation of any issues (Murphy and Baker, 2017).
PORTER’S 5 FORCES
The company can further make use of porters five force analysis so as to carry out an assessment
of overall business environment with respect to fashion retail. It will also aid in analysing the
profitability of strategies that will be applied in company in near term future. This is most
essential for River Island so as to be able to keep a close eye on rival firms and also look beyond
actions that have been undertaken by the competitors (Petermans and Kent, 2016).
The threat of entry of new competitors – As Belgium has now become a fashion oriented nation
and support is also given by government to local designers which are thus a big threat for
company. Moreover, starting one’s own fashion brand also does not demand for more investment
hence threat increases to a great extent (De Beule, Van den Poel and Van de Weghe, 2015). This
means that River Island should not only expand its presence in the nation but also lure the
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consumers by introducing new products and services. T threat can also put an adverse impact on
the company in terms of less profit figures.
The intensity of competitive rivalry- Belgium already has a presence of well-established
international as well as local fashion brands which is thus a high source of threat for company
(What is Belgian fashion?, 2015). The competitors are aggressively targeting market through
there advertising and marketing strategies. The need here is to include clothing in all price ranges
so as to grab increased sales in nation.
The bargaining power of buyers-Due to the presence of high competition in Belgium market
bargaining power of consumers is also at a high end. Hence need on part of River Island is to
lure consumers towards River Island through better consumer service; high quality of goods as
well as lowering overall prices (McIntyre, Melewar and Dennis, 2016). Bargaining power of
buyers can also be decreased if company is able to produce a loyal consumer base within
Belgium. This can be done by offering of loyalty schemes etc.
The bargaining power of suppliers – River Island is in a likely position to bargain with suppliers
in order to make sure that they purchase good quality of materials for them and give best
possible product to the consumers. The presence of strong supplier is most likely to make
industry a more competitive one (Thomas and Carraher, 2014).
Threat of substitute products – This threat is not very big for the company as River Island sells
its product in high street fashion. Hence consumers of this brand are least likely to shift their
purchases to low cost products. But seeing scenarios discussed above, if the company introduces
products in low cost segment then threat of substitute may become high in a given span of time
(Welters and et.al., 2017).
CONCLUSION
It can be concluded from the above report that River Island is considered as a brand that offers
fashionable clothing that are new in terms of looks and Style. In fact the firm was also named as
Store Design of Year 2016 which can aid in providing a competitive advantage over the rival firms.
Moreover, the fashion retail market of Belgium is also a promising one for River Island. This is
on account of fashion conscious people, support rendered by government. The place chosen by
River Island being Antwerp is also a good one as it is regarded as fashion capital of Belgium and
is a home to 5.6 million people that usually get a chance to shop in a radius of 60 km.
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However, if the company wishes to expand its outlet in the nation then it will be facing a huge
amount of competition not only from international fashion brands but also local designers. There
is also presence of issues such as high taxation, rigid labor market as well as red tapism which
may pose significant challenge for company (McIntyre, Melewar and Dennis, 2016). But still
presence of social factors such as online retail market; low unemployment rates and increased
purchasing power can provide increased opportunities to the nation. It can thus be recommend to
River Island that it must increase its expansion in nation but should be well prepared to face
intense competition. If required then management should focus on introducing low priced
clothing so as to increase the market share and sales figures. Other than Antwerp, the company
can also open its stores in other locations such as Brussels, Bruges, Liège, Hasselt as well as
Ghent which also offer main shopping streets to the consumers.
REFERENCES
Journals and Books
De Beule, M., Van den Poel, D. and Van de Weghe, N., 2015. Assessing the principles of spatial
competition between stores within a retail network. Applied Geography, 62, pp.125-135.
Islam, K., 2016. Can Ethical Business Strategy Influence Consumers’ Buying Behavior and
Loyalty: Marks and Spencer PLC?. Case Studies in Business and Management, 3(1),
p.38.
McIntyre, C., Melewar, T.C. and Dennis, C., 2016. Multi-channel Marketing, Branding and
Retail Design: New Challenges and Opportunities. Emerald Group Publishing Limited.
Petermans, A. and Kent, A., 2016. Retail design: theoretical perspectives. Taylor & Francis.
Quan, V. and Shen, B., 2017. Evolution of luxury fashion brands. In Luxury Fashion Retail
Management (pp. 11-18). Springer, Singapore.
Quinn, M. and Kristandl, G., 2014. Business information systems for accounting students.
Pearson Education Ltd.
Scott, P. and Walker, J.T., 2017. Barriers to ‘industrialisation’for interwar British retailing? The
case of Marks & Spencer Ltd. Business History, 59(2), pp.179-201.
Thomas, T. and E. Carraher, C., 2014. A retail perspective on the shopping behavior, cultures
and personalities for China, United Arab Emirates, Belgium, India, Germany and
America. Journal of Technology Management in China, 9(3), pp.289-296.
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Welters, L. and et.al., 2017. Mapping fashion in the ‘City by the Sea’: Shopping districts in
Newport, Rhode Island. Fashion, Style & Popular Culture, 4(1), pp.7-31.
Online
About Us. 2018. [Online]. Available through:
<https://www.riverisland.com/inside-river-island/about-us> [Accessed on 14th August
2018].
About River Island. 2018. [Online]. Available through: <https://www.b.co.uk/company-profile/?
river-island--62360> [Accessed on 14th August 2018].
Fashion in Belgium. 2018. [Online]. Available through:
<https://www.statista.com/outlook/244/129/fashion/belgium> [Accessed on 14th August
2018].
River Island. 2018. [Online]. Available through: <https://www.riverisland.com/> [Accessed on
14th August 2018].
River Island, 2016. [Online]. Available through: <http://www.dalziel-pow.com/news/river-island-
wins-store-design-of-the-year/> [Accessed on 14th August 2018].
Singh, 2017. River Island annual sales rise 4 percent, profit dips. [Online]. Available through: <
https://fashionunited.uk/news/business/river-island-annual-sales-rise-4-percent-profit-
dips/2017092125974> [Accessed on 14th August 2018].
The Fascinating History of River Island. 2018. [Online]. Available through:
<https://www.thefactshop.com/blog/fashion-facts/river-island> [Accessed on 14th August
2018].
What is Belgian fashion? 2015. [Online]. Available through:
<https://www.vogue.co.uk/gallery/belgian-fashion-an-unexpected-fashion-story>
[Accessed on 14th August 2018].
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