Retail Management and Fashion Industry

This document provides a compilation of research papers and articles on retail management and the fashion industry. It includes topics such as international fashion retail, merchandise and replenishment planning optimization, organizational commitment, service quality dimensions, soft skills, innovation drivers, and customer experience within retail environments. The assignment aims to provide an in-depth analysis of various aspects of retail business strategies and their applications in different contexts.

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Table of Contents
INTRODUCTION ..........................................................................................................................1
Introduction to Retail..................................................................................................................1
Introduction to the company.......................................................................................................1
Key relevant changes within UK fashion retail..........................................................................2
Relevant changes within the macro-environment.......................................................................3
Business strategies and tactics....................................................................................................5
Recommendations.......................................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Retail is the ongoing process of selling and distributing goods and services to potential
customer's. Is function is carried out by using various types of distribution channels which
basically include- online, direct mail ,etc. It is very much essential for every organisation to
make appropriate plans and strategies for manufacturing and selling goods and services. As by
doing this sale and profitability of the organisation can be easily enhanced. The organisation
chosen for this report is ZARA which is a top fashion retailer(Caniato and et. al., 2014). This
report will majorly cover changes which internally and externally affect the functioning of
fashion retail industry. Macro environment of the industry will be analysed to to make
appropriate set of plans and strategies for sustaining in the market for long period of time.
Introduction to Retail
Retail is the procedure of selling product and services directly to customers by use of
multiple channels of distribution to gain a profit. Fashion industry also aims at following this
function by making appropriate set of strategies and tactics. The process of purchasing cloths
from maker and selling them to customer is known as retail. Success of fashion market depends
on the understanding the consumer taste and preference and design according to their choice.
Company do not sell their own products to the customers they place those cloths at wholesale
price in the hand of retailers like department stores, boutiques, online stores etc. customer’s
ascertain taste and preference towards fashion allows marketer to use tracking data, attending
media coverage etc. and provide feedback to all the companies designers and makers about the
quantity and type of cloths to be produced(Crewe, 2016).
Introduction to the company
ZARA is top clothing fashion retailer which is established in 1963 by Amancio Ortega.
The organisation aims at offering wide range of products for men, women and children. ZARA
also deals in cosmetic, perfume and various other household products. It the initial stage the
prices of its products were low so that large large number of customer's can be attracted.
Management of the organisation aims at providing maximum satisfaction to its potential
customer's. This is done by providing them high quality products at relatively low price as
compared to its competitors. ZARA is currently performing its business activities in various
parts of the world with the motive of increasing sale and profitability in the best possible manner.
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Key relevant changes within UK fashion retail
The fashion industry is uncertain and dynamic in nature. This means rapid changes take
place in this type of industry. But this industry is also growing and expanding its business at a
very high rate. Due to this competition level in this type of industry is also increasing rapidly.
Customer's is fashion industry continuously demands new and attractive products, so it becomes
duty of organisations to make plans and strategies after analysing and evaluating various things.
ZARA faces various kinds of problems and issues from the external macro-environment. To
remove negative impact of this factor PESTLE analysis can be used.
PESTLE analysis is basically used for analysing and evaluate the conditions of market.
With the help of this analysis management of ZARA will be able to reduce negative and
uncertain impact of macro-environment(Dillon, 2011). Various factors related to this analysis are
discussed below-
Political factor- It is concerned with various rules and regulations imposed by the
government. It majorly involve- taxation, trade agreements and various other policies imposed
by the government of particular country(PESTEL Analysis. 2019). The government of Europe is
focusing on providing free trade agreements so that its sale can be increased(Ridley-Duff and
Bull,2015). With the help of this organisation is able to reduce negative impact of this factor
because ZARA can easily import and export its products.
Economic factor- This type of factor is related with change in inflation and deflation rate
of a particular economy. Economical factor has direct and negative impact on the soomth
functioning of then organisation. This is because any change in the economical conditions
directly leads to increase in unemployment. The cost of labour in UK is very low and due to this
cost of production for ZARA is also decreased. Customer's of the organisation are able to get
good quality of products at very low price. This has direclty lead to increase in sale and
profitability of the organisation because large number of customer's are getting attracted towards
its product(Iannone and et. al., 2013).
Social factor- It is concerned with values, belief, perception and ethics of the customer's
of a particular area. The attitude and demands of customer's in UK is changing rapidly because
they are becoming more educated. Customer's of ZARA are demanding its products at their door
step. To fulfil this demand management of the organisation has planned to introduce online
shopping facility , so that customer's can buy products as per their convince.
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Technological factor- This type of factor is concerned with use of latest technology and
innovation to enhance the experience of potential customer's. To overcome the negative impact
of this factor ZARA has introduced latest technology innovation in which customer's can have a
look on how models and actress wear particular type of dress. It helps them to analyse and decide
whether the dress will look good on them or not. Organisation also aims at attracting large
number of customer's by using social media(Rossi, 2014). By using this the sale and productivity
of ZARA has increased because customer's are becoming more satisfied with its products(Jafri,
2010).
Legal factors- This factor is related with use of various laws and regulations for the
effective functioning and achievement of goals and objectives. ZARA focuses on implementing
plans and polices according the various employment and legal laws. As by doing this its goals
and objectives can be easily attained because employee's will be satisfied working with the
organisation. Zara also focuses on using copyright laws before the introduction and launching of
any new product. With the help of this laws organisation safeguard its self from getting tits
goods copied from any local manufacturer(Tadajewski and Jones, 2014).
Environmental factor- It is related with making plans and tactics for conserving
environment in the best possible manner. The management of the organisation continuously
focus on using various new techniques for saving energy and natural resources. Zara is focusing
on making its stores eco friendly so that environment can be conserved in the best possible
manner. Organic material is also used in the manufacturing of clothes so that much destruction is
not done to the environment(Karhu and Yla-Kojola, 2010).
Relevant changes within the macro-environment
The micro-environment of the organisation directly affects the decision making and
strategy formulation. Macro-environment majorly consist of customer's, suppliers, competitors,
employee's, etc. These type of factors are internal to the organisation, this means any change in
these factors can be easily controlled by the management of Zara. SWOT analysis can be used
for analysing and evaluating the current condition in the best possible manner. With the help of
SWOT analysis ZARA can easily know its strength, weaknesses, opportunities and
threats(Machek, 2012). Plans and strategies can also be made to overcome threats in the best
possible manner. The SWOT analysis of ZARA is discussed below-
Strength Weakness
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 The designs of ZARA are unique
because its designers are able to make
dresses as per the need of its potential
customer's.
 The organisation is offering wide range
of products to its customer's. Due to
this they have strong brand image in the
market. It is one of the biggest strength
of ZARA.
 New products and projects are
introduced after analysing the market
conditions. Due to this organisation is
successful in getting high return on
capital expenditure(Mittal and Gera,
2012).
 Employee's in the sales team get proper
training so that they can explain
qualities of products to customer's in a
systematic manner. This has lead to
increase in sale and profitability.
 Zara's profitability ratio and net
contribution is not up to the mark. This
is its contribution in the fashion
industry is below average.
 The marketing and adverting strategies
of the organisation is also attractive and
due to this customer's are not getting
aware about the company's product.
 The customer's of Zara shifts to another
brand because its competitors focus on
producing a product in a more
specialised manner.
Opportunities Threat
 Organisation can charge low shipping
prices so that cost of product can be
minimised. It is one of the biggest
opportunity for Zara.
 The management of organisation has
invested large amount in online
retailing. This has lead to increase in
sale and market share of the
 Zara does not have skilled and
knowledgeable workforce and due to
this its sustainability is at danger.
 The competition level in this type of
industry is very high. Competitors of
Zara are H&M, Mango, etc.
 There is increase in number of local
suppliers and due to this competitors
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organisation.
 Zara has various types of opportunities
in the domestic and international
market. New range of product can be
launched for increasing the
sustainability of the organisation.
are paying high margin to these local
suppliers.
Business strategies and tactics
Due to busy schedule of the population of UK the sale and profitability of Zara is
decreasing day by day. This is because people do not have time to visit stores and buy its
products(Yakhlef, 2015). This factor is largely affecting the business of ZARA, to overcome this
management of the organisation is planning to make best use of latest technology and
innovation. Zara has launched online stores for its potential customer's. As with the help of this
facility customer's can buy products as per their convenience. This strategy was launched after
analysing and evaluating the exact need and preferences of the customer's. This is also lead to
increase in competition level in the market of UK(Nickson and et. al., 2012).
 Population of UK is continuously becoming more concerned about the environment. Due
to this they are demanding organic products so that environment can be saved. Zara is
making plans and strategies for making its stores eco friendly. But the management of
organisation will require different and unique set of strategies so that this goal can be
achieved. If the focus is emphasised on producing organic products than sale of
organisation will be increased. But the production of such products is a costly process
and it will lead in increase in price of product and its production cost. To overcome this
problem research and analysis of the marketing condition can be done. Appropriate
financial plan can be made so that unnecessary wastage of financial resource is not done.
Different plans and strategies can also be made for attracting large number of customer's
in the best possible manner. This means promotional strategies and discounts can be
given to customer's, so that they end up buying the product(Pantano, 2014.).
 Customer's are demanding use of latest technology to satisfy their needs and demands.
Potential customer's of Zara likes to share pictures of dresses to their loved ones before
buying the final product. To fulfil this demand organisation has introduced a unique
application in which customer's can make conference call and can consult it with their
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family and friends regarding the purchase of particular dress. This strategy has helped the
management of organisation is attracting large number of customer's and increasing their
satisfaction level. By using this technology customer's will be able to take better
decisions regarding the purchase of particular dress. With the help of this tech-savvy
technique customer's will be able to get better experience in buying the product. Zara is
also able to increase its market share because its competitors have not introduced such
strategies for the betterment of its customer's(Sarabia-Sanchez, De Juan Vigaray and
Hota, 2012).
 The customer's of the organisation are also demanding unique designs of their dresses.
This is because fashion industry is uncertain and rapid changes take place in preferences
of customer's. To fulfil this demand skilled designers can be hired so that they make
unique design of the dress. By doing this the management of the organisation will be able
to give tough competition to its competitors in the domestic and international market. If
the organisation is successful in doing this than its sale and profitability will be directly
increased. Zara can also make plans and strategies for making manufacturing products as
per the need and preferences of customer's of a particular area. As by doing this their
expectations will be fulfilled and better competition can be given to other organisations in
fashion industry.
With the help of these strategies and plans management of ZARA will be able to attract large
number of customer's in a limited period of time(Yu, Ramanathan and Nath, 2014). Its sale,
profitability and proficiency will also be increased and enhanced. So focus can be emphasised on
implementing new and better strategies for the sustaining in the market within prescribed time
period.
Recommendations
From the above report it can be recommended that Zara being a top most fashion retailer
needs to make major changes in its working structure. Some of the major recommendation which
can be given to the organisation are mentioned below-
 Latest and innovative technology can be used in the production and manufacturing
process.
 Focus can also be emphasised on providing appropriate trainings to the employee's so
that customer's need and demand are fulfilled in the best possible manner.
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 Appropriate plans can be made for promoting the products in the market. This means
innovative promotional strategies can be used to make the customer's aware about
company's product.
 Skilled and knowledgeable designers can be hired so that they can produce innovative
clothes.
CONCLUSION
From the above given report it has been concluded that rapid changes takes place in the
retail sector because customer's needs and demand are uncertain. It becomes very much difficult
for the organisations to identify exact needs and preferences of customer's. With the help of
PESTEL and SWOT analysis management of the organisation can easily make changes in the
plans and strategies for the future course of action. Best use of the available opportunities in the
external and internal market can be done by using this analysis in a appropriate manner.
Weaknesses and Threats can also be overcome if the management of organisation is successful in
making effective plans for the future course of action.
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REFERENCES
Books and Journals
Caniato, F., and et. al., 2014. Integrating international fashion retail into new product
development. International Journal of Production Economics. 147. pp.294-306.
Crewe, L., 2016. Placing fashion: Art, space, display and the building of luxury fashion markets
through retail design. Progress in Human Geography. 40(4). pp.511-529.
Dillon, S., 2011. The fundamentals of fashion management. A&C Black.
Iannone, R., and et. al., 2013. Merchandise and replenishment planning optimisation for fashion
retail. International Journal of Engineering Business Management. 5(Godište 2013),
pp.5-26.
Jafri, M.H., 2010. Organizational commitment and employee's innovative behavior: A study in
retail sector. Journal of Management Research. 10(1). p.62.
Karhu, A. and Yla-Kojola, A.M., 2010. Internationalisation of pharmaceutical retail sector:
growth opportunities in emerging markets. International Journal of Business
Excellence. 3(3). pp.363-382.
Machek, M., 2012. Retail market structure development in Central Europe. Central European
business review. 1(3). pp.22-27.
Mittal, S. and Gera, R., 2012. Relationship between service quality dimensions and behavioural
intentions: an SEM study of public sector retail banking customers in India. Journal of
Services Research. 12(2). p.147.
Nickson, D., and et. al., 2012. Soft skills and employability: Evidence from UK retail. Economic
and Industrial Democracy. 33(1). pp.65-84.
Pantano, E., 2014. Innovation drivers in retail industry. International Journal of Information
Management. 34(3). pp.344-350.
Sarabia-Sanchez, F.J., De Juan Vigaray, M.D. and Hota, M., 2012. Using values and shopping
styles to identify fashion apparel segments. International journal of retail &
distribution management. 40(3). pp.180-199.
Yu, W., Ramanathan, R. and Nath, P., 2014. The impacts of marketing and operations
capabilities on financial performance in the UK retail sector: A resource-based
perspective. Industrial Marketing Management. 43(1). pp.25-31.
Ridley-Duff, R. and Bull, M., 2015. Understanding social enterprise: Theory and practice. Sage.
Rossi, M., 2014. Capital budgeting in Europe: confronting theory with practice. International
Journal of Managerial and Financial Accounting.6(4). pp.341-356.
Tadajewski, M. and Jones, D.B., 2014. Historical research in marketing theory and practice: a
review essay. Journal of Marketing Management.30(11-12). pp.1239-1291.
Yakhlef, A., 2015. Customer experience within retail environments: An embodied, spatial
approach. Marketing Theory.15(4). pp.545-564.
Online
PESTEL Analysis. 2019.[Online] Available
Through :<https://www.ukessays.com/essays/business/next-pestle-analysis.php>.
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