Retail Theory and Practice

This study material provides an overview of retail theory and practice, focusing on the changes in the retail industry, strategies for adapting to the macro environment, and recommendations for success. It covers topics such as PESTLE analysis, modifications in the micro environment, and strategies and tactics for adapting to changes. Whether you're studying retail management or interested in the retail industry, this study material is a valuable resource.

Retail Theory and
Practice

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of Marks and Spencer…………………………………………………………………..1
PESTLE Analysis of Marks and Spencer…………………………………………………………2
Changes within the Micro Environment…………………………………………………………..4
Strategies and tactics in adapting changes with influence of macro environment………………5
RECOMMENDATIONS…………………………………………………………………………6
CONCLUSION……………………………………………………………………………………6
REFERENCES……………………………………………………………………………………7

INTRODUCTION
Retail refers to the platform in order to make sales as well as services of daily consumer
goods which is used by end users or individuals with the help of various distribution channels.
Their main purpose is to make profit and enhance their market share at the competitive market
area. In past years, retail markets are known as small physical stores which provide goods and
services to the customers according to their requirements and needs. But in current era, all these
have changes to shopping malls, grocery stores, supermarket and many more (Stewart and
Shamdasani, 2014). In this is a report which is based on Pepe Jeans, which is a denim and casual
wear brand for jeans established in the year 1973 in London. It has been observed that clothing
sector is one of the most dynamic industry where continuous alteration is done which need to
adopt by the companies for maintaining their sustainability at the marketplace. Along with this, it
has also been said that with the help of hitting all the targets in an effective manner, company
can gain higher market position at the competitive marketplace.
Overview of Marks and Spencer
There have been many changes in the recent past which has influenced the UK retail
clothing industry. Pepe Jeans London is a casual wear and denim jeans and clothing brand which
was founded in 1973 by Carlos Ortega. The company operates internationally with shipping
clothes to many countries around the world. It relies heavily on international market as well for a
significant part of its revenue. It is the leader in the industry in the segment of premium jeans
with a market share equivalent to 25%. The company achieved a revenue of approximately 480
million euros in the year 2018. Pepe Jeans London constantly tries to redefine the definition of
denim jeans with the aim of keeping up with the latest trends.
PESTLE analysis of UK clothing market:
The UK fashion industry has witnessed many changes in the last few years. Brexit has been
one of the main factors which has influenced many changes (Brigham and Ehrhardt, 2013).
Technological developments have increased the trend of online shopping where good are being
brought online by few clicks as compared to the traditional methods of buying clothes from
shops in markets. To understand all the key relevant changes in the fashion and retail industry, a
pestle analysis is being done.
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PESTLE analysis is a tool which is used to understand the impact of various factors such as
political, economic, social, technological, legal and environmental on a business or an
industry. Here is a pestle analysis of UK retail clothing market:
Political changes: Political changes in a country are considered to be one of the major source of
uncertainty in fashion industry. The exit of Britain from the European Union has had a huge
impact on the clothing industry. Retail manufacturers like Pepe Jeans Ltd. are being
encouraged by the government to buy materials locally and the taxes on import have
increased which has led to a rise in the production costs and reduced profit-margins. Also,
the increased activism by organisations like PETA has discouraged firms to use animal skins
and furs in clothes (Dalkir and Beaulieu, 2017).
Economic changes: Changes in the economic conditions have a positive impact as well as
negative impact on the retail clothing industry. Over the last few years, a rise in the level of
national income and gross domestic product and increased employment opportunities has
increased the level of disposable income of the people in UK. People are spending a larger
part of their income on clothes and fashion. Brands like Pepe Jeans are becoming more
popular among the people due to the increased affordability and buying power of the
consumers. This has motivated these retail clothing brands to launch new products with high
quality and according to the latest trends in the market on a regular basis. A new service
sector has also emerged in the form of rental clothing. People prefer to rent clothes for
special occasions like weddings instead of buying them at a much higher price.
Social changes: Social changes refer to the changes in the preference of the consumers and the
demand due to a change in demographics such as population, age-structure, living standard
etcetera. The main target of the clothing brands is the new millennial generations whose
preferences are entirely different from that of the earlier generations. Increased desire to
look good and preference for a better living standard has increased the demand of clothes of
high quality and latest designs (Chryssolouris, 2013). The demographic changes have
increased the demand for fashion clothing like rugged jeans, high-waists etcetera being
manufactured by Pepe Jeans Ltd, Marks and Spencer etcetera. Fashion items endorsed by
celebrities during stage performances and in movies witness a huge demand right after the
initial screening.
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Technological changes: The pace of technological development has increased rapidly during the
last decade. Regards to the new development in field of production and manufacturing
processes of clothes, premium class fashion is not considered as a privilege for only a few
people anymore. Online shopping has gained vast popularity amidst the millennial
generation. It has opened up a new sales channel for all clothing retail brands. People
nowadays shop without even having to go to markets at the ease of a few clicks which has
made online presence a huge mandate for these fashion brands. Pepe Jeans Ltd. has a
designated online portal for its customers to place orders and get information about latest
fashion trends. Advertising and marketing strategies have been inclined more towards social
media platforms. One of the most sought after benefit of technological advancement has
been the expansion of trade beyond the national boundaries by e-commerce. It has increased
the demand for clothes manufactured by luxury brands all over the world (Hayes, 2014).
Legal changes: Legal changes has also impacted the fashion industry along with many other
industries. Fashion industry employees a large number of people in UK which makes it
necessary for them to comply with the major labour laws. Increasing labour rates in the UK
has forced the companies to get their clothes manufactured in other developing countries to
cut costs. Fashion brands like Pepe Jeans and Zara relies on a huge amount of data of its
customers to spread information about the upcoming sales and offers. The General Data
Protection Regulatory (GDP) which came into force in May 2018 requires every firm and e-
commerce site to exhibit transparency on how it uses the data related to its customers.
Environmental changes: This factor related to events such as climate change and ecological
imbalance has come upfront in the last few years which has put the onus on big
manufactures to reduce the carbon footprints and emission of greenhouse gases.
Manufacturing of a cloth involves use of various chemicals used for dyeing the fabric and
transportation process to send the products manufactured to distribution centres creates a
bad impact on the nature and its balance (Karlan and Zinman, 2011). Thus, big retail
clothing brand are required to implement sustainability in their operations and reduce the
negative effect on the planet earth. This creates a problem in expanding and increasing the
level of productions to a huge level.
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Modifications within the Micro Environment factors
For every business organization in order to gain competitive advantages it is essential for
them to satisfy the needs and wants of customers in an appropriate manner. Modifications in
micro business environment can easily be understand as customers’ demands are dynamic in
nature and changes on a daily basis. Continuous changes in the preferences of customer needs
create loss to the company or can develop negative working condition. This might affect the
whole profitability as well as goodwill of the company in a negative manner. In the present
competitive world, it has been observed that customer’s preference and taste gets change on a
day to day basis which need to understood by the management team of Pepe Jeans. This is
essential for making effective and appropriate decisions so that brand image of the company will
be enhanced and attract large number of customers towards them (Joskow, 2014). Various
organizational departments of Pepe Jeans assist them in order to grow at the competitive market
and develop strategies and policies effectively. These departments are R&D, marketing, finance,
operational sections & so on. For instance, Research & Development department of the company
develop various strategies and policies in order to increase profitability as well as sales of the
business entity in an effective and appropriate manner.
It has also been said that apart from, strategies and policies, adoption of new techniques
and tool can also help in gaining competitive advantages at the marketplace. Along with this, by
adopting new technologies management team of Pepe Jeans increases the quality of goods and
services as well as reduce excessive workload from the workforce. It is very necessary to
maintain the quality of goods and services offered by the company to their customers so that they
can fulfil the needs and wants of customers in an effective manner. Therefore, alternation in
goods and services is quite essential so that all the requirements of users can be fulfill effectively
and retain them for a longer period of time. Adding unique feature to the product offered by the
company might attract large number of new customers towards the business organization and can
effectively beat the level of competition arouse at the marketplace. Therefore, it is quite essential
for the management team to take effective decision and formulate policies in order to beat the
competition and maintain sustainability for a longer period of time period.
Along with this, it is very essential for the management team of Pepe Jeans to motivate
their current staff members in an effective manner so that they can easily adopt the changing
policies and strategies effectively (Lorenzo-Romero, and et. Al., 2011). Positive relationship
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among the employees and managers can develop appropriate working environment which leads
towards the attainment of goals and objectives in given time frame. Along with this, adopting the
changing needs and wants of customers help in increasing the overall profitability and goodwill
of the company at the competitive marketplace. Therefore, it is very essential for the
management team of Pepe Jeans to modify their strategies and policies according the changing
environment so that they can perform their business operation in favorable manner and produce
positive outcomes for a longer period of time (Spenceley and Meyer, 2012).
Strategies and tactics in adapting changes with influence of macro environment
For an organisation it is very much essential to build strategies and tactics as helps in
adapting changes by giving potential knowledge to employees. Approaches of changes divided
into various factors such as social, economic, resources, objectives and level of competition in
marketplace. it is very much potential for the Pepe Jeans to adapt the organisational structure by
collecting knowledge and information from the outsiders so that potential outcomes should be
obtained (Hackmann, Kolstad and Kowalski, 2015). While plan strategically it is crucial to
access external business environment such as government policies and taxation so that
organisation can mould their strategies positively. due to change in taste and preferences of
consumers such as consumer today are very much health conscious and always want to protect
environment in that series respective organisation focus on disposal of waste. To bring into effect
the respective change in macro environment organisation collect potential knowledge and
information in regards of consumers in order to provide one of best products and services to
them. In today’s business environment consumers are very much demanding to enhance their
experiences it is very potential to adopt advance kinds of tools and techniques. In context of Pepe
Jeans, they work on technological advancement such as digital payments, digitalization and
online marketing so that they can capture large no. of consumers by accessing their needs and
demands in potential manner. it is very essential for an organisation while plan strategically to
focus on their competitors as to remain competitive in business it is very potential (Tate, Ellram
and Dooley, 2012). By using Porter’s five force model organisation can be able to access
knowledge about their competitors so that strategies should be frame accordingly. for gaining
profitability and sustainability organisation need to evaluate their strategies and tactics on the
regular interval and build modifications accordingly so that organisation always remain relevant
in terms of their products, services and in consumer experience.
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Recommendation:
It has been recommended that from the above report that Pepe Jeans by adopting advance
tools and techniques such as digitalisation of their products and services, smooth payment
facilities proved very much beneficial for them in enhancing consumer experience positively.
further it has been observed that consumers are very much conscious about the environment as it
contributes in developing loyalty in mind of consumers towards organisational products and
services in positive manner. in that regards it has been recommended that by focusing on CSR
activities that not only give profitability but also sustainability in market. Pepe Jeans is one of
most brand in the market to remain competitive in market they need to adjust their activities as
per the other nations norms. To stabilise in other nations they required to collect necessary
information such as political conditions, economic viability and social preferences so that they
can build their products and services as per the consumer choice and preferences. So at last it can
be said that for each organisation expansion of their business activities is very important by
understanding trends of market.
CONCLUSION
With the assistance of above mentioned report, it has been said that retail stores are
continuously spending their business and for this they need to examine their current needs and
requirements. With the help of this, they can make alteration in their offerings so that they can
satisfy the needs and wants of customers. For this, PESTLE analysis is conducted so that present
external environment can be identified by the management team of the company in order to fulfil
needs as well as requirements of customers in an effective manner. This might affect the whole
performance and profitability of the business organization in a positive manner. Apart from this,
different types of strategies and tactics are formed by the managers so that they can attract large
number of customers towards their company and enhance their profit margin in favorable
manner. Also, online stores are also opened by the company so that they can beat the level of
competition available at the marketplace. With the help of external analysis, company will be
able to identify the favorable and unfavorable market condition.
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REFERENCES
Books and Journals
Stewart, D. W. and Shamdasani, P. N., 2014. Focus groups: Theory and practice (Vol. 20). Sage
publications.
Brigham, E. F. and Ehrhardt, M. C., 2013. Financial management: Theory & practice. Cengage
Learning.
Dalkir, K. and Beaulieu, M., 2017. Knowledge management in theory and practice. MIT press.
Chryssolouris, G., 2013. Manufacturing systems: theory and practice. Springer Science &
Business Media.
Hayes, J., 2014. The theory and practice of change management. Palgrave Macmillan.
Karlan, D. and Zinman, J., 2011. Microcredit in theory and practice: Using randomized credit
scoring for impact evaluation. Science, 332(6035), pp.1278-1284.
Joskow, P. L., 2014. Incentive regulation in theory and practice: electricity distribution and
transmission networks. In Economic Regulation and Its Reform: What Have We
Learned? (pp. 291-344). University of Chicago Press.
Lorenzo-Romero, C., and et. Al., 2011. Consumer adoption of social networking sites:
implications for theory and practice. Journal of research in Interactive Marketing, 5(2/3),
pp.170-188.
Spenceley, A. and Meyer, D., 2012. Tourism and poverty reduction: Theory and practice in less
economically developed countries. Journal of Sustainable Tourism, 20(3), pp.297-317.
Hackmann, M. B., Kolstad, J. T. and Kowalski, A. E., 2015. Adverse selection and an individual
mandate: When theory meets practice. American Economic Review, 105(3), pp.1030-66.
Tate, W.L., Ellram, L.M. and Dooley, K.J., 2012. Environmental purchasing and supplier
management (EPSM): Theory and practice. Journal of Purchasing and Supply
Management, 18(3), pp.173-188
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