Retail Theory and Practice Assignment Sample

Retail Theory and Practice

Table of Contents
Introduction to retail fashion industry..............................................................................................1
Introduction to UNIQLO ................................................................................................................1
Key relevant modification or changes within the UK fashion retailer............................................2
Relevant changes within the micro environment ............................................................................4
Tactics and Strategies that can be utilize by selected organization.................................................5
Recommendations............................................................................................................................6
CONCLUSION................................................................................................................................7
REFRENCES...................................................................................................................................1

Introduction to retail fashion industry
Retail refers to the process of delivering product and services by using several sort of
channels through which people can get to know about the goods. On the other hand, it means that
wherein, different types of goods and services has been develop for the people in order to fulfil
their demand in an effective way (What Is Retail, 2019). Retail fashion industry is consider to be
one of the fastest growing sector throughout the world. In UK, the fashion retailers are growing
at a rapid pace by offering unique and variety of products to satisfy different needs of customers.
Currently around 555,000 people are being employees in fashion retail companies within United
Kingdom (UK fashion industry statistics, 2019). There are four biggest giant offering clothing
such as Burberry, ASOS, Marks & Spencer and Next Plc operates within UK which also
contribute toward the growth of economy. Among them Next Plc is one of the most active
fashion retailer which make around 4.0 billion pound of annual sale within retail market.
Introduction to UNIQLO
UNIQLO is one of the best retailing company within the Japan which opened their first
store in Hiroshima. This was established in the year of 1949 as a textile manufacturer and
headquartered in Mid Town tower, Tokyo, Japan, along with this it is operating lots of clothing
store. In addition to this it has also opened the speciality retailer store for private label apparel
(SPA) over a strategy to produce their own clothing brands and sell them exclusively within the
market era of Japan. With the help of this SPA model they successfully differentiated themselves
from the other retailers within the industries by using effective and unique product for satisfying
consumers at the right manner. On the basis of this the founder of this organisation said that
UNIQLO clothes are Made For All. The UNIQLO brand is working over the aim of providing
comfortable everyday clothing which help in improving the livings of people. In year 2017,
UNIQLO has expanded its operations by operating around 830 stores within Japan and 950
stores in international market (Global Markets Driving Future Growth, 2019). It also operates its
operations within UK in order to cater the varying need of people lives in country . The
UNIQLO maintain around 13 retail stores throughout the UK (STORES, 2019). It also working
over expanding more stores in order to capture larger market share for achieve competitive
advantage as the competition is relatively higher in UK market due to presence of several
retailers who captured majority of market shares (ABOUT UNIQLO, 2019).
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Key relevant modification or changes within the UK fashion retailer
The UK fashion retail industry has go through several changes which supported in
enhancing the quality of services offered by retailers as it help in improving their practices by
anticipation of new standard, regulations and technologies. These all contributed toward
providing several growth opportunity to the retailers so that they would be able to offer product
as per the need and expectations of customers. The change to which UK fashion retail has
undergone can be better understood using micro-environmental analysis which can be performed
with the help of analytical tool named as PESTLE (PESTEL Analysis, 2016). This evaluation
help UNIQLO in determining the several opportunities present in market that support in its
growth and development within UK market. The PESTLE evaluation of UK Fashion Retail
Industry is mentioned below:
Political factor
Political factors usually includes government policies and other affairs that may affect the
business operations of UNIQLO. The political conditions of UK is stable but Brexit case i.e.
British exist from the European Union countries has affected the trade practices so badly as
country has increased its rivals in EU that influences several retailers operating business in UK
(Companies moving out as Brexit looms, 2019). The challenges found by retailers due to Brixit
are trade restrictions which has been imposed by EU countries over UK retailers which affected
their performance up to a large extend and also have a great influence over UNIQLO by bringing
several challenges. For instance: To promote different kind of product, companies need to face
several kind of governmental tariffs which influence the profit and sales of UNIQLO. In order to
deal with these changes company started focusing over another countries for its expansion such
as Malaysia and many more which increases its international expansion. Despite of this,
UNIQLO get aware about several political policies and practices and as a result of which it has
improved their working policies to make it more flexible and adoptable to external environment.
The stable political environment of UK helps company in running its operations smoothly and
effectively as firm is not require to change its policies and practices frequently.
Economical factor
Economical factors includes attributes like interest rate, inflation rate, foreign exchange
rate and so on which influence the market position of company. Hence, it is most crucial factor
to be consider by evaluation of factors. The economical recession faced by UK had a huge
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influence over the trading practices performed within UK as it created inflation rate which also
changes the purchasing behaviour of customers (The UK economy at a glance, 2019). All these
have negatively impact over the fashion retail industry. In order to deal with this challenge, the
UNIQLO has increase its sales promotion activities by offering discounts or providing high
quality products at relatively lower price to create a base of loyal customers that further
supported in increasing the sales and profitability of UNIQLO.
Social factor
It includes evaluation of several factors like culture, society, beliefs and values of a
particular society in which an organisation operates as it have huge impact over its performance
because in the present time every people have several kind of lifestyle, level of education and
beliefs in the society. UK is considered as biggest consumer market which has a population of
around 65.6 million which is marked in year 2016. Here around 18% people are aged over 65
and 2.5% people are above 85 remaining are youngsters (PESTEL analysis of the UK, 2019).
This is a biggest challenge for retailers in fashion industry and UNIQLO as they has to offer
products as per the need of aged people. But in order to deal with these changes, company has
decided to offer product for people comes under all age group which supported it in achieving
sustainability within marketplace for longer span of time.
Technological factor
This factor refers to the instant change within the organisation as well as in the business
environment due to technology and advancement. UK is consider as one of the most
technologically advanced country within the world and London is a greater hub of technological
institute (PESTEL analysis of the UK, 2019). Hence, this is a greatest opportunity for the retail
industry and UNIQLO company as it become able to enhance its operations by getting technical
assistance but at the same time it creates several challenges by increasing competition. In order
to deal with such issue, UNIQLO has expanded its operations over social media which supported
in increasing the brand awareness and approaching larger number of customers by offering
greater customer experience.
Environmental factor
It includes several rules and regulations that are formulated in order to ensure the safety
and security of environment. The UK government is very strict toward the environmental safety
which includes effective utilisation of resources, matching up the standard fixed by government
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and avoiding the toxicants for creating textiles that may harm the environment (Environmental
law and practice in the UK, 2019). Hence it is crucial for the UNIQLO to meet all these standard
by avoiding such material or toxicants in manufacturing and packaging of its product so that it
creates less harm to the environment which in turn also support in improving the brand image
among customers.
Legal factor
It refers to the all kind of government framework within the country in order to operate
business operations in an appropriate manner. With the case of Brexit, UK has get separated
from the European Union which is a group of countries (All you need to know about the UK
leaving the EU, 2019). As a result of which the regulation of UK has reformulated by the
government which creates several challenges for the fashion retailers in industry and UNIQLO
as well which have a direct influence over the operations performed by them in marketplace and
manner in which it operates. But in order to deal with these changes, UNIQLO has reformulate
the policies in a manner that it can be able to meet the legal standards and keep its employees
satisfied with their job so that productivity can be maintained for longer span of time.
Relevant changes within the micro environment
Micro environment generally includes in the several factors such as media, supplier,
shareholder, stakeholders and employees as well that directly influence the business decisions.
Some of micro environment factors are listed below:
Customer: They are the only one who always support company in increase their sales as
well as higher revenue in an effective manner. With the increase in literacy rate and
globalisation, the trends in fashion retail industry get dynamic which change much frequently
that affect the customer demand and business performance (Paul, Sankaranarayanan and Mekoth,
2016). In context with UNIQLO, operates at international market which support it in offering
trending clothes that are high in demand. Hence the risk in market regarding customer demand is
relatively lower.
Supplier: They are also very important part of the company who offer raw material in
order to start manufacturing process of an organisation without any issues. As retail trends are
dynamic in nature which changes constantly the demand for suppliers, raw material also get
changed frequently which sometimes affect the business operations as supplier won't able to
arrange them. In order to deal with such issue, the UNIQLO always keep a good bond with
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suppliers so that they can keep stock of raw material and remains aware about the raw material
required in future so that it made available at the right time in a right manner (Dimitrakopoulou,
2015).
Competitors: This factor is also consider to be most crucial for an organisation as affect
the market position of a particular company as well as customer's perception toward it so that
expectations can be determined to offer best product for satisfying customers. According to the
UNIQLO, they have several competitors such as ZARA, H&M and Forever 21 etc. which offers
high quality and trendy clothes to customers and also have positive market image in front of
customers which create tough competition for UNIQLO in market (Sun and et. al., 2018). But to
deal with this, UNIQLO regularly promote its brand and offer discount to attract customers.
Tactics and Strategies that can be utilize by selected organization
There are number of factors present in external environment which influence the
operation performed by a company and policies over which it works. This in turn directly
influence the market position as well as customer perception toward the company. The UNIQLO
is operating into fashion retail industry where the changes get anticipated much frequently that
affect the operations performed by retailers. The challenges faced by UNIQLO due to
environmental factors are mentioned below:
Micro-environmental factor:-
Competitors: There are larger number of competition present in UK market in front of
UNIQLO that are global giant retailer such as ZARA, Marks & Spencer, ASOS etc. These all
offer similar kind of products and captured larger market share which in turn restrict the
UNIQLO to serve the customers as they already believe over other brands. In addition to this
they are also experienced with the services offered by these competitors brand which restrict
them to switch the brand. To deal with this, UNIQLO must focuses toward offering more
benefits to the customers in term of rewards or discount offers on special days.
Customers: The customers are consider as king of market as they are responsible for the
growth and success of a company. But the major challenge in front of UNIQLO is that they have
to deal with the changing demand of customers which fluctuate so frequently that it affect the
sales and profitability of company at larger share. The changes in customer demand basically
happens due to new trends in market, competitors with unique offerings etc. For this, company
can focuses toward market research to determine the market trend and changes it accordingly.
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Macro-environmental factor:-
Social factor:- It involves the taste, preference and values that a customer hold toward
the company which affect its performance in marketplace. This is consider to be the major
challenge for UNIQLO as it operates at international market in which it offer clothings to
different countries which are different in term of their cultural value, need, expectations, trends
etc. This make it difficult for the UNIQLO to cater the varying need of customers that resides
over different geographical locations. For dealing with this, UNIQLO can adopt social media
marketing strategies where company can get feedback from the customers regarding their
expectation and offer accordingly.
Technological factor:- This includes changes bring into the industry due to
technological up-gradation and innovations within the operations. UK is considered to be
technological advanced country where the competitors of UNIQLO like ZARA, Marks &
Spencer uses advanced technology to manufacture their clothes for providing extreme smooth
look which creates a tough competition in front of UNIQLO. For dealing with this situation
company can go for joint venture where it would be able to implement such technologies
effectively within their operation that help in achieving competitive edge.
Recommendations
As per the above representative report, it has been recommended that UNIQLO company
should apply PESTLE analysis in order to run their business process in a very smooth and
attractive way. On the basis of this they can make proper strategies and tactics for enhancing
their business growth in an appropriate manner. By using PESTLE this respective organisation is
able to know the condition in modern era of economy in which they can enhance their business
in a proper way. Now there are some recommendations, those are listed below:
 Firstly it has been recommended that if UNIQLO company want to expand their market
in different country that they are need to consider micro and macro environmental factors
so thPaul, J., Sankaranarayanan, K. G. and Mekoth, N., 2016at they can easily came to
know about several opportunities and challenges present in market so that it be able to
apply several techniques to perform effectively.
 With the help of this, firm can make proper communication with the team members as
well as other people for designing their product in a unique way. Along with this they
must also communicate about their strategies to employees for proper implementation so
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that they can get competitive advantages. In order to make effective and proper functions
of an organisation, fashion retailers must focuses toward trends prevailing in market.
 As this respective organisation has lots of outlets in different countries so that they are
responsible to take care of them in order to make organisation attractive. For this, it has
been suggested that they should conduct several kind of training and development
programmes to their workers and employee's as well so that they are able to understand
all kinds of laws and policies of this organisation and perform in right manner to gain
targeted goals with potential customers. On the basis of this, employees can get sufficient
knowledge which helps to enhance company's profit with higher sales.
 At last, it has been recommended that this respective company should properly used
social media and online websites for developing good awareness in the minds of
consumers so that they can aware about this company's product (Rajkumar and Arulraj,
2018). By which UNIQLO can make effective retail store who always fulfil the
customer's needs and desire in an appropriate manner.
CONCLUSION
According to the above mentioned assignment it has been evaluated that the retail theory
and practices are the good process of every company wherein, retailer helps to achieve their
goals by targeted potential customers within the marketplace. But in order to perform well, it is
very essential for a company to evaluate market condition and then formulate strategies
accordingly so that operations can be performed in right direction. For this, Pestle analysis can
be performed which is a analytical framework that evaluate the external factors that influence the
organisational policies and performance as well. Despite of this company must also perform
micro environmental evaluation as it involve analysis of factors that directly affect the decision
making of a company. These all support in formulating effective management policies that direct
the efforts toward the accomplishment of organisational goals.
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REFRENCES
Books and Journal
Akehurst, G. and Alexander, N. eds., 2013. The internationalisation of retailing. Routledge.
Crawley, E., Swailes, S. and Walsh, D., 2013. Introduction to international human resource
management. Oxford University Press.
Dimitrakopoulou, P., 2015. The Development Of A Bussiness Strategy Model For A Luxury
Brand.
Evans, N. N., 2017. The internationalisation strategies of small and medium-sized enterprises
(SMEs) clothing suppliers in the UK (Doctoral dissertation, Manchester Metropolitan
University).
Karrholm, M., 2016. Retailising space: Architecture, retail and the territorialisation of public
space. Routledge.
Kolokolnikov, A., 2013. International Fur Trade: Trends, Challenges, Prospects.
Parab, S. S. and Salker, A. V., 2018. Structural and optical properties of Tb and Na–Tb co-doped
Ca3V2O8 phosphors prepared by sol–gel process. Materials Research Express. 5(1).
p.016302.
Rajkumar, C. and Arulraj, A., 2018. Seed mediated synthesis of nanosized zinc oxide and its
electron transporting activity in dye-sensitized solar cells. Materials Research Express.
5(1). p.015029.
Spaargaren, G., Oosterveer, P. and Loeber, A. eds., 2013. Food practices in transition: changing
food consumption, retail and production in the age of reflexive modernity. Routledge.
Votsari, E., 2015. The Chinese Luxury Fashion Market.
Zada, I., 2017. Studying the External Environment of the Organizations and Evaluating the
Strategic Options to Win a Business Competition.
Sun, S. and et. al., 2018. Understanding the factors affecting the organizational adoption of big
data. Journal of Computer Information Systems. 58(3). pp.193-203.
Paul, J., Sankaranarayanan, K. G. and Mekoth, N., 2016. Consumer satisfaction in retail stores:
theory and implications. International Journal of Consumer Studies. 40(6). pp.635-642.
Online
UK fashion industry statistics. 2019. [Online] Available through:<https://fashionunited.uk/uk-
fashion-industry-statistics/>./
STORES. 2019. [Online] Available through:
<https://www.uniqlo.com/eu/en/content/Stores_Landing_UK.html>.
ABOUT UNIQLO. 2019. [Online] Available through:
<https://www.uniqlo.com/uk/en/company/>./
Global Markets Driving Future Growth. 2019. [Online] Available through:
<https://www.fastretailing.com/employment/en/uniqlo/business.html>.
What Is Retail. 2019. [Online] Available through: <https://erply.com/what-is-retail/>.
PESTEL Analysis. 2016. [Online] Available through:
<https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>.
Companies moving out as Brexit looms. 2019. [Online] Available through:
<https://phys.org/news/2019-02-companies-brexit-looms.html>.
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PESTEL analysis of the UK. 2019. [Online] Available through:
<https://www.howandwhat.net/pestel-analysis-uk/>.
All you need to know about the UK leaving the EU. 2019. [Online] Available through:
<https://www.bbc.com/news/uk-politics-32810887>./
Environmental law and practice in the UK. 2019. [Online] Available through:
<https://uk.practicallaw.thomsonreuters.com/6-503-1654?
transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1>./
The UK economy at a glance. 2019. [Online] Available through:
<https://ig.ft.com/sites/numbers/economies/uk/>./
APPENDIX
PESTLE Analysis:
Political  Brexit impacts negatively on retail industry.
 Stable political conditions in UK helps company in running its
operations smoothly.
Economic  High unemployment rate due to Brexit impacts negatively.
 Inflation rate decreases buying power of customers.
Social  Change in beliefs, education and lifestyle of people impacts
negatively.
 Offering products as per market trends creates opportunity for
company.
Technological  Change in technology may impact negatively.
 Expanding operations over social media provides opportunity to
company in increasing brand awareness.
Environmental  Non-compliance with environmental laws impact negatively.
 Use of non-toxic fabric in manufacturing clothes provides opportunity
to company.
Legal  Non-compliance with laws and regulations made by government
impacts negatively.
 Adherence of employment laws at workplace pose opportunity for
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company.
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