Retail Theory and Practice

This document discusses the concept of retail, relevant changes in UK fashion retail, and strategies and tactics for success in the retail industry. It explores the macro and micro environment factors that affect the retail sector and provides recommendations for attracting customers and overcoming competition. Study material and solved assignments on retail theory and practice are available at Desklib.

Retail theory and Practice

Table of Contents
FORMATIVE ASSESSMENT........................................................................................................1
SUMMATIVE ASSESSMENT.......................................................................................................2
Introduction to retail....................................................................................................................2
Introduction to the company.......................................................................................................2
Relevant changes in UK fashion retail........................................................................................3
Relevant changes with micro environment.................................................................................4
Strategies and tactics which could be used.................................................................................5
Recommendations.......................................................................................................................6
Conclusion...................................................................................................................................6
REFERENCES................................................................................................................................7

FORMATIVE ASSESSMENT
The retail concept is an idea which examine the evolution and transformation of retail
life cycle, also the new retailer will typically start with low cost and low margin operations and
after analyzing the need of customers, company start offer the product. While on the other side,
fashion retail industry is that section of a business which work as an intermediary between
manufacturer and customers. Thus, it is a process of buying clothes from manufacturers and then
sell them to customers as well. As per the current situation, fashion retail industry contribute the
best in order to enhance the GDP.
The study will uses Marks and Spencer (M&S) for the study because it is one of the top
retail firm in UK who work under different sector such that baby product, clothes, groceries and
furniture etc. Currently the company is operating in more than 1400 places and also consider one
of the strong brand among all retail firms. Or else, if it does not work, Debnhams is another
multinational firm which will be chosen because it is also deal with in retail sector and offered
the product such that fashion clothing, shoes, toys, accessories, cosmetics and many more.
There are some macro environment factor which creates direct impact upon fashion retail
such that Political, social, technological, environmental and legal factor which affect the
business externally and this in turn also cause positive and negative impact upon business. While
on the other side, suppliers, employees human resource and plans and policies of a company are
consider some micro environment factor which will also affect the fashion retail sector in both
opposite and positive manner. In the project, relevant theories and models are also applied which
in turn assist to meet the define aim. Such that Pestle analysis is used which is a macro
environment analysis that help to determine the external factor who affect the fashion retail.
Also SWOT analysis is also used in which internal factors are determine that support or affect
the business working under retail industry. While by consider some factor from macro analysis,
Wheel of retailing theory is applied in which pattern of retail development is analyzed. Such that
elaborate premises and facilities, move market in order to examine the pattern of retail sector.
So, by using theories and models which assist to support the discussion and also generate the
best outcome which in turn help to meet the define aim as well.
For completing the project in better manner, effective resources are selected such that the
entire study is based upon secondary study and that is why, relevant articles and books are
selected which are published latest in order to determine the results and gain the knowledge with
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regards to retail industry. It is so because, these article assist researcher to collect best
information regarding to the questions so that it did not laid the project in negative way.
SUMMATIVE ASSESSMENT
Introduction to retail
Retail is the process of selling consumer goods and services to the customers with the
help of multiple channels of distribution with an aim to earn profit. Retail shops are very ancient
history and retailers further satisfy the need of customers by identify through a supply chain. So,
shops work under retail are occur in diverse range of types with variety of context. Or else, retail
refers to the activity of selling goods and services to customers and end- users as well. Even
around 80% of the sales activity are perform in retail in UK. ….stated that the idea of retail is
also link with purchase of goods and then sell to the consumer with an aim of earning profit.
Now the market is so wide and there are different scope for people under retailing in which the
meet the need of customers and also attain the goals as well.
Introduction to the company
The chosen firm for this report is Marks and Spencer which is the top multinational
company which deal under retail sector. The company's headquarter is in London, UK and there
are around 1450 stores in which around 900 stores are deal in food stores. The firm is become
first British retailer in 1998 and there are many stakeholders who also support business in order
to run smoothly. At present situation, company is deal online in which it offer range of product
to their customers at international level. M&S offer different range of product such that toys,
accessories, clothes, furniture, cosmetic item, groceries and many more. Currently the company
offer product with high quality and that is why, it has a strong customer base within local and
international level such that it has around 1000 stores in UK only who also use e-commerce
platform.
On the other hand, the business has two division such that Food and General,
Merchandise, firm is also focus on the growth by consolidating their position by leading
international and multi- channel retailer. As per the financial report of a company, its net profit
margin is 23% while net profit is 24 GBP million which shows that company is offering the best
variety of product and services to their customers. It also sustain the brand image at global level
in which make sure that price and quality of the product will not be compromise because it
affect the customer base in negative manner.
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Relevant changes in UK fashion retail
In order to determine the changes within a fashion retail sector, macro environment
factors are applied in which Pestle analysis is used that is a strategic management macro model.
There are some factor which affect the industry and its impact are also as mention below:
Political factor
 Free trade policies
 Brexit affect the business performance
Economic factor
 conflict with Local retailer
 fluctuation in the economy of country
Social factor
 sudden changes in the preference of
customer
 Need to analyze the market trend
Technological factor
 Use of new and advance tools
 developing online platform
Legal factor
 Complying with the laws and
regulation of UK
 Legal disputes affect the business
negatively.
Environmental factor

Political factor: To run the company in better manner, it is essential to have stable
political condition of a country. Free trade policies is a massive political benefit to M&S which
help the firm to establish the unit at different country. While on the other side, Brexit further
affected the situation of M&S and even many customers are not ready to invest within a
business. As a result, production cost of a company is leads to increases and as a result, it losing
the customers which affect the financial performance of a company.
Economic factor: This factor deal with economy of a country such that recession rate of
the business also affect the business performance because it lead to decrease the price of
customers, then company compromise with the quality of offered product. Therefore, it decrease
customer base. Also, there are many local stores who also offer the same product with low rate
with moderate quality as compared to Marks and Spencer. So, most of the customer prefer to use
that product which directly cause negative impact upon business.
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Social factor: The preference of the customer are changes as per the market trend and
that is why, it is necessary for the firm to make sure that they offer the same product which
customer need. Such that now customer prefer healthy product because they are health
conscious, but M&S do not offer the same and this in turn affect the results in negative manner.
Also, another trend that changes the perception of customer such that rise in consumption of
ready meals in all over world, that is why, Marks and Spencer is ready to face the challenge and
it is one of top provider that provide ready meals.
Technological factor: In the era of digitalization, most of the companies use online
marketing tools in order to promote the product. That is why, M&S also uses the same such that
social media and different marketing tools which in turn help to attract range of customers.
Further, company also uses different online tools and techniques for proper management and
information by complying with the technological factor but it somehow creates cyber attacks as
well. For example, it start its online and e-commerce platform that assist to attract range of
customers.
Legal factor: This factor deals with the laws and regulation but legal disputes affect the
overall business in opposite manner. But M&S comply with different laws related to company
like, health and safety measures, employment law and many more. Also, after Brexit,
government made many laws which also affect the business like, changes in trade policies that
help some business while some are negatively affected. Also, M&S allows an omni channel
experience which allow the consumer option for home delivery and provide legal plan that leads
to provide positive impact.
Environment factor: This factor deal with environment and it is necessary for fashion
retail sector to use sustainable product so that it do not cause negative impact upon the
environment. Also, it make sure that company promotes the concept of sustainable retail
industry and this in turn attract range of customers as well. Company also make sure that during
the production process, company do not waste any product and also uses sustainable raw
material which in turn lead to promote environment.
Relevant changes with micro environment
To examine the micro environment factor, SWOT analysis is used which in turn help the
company to meet the define aim and also examine the internal factor of a firm as well. These
factors are as mention below:
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Strength: Marks and Spencer have a brand image at international level because of
offering high range of product at low and reasonable rates. Also, retail store further provide
stylish fashion brand to customers and also have its own private labels that makes its product
unique from others. M&S keep focusing on innovation such that it keep altering in the product
and services so that customers are attracted. Also, it has both brick and mortar as well as online
stores and now it offer franchising option as well because there are around 1400 stores at world
level and also have a diverse workforce who assist the business to understand customer better.
Weakness: Company do not successfully launch in the foreign market like Asia and
Middle East because it only offer western outfit. Thus, the market is completely relied upon the
UK earning which leads to decrease the customer satisfaction in foreign market. The market
share of M&S is low which means company faces strong competition. As M&S is one of the top
brand that is why, there is a need to protect the brand from fake product otherwise it leads to
decrease the brand image of a company.
Opportunities: having a strong financial performance at global level, company can tap
into new market segments which in turn help to raise the profit margin. Also, it may open its
new branch in India and China because people prefer to wear western outfit and the chances of
success is also high. Further, company should also reshaping their cloth segment which in turn
also provide another opportunity for the company to sustain the brand image.
Threat: Competition is the biggest threat which M&S faces in the retail sector especially
with regards to clothing and food sector. Therefore, company have to develop the strategy in
order to meet the define aim such that by keep changing the trend in the clothing space.
Changing in the government policies for retail stores is another threat for the company which in
turn affect the overall performance in negative manner.
Strategies and tactics which could be used
It is analyzed that macro environment factor affect the performance of Marks and
Spencer which is analyzed by using Wheel of Retailing that determine the pattern changes
within retail sector such that:
Entry phase: it means that when the organization enter into a new market with limited
product at reasonable price which help the business to keep a low margin. In this stage, they
wants to build the reputation but for that Marks and Spencer must have to offer unique product
which in turn help to meet the define aim. Such that under this stage, company develop range of
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strategies which in turn leads to attract the customers. But their main aim is to build a strong
reputation within a business and that is why, company start offering the product at discounted
rates which help to meet the define aim.
Growth phase:
Maturity phase:
Decline phase:
Recommendations
To attract the range of customers, it is recommended to the company to keep using the
online and advance technologies which in turn assist the company to meet the define aim. Also,
with the help of personalised things, company also keep attracting range of customers towards it
so that it will meet the define aim. Moreover, retailer also faces issue with regards to suppliers
and selection of channels that is why, it is recommended to the company that they should
consider all the factors in order to determine their actual condition so that it will not affect the
results.
On the other side, company faces another issue of strong competition and this can be
overcome by offering product and service which posses unique selling proposition which in turn
leads to increase the brand image. Also, this is assist the company to attract range of customers
who help the business to enhance the financial performance.
Conclusion
By summing up above report it has been concluded that for macro environment factor,
Pestle analysis is used which in turn leads to determine the external factor which affect the
business, but M&S develop strategies to minimize the negative impact. Also, study concluded
that micro environment factor are also affect the performance of a business which is determine
by using SWOT analysis in which due to strong competition, company faces threat and that is
why, there is a need to develop strategies in order to meet the attract customers by lower down
the price and enhance the quality. Moreover, by considering factors discussed within macro
environment, it is concluded that this affect the business while with the help of Wheel of
Retailing, it is evaluated that pattern of retailers are keep changing.
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REFERENCES
Books and Journals
Simões, E.N., 2020. A decision support system application module-for PESTLE analysis-
competitive intelligence algorithm (Doctoral dissertation).
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
SHTAL, T.V. and et.al., 2018. Methods of analysis of the external environment of business
activities. Revista ESPACIOS.39(12).
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research,10(51).
Hagberg, J. and Fuentes, C., 2018. Retail formations: tracing the fluid forms of an online
retailer. Consumption Markets & Culture. 21(5). pp.423-444.
Online
SWOT analysis of Marks and Spencer. 2017. [online]. Avaialble through:
<https://www.howandwhat.net/swot-analysis-marks-spencer-marks-spencer-swot-
analysis/>.
Wheel of retailing. 2020. [online]. Available through: <https://theinvestorsbook.com/wheel-of-
retailing.html>.
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