Theories of Retailing and Practice

The provided document is an assignment on Theories of Retailing. It appears to be a collection of references related to retail management, covering various topics such as retail life cycle theory, innovation drivers in retail industry, and measuring internet retail service quality using ES-QUAL. The references are from academic sources, including journals and books, and provide insights into the practical aspects of retailing. The assignment likely requires students to analyze and apply these theories in a real-world context.

Retail Theory and
Practice

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of company.................................................................................................................1
Key relevant changes within the UK fashion retail....................................................................2
Relevant changes within the micro environment........................................................................3
Strategies and tactics that could be used.....................................................................................4
Recommendations.......................................................................................................................6
CONCLUSIONS..............................................................................................................................7
REFERENCES................................................................................................................................7

INTRODUCTION
Retail is all about the sale of goods to the final consumers in relatively small quantities and
consumers doesn't resell the products that they have bought as they are considered as the end of
the line of the product. But is rare case in the retail sector buyer is not term to be the ultimate
consumers.. Therefore the retails sector includes all the stores and shops which sell products to
the shoppers i.e. the ultimate consumers (Viljoen and Wiskerke, 2012). Fashion is one of the
most challenging retail business to run, so one among the growing retail sector is fashion retail
industry, where consumers’ goods market focused specifically on footwear, clothing and
accessories which can further be categorized by short lifestyles, fickle consumers and intensive
competition. Whereas there are different clothing retail organisations in UK like Debenhams,
Mark and Spencer, River island, Primark, Next etc. Therefore, in order to carry out this report
the clothing retail organisation which is being taken into consideration is Primark. This
assignment focuses the firm adopts to the changes taking place in micro and macro
environmental factors. It has also discussed about various strategies and tactics which the firm
uses so as to cope up with changes. Lastly, recommendation has also being discussed which the
retailer can use so as to meet the challenges.
Overview of company
Primark which is one of an Irish fast fashion retailer company with its headquarter in
Dublin and is term to be a subsidiary of ABF (Associated British Foods). This company was
established over thirty years ago and stated out in Ireland but soon established its branches in
UK, by creating historical legacy which explains why it retains two head office that is one in
Dubai and one in England (Ulbrich, 2013). Clothes retailer has been term to be successful in last
decade by enjoying rapid expansion across Europe. Furthermore, Primark sources its clothes
from different countries like Bangladesh, china, India and Vietnam, whereas labour and material
cost term to be lower as well as it works with variety of manufacturers from all round the world
so as to render consumers with what they want. Diverse range of products are being offered by
Primark which includes newborn and children clothing, home care, accessories, men's and
women's wear, beauty products, confectionery and footwear. The company specifically sells
clothes at the low cost end of market that is below average prices. Moreover, Primark owns over
350 stores and the largest Primark store is term to be located on Market Street Manchester that is
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in England. Near about 70,000 employees work under this retail company with its revenue
around £5.949 billion as well as it is consider to be the largest retail business in UK.
Key relevant changes within the UK fashion retail
The key relevant changes within the UK fashion retail market can be identified with the
help of PEST analysis which is examined below (Stewart and Shamdasani, 2014):
PESTLE Analysis of Primark:
Political:
Political analysis specifically refers to the government rules and regulation which must be
followed by an organisation in order to carry out its business activities legally. Policies
established by the government might divert the local priorities of an organisation as the
government majorly contributes in predicting the success of downfall of the Primark.
Government of UK acts in the changes of fiscal and monitory policies in a degree on how the
economy reacts (Shanks and Tilley, 2016). Moreover, in deeper sense Primark company must
react in the impact of an increase or decrease in taxation or in the impact of act in their business
like health and safety act, sex discrimination act data protection act so as to carry out its business
in a legal manner. If the government of UK impose high tax rate regulation for retail industry
then the Primark company will also increase the price level of their products because of while
they might have to lose their potential customers. As consumers will prefer less to make
purchase of high priced products. Furthermore, Primark should also adhere to UK and Irish
regulations such as children code of practice that changes from state to state.
Economical:
It is an analysis where the impact of different market and economic trend changes and
which can create risk in an organisation. The recession period of UK has greatly impacted upon
Primark success as customers look to cheaper clothing alternatives. When the economy changes
again the consumers will remain loyal to the brand if they possess the means to spend more
elsewhere (Schwarz and Hunter, 2012). Furthermore, labour cost is term to rise due to increasing
concern for shareholder's ethical working conditions and welfare regulations. As customer’s
comes from different society so it is essential for the management of Primark to produce
products and to decide the cos of product taking into consideration the pocket of their potential
customers. In case if the products produced by Primark company will cost more than affordable
price of customers then in that case customer will no more make any purchase. Additionally,
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foreign exchange rate is also term be one of the aspect which can affect the profitability of the
company because it results in decrease or increase in the rate of products.
Social:
This analysis generally focused on the demographic changes which might affect the
influence of the goods in the new buying perception of the customers (Ridley-Duff and Bull,
2015). Social changes are term to be the strong force for Primark company to carry further
research and to develop and craft a new product in market that will help in earning the trust of
the market. There take place change in customers preferences from time to time which greatly
impact on Primark company. As in modern era it is being seen that there is increasing trend of
learning something new like sewing of own clothes instead of purchasing new one's, such
change negatively impact on firm profitability ratio. So it is essential for the Primark to analyse
such changes so negative impact of such changes can be overcome. Environmental awareness
and recycling has become trendy which forces Primark to set the prices of its products low so as
to attract large number of customer to make purchase of there products. Thus, management of
Primark must produce product taking into consideration different changes taking place in cultural
aspects of people in different nations so as to earn maximum profit.
Technological:
These factors refers to the advancemnt in technology which is taking place due to great
use of internet. This analysis will help the Primark company to adopt and make use of latest and
modern technology innovation so as to improve the efficiency of every transaction process and
the quality of the products as well as it will also help in improving the overall performance of the
business in marketplace (Rafiq, Lu and Fulford, 2012P). As the time changes technology also
keeps on changing specifically in clothing sector. People of UK prefer more of trendy clothes so
management of Primark must adopt such a technology which could help them to produce clothes
a per the requirement of customers. Thus, adoption of such change in technology will help firm
to achieve greater profitability ratio. If the management of Primark will carry out its production
process by making use of modern technology then it will help in minimizing the uncertainties
which may appear in social and economic changes. In addition to this technology can also lessen
different unethical working practice like shoplifting, fraud, misconduct and many more. So
invention of innovative technology like advanced software, cameras etc. can help the
management of Primark to have the sense of security.
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Legal:
These factors refers to the legal rules and regulation framed by the government under
which company have to incorporate its different operational activities. Government has imposed
a sudden change in legal laws by implementation discrimination act, as per this act no
individuals should be discriminated on the basis of any religion, caste, marital status, etc.
Therefore such change made by government will help company in creating flexible environment
and n retaining talented and skilled workforce within an organisation.
Environmental:
As per these factors company must produce Eco friendly products by taking environment
law into consideration. Recent change which greatly influence UK Primark retail industry is the
rise of environmentally and ethically conscious customers who continuously demand to adopt
practices of uses of recycled materials, paper packaging etc. So taking such change into
consideration Primark is launching sustainable clothing lines made from environmental friendly
materials, organic cotton etc.
Relevant changes within the micro environment
Micro environmental factors are the one which are under the control of organisation and
they are like competitors, customers etc. Additionally, such factors are considered to be within
the surroundings of an organisation. Therefore, some of the changes in micro factor of Primark
company are specified below (antano, 2014):
 Competitors: This is considered to be one of the micro factor which greatly impact upon
business organisational functional activity and on the profitability of the company as well
as this aspect terms to be under the control of an organisation. For example there exist
different competitors of Primark clothing retail organisation like Mark and Spencer,
Mother care etc. are termed to be the biggest competitors and they render stiff
competition to Primark company (Leigh and Blakely, 2016). So it is very much essential
for the management of Primark company to make an analysis of the competitors strategy
by carrying out research in respect of pricing strategy, they tactics and strategy the
competitors use in order to attract and influence more number of customers, so that
accordingly they can make their strategies. Thus, it will help the Primark to sustain for
long period of time in marketplace.
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 Customers: This is considered as the another essential aspects of micro environment
which is term to be under the control of Primark management as they are the one who
make purchase of product and services. As customer references keeps on changing
specifically for clothes, as changes in trends take place due to modernization and
different cultural practices (Kitchin and Tate, 2013). So it is very much essential for the
management of Primak company to take into consideration preferences and demand of
the customers so that accordingly they can produce products so as to increase the level of
customer satisfaction. Thus, it will help the Primark company to achieve competitive
edge in marketplace as well as will help in sustaining for long period of time.
 Suppliers: These are the one who render raw materials to Primark for carrying out their
production process smoothly. In case if the suppliers starts rendering law quality raw
materials on low price to manufacturer of Primark then it will negatively impact on profit
margin of the firm, as customers will prefers less to make purchase of low quality
products. In addition to this if there exist poor relation between suppliers and
manufacturer of Primark then it will negatively effect the production process as the
production process will get delayed. So it is very much essential for the manufacturer of
Primark to maintain healthy and good relationship with suppliers so that they get raw
material on time with better quality.
Strategies and tactics that could be used
Strategies in order to meet macro environmental changes:
After analysing the macro factors two major changes were analysed that there is avast
increase in technology due to the widespread use of internet. In addition to this it is also being
analysed that demand,and for trendy clothes were increasing due to the changes in social and
cultural beliefs and values. Therefore in order to overcome this changes Primark need to adopt
some strategies and tactics so that changes can be deal effectively.
Strategies in order to meet micro environmental changes:
Technological change:
In order to cope up with advancement of technological change Primark company need to
make use of updated machineries so that they can produce latest design of clothes as per the
customer preferences. Thus, in addition to this company can adopt the tactic of rendering
training session for employees so that each workers remain updated about how to make best use
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of latest and innovative technology. This will help in increasing the profit margin and the
productivity level of an organisation.
Social change:
As customer preferences keeps on changing due to the change in belief and attitudes of
society. So in order to deal with such changes company can adopt the customer focused strategy.
In order to cope up with this strategy firm can ask their customer to render the types of design
that they will prefer so that they can manufacturer product taking into preferences of customers.
Thus, it will help in influencing and retaining customers for long period of time.
Strategies in order to meet macro environmental changes:
Various changes were identified in supplier behaviours like they used to render low
quality raw materials because of poor relationship with manufacturer so in order to maintain
helath relationship with supplier manufacturer can adopt the strategy of rendering payment on
time for the raw material they render. In addition to this in respect of customer behaviour too
changes were identified due to the changes in preferences of consumers and because of which
customers use to shift to other products as the company was unable to full-fill there preferences
in respect of price they ask for their products. So in order to deal with this situation company can
adopt penetration pricing strategy so as to attract and retain large number of customers. is very
much essential for Primark to make analysis of the structure of an organisation which get
affected by external elements. Apart from this, increase in competition level also create major
problems for an organisation as it may result primark organisation to suffer from loss or in
gaining profit. Thus, overall management of primark company takes into consideration customer
focused strategy so as to full fill demand of the customers on time and which will also help to
increase in productivity and profitability of firm.
Appropriate theories
In order to overcome the significant changes taking place in dynamic business
environment it is essential for the Primark firm to understand the concept of retailing as well as
in maintaining significant position in market. Therefore it could be easily understandable with
the help of Wheel of retailing theory.
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The wheel of retailing theory: This theory was propounded by Philip Kotler according
to him retailer who are termed to be new in retail market has to follow a proper cycle so as to
sustain in marketplace for long period of time. Therefore, some steps and phases are specified
below (Jarzabkowski, Lê and Feldman, 2012):
Source: The wheel of retailing theory, 2019
 In step 1: Establishing and penetrating in the market by keeping low margin level.
 In step 2: Expanding in marketplace take place as the company start gaining more
experience of the market so in this step retailer strives to enlarge their customer base so
as to increase sales.
 In step 3: Stabilized business model by attracting margins, as the company is already
term to be in established position so the rate are enough to get a attractive margin.
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Illustration 1: The wheel of retailing theory

 In step 4: There take place entry by another retail competitors who challenges and then
brings down the original.
Thus, Primark company on the continuous basis must carry out research analysis in order
to acknowledge competitors different tactics and strategies to attract customers, so that
accordingly Primark help to make changes in their tactics and strategies. In addition to this the
firm should also keep on altering the prices of clothes so as to remain sustain for long period of
time in marketplace (Hristov and Reynolds, 2015). Thus it will help in increasing customer
satisfaction level as well as help in achieving growth in marketplace.
Retailing ideas: Primark in itself is a big brand name, so it can be comprehended that the
management of the company should keep on adopting alterations in cost price of their clothes.
As there exist large number of competitors for Primark company on regular basis so management
must adopt certain low cost ideas which are specified below (Hayes, 2018):
 Management of Primark can adopt social media app in order to promote products to large
number of people as it will not cost much even to company.
 Though company already market its product through its websites but should also starts
selling through inline basis as customer specifically prefer to market its products online
in order to save time (Harper, Randall, and Rouncefield, 2012).
 If Primark company wants to expand its business in other nations, then they can adopt
partnership techniques so that it become easy for the management of firm to understand
different culture and trends.
Retailing concept: Primark company likes to hit aims and objectives on continuous
basis, so it is very essential to take into consideration all the concepts of retail sector so as to
make favourable conditions. Additionally, it involves direct interface with consumers and
coordination to company activities from end to end right from designing or conceptualising of
product ideas to its delivery to ultimate consumers (Gillis, Combs and Ketchen Jr, 2014). Thus,
clear conception of retailing sector will help organisation to run business smoothly and to
understand the consumers needs and preferences as well as to generate maximum revenue. As
retailing industry has contributed to the great extent in the economic growth of different
countries and is termed to be one of the fastest growing and changing industry in the world.
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Recommendations
From the above mentioned assignment it can be examined that management of Primark
company should start rendering online product and services so that they establish direct contact
with customers as it will also help company to get immediate feedback from customer. As
digitalisation can help Primark company to deliver goods to various nations as well as it will
directly impact in a positive manner in the profitability ratio of the company (Davies, 2012).
Moreover, online services also create avail opportunities like helps in promoting new products in
marketplace and is tern to be the cheapest mode of promoting products to large number of
persons. Apart from all these management of company can use different social media sites like
what-apps, Instagram, twitter, Facebook etc. in order to promote products in market to large
number of people as most population are connected with each other via this sites. Thus, I will
lead in increase in percentage of profit ratio, increase in brand value in marketplace, helps in
improving goodwill of company as well as helps in building long term relationship with final
customers.
CONCLUSIONS
From the above report it can be concluded that fashion retail indutsry are enhancing their
business at greater pace. As well as key relevant changes within the UK fashion retail market has
been identified with the help of PEST analysis that is by analysing the political, social, cultural
and technological analysis. Additionally, different retailing ideas, concepts have also been
concluded in this report by taking into consideration wheel of retailing theory. Lastly,
recommendation has also been given that company should open up online store so as to render
online products and services to large numbers of customer. Thus, it will help an organisation to
achieve competitive edge in market place as well as will help in increasing high level of
profitability ratio.
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REFERENCES
Books and Journals
Chryssolouris, G., 2013. Manufacturing systems: theory and practice. Springer Science &
Business Media.
Davies, R., 2012. Retail and Commercial Planning (RLE Retailing and Distribution). Routledge.
Gillis, W. E., Combs, J. G. and Ketchen Jr, D. J., 2014. Using resource‐based theory to help
explain plural form franchising. Entrepreneurship Theory and Practice. 38(3). pp.449-
472.
Harper, R., Randall, D. and Rouncefield, M., 2012. Organisational change and retail finance:
An ethnographic perspective. Routledge.
Hayes, J., 2018. The theory and practice of change management.
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.
Jarzabkowski, P. A., Lê, J. K. and Feldman, M. S., 2012. Toward a theory of coordinating:
Creating coordinating mechanisms in practice. Organization Science. 23(4). pp.907-
927.
Joskow, P. L., 2014. Incentive regulation in theory and practice: electricity distribution and
transmission networks. In Economic Regulation and Its Reform: What Have We
Learned? (pp. 291-344). University of Chicago Press.
Kitchin, R. and Tate, N., 2013. Conducting research in human geography: theory, methodology
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Leigh, N. G. and Blakely, E. J., 2016. Planning local economic development: Theory and
practice. SAGE publications.
Pantano, E., 2014. Innovation drivers in retail industry. International Journal of Information
Management. 34(3). pp.344-350.
Rafiq, M., Lu, X. and Fulford, H., 2012. Measuring Internet retail service quality using ES-
QUAL. Journal of Marketing Management. 28(9-10). pp.1159-1173.
Ridley-Duff, R. and Bull, M., 2015. Understanding social enterprise: Theory and practice. Sage.
Schwarz, E. C. and Hunter, J.D., 2012. Advanced theory and practice in sport marketing.
Routledge.
Shanks, M. and Tilley, C., 2016. Re-constructing archaeology: theory and practice. Routledge.
Stewart, D. W. and Shamdasani, P. N., 2014. Focus groups: Theory and practice (Vol. 20). Sage
publications.
Ulbrich, H. H., 2013. Public Finance in Theory and Practice Second edition. Routledge.
Viljoen, A. and Wiskerke, J.S. Eds., 2012. Sustainable food planning: evolving theory and
practice. Wageningen Academic Publishers.
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