Retail Theory and Practice

This document explores the theory and practice of retailing in the fashion industry, with a focus on Next Plc. It discusses key changes in the UK fashion retail market, including political, economic, social, technological, environmental, and legal factors. The document also provides recommendations and strategies for Next Plc to respond to these changes and succeed in the industry.

Retail Theory and Practice

Table of Contents
Formative assessment......................................................................................................................1
Summative assessment.....................................................................................................................3
INTRODUCTION...........................................................................................................................3
Overview of organization............................................................................................................3
Key relevant changes within UK fashion retail..........................................................................4
Relevant changes within micro environment..............................................................................5
Tactics and strategies that can be used........................................................................................7
Recommendations............................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

Formative assessment
Retailing is all about buying and selling of goods and services, it also involves a direct
interface with a customer and with proper coordination of business activities, companies able to
meet the demand of customers. Under retail, fashion industry stands in top position, as it
provides the range of clothes to their customers (men, women and children of all age). So,
fashion retaining is the section of a business which acts as a intermediary between the
manufacturers and customers. So, in simple word, it is a process of buying clothes from
manufacturers and selling them to customers.
For the study, investigator chooses Next plc which is a British multinational clothing
firm who has around 700 stores which are operating at world wide level. Having a brand image
and effective designing in its cloth, most of the customer easily attract towards it. If this is not
work out, then Levi's will be second choice which is also consider another top fashion retail in
UK.
Further, to identify some macro factor which affect the fashion industry, Pestle analysis
will be used which is a strategic management tool that is used to identify the the external
environment of the company. This tool consist of six element such that political factor,
economic factor, social factor, technological factor, environmental factor and Legal factor. So,
with the help of this management tool, it is easy to analyze both positive and negative impact
upon fashion industry.
Moreover, it is also analyzed that in order to determine the internal factor, investigator
uses SWOT which is another management tool, that is used to examine internal strength of a
firm. As micro factor is all about to determine the internal factor which is easily determine
through SWOT analysis. This tool is made up of four key element such that strength, weakness,
opportunities and threats. The theory clearly help to examine the internal working environment
of Next Plc and determine how it create direct impact upon the business.
In order to suggest the tactics which could be used by Next Plc, investigator suggest to
use technological factor and economical factor because these factor highly affected the business
in negative as well as positive manner. Similarly, for micro factor, researcher select, strength and
opportunities which help the company to grow the business at next level of success. So, by using
digital technology's theory, it will be easy to determine the influence of both macro and micro
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factor upon the business performance, so that company is able to develop these strategies in
order to take a business at further level of success.
In order to meet the define aim, researcher chooses secondary resources in which
relevant books, articles and Journals are used related to fashion industry. So, bu consulting with
these, it will be easy to examine and recommending the ways through which Next Plc run its
business operations in smooth manner. Also, technological resources are also used in the study
such that Internet which help to answer every questions.
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Summative assessment
INTRODUCTION
Retail is selling of products or goods to people who will utilize them and purchase
according to their personal needs. Fashion retailer buys items in wide quantities from
manufacturers either directly or through a wholesaler and then sells single product to local
people or end user consumers usually in a outlet. Fashion industry is one of the most progressive
sector in the world. It consists of four stages production of raw materials, principally textiles &
fibres but also leather and further manufacture of fashion items by manufactures, designers and
contractors and others such as retail sales as well as several forms of promotion.
The current assignment is based on Next Plc which fall under category of leading fashion
retailer in UK. This study will explain important changes in UK fashion clothing market and
also justify tactics that could be used by company to respond to major modification occurring in
fashion clothing industry.
Overview of organization
Next Plc is leading British international clothing, home products and footwear retailer in
UK. It has around 700 outlets of which circa 500 are in the nation and outlets 200 cross Europe,
Middle easy and Asia. It has more over than 5 Million active consumers internationally and its
websites serving over 70 nations effectively. Organization operates 8 United Kingdom
warehouses, 7 UK depots and 3 international hubs offering cost-efficient and effective delivery
to their online as well as retail buyers (Thompson and McLarney, 2017). The segments of
company include Next online, Next finance, retail, international retail and other. Next sourcing
design and deliver branded products of firm in effective manner according to the preferences of
target market.
The objective of company is to deliver long term returns to shareholders through a
combination of sustainable progress in earning per share & payment of cash dividends. It
designs, produce and distributes the latest clothing styles, home furnishing & accessory goods to
nearly 330 next retail outlets and through firm's next directory mail order sales catalogue.
Organization also operates their franchises in come 20 global markets especially in Far East
Asian markets and Middles Eastern. At home, firm business operations are distinguished into
two key complementary activities such as catalogue sales and retail outlets. In additional, Next
Plc conducts retailing, consumer services management and home shopping operations. Its retail
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stores sells children, ladies and men wears as well as housewares. Next plc give tough
competition to its competitors like M&S, Asos, H&M and furniture.
Key relevant changes within UK fashion retail
PESTLE analysis-
Political factors-
Political stability is one of these factors that affects Next plc in positive manner and
help them to increase their profitability rather than before (Belaid, Elsayed and Belaid, 2019).
UK is members state of EU and fulfils stable political environment surrounding which is footing
for longer run determinations upon which authorities have to move to fulfil some situations. It
has given firm a higher range of economic actions. Another factor that affect company sales is
trade policy is also considered as political factor which put positive impact on business may be
next 5 years.
Economic factors-
Economies growth is one of the economic factors that have an impact on Next plc in
positive manner, it is because buyers are earning more when economic is growing which means
they can spend more too which is quite beneficial for success and growth of company in term of
increasing sales and productivity.
Unemployment rate is another economic factor that impact on Next plc in same manner
which has been discussed above (Manning, 2019). As it gives firm opportunity to hire most
skilled and talented applicants who are able to serve its best services to buyers and help
organization to build their brand image.
Social factors-
Change in lifestyles and fashion are some of social factors that impacting business of
Next plc in negative manner because growth in preferences and taste of younger generation
changes rapidly and work with these changes become quite challenging for organization. This
factor also affect buying behaviour of consumers and drive them towards demanding latest
fashion clothes.
Ageing of populations is also included in list of many economic factors affecting Next
plc business operations negatively (Götmark, Cafaro and O’Sullivan, 2018). Aged people
change their preferences according to their needs as it high pressure on company to identify their
demand and match products they sell accordingly.
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Technological factors-
Technology is growing so rapidly in fashion retail industry or clothing market, with
utilize of online shopping and technological marketing approaches Next plc can grab the
attention of potential buyers (Moorhouse, tom Dieck and Jung, 2018). Technology advancement
is highly beneficial for company as it gives them the best opportunity which management can
use to reach at their target market.
With the developed marketing methods, organization can promote their products and
segments all around the world. It would help them to generate brand awareness and build strong
image at global level. Via creating official profile on social media platforms company is able to
aware billion of people on same source about goods.
Environment factors-
Current trends in government and consumers demanding companies within fashion
clothing market to reduce their carbon foot prints is an environment factor that put high
pressure on Next plc of make changes within their production and other practices of business.
But it affects positively because company is already committed to reduce their own by
increasing recycling waste, packaging in some of their items and lowering transport.
Climate change is another environmental factor that affect Next Plc transportation
process negatively. It creates barrier to deliver products to target market both at national and
international level which is not suitable for brand image.
Legal factors-
Business cannot expect to remain and sustain without following rules and regulations
according to the government related to business, workers and other practices. Minimum Wage
act 2019 is an legal factor that affect Next Plc in negative manner. It comprises with some rules
that need to be followed by company and cater wages to their workers accordingly that affects
financial budget of firm.
Copyright law put positive impact on organization as it help to assure then that their
products are not copied by other.
Relevant changes within micro environment
SWOT analysis-
Strengths-
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The biggest strength of organization is their audit fashion wear for individual between 20
and 40 which are sold under label of Next Plc, it is their main target market (Coffee, 2019). Firm
financial performance have been progressing at an maximizing rate over than past 5 eras. Team
turnover has increased 5.7 percent to GDP 3.3 billion. This growth has been achieved by good
stock control, continued sales progress, rigorous cost control and improving gross margin in
Next directory. Another strength of this company is skilled workforce who are able to increase
profitability of business rather than before by performing their roles at workplace in effective
manner.
Weakness-
Lack of speed to respond to market changes is the main weakness of Next Plc that direct
affect sales and productivity of business. Organization do not give respond to the latest market
trends in effective manner that impact on consumer satisfaction level negatively. Buyers within
market place seek to obtain the latest design of clothes offered by their favourite brand. When
firm do not act effectively it can impact on their brand image as well as further practices of
business. Without responding quickly to market changes company can unable to beat their
competitors operating in same sector since for so long.
Opportunity-
Development of E-commerce is one of the biggest opportunities for Next Plc which they
can grab to enhance business performance and consumer satisfaction as well. There has been a
sales of e-commerce sector that means that a lot of buyers are now able to make their purchases
online. Next Plc by creating their websites gain attention of more buyers, they can earn revenue
by opening online outlets and making sales through these. It is the best way company can utilize
to sustain for long and generate their brand awareness at global level.
Threat-
One of the biggest treat to Next Plc is highly competitive market in fashion sector that
affect its marketing, production and selling strategies in negative manner. ZARA, H&M and
M&S are the main competitors of company. They give tough competition to organization by
creating effective strategies and improving their product quality which makes them able to
become a market leader. There is tough competition in United Kingdom fashion clothing
industry that out high pressure on firm to retain their consumers and sustain business for longer
period of time.
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Tactics and strategies that can be used
Climate change
It is one of the changes that has been discussed above in context Next Plc by using
PESTLE analysis model. It influences at high level which is not good for growth of company, to
overcome this issue firm can create and use effective tactic. Management can pack their
products by using water prof materials that can save items from harm. Furthermore, it can be
said that firm considers climate change and use tools that help to inform management about
weather change. By using tools, company can know how the weather is and then develop their
trade plan accordingly which makes them able to delivery products on commitment. It allows
them to deliver items on timely and systematic manner. It also makes firm more capable to
satisfy their consumers and gain attention of new buyers. They can use weather forecast tools &
resources which is quite beneficial and effective.
Unemployment rate-
It is another change that has been identified by using PESTLE framework in regard to
Next Plc. Government put high pressure on companies operating under fashion clothing market
to hire local people that can help to improve their living standards. Organization HRM to
overcome this influence develop recruitment strategy, they decide to hire skilled and
knowledgeable applicants as well as those who have not much skill. Along with this, company
can develop training and development session for all the workers in order to enhance their
productivity level equally. By providing employment opportunities to residential people firm can
increase their CSR score and build effective brand position with market place. This tactic will
help to reduce unemployment rate in nation and enhance living standard of individual rather than
before. It is also beneficial for company in term of increasing productivity and profitability.
Change in lifestyles-
This factor impact on Next Plc production and marketing function negatively, because
company is unable to respond to market trend, they do not consider current changes effectively
that impact sales. To solve this issue or overcome this factor organization can build strong team
who are able to conduct in depth market research identify needs of buyers and determine the
latest trend. It can help management to develop plan for collecting raw materials accordingly
and then support production department to manufacture clothes according to gather data about
consumers demand. When the items produce by Next Plc match with needs of buyers it helps to
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increase sales of business. People start purchasing products from next outlets instead of other
one and retain with them for longer period. Market research is one of the best strategies which
makes firm able to strengthen their brand image, reputation and position more than its
competitors.
Minimum Wage act 2019-
Along with above factors, it also put high pressure on Next plc to provide wages
according to Law and changes within this Act because without following overall process they
cannot be able to keep business sustainable. In context of this issue, company decide to develop
new salary structure in which they can mention wages according to role and effectiveness of
applicants at workplace without making any differences. By providing equal and fair wages to
employees Next Plc can achieved greater equity. It can help firm to retain their skilled and
talented candidates for long and also aid to gain attention of new workers who are seeking to
find the best employment opportunities in well reputed companies like Next plc. Improvement
or development of new salary structure is the best way firm can use to solve this problem.
Intense competition- the business Next Plc operates at the global level and the competition at
the global level is very high which the company has to face. Thus, for this the major tactic being
used by Next plc is to make use of the latest digital marketing techniques. Under this the most
effective tactic is to use the social media marketing as this will help Next Plc in managing the
consumer as people in this modern world are more used to social media use. Thus, whatever will
be trending over social media will be liked by the consumer as well. Thus, this will assist the
company in managing and attracting more of the consumers. Also, the range of the social media
advertising is more in attracting more of the consumer and this will increase the number of
consumers.
Recommendations
From the whole above discussion it is clear that the Next need to work more on its working so
that it can manage the business in more good and effective manner.
For this the most important recommendation for the Next plc is to have a good market research
technique. This is majorly because of the reason that there are many different and frequent
changes taking place within the global market. It is very essential for the company to adapt to
these latest changes and implement within the working. Thus, for this it is recommended to Next
Plc to use effective technique of market research. Also, the market research will help the
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company in analysing the strategies of competitors as well. Thus, this will assist the company in
managing the strategies of the company in accordance with the strategies of competitors.
In addition to this another major recommendation for Next plc is to take feedback from the
consumer with help of social media platforms. This is essential because of the fact that the
competition within market is very high and if the company will ask for the experience and
suggestion from the consumer after their use. Then this will help the company in assessing the
fact that whether the consumer is liking the product and service or not. Also, this method will
help Next plc in getting the suggestion of consumer and then they can use these suggestions and
make changes in the product of the company.
CONCLUSION
From the above discussion it is clear that the retail is the sector which is fast growing and is a
very good for the growth and development of the business. From the above study it was seen
that there are many changes taking place in the environment of a retail company. Thus, all these
changes was analyzed with help of the PESTLE analysis and also it was seen that what is the
impact of the changes taking place on the performance of the company. With the analysis of the
changes it was seen that there are some tactics and strategies which can be used for better
working like using social media marketing, increasing employment opportunities and many
other things. In the end some recommendation was made like using proper market research
tools, taking feedback from consumer and many others.
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REFERENCES
Book and Journals
Belaid, F., Elsayed, A.H. and Belaid, F., 2019, August. What drives renewable energy
production in MENA Region? Investigating the roles of political stability, governance
and financial sector. In Economic Research Forum Working Papers (No. 1322).
Coffee, J.C., 2019. Why do auditors fail? What might work? What won’t?. Accounting and
Business Research. 49(5). pp.540-561.
Götmark, F., Cafaro, P. and O’Sullivan, J., 2018. Aging human populations: Good for us, good
for the Earth. Trends in ecology & evolution. 33(11). pp.851-862.
Manning, A., 2019. CEP Discussion Paper No 1639 July 2019 Residential Mobility and
Unemployment in the UK Monica Langella.
Moorhouse, N., tom Dieck, M.C. and Jung, T., 2018. Technological innovations transforming
the consumer retail experience: A review of literature. In Augmented reality and virtual
reality (pp. 133-143). Springer, Cham.
Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by
next Plc have on themselves and their competition in the UK Clothing Retail
Market?. Journal of Commerce and Management Thought. 8(2). pp.234-264.
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