Retail Theory and Practice

This document discusses the theory and practice of retail, focusing on the case of H&M. It explores the key changes in UK fashion retail and suggests strategies and tactics that could be used by the company. The document also analyzes the impact of political, economic, social, technological, environmental, and legal factors on H&M's operations. Recommendations for the company are provided as well.

Retail Theory and Practice

Table of Contents
INTRODUCTION...........................................................................................................................1
Introduction of retailer ....................................................................................................................1
Q1 Key relevant changes in UK fashion retail............................................................................2
Q2 Suggest strategies and tactics that could be used by company.............................................5
Conclusion ......................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Introduction of retailer
Retailer is a person or institution and it makes bridge between whole seller and customer. It
means that it purchase goods from whole seller and then sale to customers. So it provides service
to customers through fulfil their needs and provide satisfaction to them (Fozer, and et.al., 2017).
So it purchases large quantity of goods from whole seller and manufacturer and break in small
quantity then sell to customers. So H&M is a also a retail company and it sells fashion clothes. It
also promotes their product in affective manner and also deliver goods to customers. So it also
collects information from customer and then give information to manufacturer.
Introduction to the company:-
H&M is fashion retailer company and it provides fashion clothes to customers. It has 10000
stores and it served worldwide. It is very big brand so it provides men and women clothing and
children clothing as well. It provides product according to the latest trend and taste and choice of
customers. H&M has zero advertisement (Widya Yudha, Tjahjono, and Kolios.2018). As it has
very popularity and it offers 12000 new designs each year. It does business in different country
and on global level like Spain, Portugal, turkey, Morocco. Its marketing strategy is also very
systematic because it provides the latest clothes at reasonable price. It makes policy about well
research and it researches time to time so market and understand choice, taste and preference of
customers and produce according to customers choice. It also adopts and establish new
technology and innovations frequently for improve and develop their production.
H&M has effective, efficient and skilled workforce and it has improved their ideas for
improve fashion and it helps in attract customers for increase sale and profit. It also provides
incentive and reward to their employees for motivation and improve their work with full efforts.
Its online marketing is also very wide it means it also provides online services that customer's
time save and they do shopping from home (Pantano, and et.al., 2017). It provides quick service
to their customers with quality and its distribution channels is also very strong and systematic. So
all theses things affect to their productivity and profitability.

Q1 Key relevant changes in UK fashion retail
There has been many changes in H&M fashion which will be evaluated on the basis of PESTLE
analysis and micro environmental factors.
Pestle Analysis
A PESTEL analysis is a structure used to examine and reveal the macro-environmental factors
that can have a intense effect on an corporation’s performance. Thus, PESTEL is an word form
for Political, Economical, Social, Technological, Environmental and Legal, these forces are vital
and their impact on organizational activities are profound (Scanning the Environment: PESTEL
Analysis.2016). This PESTEL evaluation of H&M will make it clear how these elements can
have an effect on businesses directly and in a roundabout way.
Political: The most vital political factors that effect any business are the financial
guidelines of an economy. However, each country and its government do not have the equal
prospect on business . Further, political interruption leads to the disruption of the market because
it impacts the economy and thus, it will disrupts the deliver chain after which supply rise to
several difficulties for the H&M as a result they have to limit its deliver chain operations to its
domestic country and neighboring international locations. On the other hand, the free exchange
agreements in Europe have assist H&M in enhancing their sales and its typical organization's
income (Franco. 2017).
Economic: The extent of monetary interest in any country or market has a great impact
on how company's will operate. However, the world has these days been through a low financial
situations and the recession have damage the working of H&M deeply and due to the fact that
then a more potent dollar has made the situation not so satisfactory for them,thus,it has reduced
earnings from the markets of H&M. Moreover, lower monetary activity reduces the purchasing
energy of the customers who start reducing expenses or are pressured to do it and this leads to
heavy cost on sales.
On the flip side, Spain’s speedy-developing financial environment has desired H&M’s
income and universal sales of the clothing retail enterprise, this is because with Spain’s
incredible excessive tiers of unemployment and excessive population, the fee of labor is low
results low production costs and exquisite merchandise with decreased prices which in turn
draws greater clients (Ozdamar Ertekin, and Atik. 2015).

Social: Social factors are significance in case of commercial enterprise. Thus,
organisation ought to work consistent with social trends and consider their social duty towards
the country. However, if branded companies lose their interest of cultural component of
enterprise and advertising are at the hazard of dropping their clients. So, H&M researches new
markets and cultures before introducing any new product or making an investment in new
markets and thus, it influences the buying choices of patrons.
On the other side, the increasing desire of consumers to prefer online shopping due to its
various benefits like potential to purchase 24/7, capability to evaluate expenses and shortage of
associated transportation expenses has forced H&M to open a couple of on-line stores and this in
flip demonstrated a success for H&M that have multiplied through 10%.
Technology: Today,Digitalized era is increasing globally at a faster rate whether it's miles
in phrases of communication, shipping, or different components of companies. Thus,this
technological factor has enabled H&M to respond to consumer needs and wants at a faster rate in
addition to coordinate its deliver chain and logistics work (Pantano, and et.al., 2017).
However,H&M has additionally implemented an RFID device for tracking inventory
along its fee chain as It allows the store personnel to track inventory inside the different shops or
on H&M internet site and enhance purchaser experience. Thus,this has progressed H&M’s entire
stock management process.
Environmental: Sustainability that began as a fashion has now end up one of the most
vital worries for agencies globally. Thus, the ecological facet of enterprise has become extra vital
now than ever. However, due to governments policies to create a greener surroundings, H&M’s
organisation has pledged to make its shops eco-friendly by 2020 and has invested over $8.5
Billion in sustainability goals which include manufacturing of sustainable outwears prepared
from natural material using sustainable energy and equipping its shops with efficient and
regulatory capabilities (Balaji, and Roy.2017).
Legal: Their is a famous phrase that says law is everywhere and anywhere, therefore an
enterprise cannot anticipate to remain unaffected by way of it. Thus, due to this reason H&M’s
focus is also on ethics and sustainability across its business and its supply chain and there are
numerous laws that H&M are required to comply with. Keeping in mind the legal factors,the

company has enforced policies that assure fair wages for its workers and apart from it H&M is
likewise targeted on creating an ethical brand photo.
Micro-Environmental Factors
Customers: customers have the most direct effect on the revenue of business. Thus,the
company cannot efficaciously operate without attracting focused clients. However, due to this
reason H&M's business focuses on the consumer’s wants and needs (Martino, and et.al., 2017).
Hence, every advertising and marketing strategy of H&M that concentrates on the desires of the
patrons and offers high quality wearables to customers that satisfy their needs.
Employees: Employees of the companies produce, promote or carrier the products and
service that drives the enterprise. Therefore, the accessibility to qualified, inspired personnel to
is important for the success of companies. Thus, in H&M , employees are the essential factor of
that contributes extensively to its achievement as they relies upon on the training and motivation
sessions and promotion opportunities for them which helps the company in reaching a combative
facet.
Suppliers: Suppliers are the individuals from whom the cloth is bought to make a finished
excellent and hence are very important for the corporation. Thus, a supplier’s conduct will
immediately impact the business of H&M. for instance, if a supplier of H&M provides a terrible
raw material this ought to increase time scales or quality of clothes, thus, their will an increase in
cost of raw material that will affect an company’s advertising and marketing method and might
even pressure price increases (Çifci, and et.al., 2016). Thus, it's miles essential for H&M to
identify and choose high-quality suppliers present inside the market and hold near relationships
with them to remain combative and provide excellent outfits to its patrons.
Competition: Maintaining a close watch on competition permits a company to determine
its marketing strategy in step with the going trends within the fashion industry. Thus, H&M
should conduct Competitor analysis and monitoring their trends as it helps the company to
maintain or improve its position within the fashion industry.
Government: The authorities departments make several rules and guidelines like pricing
strategies, credit score coverage, training policy, housing policy, and many others. that do have
an influence at the advertising techniques of the company. Therefore, the H&M has to adopt
those regulations and make the advertising and marketing policies according to those regulations.

General Public: Local societies and media additionally affect ongoing enterprise
reputation. However, local citizens often aid agencies that offer jobs, pay taxes and operate with
social and environmental responsibility and if the companies do not comply with social
responsibilities,they may run into negative public repercussions (Lee, and Ha‐Brookshire,
2018). Thus, the H&M has certain social obligation closer to the society in which it's miles
running. Consequently, all the marketing activities of H&M must be designed that will lead
towards the welfare of the society as a whole.
Q2 Suggest strategies and tactics that could be used by company
From the above pestle analysis, we can conclude that there are certain macro and micro
environment factors that are affecting the working of the company and the company need to
apply certain strategies to cope up with those changes.
Political: This is the major factor that are affecting the foreign direct investment of the
company that includes red tape which is biggest political barrier for H&M as it restricts the the
company world wide. Thus, this factor affects the working condition of the company (Rashid,
and Barnes.2017).
However to cope with the political factors company should adopt various tactics through
which they can improve their economical conditions. Further,H&M should follow flexible
economical policies that helps them to improve their financial regulations within the fashion
industry.
Moreover,H&M has to preserve a close eye at the extensive government priorities to
expect developments and thus they have to abide by various regulations present in different
markets within which they operate (Mayrhofer, and Roederer.2016).
Environment: There are various ecological factors like carbon foot print targets,
pollution, climatic and weather changes that affects the company's foreign trade as today
consumers and government is focusing more on the environmental practices which is affecting
the operations of the company. Thus, in order to comply with ecological practices of
environment the company follows CSR(corporate social responsibility) practice.
According to Jen ,Corporate responsibility is a practice adopted by H&M to take duty for
the social and environmental influences in their commercial enterprise operations. However,a
strong CSR program is an opportunity for company to illustrate their citizenship and defend the

organization from risk via looking on the entire social and environmental domain that surrounds
the H&M (Lee. and Lee.2018).
Social Factors: These are factors which includes different customs and ethics that are
followed by different people and thus it affects the product offering of the company as due to this
factor the company need to produce those outfits that comply with ethics and standards followed
by customers world wide. However, the company should not bribe country legislators for tax
credits or unique privileges and they should not follow Insider buying and selling as it is against
the business ethics of the country (Fozer, and et.al., 2017). Moreover, the company should follow
certain programs like better Cotton Initiative is the idea for the enhancements of the impact of
their working on the surroundings and society, thus,the purpose of the initiative is to growth
profitability and sustainability inside the company.
Employees: Employees are the most important dimension of any organization at they
help the company in achieving their goals, thus, this factor majorly affects the working of the
company. However, in order to cope with such changes ,H&M should follow certain associations
like fair labor affiliation through which the company promote obligation and transparency with
the intention of protective labor requirements and enhancing operating conditions. Further, the
company develops campaigns that help in protecting the employee rights and providing the
proper working conditions.
Customers: Customers are usually king of the market and they majorly affects the
working of the organization. Thus, H&M should follow certain concept in order to satisfy their
customers and capture huge market share (Widya Yudha, Tjahjono, and Kolios.2018).
Moreover, the company should design their products keeping in mind the tastes and
preferences of people according to their different cultures. Further, the company should always
thank their customers for shopping with their brands and ask them to give their feedback
regarding their services so that company will be able to meet those expectations that the
customers have towards their company. Furthermore, the company should provide various offers
and gifts on their wearable like buy 1 get 1 free, 50% seasonal discounts, vouchers etc. so that
the consumer remain attracted towards the company.
Recommendations

In my opinion, in order to meet the challenges , H&M should adopt various tactics through
which they would be able to cope up with such issues.
Moreover the company should adopt various advanced technologies like augmented
reality or the company should develop their mobile apps through which they will be able to
provide various opportunities to customers to shop their outfits online and thus the customers
remain loyal towards the company (Six challenges fashion retail faces in 2018).
Further, the company should analyze the trends of their competitors like ZARA,ICONIC
etc. And then form their own strategies that provide unique products and services to remain
competitive in fashion industry.
Simultaneously, the company should provide various advantages to their employees by
providing them proper working conditions and conduct certain programs that protects the rights
of employees and solve their grievances towards the organization (Ozdamar Ertekin, and Atik.
2015).
Moreover, the H&M follow corporate social responsibility practice that helps the
company to work according to the ecological and environmental practices by reducing the
harmful activities like carbon foot print , using inorganic material etc, and focusing on products
the products from waste materials without harming the health of people as well as the country.
Conclusion
From above study it has been summarized that retail company is mediator of manufacturer and
customer. So it purchases product in bulk and then sale to customers in small quantity. It also
researches of markets like latest fashion, techniques and choice of customers for improve and
develop product. It also covered that many factors affect to environment of business. That affect
to internal and external performance of organization and marketing use tool for analyze like
pestle analysis for external environment and SWOT analysis is for internal environment. It is
also known as micro and macro environment. So retailer also important for provide goods to
customers for provide satisfaction and make systematic strategy for increase productivity and
profitability.

REFERENCES
Books and Journals
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stakeholder analysis of Indonesia’s fossil fuel energy industry. Energies.11(5).p.1272.
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incumbents’ struggles and challenges in the textile industry. journal of cleaner
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barriers, and remedies for mobilization of slow fashion. Journal of Macromarketing.35(1).
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Pantano, E. and et.al., 2017. Does innovation-orientation lead to retail industry growth?
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organizational citizenship behavior on US fashion retail organizations' sustainability
performance. Corporate Social Responsibility and Environmental Management.25(5).pp.939-
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Rashid, A. and Barnes, L., 2017. Country of Origin: Reshoring Implication in the Context
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Online
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