Australian Fashion Retail Industry Analysis 2019

This report provides an analysis of the Australian fashion retail industry in 2019, focusing on the size, growth, and opportunities for a new fashion brand in Melbourne. It discusses the competitive market, the impact of macro and meso environmental factors, and the drivers of changes in the industry.

Business report
Australian Fashion Retail Industry Analysis 2019: An
initial briefing for the establishment of a new fashion
brand in Melbourne, Australia.

Executive summary
The report has developed a business plan for Purple Blossom which is a new, last
spring, start-up fashion retail business of upscale evening wear dresses targeted at females
between the age of 18 and 40. Purple Blossom will be the Australian brand and will try to
become one of the best fashion retail business brands in Melbourne. The highly competitive
Australian domestic market of the fashion industry generates annual revenues of approx.
$28.5 billion. The e-commerce market of the retail fashion industry is valued at approx. $3.1
billion as online buying and selling is preferred by people in the current form of the market.
As per the study, the high cost of manufacturing is increasing the overall prices of cloths
which creating pressure on the organization to maintain low prices that could influence the
buying decision of customers. The analysis has suggested that, the digital business tools are
helping the fashion industry to generate leads and explore new market segments without
investing funds for marketing and establishing physical stores. Now, the Purple Blossom
strategy is to successfully establish and market a quality range collection to customers
include the development of business in local markets regions and the entity should focus on
developing chain stores. However, it will difficult for Purple Blossom to establish a positive
brand image in quick time to manage the growth and popularity in the market at initial stage.
Therefore, it is recommended to Purple Blossom to implement the online business
operations like sales through the website and mobile application which will be useful for the
company to explore wider areas and generate the leads for potential customers.

Table of Contents
Introduction...............................................................................................................................1
Task 1: Size and growth of the fashion industry.................................................................1
Task 2: Analysis of macro environmental factors...............................................................3
Threats:.................................................................................................................................3
Opportunities........................................................................................................................5
Task 3: Identification of the impact of meso environmental factors................................5
Opportunities........................................................................................................................6
Threats..................................................................................................................................6
Task 4: Drivers of changes....................................................................................................7
Conclusion................................................................................................................................9
References.............................................................................................................................10
Appendix.................................................................................................................................12
Roc.......................................................................................................................................12

List of figures
Figure 1: Market size and growth..........................................................................................2

Introduction
Purple Blossom is a new, last spring, start-up fashion retail business of upscale
evening wear dresses targeted at females between the age of 18 and 40. Purple Blossom
will be the Australian brand and will try to become one of the best fashion retail business
brands in Melbourne. It not only develops the evening dresses but also manufactures pretty
intimate wears. It supports retail business with promotional campaigns and advertisements.
The brand plans to give a healthy elasticity to make a strengthened partnership with its
retailers by creating brand awareness. Purple Blossom focuses on marketing its dresses as
an alternative to other highly expensive brands and differentiating itself by exclusiveness,
high quality and new marketing strategies. The report will provide information related to the
size and growth of the fashion retail market of the Australia and factors that could encourage
the brand and hinder the opportunity to fashion retail industry of Australia. Moreover, the
report will also analyse and identify the threats and opportunity for the new brand as well as
isolate the drivers of changes considering the macro environmental factors. In the upcoming
years, the brand plans to manufacture lines of upscale accessories for men and children.
And these accessories will include watches, perfumes, footwear.
Task 1: Size and growth of the fashion industry
Relative Size and growth rate:
In order to the impact of foreign brands in the fashion industry and availability of a
wider range of products, the regional consumers have become more demanding and
sophisticated, thus it caused more opportunities for the Australian Fashion Apparel Industry.
Retailers are providing extra value added services to satisfy their customers. The highly
competitive Australian domestic market of the fashion industry generates annual revenues of
approx $28.5 billion. The business size of Purple Blossom fits in the small business
category. The fashion industry of Australia is exporting $6.1 billion in textile across the world
1

(Chan, Ngai, and Moon, 2017, p. 486-499). The retail market sale of the country is around
$21 billion each year and domestic market value is around $30 billion. Apart from that, about
$11.5 billion in clothing textile are imported by the Australian clothing industry. In addition to
this, the fashion industry is offering jobs which involve approx. 110,000 full and part-time
workers within the retail industry. The e-commerce market of the retail fashion industry is
valued at approx. $3.1 billion as online buying and selling is preferred by people in the
current form of the market (Australian clothing industry statistics and trends, 2018).
According to the analysis, the growth rate of the retail fashion industry in Australia is 19.5%
annually. Additionally, the demand for woman clothing in the coming financial year of 2019-
20 will be around 6.3%.
Figure 1: Market size and growth
(Source: Australian clothing industry statistics and trends, 2018)
Main players
2

By taking on new technologies, globalization, offering consumers easy to use
payment solutions, and making doing shop as easy as possible, the Australian retailers are
thinking innovative ideas what it means to be in the stores. Last year, a big number of
Australia's old guard of fashion met their demise. Iconic brands like Roger David, Ed Harry
were unable to keep up with the foreign retailers and brands and have had to shut up shop.
The major fashion brand in the Australian industry involve the Ellery that having 12% market
share in the women fashion focusing on the modern trends in the clothing design, Dion Lee
is also emerging as quality fashion brand in the industry that having 18% market share and
offering ultra-modern fashion wears for women and Gorman which one of the most preferred
brand name in Australian women clothing industry that offering fast-forward fashion wears
from the last 19 years (Gardetti, and Torres, 2017, p. 11). The market share of Gorman is
approx. 21% and one of the most popular women fashion brand in the country. The
management will consider the tactics and approaches of these brands for establishing the
new business venture in Melbourne city to get success.
Task 2: Analysis of macro environmental factors
To understand the market condition, it is essential to conduct the external analysis,
the PESTLE analysis will be helpful to understand the critical factors for the Australian
fashion industry that are creating barriers and opportunity for the whole industry. Following
are the threats and opportunities for the fashion industry of Australia focusing on the women
clothing sector.
Threats:
Social factor:
Australian fashion retailers are going through a tough time with international fashion
retailers taking $600 million out of the Australian market in 2016 and competition has
increased as more foreign brands set their sights on the Australian market. The people are
giving preference to western clothing design and trends which is a cultural change in the
3

design and offering of clothing products. There is a lack of sustainable strategy and the
Australian retailers are losing confidence or trying to copy other foreign retailers. The lack of
differentiation caused complete wiped out of customers (Ballantine, and Au Yeung, 2015, p.
508-521). The consumers are not motivated by the repeated in the very slightly differentiated
designs of each retailer. Therefore, it is creating a threat for the local organization to
maintain the growth by retaining customers.
Economic factors:
There were more than 5000 retail industry primary 457 visas as at the end of June
2016, the average expected salary for the group in total sitting at 86000. No doubt, the
majority of these roles are in NSW with 2140 positions and VIC coming at 1230 which covers
a big proportion of recruitments. Cotton On has set up a training program to develop trade
planners who after a fifteen-month skill development program have the desired skills and
can be hired to become permanent team workers. The high cost of manufacturing is
increasing the overall prices of cloths which creating pressure on the organization to
maintain low prices that could influence the buying decision of customers. The economic
changes related to low employment and income level has a direct impact on the buying
behaviour of existing and potential customers (Ozdamar Ertekin, and Atik, 2015, p. 53-69).
Environmental factors:
Many international fashion brands have moved away from expanding their footprint to
working on their online offer and stores. For example, H&M has a fast fashion strategy ad to
slow down its expanding business, Katie Smith is selling its products through more newness.
It's visibly tough retail market competition with strong online and international business. The
changes in environmental protection regulations are creating barriers for the new and
existing organizations in the fashion industry to manage the operations (Courvisanos, Jain,
and Mardaneh, 2016, p. 629-643). The changes in business operations like proper waste
4

management and use of green policies also have a significant impact on the production level
of organizations.
Opportunities
Technological factors:
In the current scenario, technology is having a positive impact on business planning
and development. According to analysis, the use of technical tools like the website, mobile
applications and social media are creating new opportunities for business. The fashion
organizations are utilizing the online sales and customer relationship functions through the
social media and website (Bertrand, Brusset, and Fortin, 2015, p. 261-276). Moreover, digital
business tools are helping the fashion industry to generate leads and explore new market
segments without investing funds for marketing and establishing physical stores.
Political factors:
The government is supporting the textile industry for expanding the business as it
offering access to resources and helping through providing liberty in the tax and export of the
goods and services. This kind of approach of government is beneficial for the industry to
explore the opportunity to increase production and maintain the growth the fast forward
fashion retail segments. In addition to this, political stability in the country is also useful for
the Australian market for targeting new business areas (Anggraeni, 2015, p. 442-447).
Legal factors:
The legal factors are not affecting the business operations of the fashion industry of
Australia. For example, the regulations related to production, exporting and tax planning are
creating opportunities for the organizations to expand the business as well as planning of the
new venture. The legal framework of the Australian fashion industry is helping to manage the
business operating smoothly and support to encourage the business.
5

Task 3: Identification of the impact of meso environmental factors
The mission of the Purple Blossom is to provide a brand new look for its consumers,
based on quality and style. To understand the business environment, the management has
considered the outcome of Meso environmental factors to identify the opportunity and
threats for a new venture in the Australian fashion industry.
Opportunities
General industrial factors:
The brand is a new entry in the markets of Australia and hence establishing the
business in various local market regions will be one of the biggest opportunity entity and new
product. The Purple Blossom strategy is to successfully establish and market a quality range
collection to customers. For example, the demand for fast forward fashion products
especially within the women clothing sector is high. The organization could target the women
customer by offering trendy and western design clothes (Phau, Teah, and Chuah, 2015, p.
169-187).
Distribution:
Chain stores and franchises will be gaining a large market share and which will prove
beneficial for the local businesses. As Purple Blossom is also attempting to develop
business in local markets regions, the entity should focus on developing chain stores. This
will aid the business entity in attaining a large market8 share with easy means (Chan, Ngai,
and Moon, 2017, p. 486-499). The online selling and improvement in the supply chain
operations can be an opportunity for a new venture to maintain positive relationships with the
customers in local areas.
Threats
Challenges for Retailers:
6

Online retailing has been flourishing worldwide over the past decades and it has
changed the attitudes of consumers. Dynamic economic conditions and global business
interdependency have caused many consumers to cut back expenditure as well as the
following of fashion influenzas has also made them very selective. In addition to this, low
switching cost and price sensitivity are having a negative impact on the business planning
and selling approaches of the organizations (Ozdamar Ertekin, and Atik, 2015, p. 53-69).
Purple Blossom has to encounter the policies and business approaches of the competitors of
the women fashion industry.
Competition:
In this dynamic business era, to improve profitability, companies need to adopt new
technologies and business strategies. The level of competition within the Australian fashion
industry is high as many luxury and price sensitive brands are offering high-quality products
and services focusing on the needs of women. Larger companies easily gain leverage in
cost-cutting and market position, so attracting consumers towards a developing brand is a
task in itself. It will difficult for Purple Blossom to establish a positive brand image in quick
time to manage the growth and popularity in the market (Antonius, Xu, and Gao, 2015, p.
32-43).
Task 4: Drivers of changes
The key drivers of changes for Purple Blossom women clothing organization that will
help to overcome the impact of the threat will involve the following factors. By considering
these factors, the management will be able to develop and sustainable business strategy
that helps to encourage business effectiveness.
7

Figure 2: Decision making process
(Source: Decision making tree, 2019)
Technology: In the current scenario, the use of digital mediums for business and
maintaining the relationship with the client and other stakeholders is beneficial. To drive the
business, it is essential for Purple Blossom to implement the online business operations like
sales through the website and mobile application which will be useful for the company to
explore wider areas and generate the leads for potential customers (Ainin et al., 2015, p.
570-588).
Environmental factors: The green policies and use of eco-friendly approaches in
production and destruction of products and services will be beneficial for the organization to
manage the business in a highly competitive business environment. It is recommended to
the management of Purple Blossom to consider the green policies for waste management
and recycling approaches which will support to establish a positive brand image of the
company.
Economic factors: To establish and manage the business operations in fast forward
fashion industry of Australia, it is essential for Purple Blossom to consider the economic
8

factors like income and demand of the clothing. In the current scenario, the income of people
is good as the company could charge the high amount that will increase profit which is
necessary for initial motivation and growth in the sector (Chapman, Plummer, and Tonts,
2015, p. 629-653).
Conclusion
From the above study, it has been carried out to establish a new venture in the
fashion industry of Australia. The management has to focus on external factors like
economy, environmental regulations and social factors. The report has provided critical
analysis of factors that could help Purple Blossom to establish and expand the business by
considering the consumer demand, use of digital tools to manage relationships and offer
quick support to the stakeholders. Moreover, the report has recommended making emphasis
on technology, environmental and income level of the target audience.
9

References
Ainin, S., Parveen, F., Moghavvemi, S., Jaafar, N.I. and Mohd Shuib, N.L., 2015. Factors
influencing the use of social media by SMEs and its performance outcomes. Industrial
Management & Data Systems, 115(3), pp.570-588.
Anggraeni, A., 2015. Effects of brand love, personality and image on word of mouth; the
case of local fashion brands among young consumers. Procedia-Social and Behavioral
Sciences, 211, pp.442-447.
Antonius, N., Xu, J. and Gao, X., 2015. Factors influencing the adoption of enterprise social
software in Australia. Knowledge-Based Systems, 73, pp.32-43.
Ballantine, P.W. and Au Yeung, C., 2015. The effects of review valence in organic versus
sponsored blog sites on perceived credibility, brand attitude, and behavioural
intentions. Marketing Intelligence & Planning, 33(4), pp.508-521.
Bertrand, J.L., Brusset, X. and Fortin, M., 2015. Assessing and hedging the cost of
unseasonal weather: Case of the apparel sector. European Journal of Operational
Research, 244(1), pp.261-276.
Chan, A.T., Ngai, E.W. and Moon, K.K., 2017. The effects of strategic and manufacturing
flexibilities and supply chain agility on firm performance in the fashion
industry. European Journal of Operational Research, 259(2), pp.486-499.
Chapman, R., Plummer, P. and Tonts, M., 2015. The resource boom and socio-economic
well-being in Australian resource towns: a temporal and spatial analysis. Urban
Geography, 36(5), pp.629-653.
Courvisanos, J., Jain, A. and K. Mardaneh, K., 2016. Economic resilience of regions under
crises: A study of the Australian economy. Regional Studies, 50(4), pp.629-643.
Gardetti, M.A. and Torres, A.L., 2017. Sustainability in fashion and textiles: values, design,
production and consumption. Routledge.
Ozdamar Ertekin, Z. and Atik, D., 2015. Sustainable markets: Motivating factors, barriers,
and remedies for mobilization of slow fashion. Journal of Macromarketing, 35(1),
pp.53-69.
10

Phau, I., Teah, M. and Chuah, J., 2015. Consumer attitudes towards luxury fashion apparel
made in sweatshops. Journal of Fashion Marketing and Management, 19(2), pp.169-
187.
Online
Australian clothing industry statistics and trends, 2018, [Accessed through] <
https://brandongaille.com/18-australian-clothing-industry-statistics-and-trends/>
[Accessed on 28th March 2019]
Decision making tree, 2019, [Accessed through] <
https://www.slideshare.net/anandarora/decision-tree-analysis-slideshare> [Accessed
on 28th March 2019]
11

Appendix
Roc
Week 1
1. Modern consumers: The modern consumers of Australia are young generation that
following the latest trends of fashion industry like western country that involve bright colour,
broad texture and long patterns.
2. Challenges: The major challenges for fashion relaters in Australian industry involve the
high competition, large numbers of new fashion brand from foreign market, changes in the
needs of target customers and use of technical tools to influence the buying decisions of
customers.
3. Factors of success: The key factors of success in women fashion business are price
sensitivity, creative marketing and consideration of expectation of the target customer
focusing on the global trends.
5. MM strategy: To manage the business, it is essential for organization to use the online
tools for marketing that involves social media and selling through website. The online tools
are time and cost effectives as well as provide the facility to perform the payment.
Week 2:
2. Marketing emotional economy: The fashion brand will focus on niche pricing strategy to
get the attention of the customer which is essential to increase the customer base. To
manage the emotional appeal, the brand will mix the traditional design with modern trends.
3. Brand attributes: The brand attributes will involve creative design, eco-friendly
manufacturing approaches and use of customer input to meet the satisfaction level of the
target audience.
4. Brand integrity: The brand integrity will focus on current trends of women clothing like use
of bright colours and broad patterns. Moreover, the organization will use high quality fabric to
create high end brand identity.
5. Branding strategy: The organization will use name brand strategy that will help to
establish own identity by encouraging the brand name Purple Blossom by designing a logo
and slogan.
Week 3:
12

2. Challenges of global interdependence: The major challenges of global interdependence
for new clothing business involve the import of quality fabric and use of technology that helps
to minimize the use of chemical and recycling of the waste.
3. Technology and globalization: To manage the new business, it is essential for
management to understand the use of technology in designing, production and distribution
of products. Moreover, globalisation has influence the needs and expectations of customers
which can be big threat for new business venture.
13