Retail Theory and Practice - Zara Plc

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Added on 2021-01-02

Retail Theory and Practice - Zara Plc

Added on 2021-01-02

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Retail Theory andPractice

Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Background of retail sector....................................................................................................1Background of company.........................................................................................................2Key relevant changes within the UK fashion retail................................................................3Relevant changes within the micro environment...................................................................5Suggest and discuss strategies and tactics that could be used................................................6Recommendations..................................................................................................................7CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9

INTRODUCTIONRetail refers to the process of selling products and services to the customers via adistribution channel in order to earn profit. Retail business satisfies the demand of customers byusing their supply chain. Retail business are very essential for the people as they provides dailyhousehold products and services to the customers. Zara is the taken firm for this assignmentreport which is a fashion retailer having a wide range of fashions products to customers. Thiscompany was founded in 1975 in Spain. This report will cover the various issues faced by Zarain the market. Further the changes in the retail sector will be discussed by using the Pestleanalysis. This report will also cover the competitors of Zara and their strategies. In the end,Recommendations will be provided to the company for resolving and handling the issues.MAIN BODYBackground of retail sectorThe retail industry is the last step in the process of selling products to the customers. Thedifference between the whole seller and retail is that the wholesalers sells the products to thebusiness firms whereas retailer sells the products directly to customers. Wholesale sector plays amajor role in the functioning of the retail sector as the wholesalers provide their products to theretailers firms which are necessary for their smooth running (Berry, Broadbent and Otley,2016). Any business who is providing their products to the customers directly is a retailestablishment. There are various types of retailers as discussed below:Department stores: It is a large retail store which is segmented into small departmentsand provides wide range of merchandise such as J.C. Penney's.Discount stores: It is the mass-merchandisers or membership warehouses, such as CostcoCategory killers: These are the large stores which specializes only in one type ofmerchandise, such as Home Depot.E-tailers: These provides their products to the customers by online platforms such asAmazon.Specialty stores: These concentrate on one type of product and sells it in a unique waysuch as The Body Shop.Grocery stores: These provides food and beverage to the customers such as Kroger andJumbo.1

Convenience stores: These include gas stations and corner stores.Background of companyZara is a fashion retail firm who was founded in the year 1975 by Amancio Ortega andRosalía Mera. The parent company of Zara is Inditex group which is the world's largest retailer.By 2017, Zara was managing up to 20 clothing collections a year. The company has more than10,000 stores worldwide. The Inditex group is employing more than 17000 employees throughout the stores of Zara (Bloom and et. al., 2012). Zara also started their own online boutique.Company is strongly active on social media platforms. The products of the company includesmen's and women's clothing, as well as children's clothing products. The revenue of the firm in2018 was $18.9 billion annually.Issues faced by the ZaraFashion industry is getting very famous in this world as people are getting moreconscious towards their living standard. Fashion covers various areas including footwear,lifestyle, make-up, clothing, hairstyle, etc. Zara is a retail fashion firm who is experiencingvarious issues in the market (Dholakia, Dholakia and Chattopadhyay, 2012). This is because thefirm is operating in various countries and the company is finding it difficult to handle the variouspeople from different countries. The issues faced by the Zara is discussed below:Zara takes five week time in introducing their new fashion products from concept to thesales which is comparatively more than the competitors such as ASOS, Boohoo, andMissguided. This is a major issues which is impacting the sales of the company as thesecompetitors takes less then 1 week time in introducing their new fashion products (Zara isfacing a massive threat that could jeopardize the business, 2017).Zara is facing critics from the people due to various issues such as Using Swastik ontheir handbags which was withdrawn from the market. The printing of shirts similar tothe Holocaust prisoners. Another instance is the printing “Black is the new white” on tshirts which is considered as racial discrimination. Also a discrimination suit was filed bythe Ian Jack Miller, corporate attorney of Zara as he was fired because he was a JewishAmerican gay (Controversies of Zara, 2018).Recently, in March, 2019, Zara started a campaign on Instagram in which a young girldressed in a puffy sleeved dress sitting on a bed. Company has faced heavy critics fromthe social media users as they find it inappropriate to represent a teenage girl as a adult2

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