Retail Theory and Practice

This document discusses the concept of retail, relevant changes in the UK fashion retail sector, and strategies and tactics for success in the retail industry. It explores the macro and micro environment factors that impact the fashion retail sector and suggests strategies that can be used to navigate these changes. The document also provides an overview of Marks and Spencer, a top multinational retail company, and its operations in the UK.

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 examines the evolution and transformation of the
retail life cycle, also the new retailer will typically start with low cost and low margin operations
and after analyzing the needs of customers, company start to offer the product. While on the
other side, the fashion retail industry is that section of a business which works as an
intermediary between manufacturer and customers. Thus, it is a process of buying clothes from
manufacturers and then selling them to customers as well. As per the current situation, the
fashion retail industry contributes the best in order to enhance the GDP.
The study will use Marks and Spencer (M&S) for the study because it is one of the top
retail firms in the UK who work under different sectors such as baby product, clothes, groceries
and furniture etc. Currently the company is operating in more than 1400 places and also
considered one of the strong brands among all retail firms. Or else, if it does not work,
Debnhams is another multinational firm which will be chosen because it also deals with the
retail sector and offers products such that fashion clothing, shoes, toys, accessories, cosmetics
and many more.
There are some macro environment factors which create direct impact upon fashion retail
such as Political, social, technological, environmental and legal factors 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 resources and plans and policies of a company are
considered 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 defined aim. Such that Pestle analysis is used which is a macro
environment analysis that helps to determine the external factors who affect the fashion retail.
Also SWOT analysis is also used in which internal factors are determined that support or affect
the business working under the retail industry. While by considering some factors from macro
analysis, Wheel of retailing theory is applied in which pattern of retail development is analyzed.
Such elaborate premises and facilities move the market in order to examine the pattern of the
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 defined aim as well.
For completing the project in a 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
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selected which are published latest in order to determine the results and gain the knowledge with
regards to the retail industry. It is so because these articles assist researchers to collect best
information regarding the questions so that it did not lay the project in a 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 needs of customers by identifying through a supply chain.
So, shops that work under retail occur in a diverse range of types with a 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 is performed in retail in the UK. .... ….stated that the
idea of retail is also linked with purchase of goods and then sold 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 they meet the needs 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 deals with the retail sector. The company's headquarter is in London, UK and
there are around 1450 stores in which around 900 stores deal in food stores. The firm became the
first British retailer in 1998 and there are many stakeholders who also support business in order
to run smoothly. At present situation, company is dealing online in which it offers a range of
products to their customers at international level. M&S offer a different range of products such
as toys, accessories, clothes, furniture, cosmetic items, groceries and many more. Currently the
company offers products 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 the UK only who also use e-
commerce platforms.
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 retailers. 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 products and services to their customers. It also sustains the brand image at global
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level in which make sure that price and quality of the product will not be compromised because
it affects the customer base in a negative manner.
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 mentioned 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 a better manner, it is essential to have a stable
political condition of a country. Free trade policies are a massive political benefit to M&S which
help the firm to establish the unit in different countries. 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
Simões, 2020). As a result, production cost of a company leads to increases and as a result, it
loses the customers which affect the financial performance of a company.
Economic factor: This factor deals with the economy of a country such that recession
rate of the business also affects the business performance because it leads to decrease the price
of customers, then company compromise with the quality of offered product. Therefore, it
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decreases the 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
customers prefer to use that product which directly causes a negative impact upon business.
Social factor: The preference of the customer 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 customers
need. Such that now customers prefer healthy products because they are health conscious, but
M&S do not offer the same and this in turn affects the results in a negative manner (Perera,
2017). Also, another trend that changes the perception of customers is that rise in consumption
of ready meals all over the world, that is why Marks and Spencer is ready to face the challenge
and it is one of top providers 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 social
media and different marketing tools which in turn help to attract a range of customers. Further,
the 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 started its online and e-commerce platform that assists to attract a range of
customers.
Legal factor: This factor deals with the laws and regulation but legal disputes affect the
overall business in the 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,
the government made many laws which also affect the business like, changes in trade policies
that help some businesses while some are negatively affected. Also, M&S allows an omni
channel experience which allows the consumer option for home delivery and provides a legal
plan that leads to positive impact (SHTALand et.al., 2018).
Environment factor: This factor deals with the environment and it is necessary for the
fashion retail sector to use sustainable products so that it does not cause a negative impact upon
the environment. Also, it makes sure that the company promotes the concept of sustainable retail
industry and this in turn attracts a range of customers as well. Companies also make sure that
during the production process, companies do not waste any product and also use sustainable raw
material which in turn lead to promoting the environment.
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Relevant changes with micro environment
To examine the micro environment factor, SWOT analysis is used which in turn helps
the company to meet the defined aim and also examine the internal factor of a firm as well.
These factors are as mentioned below:
Strength: Marks and Spencer have a brand image at international level because of
offering a high range of products at low and reasonable rates. Also, retail stores further provide
stylish fashion brands to customers and also have its own private labels that makes its product
unique from others (Gürel and Tat, 2017). M&S focusing on innovation such that it keeps
altering the product and services so that customers are attracted. Also, it has both brick and
mortar as well as online stores and now it offers franchising as well because there are around
1400 stores at world level and also have a diverse workforce who assist the business to
understand customers better.
Weakness: M&S do not successfully launch in the foreign market like Asia and Middle
East because they only offer western outfits. Thus, the market is completely relied upon the UK
earning which leads to decreased customer satisfaction in foreign markets (SWOT analysis of
Marks and Spencer, 2017). The market share of M&S is low which means the 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 outfist and the chances of
success are also high (Hagberg and Fuentes, 2018). Further, company should also reshape their
clothing segment which in turn also provides 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 the clothing and food sector. Therefore, company have to develop the strategy in
order to meet the defined aim such that by keeping changing the trend in the clothing space.
Changing government policies for retail stores is another threat for the company which in turn
affects the overall performance in a negative manner.
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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 enters into a new market with limited
product at a reasonable price which helps the business to keep a low margin. In this stage, they
want to build the reputation but for that Marks and Spencer must have to offer unique products
which in turn help to meet the defined aim (Wheel of retailing, 2020). Such that under this stage,
company develop a range of 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 defined aim.
Growth phase: Marks and Spencer shall be focusing to develop new technology
paradigms and higher effective utilization of innovative development for gaining higher end
marketing and to rationally bring on rapid evolvement of new technical advancement through
which higher external competitive goals can be further enhanced onto wider goals. The growth
phase will be explored by rapid innovation and advancement within yielding opportunities
which rationally brings on determinants which shall be focusing to bring on fashionable clothing
products an keenly focus onto higher functional advancement. Here from pestle technology
factor shall be focused for gaining on new paradigms and stronger innovation among all
services which are highly important for gaining on new levels of working determinants which
shall be yielding onto new goals and rapid evolvement with new customer preferences which are
widely changing. The brand aims further to bring on wider use of high effective machinery for
production efficiency and wider metrics of innovation within marketing parameters through
which keen synergy of rapid new competitive levels can be further explored (de Luna, Dadios
and Vicerra, 2020).
Maturity phase: At this phase wider manufacturing goals of new end marketing factors
where there are rapid demand for developing new end functional goals through which keen
synergy of monitoring the various new changes can be further determined by brand. M &S shall
be using new end goals and use of digital marketing communication channels for entering into
rapid communication networks among consumers which are rapidly increasing for gaining new
synergy of innovation. The maturity phase shall be focusing to bring on developed synergy of
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technical advancement among innovative operations for working on new rational goals through
which new competitive goals can be worked onto rapid development profitability paradigms.
Maturity phase shall be widely focused for developing new rational functional approaches
through which wider productive development shall be worked onto wider consumer market
share. Maturity phase will also be widely more important for work towards various determinants
and technical goal where brands are facing various external competitive factors due to
competitive targets where higher efficiency shall be worked on by M&S.
Decline phase: The decline phase shall be focused onto wider rapid factor of competitive
strength which will be worked onto new working levels where M&S brand shall be focused
onto wider paradigms to keep all legal competitive goals shall be worked onto. Legally there
are high risk for bringing on new stores expansion internationally for gaining wider
expansion levels as after Brexit UK country has been facing wide changes within new legal rules
and to pertain onto higher synergy of innovation. Decline phase will also keep focus onto wider
paradigms within new technical goals where M&S might be at loss for bringing on new synergy
of functional efficiency and work onto wider determinants which shall be working on to work
with new level of advancement. Decline phase shall be focused for improving new goals which
will be worked onto wider competitive levels for bringing on new functional efficiency for
higher productivity (de Luna, Dadios and Vicerra, 2020).
Recommendations
To attract the range of customers, it is recommended to the company to keep using the
online and advanced technologies which in turn assist the company to meet the defined aim.
Also, with the help of personalised things, company also keep attracting a range of customers
towards it so that it will meet the aim. Moreover, retailers also face issues 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 a product and service which possesses a unique selling proposition which
in turn leads to increase the brand image. Also, this is to assist the company to attract a range of
customers who help the business to enhance the financial performance.
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On the other side, company should also make sure that they have a skilled labor workforce who
also ensure that it provide proper customer service to their customers so that it increases the
customer base towards a firm. Also, M&S currently develop different policies with regards to
raising customer loyalty such as loyalty cards for their regular customers that help to encourage
them for shopping. Also, these strategies assist the firm in order to enhance the customer base
which in turn assist to raise the financial performance of a firm and sustain a brand image as
well.
Conclusion
By summing up the 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 affects
the business, but M&S develop strategies to minimize the negative impact. Also, study
concluded that micro environment factors also affect the performance of a business which is
determined 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 attractive customers by
lowering down the price and enhancing the quality. Moreover, by considering factors discussed
within the macro environment, it is concluded that this affects the business while with the help
of Wheel of Retailing, it is evaluated that patterns of retailers are keep changing.
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REFERENCES
Books and Journals
de Luna, R. G., Dadios, E. P., and Vicerra, R. R. P , 2020. Tomato Growth Stage Monitoring for
Smart Farm Using Deep Transfer Learning with Machine Learning-based
Maturity Grading. Agrivita, 42(1), p.24.
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.
Markard, J., 2020. The life cycle of technological innovation systems. Technological
Forecasting and Social Change, 153, p.119407.
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).
Simões, E.N., 2020. A decision support system application module-for PESTLE analysis-
competitive intelligence algorithm (Doctoral dissertation).
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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