Changes and Strategies in the Fashion Retail Industry of UK

This assignment report discusses the concept of the retail sector and focuses on the fashion retail industry in the United Kingdom. It provides an overview of Matalan, a prominent fashion retailer, and analyzes the changes in the industry's micro and macro environment. The report also suggests strategies and recommendations for Matalan to effectively deal with the challenges in the market.

FASHION
RETAILER

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Introduction to the concept of retail sector ................................................................................1
Overview of the selected organisation in context with position and relative size in market......2
Relevant variations and changes in the fashion retail industry of United Kingdom ..................2
Discuss about the changes associated with micro environment of business...............................4
Strategies and tactics to deal with the changes in a proper manner............................................5
Appropriate recommendation to selected organisation to meet business challenges..................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Retailing is referred to the procedure of selling services and goods to the consumer by
using different medium and channels of distribution. Main aim behind retailing activities is to
earn high profits and revenues so that a company can achieve high competitive advantage over
the competitors (Bloom and et. al., 2012). In order to provide right service and products to the
customers, a retail firm needs efficient supply chain. This assignment report is prepared in
relation to Matalan which is a Britain based home-ware and fashion retailer, headquartered in
Knowsley, UK. This organisation is founded in 1985 and operates more than 210 shops in UK.
This assignment is going to cover about the term retail and fashion retail along with overview of
selected organisation. Other than this, micro and macro environment of business will be analysed
in context with UK. At last some strategies will be formulated and recommendation will be given
so that concerned organisation can operate their business in a proper manner.
MAIN BODY
Introduction to the concept of retail sector
Retailer is a person which operates and manage their business either via an online
platform like E-commerce and shopping sites or through brick and mortar outlets. The term
Retailers is utilised for those individuals which are service provider of products at small scale.
These people have contact with wholesalers and distributors that provide them required amount
of product so that requirements of customers can be served in a proper manner.
In today's time, retail organisation take multiple strategic decisions including
identification of right market, type of outlet, appropriate product assortments, market and
product positioning, customer service etc. Outlets in retail stores have different context and types
like indoor shopping malls, large stores, shopping complex etc. Fashion retail is basically a sub
part of retail market which deals in providing latest fashion and lifestyle to the customers as per
their demand. Strategies associated with fashion retail based on key positioning factors, value
propositions, assortments, distribution channels etc. so that a business firm can easily
differentiate them from rivals (Bodie, 2015).
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Overview of the selected organisation in context with position and relative size in market
Matalan is a UK based home-ware and fashion retailer which provides high quality
offerings to their customers. This business organisation has its main office situated in Knowsley,
UK and founded in 1985 by John Hargreaves. This organisations operates in UK and manages
around 217 stores in successful manner. To gain the attention of customers, organisations
provides high-quality products to their customer base.
Features of company: Main feature of this organisation is its loyalty and commitment of
their employees in serving their customers. Due to this, all the stores of company are working
profitably.
Location: This firm is operating all of its business operations in UK at more than 210
geographic locations. This company also posses 30 international franchise in Middle East and
Europe.
Business format: This organisation perform their store based operations via two channels
i.e. Matalan outlets ( more than 215 retail branches in UK ) and Matalan international franchise
which are more than 28 in number. Company also take orders through mail and e-commerce so
that people from remote areas can also purchase products of company (Das, 2015). For these
customers, company also provides home delivery service by charging minimum fees of around
4£.
Classification through size: In accordance with the size, a retail organisation can either
be a high street or a departmental store. Matalan has both high street stores and departmental
outlets in UK which are around 220 in number.
Classification by margins: E-commerce business of Matalan is flourished by more than
30% due to increment in sales by 3.8% and availability of pre-tax profits i.e. around 50% of total
online income.
Relevant variations and changes in the fashion retail industry of United Kingdom
Changes in retail sectors varies at a fast pace which is mostly associated with the
distribution mediums used by the company to provide offerings to their clients. Traditional
distribution channels involves wholesalers, distributors and suppliers etc. but from the year of
2008, business firms have started to use different modes and channels for distribution of goods
like direct selling, online selling, selling through intermediaries, dual distribution, selling via
online sites (Dos Santos, Svensson and Padin, 2013). for instance, e-commerce is one of the
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basic distribution channel which is used by Matalan to serve their international customers. But,
this method has some disadvantages like maintenance of real time stock figures and following
international laws. These issues can be resolved by analysis of external environment. As time is
moving forward, variations in retail are encountered. In context with changing time, some
change in retail sector are stated below:
In the year of 1950, manufacturer of a good or service is considered as the king. At that
time, people do not have very high demand due to which each product produced by manufacturer
is appreciated by the customers. In 1960's, customers and their opinions were also considered
while producing goods due to which consumers of that time were regarded as king. But, in year
of 1970, organisations produce goods according to the latest trends due to which trade is given
more preference than the wants of customers and manufacturers. During this time, retail sector
flourishes and emerges. After 1970's, whole emphasis is given to marketing so that high attention
of customers can be gained and high revenues can be achieved. Time period form 2000 to 2019
is considered as modern era, here all the services and products of company are produced
according to the requirements of customers and if customers will not like product, retail sector
can face business failure (Ford, and Mouzas, 2013).
PESTLE analysis
This is a strategic framework which helps an organisation in analysing and evaluating
their current situation in context with external factors. These external factors are related with
politics, society, legal norms, economic situation, technology and environmental aspects of UK.
PESTLE analysis, to analyse macro-environmental changes is discussed below:
 Political factors: Political aspects in UK can bring high uncertainties for fashion retail.
This is because of aspects like geopolitical instability, Brexit, terrorism etc., business
organisation operating at high scale are impacted negatively. In previous time, UK was
completely stable and all the policies were in favour of retailers like Matalan. But now,
Brexit has leads to uncertainties due to which retail industry is negatively impacted
(Glover and et. al., 2014).
 Economic factors: These aspects are associated to the purchasing power of people, GDP,
growth rate, interest rate and inflation. People in UK have good income, due to which
sales and revenues in retail sector is high. But, due to great recession in 2018, inflation
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has rise and purchasing power of people is low. This can impact sales of Matalan in
negative manner.
 Social factors: This kind of aspects involve preference, perception and opinion of people
which reside in a specific geographic location. In UK, earlier people purchase those
products form retail firms which serves their needed. In today's time, people purchase
those products which are modern and helps them in showing off their status. In this
context, retailers like Matalan can provide products to customers as per latest trends if
they want to maintain their shares and revenues in a profitable manner (Hagberg and
Kjellberg, 2015).
 Technological factors: These aspects are linked to the innovation and advancement in
technology. In earlier time, people prefer to purchase clothes and other fashion related
accessories from outlets to assure its quality. Now, time has changed and people prefer to
do online shopping to save their precious time. In this context, Matalan is needed to
increase their technological dependence so that more people can appreciate their online
initiatives and perform shopping from their websites (Vaara and Whittington, 2012).
 Environmental factors: These factors are linked to the environment and ecological
aspects. Earlier people were not so aware about environmental concerns due to which
they do not care about the methods of producing a product. Now the scenario has
changed and people prefer only those products which are sustainable in nature. Here,
Matalan is required to produce their product without harming nature so that maximum
people can appreciate their products and sales of company will increase.
 Legal factors: This factor includes about legal laws and regulations which are essential
for an organisation to follow if they operate in a nation. In UK, earlier laws for
employees, customers and other business organisation were not very strict, due to which
retail organisations were able to perform work as they want. But, now situation has
changed and Matalan is needed to operate very careful. If welfare of employees or
customers will be compromised then organisation have to pay heavy penalties and fines
which will reduce their revenues and reputation in market (Hristov and Reynolds, 2015).
Discuss about the changes associated with micro environment of business
To acknowledge the micro environment of a company, porter's five force model can be
used in a proper manner. In case of Matalan, management in organisation can use this analysis so
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that high competition in market can be acknowledged in a proper manner. This model consists of
five elements which are discussed below:
 Threat of new entrants: This fact is related with the entrance of new competitors in
marketplace. As Matalan is a renowned organisation which is successfully operating in
UK, impact of this force is not so high. This is because to operate against Matalan, high
investment is needed which can not be invested by a new organisation (Kitchin and Tate,
2013).
 Bargaining power of suppliers: Retail sector is very competitive as large number of
businesses came under it. Due to this, demand of rare or basic resources is very high.
This is the reason, bargaining power of supplier is very high as it depends upon them
which raw material will be supplied to which organisation. If Matalan will not comply
with suppliers of company then achieving appropriate outcomes will not be possible.
 Bargaining power of buyers: Customers are treated as a king in a business environment.
This shows that bargaining power of customers is high as if they will not like the
products of company then concerned business will not be able to operate their services.
Hence, Matalan is needed to offer only those products which are needed by customers so
that firm can achieve high sales and revenues (Klaus and Nguyen, 2013).
 Threat of substitutes products: There is no substitute for clothes and home-ware due to
which this force is low in context with Matalan. In order to live a standardised life,
people needs to wear pretty clothes and accessories. This force is in favour of concerned
retail company and do not influence Matalan in negative manner.
 Rivalry among existing competitors: Retail sector is highly competitive where large
scale organisations like M&S, H&M, Zara, Matalan are giving tough competition to each
other. This force is very high for Matalan as standardised products from rival
organisations will impacts the product sales of concerned firm in negative manner. In this
context, company is needed to adopt new strategies so that they can counter measure the
strategies of rivals (Stewart and Shamdasani, 2014).
Strategies and tactics to deal with the changes in a proper manner
There are different strategies which can be implemented by the manager in concerned
business firm so that high revenues and profits can be gained against rivals. Strategies after
analysing macro environment and micro environment of company are discussed below:
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Identified changes Appropriate strategy
Change in choice and
opinions of customers
 People in UK changes their opinion and perception about
products on regular basis, in this context, company can
chose diversification in which only unique products will be
given to customers so that they can appreciate the offerings
and revenues of business firm can be managed in a proper
manner (Mair, Whitford and Mackellar, 2013).
More reliability towards
digital media
 Earlier, people use to do shopping at retail stores but now
they have more tilt towards online shopping and e-
commerce. In this context, organisation can adopt artificial
intelligence so that online processes of Matalan can be
managed in proper way.
Purchasing power of
people is reduced due to
Brexit and Great recession
of 2018
 In this context, company can adopt total quality
management as a strategy so that those procedures which
do not add value to the company can be eliminated. By
this, overall price of products will reduce and customers
will purchase them in high quantity. This will help the firm
in earning high revenues (Shanks and Tilley, 2016).
Due to increased
competition, customers
have very high bargaining
power
 To deal with this change in a proper manner, concerned
company can adopt the strategy of product development.
Here, company will provide new products to the existing
customers so that they can shift their preference towards
the product towards Matalan only.
Appropriate recommendation to selected organisation to meet business challenges
There exist different recommendations that can be given to the firm so that they can deal
with business challenges in a proper manner. These recommendations are stated below:
 Company is recommended to train their employees on regular basis so that changing
needs and requirements of customers can be acknowledged & served in a proper manner.
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 Matalan is recommended to increase their online presence so that customers can shop
their offerings in high amount and overall profits of organisation can be increased
(Spaargaren, Oosterveer and Loeber, 2013).
 Organisation is also recommended to follow all legal compliances and policies in a
proper manner so that positive reputation of company will be prevailed in market. By
this, concerned organisation can surpass the popularity of competitors in a proper
manner.
CONCLUSION
As per the mentioned project, this can be inferred that a retail organisation is required to
have robust distribution and supply chain so that customer's can be served in a proper manner.
There exist various type of changes in internal and external business environment due to which
performance of company is impacted in a considerable manner. Hence, it is important for an
organisation to evaluate each factor in detailed manner with the help of frameworks like
PESTLE, Porter's five force etc. Overall, it can be said that retail sector helps in increasing the
economic growth of country as sales of manufacturing and production organisations also
depends upon these firms. In this context, an organisation is needed to adopt various strategies so
that all the work of organisations can be carried out appropriately.
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REFERENCES
Books and Journals
Bloom, N. and et. al., 2012. Management practices across firms and countries. Academy of
Management Perspectives. 26(1). pp.12-33.
Bodie, Z., 2015. Thoughts on the future: Life-cycle investing in theory and practice. Financial
Analysts Journal. 71(1). pp.43-48.
Das, G., 2015. Retail shopping behaviour: understanding the role of regulatory focus theory. The
International Review of Retail, Distribution and Consumer Research. 25(4). pp.431-
445.
Dos Santos, M. A., Svensson, G. and Padin, C., 2013. Indicators of sustainable business
practices: Woolworths in South Africa. Supply Chain Management: An International
Journal. 18(1). pp.104-108.
Ford, D. and Mouzas, S., 2013. The theory and practice of business networking. Industrial
Marketing Management. 42(3). pp.433-442.
Glover, J. L. and et. al., 2014. An Institutional Theory perspective on sustainable practices across
the dairy supply chain. International Journal of Production Economics. 152. pp.102-
111.
Hagberg, J. and Kjellberg, H., 2015. How much is it? Price representation practices in retail
markets. Marketing Theory. 15(2). pp.179-199.
Hristov, L. and Reynolds, J., 2015. Perceptions and practices of innovation in retailing:
Challenges of definition and measurement. International Journal of Retail &
Distribution Management. 43(2). pp.126-147.
Kitchin, R. and Tate, N., 2013. Conducting research in human geography: theory, methodology
and practice. Routledge.
Klaus, P. and Nguyen, B., 2013. Exploring the role of the online customer experience in firms'
multi-channel strategy: An empirical analysis of the retail banking services sector.
Journal of Strategic Marketing. 21(5). pp.429-442.
Mair, J., Whitford, M. and Mackellar, J., 2013. Participant observation at events: theory, practice
and potential. International Journal of Event and Festival Management.
Shanks, M. and Tilley, C., 2016. Re-constructing archaeology: theory and practice. Routledge.
Spaargaren, G., Oosterveer, P. and Loeber, A. eds., 2013. Food practices in transition: changing
food consumption, retail and production in the age of reflexive modernity. Routledge.
Stewart, D.W. and Shamdasani, P.N., 2014. Focus groups: Theory and practice (Vol. 20). Sage
publications.
Vaara, E. and Whittington, R., 2012. Strategy-as-practice: Taking social practices seriously. The
Academy of Management Annals. 6(1). pp.285-336.
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