Comparative Analysis of Fashion Retail Industry in US and UK

This comparative analysis explores the fashion retail industry in the United States and United Kingdom, including an overview of the industry, analysis of the countries' competitive advantages, and recommendations for businesses. It also discusses the challenges and opportunities in the industry.

Running head: COMPARATIVE ANALYSIS
Comparative Analysis
Name of the Student
Name of the University
Author Note

1COMPARATIVE ANALYSIS
Table of Contents
Introduction:...............................................................................................................................3
Overview of the Industry:..........................................................................................................4
Overview of the Countries:........................................................................................................6
United States:.........................................................................................................................6
United Kingdom:....................................................................................................................7
Comparative Analysis on the National Competitive Advantages:.............................................9
Recommendations:...................................................................................................................13
Challenges:...........................................................................................................................13
Conclusion:..............................................................................................................................13
References:...............................................................................................................................15

2COMPARATIVE ANALYSIS
Introduction:
The retail business is considered to be a form of business where the flow of products
or the services directly takes place from the manufacturer to the end users (Wrigley and Lowe
2014). Many of the business analysts are observed to comment that the retail business to be a
single point business operations. The main objective of the retail business is observe to be
transaction of the goods from the creator to the end user which increases the fluency of
operations and enables the customers to buy the products in a significantly less complicated
manner (Pantano 2015). Adding to this, the fashion retail industry is concerned with the
selling of the cloths, accessories and the jewelleries products. The fashion retail industry is
considered to be one of the few industries that are changing in a rapid manner. The modern
business conduction of the mentioned industry is seen to be notably dependent on the
preferences of the customers and adding to that, the organizations, capable of achieving the
preferences of the customers are seen to generate significant amount of revenue from the
industry. As the industry is considered to be notably profitable, the competition in the
mentioned industry is observed to increase as well.
The global fashion retail industry is seen to be populated with the renowned
organizations such as ASOS, Next Plc., Walmart and Zara. Many of the organizations are
observed to apply the competitive pricing policy for the effective management of the
competition. Apart from the application of the competitive pricing policy, the organizations
are seen to focus on the improvement of the quality in the services and in the manufacturing
of the products for managing the detrimental impact of the competition (Thomassey 2014).
Adding to this, the impact of the various aspects of the nation such as the legislation,
economy or the human resource are notably influential in the effective business conduction of
the organizations. The paper is focused in comparing two different countries and the various

3COMPARATIVE ANALYSIS
aspects of their business conduction in the chosen business sector that is fashion retailing.
The two chosen countries for the comparison are United States and United Kingdom. The
paper analyses the chosen industry and adding to this, the paper presents notable amount of
information regarding the business conduction of the organizations operating in the
mentioned industry of the countries. Apart from this, the paper is able to identify the some of
the crucial challenges that have the capability to affect the competitive advantage of the
mentioned countries.
Overview of the Industry:
As mentioned, the chosen industry is fashion retailing. The modern business world is
seen to experience significant representation of the organizations belonging to the mentioned
industry and the forecast of the significant growth of the industry considered to be one of the
key triggering factor for the organizations. The fashion retailing industry is seen to change in
a significant manner depending on the various elements of the industry. One of the key
changes in the industry is seen to be the increment in the dependence over the customers
(Caniato et al. 2014).
The fashion retailing industry has changed over the years and from the brick and
mortar stores of the organizations, the shift of focus is on now on the online shopping. The
significant improvement of the technology has enabled the organizations to reach to their
customers in an efficient manner and adding to that, it helped the organizations operating in
the industry to focus their business on the preferences of the customers. In the modern
generation, the successful business conduction in the mentioned industry is seen to be
dependent on the effective achievement of the preferences and views of the customers
(Dabija,, Szentesi and Pop 2014). With the customer-centric business approach, the
organizations of the mentioned industry is seen to align their business operations with a

4COMPARATIVE ANALYSIS
precise focus on the demand of the market. The design and the quality of the products offered
to the customers are seen to hold greater significance for the customers in preferring a
particular organization for their purchases.
On the other hand, the organizations are seen to consider the requirements and the
preferences of the customers while designing the products for the customers which is a
crucial strategy for the effective business conduction in the mentioned industry. Adding to
this, the effective achievement of the preferences of the customers is seen to be significant for
the organization in increasing the customer loyalty and the level satisfaction amongst the
customers. This becomes significantly important for the sustainable business conduction in
the mentioned industry. The revenue of the fashion segment in the year 2019 is expected to
reach 600994 million US dollars which plays a significant role in the increment of the
competition of the mentioned industry (Statista.com. 2019). Apart from this, the industry has
the potential to offer a significant growth to the organizations operating in it and that is pretty
evident with the CAGR report of the annual growth rates. The CAGR report indicates that the
annual growth rate of the fashion industry will be 9.8% in the time span of 5 years starting
from 2019 to 2023 and that results in a market volume of 872619 million US dollars in the
year 2023 (Statista.com. 2019).
The largest segment of the fashion industry is seen to be the apparel industry with a
market volume of 390975 million US dollars in the year 2019 (Statista.com. 2019). The retail
sales of the global apparel market is seen to have a sharp rise over the years and is expected
to continue that in future as well. In the year 2012, the retail sales of the global apparel
market is observed to be 1135.4 billion US dollars and that in the year 2015 went up to
1277.7 billion US dollars (Statista.com. 2019). The retail sales of the global apparel market
continued a significant growth which reached 1446.5 billion US dollars in the year 2018
(Statista.com. 2019). As the growth is expected to continue, the retail sales in the year 2019 is

5COMPARATIVE ANALYSIS
expected to reach 1514.1 billion US dollars (Statista.com. 2019). Hence the significant
financial stability of the industry and the attractive growth of the industry are the main
influential factor in the choice of the industry.
Overview of the Countries:
United States:
The fashion retail industry in the mentioned nation is seen to expand in a significant
manner. Over the years, the country is able to produce globally recognised companies which
are seen to operate across the globe. However, many of the researchers are able to comment
the fact that the perfect environment for the significant business conduction in United Nations
is one of the prime reason of the emergence of those global leaders of the mentioned industry.
The political and the social stability of the chosen nation is considered to be a key factor in
the significant growth of the industry. The encouragement of the US government regarding
the sourcing of the fabrics is seen to be crucial in the development and growth of the
organizations operating in the mentioned industry. Adding to this, the strict implementation
of the taxation on the outsourcing of the fabrics and raw materials from the part of the
government is considered to be influential in the reduction of the import of the fabrics from
other countries (Dabija, Szentesi and Pop 2014). In addition to this, the environmental
concerns in the form of agencies like PETA boycotting many of the organizations for using
animal furs and skins in the design of their products are considered to be notably impactful
for the mentioned industry. Fashion and clothing was a much discussed topic amongst the
researchers of mentioned nation as it has notable amount of influence on the people of the
nation starting from citizens belonging to the low income groups to the residents of White
House in the form of Michelle Obama to Melania Trump.

6COMPARATIVE ANALYSIS
Considering the societal aspect, he mentioned industry was seen to have a significant
mileage due to the preferences of the renowned musicians of the country and the world
renowned celebrities of the nation. However, the technical feasibility was considered to be an
influential factor in the significant growth of the mentioned industry. The presence of the
modern day technology in the products of the mentioned industry is seen to be crucial in
increasing the sales. The dependence of the mentioned industry on the technology and the
innovative ideas is substantial and that is pretty evident with the urgency show by the
organizations of the mentioned country operating in the fashion retail industry. The effect of
the above mentioned factors are pretty evident with the status of the largest apparel market
that is associated with the mentioned country and that is pretty evident with the market value
of the store based retailing of 292 billion US dollars in the year 2016 (Statista.com. 2019).
The women’s apparel market in United States is seen to have a revenue of 117 billion US
dollars in the year 2017 and apart from that, the revenue of the men’s apparel market is
observed to be 87 billion in the year 2017 (Statista.com. 2019). The contribution of retail
trade to the percentage change in the real GDP has increased from 0.21 of 2016 to 0.22 of
2017 (Bea.gov. 2019).
United Kingdom:
The fashion retail industry is considered to be one of the industries of United
Kingdom that faced considerable number of challenges over the years. The fast changing
fashion preferences of the people of the nation is considered to be a key factor for the
organizations in conducting a sustainable business in the nation (Bandinelli et al. 2013).
However the falling prices of the products is seen to be an influential factor for many of the
organizations in conducting their business in the mentioned nation. The revenue growth of
the organizations participating in the mentioned industry of the nation is seen too be notably
affected with the falling prices of the products. As a result the retailers awe seen to face

7COMPARATIVE ANALYSIS
considerable number of issues in the effective management of the requirements of the
customers through the design of their products. This makes their life difficult in managing the
customers and retaining them from the hand of the other competitors.
The significant growth of the online shopping in the mentioned nation along with the
progress of the retail landscape are considered to be a key factor responsible in triggering the
organizations towards allocating larger investments for their increased online activities. It is
pretty evident that the online business activities are able to achieve a significant growth
percentage over the brick and mortar departmental stores in the recent years. The added
benefits like the different delivery options along with the considerable discount offers in the
online shopping is seen to influence the customers of the mentioned industry in a significant
manner in UK. This forced many of the organizations in increasing their online business
activities. With a revenue of £ 42.5 billion, the mentioned industry is seen to be subjected to a
significant growth and along with that, annual growth rates of 1.6% over the time span of 6
years from 2014 to 2019 is significant in stating the expected growth of the organizations
operating in the mentioned industry (Ibisworld.com 2019). The revenue of the fashion
industry in the nation is expected to reach 24914 million US dollars in the year 2019 and
along with that, the CAGR report confirms that the industry will be subjected to an expected
growth rate of 6.1% in the time span of 5 years starting from 2019 to 2023 (Statista.com.
2019). This will increase the market volume of the mentioned industry to 31537 million US
dollars in the year 2023 (Statista.com. 2019).
The above mentioned financial statistics are significant in confirming the growth that
the fashion retail industry is subjected to, in the mentioned nation. However, the industry is
seen to experience considerable number of changes starting from the organization’s approach
in conducting their business operations, considering the preferences of the customers in
designing the products and the services and the increment of the social shopping (Taplin

8COMPARATIVE ANALYSIS
2014). Apart from this, a notably relevant change into the business operations of the modern
business organizations of the mentioned nation is seen to be the conduction of exhibition for
sales. The perfect application of the above mentioned strategies are of significant potential in
increasing the profit of the organizations operating in the mentioned business industry.
Comparative Analysis on the National Competitive Advantages:
In order to compare the chosen countries for the identification of the national
competitive advantages, the usage of the Porter’s diamond model strategy will be of great
significance.
Considering the Firm structure, rivalry and strategies, it is pretty evident that the
mentioned industry is experiencing a notable competition in United States. The level of
competition is pretty evident with the statistics of the companies like Nike, TJX Companies
and VF Corporation. In the year 2015, the largest organization of US operating in the
mentioned industry, Nike was able to create a market value of 105 billion Dollars (Nike.com.
2019). Apart from that, TJX and VF Corporation were seen to create a market value of 54.5
billion dollars and 27.6 billion dollars respectively (Vfc.com. 2019). The significant
competition from the part of the organizations of US was pretty influential in forcing the
organizations to consider the application of the technology in their business operations for the
increment of the production and the improvement of the quality of the products.
On the other hand, the UK market of fashion retailing was seen to face a similar
situation where the competition amongst the organizations were significant in forcing the
organizations towards undertaking relevant changes in their business operations. The
statistics of the estimated year on year revenue growth rate of the major organizations
operating in the fashion retailing industry of UK is noteworthy in stating the intense
competition amongst the organizations like Boohoo.com, ASOS, Ted Baker, Primark UK or

9COMPARATIVE ANALYSIS
JD Sports. The organizations that are seen to conduct a sustainable business in the mentioned
nation are seen to achieve the qualities like the effective achievement of the preferences of
the customers, improvement in the social media activities for the efficient conduction of the
marketing and the promotional campaigns and capable of applying the competitive pricing
policy (Yang, Song and Tong 2017).
(Information: Estimated year-on-year revenue growth rate of selected major public apparel
retailers in the United Kingdom (UK) in the fiscal year 2017 (in million GBP))
(Information Courtesy: Statista.com. 2019)
With a precise focus on the related and supporting industries aspect, it is pretty
evident that the US government is trying to promote their local suppliers in a significant

10COMPARATIVE ANALYSIS
manner. As mentioned earlier, the Trump led government of US is substantially strict in the
implementation of the legislation regarding the high taxations on the organizations that are
not sourcing the raw materials from the local suppliers (Iannone et al. 2013). On the other
hand, the UK government is see to apply a same sort of tactics after the Brexit. The impact of
Brexit is pretty evident on the organization operating in the mentioned industry as the strict
legislation is employed on the International sourcing of the materials (Macchion, Danese and
Vinelli 2015).
Considering the demand condition aspect, it is visible that the industry is subjected a
significant growth in terms of market value, however, the market value of the industry is
seem to change in a notable manner over the years (Khan 2013). Although, the offline store
based retailing is seen to be affected in a limited manner in US compared to the growth of the
online based retailing.
(Information: Apparel and footwear market value in the United States from 2011 to 2016, by
retail channel (in billion U.S. dollars))

11COMPARATIVE ANALYSIS
(Information Courtesy: Statista.com. 2019)
After evaluating the factor conditions, it is visible that the firms or organizations have
the potential to achieve the employees as per their design criteria of quality (Henninger et al.
2017). The incorporation of the training and the developmental activities to meet the
requirements of the customers is considered to be a major step in the effective achievement of
the varying preferences of customers (Fernie, Fernie and Moore 2015). However, the impact
of the technology is seen to be crucial in the effective achievement of the preferences of the
customers (Nenni, Giustiniano and Pirolo 2013). Adding to this, the incorporation of the
presence of technology on the products or the services of the organization is notably
successful in improving the quality of the employees and in the management of the design of
the products with a precise focus on the achievement of the views and pinions of the
customers ad that seen to be a key factor for both the countries.
(Information: Number of employees)

12COMPARATIVE ANALYSIS
(Information Courtesy: Statista.com. 2019)
Recommendations:
Challenges:
The challenges faced by many of the organizations operating in the mentioned
industry are the inefficiency in managing the preferences of the customers, the ineffective
management of queries of the customers, effective alignment of the design of the products
with the requirements of the customers, lack of improving the online and social media
promotions and the marketing activities.
The organizations operating in the industry are in need to make sure that the customer
relationship management of the organizations are improved enough to achieve the
preferences of the customers, effectively collects the information regarding the views and the
opinions of the customers. Along with that, improvement in the social media or online
business activities will be of great significance for the organizations in increasing the level of
customer satisfaction. Adding to the point of CRM, the organizations need to conduct the
exhibitions for sale in a more frequent manner to understand the preferences and the modern
trends in an efficient manner. Adding to this, the effective alignment of the organizations’
operations in terms of designing the products with a precise focus on the style statement of
the customers such as the hairdos, nose and ear piercing is much needed from the part of the
organizations in conducting sustainable business in the mentioned business industry of the
two chosen countries.
Conclusion:
On a concluding note, the preferences of the customers is seen to be an influential
factor in the business conduction in the mentioned industry. However, the impact of the
implementation of the strict legislation from the part of Trump government and impact of

13COMPARATIVE ANALYSIS
Brexit are seen to be crucial in the business conduction of the modern fashion retail
organizations. With an effective restructuring in the CRM of the organizations, the industry
has the chance to revive its business operations in a significantly efficient manner.

14COMPARATIVE ANALYSIS
References:
Bandinelli, R., Rinaldi, R., Rossi, M. and Terzi, S., 2013. New product development in the
fashion industry: An empirical investigation of Italian firms. International Journal of
Engineering Business Management, 5(Godište 2013), pp.5-31.
Bea.gov. 2019. U.S. Bureau of Economic Analysis (BEA). [online] Available at:
https://www.bea.gov/
Caniato, F., Caridi, M., Moretto, A., Sianesi, A. and Spina, G., 2014. Integrating international
fashion retail into new product development. International Journal of Production Economics,
147, pp.294-306.
Dabija, D.C., Szentesi, S. and Pop, N.A., 2014. A customer-oriented perspective on retail
brand equity in the fashion industry. Dabija Dan-Cristian, Pop Nicolae Al., Szentesi Silviu, A
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Textilă, 65(1), pp.37-46.
Iannone, R., Ingenito, A., Martino, G., Miranda, S., Pepe, C. and Riemma, S., 2013.
Merchandise and replenishment planning optimisation for fashion retail. International
Journal of Engineering Business Management, 5(Godište 2013), pp.5-26.
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exploratory case of Marks & Spencer. Manchester School of Management, Manchester.
M. Taplin, I., 2014. Who is to blame? A re-examination of fast fashion after the 2013 factory
disaster in Bangladesh. critical perspectives on international business, 10(1/2), pp.72-83.

15COMPARATIVE ANALYSIS
Macchion, L., Danese, P. and Vinelli, A., 2015. Redefining supply network strategies to face
changing environments. A study from the fashion and luxury industry. Operations
management research, 8(1-2), pp.15-31.
Nenni, M.E., Giustiniano, L. and Pirolo, L., 2013. Demand forecasting in the fashion
industry: a review. International Journal of Engineering Business Management, 5, p.37.
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Wrigley, N. and Lowe, M., 2014. Reading retail: A geographical perspective on retailing
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Yang, S., Song, Y. and Tong, S., 2017. Sustainable retailing in the fashion industry: A
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