Retail Theory and Practice: A Case Study of Geox in the UK Fashion Market

This report analyzes the relevant changes in the UK fashion clothing market and their impact on Geox, an Italian brand specializing in breathable and waterproof footwear and clothing. It examines the macro-environmental factors using PESTEL analysis and the micro-environmental factors using Porter's Five Forces framework. The report then suggests strategies and tactics for Geox to address these changes, including recommendations for dealing with Brexit, technological advancements, and competitive pressures. The report concludes by emphasizing the importance of applying retail theories and practices to navigate the dynamic retail landscape.

Retail Theory and Practice

Table of Contents
Introduction to Retail.....................................................................................................3
Introduction to Geox.....................................................................................................4
Key relevant changes in the UK fashion clothing market.............................................5
Relevant changes within the micro environment..........................................................7
Suggest and discuss strategies and tactics that could be used...................................8
Recommendations......................................................................................................10
Conclusion..................................................................................................................11
Reference list..............................................................................................................12

Introduction to Retail
Retail is defined as the systematic procedure that involves the sale of consumers’
commodities and services to end consumers by the help of various channels of
distribution fort earning profit. The individuals or group of people engaged in this
particular procedure is known as retailers. The retailers fulfil the demand of the
customers identified by a supply chain. The retailers purchase retail products and
services from the wholesalers and sell it to the final customers in small quantum for
meeting customers demand. Retail industry in UK is growing rapidly since past few
years and contributing to the country’s economic growth and development. The retail
industry in UK has created a large pool of employment opportunities for individuals
and at the same time improved quality of lifestyle of people by providing a wide
range of products and services to its customers at an affordable rate.

Introduction to Geox
Geox is an Italian brand that is involved in the sale of clothing and shoes, which are
manufactured with breathable or waterproof fabrics. Mario Polegato had found the
company during the year 1995. The name of the brand Geox had been created with
the mixture of two Greek words - x (which means technology) and geo (which means
earth). The brand operates in the retail textile industry with its headquarters in
Montebelluna, Italy. The company has a net income of £15.38 million during the last
financial year with revenues amounting to £884.53 million.
The number of employees in the organization is approximately 535000 and operates
in various regions of the world including Europe, Russia, United States, Japan,
China and Canada. The organization has a wide number of physical retail outlets in
these countries. For example, Geox has retail stores in UK in London, Westfield
Stratford City, Ashford Designer Outlet and Westfield, London. Similarly, in Italy,
Geox has various retail stores in Roma Termini, Roma RM, Milano MI, Eboli SA,
Porte di Moncalieri, Empoli and Arezzo. In addition to the retail outlets mentioned
above, there is a strong presence of Geox in on online basis as well. The shoes and
clothes of Geox are sold on various online sites and the official site of Geox as well.
This indicates that the presence of the company Geox is strong in the retail industry
in terms of both physical stores and online presence.

Key relevant changes in the UK fashion clothing market
The analysis of retail industry, especially the fashion clothing industry of UK,
indicates that 2016 has been a tough year for all the retailers operating in the UK
clothing market (McCormick et al., 2014). The difficulty in the industry has taken
place because of the event of Brexit in the country. However, relevant changes can
also be noticed during the year 2017, which shows that the UK fashion clothing
market is slightly recovering from the previous situation, as UK’s retail market is one
of the fastest growing industries around the globe (Macchion et al., 2015). However,
analytical frameworks are the most useful techniques for analyzing the relevant
changes that have taken place within an industry. According to Newton (2014), the
PESTEL is an effective tool for analyzing the macro environmental forces and
changes in an industry. The PESTEL analysis of the UK fashion retail industry is as
follows -
 Political forces - One of the biggest uncertainties in the UK fashion retail
industry is the political factors. As discussed earlier, Brexit has had a
significant impact on the fashion clothing market of UK (Rivoli, 2014). Due to
Brexit, the value of pound has fallen. However, if the effects of Brexit are hard,
it will be leading to a further devaluation of pound sterling, thereby leading to
lower confidence of domestic consumer, automatically affecting the fashion
retail industry in UK. Brexit also led to the limitation of free movements of
British and EU citizens living in Europe, thereby creating issues for the retail
fashion industry, as foreign workers account of a considerable percentage of
the workforce of the industry. Operations of Geox in the UK fashion clothing
industry have had a great impact due to these political factors. Economic forces - There are various economic factors affecting UK’s fashion
clothing industry. According to Wojcik (2018), there have been various
economic fluctuations and recession during the past few years, thereby
lowering the GDP generation of the UK fashion retail sector. Brexit has led to
various changes in the share prices and exchange rates of UK, thereby
having a direct impact on buyer behaviour. This in turn has affected the sales
and profits of Geox in particular.

 Social forces - Socio-cultural forces also have an influence on the
operations, activities, sales and profitability of the UK fashion retail sector.
The popularity of various products in UK fashion industry and major changes
in cultural factors have led to the changes in the preference and taste of
customers, thereby making it difficult for the UK retail industry and its various
components such as Geox to cope up with it. Technological forces - The biggest threat for any industry is the
technological factors (Joung, 2014). Increasing use of smart phones and
internet, globalization and IT is increasing the requirements of the fashion
industry to undertake technological developments. As a result, Geox is greatly
influenced by technological forces in its macro environment, thereby making it
necessary to incorporate technology in its operations. Legal forces - The UK fashion retail sector is also proliferated with legal
forces. The increasing emphasis of UK on environmental and labour laws in
UK has led to the difficulties of the UK fashion clothing market (Percival et al.,
2017). For example, the trade of Geox in the UK fashion clothing market has
to be done with the other member states of the European Union as per the
rules of the World Trade Organization.
 Environmental forces - The two significant factors influencing the retail
clothing industry is environment and sustainability (Khan et al., 2017). All
retailers in the UK fashion clothing market have to be careful with their carbon
footprint and their marketing activities stating that they are eco-friendly
clothing brands. Retailers including Geox require using eco-friendly inputs for
packaging goods, selling them and their various activities. Geox has to invest
largely for ensuring that its raw materials are eco-friendly in nature.

Relevant changes within the micro environment
In addition to the factors prevailing in the macro environment of an organization, it is
necessary to evaluate the factors in the microenvironment of an industry and the
relevant changes taking place in the microenvironment. The relevant changes of the
internal environment of any organization can be evaluated effectively with the
application of the Porter’s five forces framework (E. Dobbs, 2014). The Porter’s five
forces analysis of Geox is as follows -
 Competition within the industry - According to Kasemsap (2018), the
evaluation of the UK fashion retail industry indicates that there a large number
of fashion clothing and footwear brands within the UK market, due to which
the competition present within the industry is high. There are various other
retail brands except for Geox, who are strong as Geox. The main rival
companies of Geox in UK market for clothing are Marks and Spencer and
Zara while in terms of footwear, its main competitors are Weyco Group and
Wolverine World Wide Inc.
 Bargaining power of suppliers - The suppliers of the UK retail industry have
quite high bargaining power. It is mainly because the switching costs of any
brand in the sector to another supplier is high, thereby posing great threats to
Geox in terms of bargaining with suppliers. Threat from new entrants within the market - According to Bhatnagar et al.
(2016), the threats of a new entrant in the retail fashion marketplace in UK is
quite low. This is because it is going to be extremely difficult for any new
company to enter the retail industry and establish it as a retail brand as strong
as Geox. The sum required to be invested will also be quite huge, thereby
reducing threats for Geox.
 Bargaining power of the customers - Similar to the bargaining power of
suppliers, the consumers of the industry also have high bargaining powers.
The costs that a buyer has to spend to switch from one retail brand to another
is actually negligible, due to which the bargaining power of the organization’s
buyers are high, thereby influencing the operations of Geox.
 Threat from substitute goods in the market - The retail sector of UK
comprises of a large number of retail brands who provide a wide range of

substitute goods in comparison to the goods of other brands (Littlechild,
2017). Other retail brands such as Zara, H & M, Marks and Spencer and such
other brands provides greats threats for Geox, as the substitute goods of
these retail brands are of quite good quality.
Suggest and discuss strategies and tactics that could be used
The analysis of the macro environment and microenvironment helps in evaluating
that there are different types of relevant changes taking place in the business
environment of Geox. For example, the occurrence of Brexit, the rapid
advancements in technology and the socio-cultural forces are one of the main
factors, which influence Geox. In the same way, the two major factors in the
microenvironment of Geox that has a significant influence on it are the competition in
the market and the bargaining power of consumers. However, all these relevant
changes in the business environment of Geox can be handled with the help of
different strategies and techniques.
In order to respond to the political turmoil that is going to take place in UK, it is
necessary for the companies in the country to take measures, which will be
beneficial for them to fight through the rapid changing situations (Owen and Walter,
2017). The best strategy that Geox can be adopting for overcoming the challenges
that it may face due to Brexit is to boost the capacity of the warehouses of the
company in UK and to ensure that it has sufficient flow of cash for meeting the new
demands of VAT. It should also be preparing itself for the advent of the customs with
the European Union. On the other hand, the technological changes in the business
environment of any retail business can be using are the adoption of an IT change
agents program, development of research and development team that will help in
developing and implementing technologies in the operations of the business. In
addition to these strategies, Geox must focus on the development of a “centre of
excellence”, which will be specializing in new technologies and methods.
In order to deal with the socio-cultural factors affecting the retail business, retail
businesses must be able to understand the different needs of customers. Geox
should be using a strategy with which the motives of shopping of the consumers in

Reasons for shopping other than buying
PERSONAL MOTIVES
Role playing
Physical activity
Self-gratification
Sensory stimulation
Diversion
SOCIAL MOTIVES
Social experiences
Status and authority needs
Peer group attraction
Bargaining pleasure
Being with people of same
interests
the UK retail industry can be determined. The following table shows the different
motives of shopping of customers that Geox must consider -
(Source: Created by the author)
After the analysis of the motives of customers based on the above categories, it is
important to understand the needs of customers, such as hedonic needs and
utilitarian needs. Geox must also use the tactic of understanding the choices of
customers and the factors that influence choice, such as habitual behaviour,
segmentation variables, situation, choice activation, experience and expectations.
The micro environmental changes of retail businesses also have to be dealt with the
help of various tactics and strategies. The stiff competition in the UK market should
dealt with Geox using the strategy of knowing the competition in the market, the
USPs of the competitors, the key benefits the customers can avail from the
competitors and the development of diverse products that competitors are unable to
provide customers. The bargaining power of the customers in the retail business can
be addressed with an effective strategy as well. The enhancement of the quality of
the products sold in Geox and the best quality of after sales services can help the
business in responding and dealing with the bargaining power of customers. The
company should ensure that even if the switching costs of customers are low, the

customer is not able to avail the high quality of services that Geox provides its
customers both during and after sales. Therefore, with these tactics and strategies,
Geox can be dealing and responding to its micro and macro environmental
challenges.
Recommendations
As per the discussions of the different tactics and strategies with which Geox can be
dealing with the several changes taking place in the UK fashion market and the
microenvironment of the business. As per the current situation analyzed in the
context of Geox, the following are the recommendations provided to the company to
deal with its challenges -
 The company is recommended on building an infrastructure for corporate
customs, obtaining the status of authorized economic operator, map out its
supply chains, and audit all its international contracts by renegotiating some of
them along with developing a contingency plan to deal with the effects of
Brexit.
 The socio-cultural trends and changing behaviour of customers affecting
Geox is recommended to be dealt with the analysis of the motives of shopping
of buyers in the country and understanding the different needs of customers
such as utilitarian needs and hedonic needs.
 Geox is recommended to deal with the tough competition existing in the UK
retail market by stepping up on marketing and knowing the USPs of
competitors with which customers can be attracted more towards Geox than
its rivals.
 The company must also focus on improving the quality of products and after
sales services of the company. This will help it in reducing the bargaining
power of customers, as the quality of goods and after sales services provided
by Geox will be difficult for any customer to avail from any other retail brand.
 The company is further recommended on implementing technology in its
operations through developing an efficient research and development team
and a centre of excellence, which will help the company in implementing
technology and growing further.

Conclusion
Hence, from all the analysis conducted above, it can be determined that the retail
business itself is a theory. This is because the factors affecting a retail business are
innumerable and the impacts on these factors are significant. However, the
application of retail theories and efficient practices can help retail businesses in
overcoming challenges and surviving through the various changes taking place in
the external and internal environment of the businesses. This report helped in
understanding the different strategies and tactics for retail business in responding to
the relevant changes in the industry and the recommendations provided in the report
can be used in every retail business, even the retail businesses other than Geox, in
order to deal with changes of the business environment.

Reference list
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