This report explores the trends in the retail industry, with a focus on the case study of NEXT. It includes a literature review, analysis of the company, recommendations, and conclusions.
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CW1:Inquiry project
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Table of Contents INTRODUCTION...........................................................................................................................1 LITERATURE REVIEW................................................................................................................1 Trends in retail.............................................................................................................................1 METHODOLOGY..........................................................................................................................2 RESULTS OR DISCUSSION.........................................................................................................3 Analysis of company....................................................................................................................3 RECOMMENDATIONS.................................................................................................................5 CONCLUSIONS..............................................................................................................................6 REFERENCES................................................................................................................................7 APPENDICES.................................................................................................................................8
INTRODUCTION Project could be delineated to a sequence of activities that are to be completed for the purpose of accomplishing specific results. Similarly, inquiry project is a work that includes group of learners that investigates a worthy problem, idea or issue (Hirst, 2019). It is an authentic work which comprises serious engagement together with investigation. For present inquiry project report, considered organisation is NEXT which is multinational footwear, home as well as clothing products retailers having headquarters situated at Enderby, UK. The company have approx 700 stores among which circa 200 across Middle East, Europe, Asia and circa 500 are located in United Kingdom. The report highlights trends pertaining within retail sector, organisational analysis as well as recommendations to company for continuing operations in complex retail industry. LITERATURE REVIEW Trends in retail In accordance to statement of Von Briel (2018) retail industry is defined to that sector wherein ventures or enterprises sells any type of commodity to an individual consumer for own usage. In this industry, product or service selling takes place through certain mechanisms such as store at bricks together with mortar location, departmental shops, postal services and hence forth. Retail industry have went through enormous structural changes in last couple of years with digital technology addition to e-commerce at centre to transform retail landscape of UK. Gibbons (2020) says that retail industry of UK is considered as £395 bn industry. Store shut down in the month of March and April of 2020 has huge negative impact on retailers as it have resulted in nearby 5 to 6% of overall annual decline in annual sales. In 2020, approx to 3096655 retail outlets exist within retail sector. It is also determined that around 324% of online sales have increased in last couple of years. Top players or enterprises that operate effectively in retail industry includes Aldi, IKEA, Marks & Spencer, Asda, John Lewis, Argos, Wilko, Card Factory, Waterstones, NEXT and so on. Key trends associated by retail industry are as follows: Digital by design: Year 2020 is proved to be one of transformation year for retail industry through offering compelling cases about digital first approach. It is because retailers have to close down their stores due to Covid-19 restrictions as well as consumers were informed for shop from home. For the purpose of reaching to locked down consumers, retailers had to make 1
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decision for only channel available for scaling their online potentiality. It is expected that this will lead to more and more number of retailers adopting digital first approach. Health becomes new battleground: It is one of trend within retail sector that consumers are changing their behaviours. They are working to emphasis more on healthy and wellness which have wider chances of improving demand for wearables addition to data services so to deliver personalised programmes (Peker, Kocyigit and Eren, 2017). More time as well as money are dedicated by consumers for looking after themselves and it is devises greater opportunity for retailers of UK. Thoughtfulexperiential: Growth of online have put pressure on retailers for the purpose of reassessing true value addition to role of stores. In last couple of years, experience related retailersstruggledwithlimitedfootfalltogetherwithopportunityforfosteringconsumer engagement. Experts in the industry believes that experience remains important to future of outlets which requires to be more thoughtful (Retail Trends 2021,2021). Moreover, cost pressure along with investment in experience requires to ensure that all these makes sense as per brand perspective, deliver commercial return as well as adds consumer values. Eco-friendly shopping as main consumer priority: With changes in ecological factors, consumers are becoming more aware about ways to protect environment. For this, the are demandingfromretailersaboutimplementingmeasureswhichwillpermitthemfor environmentally conscious shopping with the help of participation in recycling schemes so to develop sustainable goals (Moorhouse, tom Dieck and Jung, 2018). Top retailers of UK have announced that in the year 2022 they will be launching a Deposit Return Scheme which will permit consumers to make payment of 20p deposit on individual use drink containers so to get refund on being returned to returns place. METHODOLOGY Data refers to collection of facts comprising measurements, numbers, description of things and observations. Key steps that are undertaken for conducting the research of inquiry project includes identifying general study area, selecting topic for research, devising plan along with methodology, collection of data, analyse as well as interpreting data and presenting findings. The investigation for the report is carried through through using two sources of data collection. One is primary source and another is secondary source.Primary sourceis termed as original data source wherein information is collected first hand for particular investigation 2
purpose.Forpresentreport,informationordataisgatheredthroughquestionnaireand observation method. Questionnaire that is used by professionals of NEXT in order to collect information from respondents are attached in Appendices. At same time,secondary sourceis represented as data collection method in which information which is collected by other is used in investigation (Oh, Yeatman and Trinitapoli, 2019). Key secondary sources that helped the researcher in collection data for the report are journal articles, books, websites and many more. RESULTS OR DISCUSSION Analysis of company NEXT is leading British retail organisation which was founded in the year 1864 at Enderby, UK. It is largest clothing retail business by sales in United Kingdom. It was established by Joseph Hepworth. It performs its operations in areas of Europe, Middle East, UK and Asia. Presently, the organisation have existence in approximate 700 stores in which 500 are at UK and rest 200 are located across Europe, Middle East along with Asia. The retailer performs operations with the mission of becoming natural choice venture in UK for clothing aware female and male that are expecting distinction, quality along with style from the entity. It designs, manufactures along with distributes home furnishing, accessory products and clothing to approx 330 NEXT retail stores as well as organisational Directory mail order sales catalogue. It have employed its own design manpower for keeping eye on seasonal trends, industrial trends and to devise offerings accordingly. In the year 2020, Next have achieved revenue of £4,266.2 Million, net income of £610.2 Million and operating income of £853.9 Million with employee size of approx 44139 people. SWOT Analysis of NEXT On the basis of results that is obtained from primary data collected by using questionnaire approach, it is founded that NEXT is one of popular retailer in the market for its high quality offering at affordable prices. Products of such retailer are sold at flexible rates which attracts wider customer base that is its on its key strength. At same time, customers of NEXT says that employees at premise do not assist or provide guidance at the time they shop that dissatisfy them the most. The retailer can meet increasing demand for offering through offering large discounts on certain products that will help it to improvise its financial position in industry and generate profits. 3
As per secondary data that is collected through books, journals and other sources, results of SWOT Analysis about NEXT is as presented: Strengths: NEXT have strong distribution network thathelpsinreachingmajorityof potential locations. The retailer have strong free cash flow which provide numerous resources at organisational hands for the purpose of further expansion of projects. The company have high skill workforce thataretrainedthroughsuccessful learning programs. Weaknesses: In provided scale of expansion along withdistinctgeographicallocation, NEXTlacksinvestmentinnew technologies. ProfitabilityratiosalongwithNet Contributionsofpercentageofthe retailerarebelowindustryaverage (Sharma and Sehrawat, 2020). Itlackssuccessinintegrating organisationswithdistinctwork culture. Opportunities: Technologicaldevelopmentishuge opportunityforNEXTtoexpandin wider geographical locations and meet customer demand. Changes in policiesand adoption of new engagement policies can help the retailer in integrating with companies that have different culture of working (Maguth and Wu, 2020). Threats: Newtechnologiesdevelopedby competitorsinindustryisaserious threat for NEXT to make future in long term. Intensecompetitionatdomesticand international level is another threat for the retailer. Organisational performance against trends pertaining in the industry Performance of NEXT is improving year by year within global retail industry. It is because it have experts and professionals who have implemented effective strategies for gaining support along with trust of customers. Such retailer carry out its operations on the basis of analysing pertaining trends so that necessary modifications in tactics and practices are carried out in retail sector of UK and other countries. Core agenda of NEXT is sustainability with the help of 4
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which organisational performance is emphasised to reduce carbon footprints. With this, customer expectations are met at centre and leading positions are accomplished. Trends in retail industry have assisted the venture for expansion within emerging market addition to devise new channels (Fernandes, Rodrigues and Ferreira, 2019). At certain times, managers of NEXT fails to execute practices as per set criteria but by making improvisations in strategies, they are able to perform smoothly within retail trends. RECOMMENDATIONS For the purpose of focusing towards continuing on success, there are certain tactics or strategies which are important to be adopted by managers and administrators of NEXT. Some recommendations to professionals of NEXT in order to continuing success are as mentioned: Online outlets within offline spaces: It is recommended to managers of NEXT to launch together with expand their physical existence so to continue their success in dynamic and competitive industry. With this, the retailer will be able to open stores that sell apparel, home related and other products, that makes sense, for personalisation by using digital mechanisms. For instance, NEXT retail store could be a new store of the company designed from ground up with the purpose of offering seamless shopping experience at the time when customers shop either in store or online that will drive organisational success to huge level. Responding to change: Business change are inevitable in nature and the ones who are capable to respond are versatile. It is recommended to professionals and administrators of NEXT to be prepared for accepting change together with adapting operations successfully. Managers are suggested to realise from initial so that they do not leave behind. However, in context to lack of adaptability, then it can lead to loss of profits, customer base and business failure. Changes can begin at any time and when managers will respond on them promptly then it will help them to continue business success so to win heart of global economy. Enhance use of chatbots: Covid-19 have resulted on restricted in person experiences due to which organisations have to severely reduce face to face interactions along with support with customers. For the purpose of meeting needs of customers from the location they resides and continue achieving success, it is recommended to managers to NEXT to embrace chatbots addition to personal assistants. Prior to pandemic, the company was already using the technique, however, the entity is suggested to make necessary developments in the technology so that it can engage with customers on apps of messaging including KiK, Facebook Messenger and so on. 5
Chatbots will offer the business along with users certain benefits such as 24*7 availability, shorter wait times, etc. With this, it will become possible for administrators of NEXT to help customers in completing their purchase in minimum durations so that huge revenues are achieved to continue success. CONCLUSIONS From the report, it have been concluded that inquiry project is a working which comprises investigation on worthy idea, problem and issue. Key trends concerned with retail industry are Digital by design, health becomes new battleground, thoughtful experiential and Eco-friendly shopping as main consumer priority. Primary data and secondary data are key methods that researcher uses for the purpose of collecting information that are required in investigation. Key recommendation that will aid organisational managers to continue their success includes online outlets within offline spaces, responding to change and enhancing use of chatbots. 6
REFERENCES Books and Journals: Fernandes, G. W. R., Rodrigues, A. M. and Ferreira, C. A. R., 2019.Using ICT in Inquiry-Based Science Education. Springer International Publishing. Hirst, N., 2019. Education for sustainability within early childhood studies: Collaboration and inquiry through projects with children.Education 3-13.47(2). pp.233-246. Maguth, B. M. and Wu, G. eds., 2020.Inquiry-Based Global Learning in the K–12 Social Studies Classroom. Routledge. Moorhouse, N., tom Dieck, M. C. and Jung, T., 2018. Technological innovations transforming the consumer retail experience: A review of literature.Augmented reality and virtual reality, pp.133-143. Oh, J. H., Yeatman, S. and Trinitapoli, J., 2019. Data collection as disruption: Insights from a longitudinal study of young adulthood.American sociological review.84(4). pp.634- 663. Peker, S., Kocyigit, A. and Eren, P. E., 2017. LRFMP model for customer segmentation in the grocery retail industry: a case study.Marketing Intelligence & Planning. Sharma, M. and Sehrawat, R., 2020. Quantifying SWOT analysis for cloud adoption using FAHP-DEMATELapproach:evidencefromthemanufacturingsector.Journalof Enterprise Information Management. Von Briel, F., 2018. The future of omnichannel retail: A four-stage Delphi study.Technological Forecasting and Social Change.132.pp.217-229. Online: Gibbons. K., 2020.KPMG: UK retail sector trends 2020 & forecast 2021. [Online]. Available through: <https://resignal.com/blog/kpmg-retail-sector-trends-2020-forecast-2021/> RetailTrends2021.2021.[Online].Available through:,https://www2.deloitte.com/uk/en/pages/consumer-business/articles/retail- trends.html> 7
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APPENDICES Questionnaire QuestionsFrequency Q1. What features of NEXT motivates you for shopping its offerings? A. Quality20 B. Service excellence20 C. Low product prices10 Q2. How often you buy fromNEXT? A. Daily10 B. Once in week20 C. Once in month12 D. Once in year8 Q3.DoesworkforceofNEXThelporguideyouwhenyouare shopping? A. Yes32 B. No18 Q4. Do you also shop from other retail outlets except NEXT? A. Yes35 B. No15 8