Retail Theory and Practice

This document discusses the changes in the clothing market of UK and explores the strategies used by Zara, a multinational retailer, to respond to these changes. It covers topics such as SWOT analysis, PESTEL analysis, online stores, search engine optimization, pricing strategies, and more. Additionally, it provides recommendations to improve the retail business of Zara, including effective communication, online platforms, customer-centric strategies, and feedback collection.

RETAIL THEORY AND
PRACTICE

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Determine the changes in the clothing market of UK ...........................................................3
TASK 2............................................................................................................................................7
Determine different strategies that will helps to respond on major changes in clothing market 7
Recommendation to improve retail business of Zara.............................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Retail marketing is used to aware customer about the products and services to achieve the
sales plans for the company. It involves different strategies and tools to promote the goods and
services to the target customers. Retail business involves producing goods and services by
identifying the consumer needs and desires and evaluating marketing offerings. Retail business
re been been set in order to accomplish the sales and profit margin of the company. Zara is an
UK based organisation which is a multinational retailer focusing on rendering clothing ,
accessories, shoes, perfumes. It is consumer oriented retailer doing business over consumer
durable goods. This report covers changes in the clothing market in UK and different strategies
and tactics used by Zara to major change in the clothing market (Ciravegna and Brenes, 2016).
TASK 1
Determine the changes in the clothing market of UK
With the continuous growing population, the need an desires of people also keeps on
changing, it becomes important to determine the changes the external business environment. In
order to adopt to changes in the macro and micro business environment it becomes important to
adapt to changes in the business environment to maintain the continuous positioning in the
market environment. To analyse the changes in the business environment, SWOT and PEST
analysis is used, SWOT analysis determines internal business environment factors whereas
PEST analysis determines the external business environment.
SWOT analysis
SWOT analysis helps to determine that internal strength and weakness and external
factors of the business environment which negatively or positively impacts the business
situation. Zara uses SWOT analysis in order to determine positioning of the business in the
market (Davis-Sramek and et. al., 2020).
Strengths:
The strength of the business is determined by the areas where the business where the
business is performing well. The strengths of Zara are as:
International market

The major strength of Zara is that it has an international business, international business
helps to increase the customer base of the business and achieve the profit goals (Griva and et. al.,
2018).
Effective internal management
Zara deploys highly skilled employees in the workplace who efficiently performs
different business activities. Due to effective internal management in Zara it achieve productivity
in the business activities.
Weakness:
Dependency on physical stores
The major drawback faced by Zara is that it has lot of reliance on physical stores. Where
people from different location who cannot access to the physical stores it becomes difficult fr
them to take the services from the company.
Fast fashion
Due to the fast fashion changes in Zara, it becomes difficult to develop and sustain into
the current fashion in the market (Journée and Weber, 2017).
High prices
Due expensive prices of products of Zara, it de motivates customer to buy goods and
services of the company which further affects the profitability of the business.
Opportunities:
Eco friendliness
Zara develops products by mentioning environment friendly tags on them which helps to
build goodwill in the minds of the market.
Supply chain management
Supply chain management is determined by the easy availability of products with limited
time period to the final customers. With the rapid delivery of products and services in to final
prospects it helps to customer reliability and goodwill in the market.
Threats:
Competition
Due to the high competition in the external business environment, becomes threat for
Zara to attain competitive advantage. With increase in the competition of the products and

services people switches to competitor brands which looses the sales and profit margin of the
organisation.
Price wars
As Zara offers high prices for the products and services, where people prefer products
and services which are affordable in nature. Zara loses it customer base by rendering higher
prices of product to the customers (Kurnianto and et. al., 2019).
Pestle analysis on Zara for evaluating the macro environmental factors
A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the
macro-environmental factors that have an impact on an organisation. PESTEL stands for
political, economic, social, technological, environmental and legal factors. Organisations that
successfully monitor and respond to changes in the macro-environment are able to differentiate
from the competition and create a competitive advantage.
PESTEL ANALYSIS OF ZARA
Political Factors: These factors are all about how and to what degree a government intervenes
in the economy or a certain industry. This can include government policy, political stability or
instability, corruption, foreign trade policy, tax policy, labour law, environmental law and trade
restrictions.
The country has a well established framework of extensive trade agreement which helps
Zara to import raw materials and export finished products. The industry accounts for 74% of the
total exports of EU and hence it gives access to Zara to a broader customer base within all
European countries without paying extra border tariffs which helps to boost its sales. Another
major factor that affects the market is political disruption as it affects the economy and disrupts
supply chain. Zara overcame this problem by limiting its supply chain operations in its home
country and some neighbouring countries (Liao and Yang, 2020).
Economic Factors: Economic factors are determinants of a certain economy's performance. This
can include economic growth, exchange rates, inflation rates, interest rates disposable income of
customers and unemployment rates. Consequently it also affects the way companies price their
products and services.
The ability of the brand to cater to the needs of the majority of the shoppers helps Zara to
establish a loyal customer base. Zara is a relatively less expensive brand in comparison to other

European brands which rewards Zara a greater market share in comparison to its competitors.
The British exit from the EU, also known as Brexit has lead to a decline in the value of pound
resulting in high inflation rates and less disposable income in the hands of the consumers to
spend on clothing. Thus, it has reduced the sales of Zara and overall sales of the clothing
industry (Martínez and et. al., 2017).
Social Factors: These factors focus on the social environment and identify emerging trends.
This helps a marketer to further understand their customer needs and wants. This includes the
population trends such as the population growth rate, age distribution, income distribution, career
attitudes and cultural barriers.
Since Zara has a huge market and makes a variety of products it is quite unlikely that
there will a shift with respect to such social factors. Culture influences buying decisions of
consumers especially in the clothing industry. Any product that the customers cannot identify
which doesn't find acceptance in that particular cultural group. Zara makes its products rhyme
with the local culture as it doesn't believe much in experimentation.
Technological Factors: These factors consider the rate of technological innovation and
development that could affect a market or industry. This refers to technology incentives,
automation, research and development activity, technological change and the amount of
technological awareness that make a market possesses.
The company has a popular website through which it interacts with customers from the
entire world. The company communicates with the customers through both online and personal
touchpoints. Zara partnered with Toyota for the application of JIT and lean facilities across its
manufacturing operations (Mozina, 2016).
Environmental Factors: These factors relate to the influence of the surrounding environment
and impact of ecological aspects. These factors include ecological and environmental aspects
such as weather, climate environmental offsets and climate change which may especially affect
industries such as tourism, farming, agriculture and insurance.
Zara has been preparing and planning to make all stores 100% eco efficient. The plan
charts out various policies through which the brand focuses to reduce its energy and water

consumption. The brand has actively shown its commitment to climate change and energy,
biodiversity, sustainable materials, animal welfare and other environmental issues in depth.
Legal Factors: An organisation must understand what is legal and allowed within the territories
they operate in. Factors include employment legislation, consumer law, healthy and safety
international as well as trade regulation and restrictions (Nandonde and Kuada, 2016).
Zara provides living wages to its workers for which they have developed separate laws.
Concurrence with legal laws is a growing requirement for the brand and the company has
invested for the same through its supply chain management. Zara also need to strongly enforce
copyright laws as the clothes that they launch in the market involves investment of time, effort
and money.
TASK 2
Determine different strategies that will helps to respond on major changes in clothing market
In order to improve and respond to the changes in the fashion market, there are different
strategies which involves different measures to be taken in order to achieve the competitive
advantage in the market. Research and development department in Zara conduct market research
to analyse the market demand and prepare market offering to accomplish organisational
objectives. To respond the changes in the market demand it involves different strategic planning
in order to deal with the external environmental changes. Strategic business 44816 planning is
helpful to the retail business as it defines the complete retailer goals, it helps it anticipating
different business changes and challenges. Strategic planning helps to evaluate market offerings
which is to rendered to the target customers (Nazarenko and Sukhorukova, 2019). Some
strategies adopted by Zara for addressing the changes in the business environment are as:
Online stores
To improve the retail business, Zara uses the online stores to render services to the
customers over internet. Online stores helps to connect to different individual in a workplace so
that they are able attain services of the company from any location. It helps to improve the
customer base and improves the customer relationships.
Search engine optimisation
Search engine optimisation is an another tool for retail marketing that when customer
searches for products and services in the search engines it shows the result of company rendering

similar services. Zara uses these search engine optimisation tools in order to aware the products
and services offered by the company.
Strong in store visual
Zara have strong and attractive display in the store which attracts different customer to
take services of the company. Having strong visual display of the store attracts the other buyers
than the target market to purchase the goods and services of the company. It influences the
psychologically to customer to buy the products and services of the company (Petković, Pindžo
and Agić-Molnar, 2018).
Pricing strategies
Zara uses effective pricing strategies which helps to attracts the customer to take services
of the company. Using effective pricing strategies where it influences the target customer to
purchase the services of the company. Effective pricing strategies helps to achieve competitive
advantages. Pricing strategies used by Zara customer value pricing and competitive pricing.
Customer value pricing involves setting the prices of the products and services which matches
the customer value where competitive prices of the products and services is determined when the
form uses the competitive pricing strategies in order to accomplish competitive advantages.
When customer are able to accomplish their value satisfaction from the products and services
through the prices of the products it influences customer to purchase the products and services of
the company.
Product on point of sale
Zara ensures the availability of products in the store so that company is able to deliver the
value to the customers. Zara develops effective supply chain management for availability of
products to final prospects on time. When the company is not able deliver products and services
on time it breaks the supply of products and services of customers on time.
Quality product
Offering quality products and services to the customers helps build strong customer
relationship as customer feel satisfied and reliable from the products and services of the
company. Zara offers quality product to the customers, which achieves customer satisfaction to
the customers. It develops a strong customer perception in the minds of the customers.
Communication and promotional channels

Zara uses different communication and promotional channels to the customers in order to
effectively communicate to customers about the market offerings company. Zara communicates
about different market offerings to the customer in order to aware customer about different
market offering rendered by the company (Potts, 2018).
Recommendation to improve retail business of Zara
Effective communication
Communication plays an important role in order to convey the message of the company
to final prospects, when business effectively communicates the right message to the right target
prospects, it helps to deliver value to the target customers. Zara should different communication
tools like in order to communicate marketing message to the customers. It uses digital marketing
approaches and other indoor and outdoor advertising to engage with the target customers and
make profitable relationships with them.
Online platforms
With the increase in the digital technology, online digital sites play an important role to
engage with large segment of market within limited time period. Zara should use online site to
render services at different location worldwide, it should create an online site where it upload all
different market offerings of the company, the company should appoint delivery man to deliver
the order apparel and item by the customer online. It will help to develop customer base as the
company will be able to communicate effectively to target customers.
Centric centric strategies
It is true for implementing customer centric strategies helps to develop strong customer
base. Zara should use different customer centric strategies, implementing customer centric
strategies involves analysing customer needs and formulating market offering which satisfies
customer needs, it also involves implementing pricing strategies which matches the customer
value and taking proper feedback so that changes in the products and services can be taken in
accordance of the customer value.
Feedbacks
Feedbacks play an important role as it focuses on delivering the value to the target
customers and achieve customer satisfaction. Zara should take timely feedbacks from the
customers to evaluate the effectiveness of market offerings by the company, it also helps to

determines the changes in the current market offerings and develop an effective market offering
to the customers.
Workforce management
Workforce management is the important tool for accomplishing business objectives. Zara
should evaluate different strategies to maintain and develop the workforce of the organisation.
Human resource should render training and development programmes to the employees so that
they work effectively. Highly efficient workforce is needed to accomplish organisational
objectives and carry business functions in the most effective manner.
Pricing strategies
Zara should use effective prices which involves determine the customer value and
perception of the goods and services both in the market and in the minds of customers. Zara
should also render seasonal and occasional discounts and other offers which helps to attract
customer to buy products and services of the company.
CONCLUSION
Retail business are determined business which operates in consumer durable goods and
services. Retailer set different business objectives to engage with target customer and accomplish
the sales and profit margin. Retail marketing is used by retail business to promote the goods and
services of the company and communicate business objectives to the customers. It establishes
different marketing strategies in order to develop effective market offering to achieve the
customer satisfaction and build strong goodwill in the marketplace.

REFERENCES
Books and journal
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retail business. In Managing Complexity (pp. 391-404). Springer, Cham.
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Garage Shop. International Journal of Multicultural and Multireligious
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Liao, S. H. and Yang, L. L., 2020. Mobile payment and online to offline retail business
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emerging issues and research agenda. International Journal of Retail & Distribution
Management.
Nazarenko, I. L. and Sukhorukova, D.O., 2019. Implementation of value based management in
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165.
Potts, J., 2018. Strategies to sustain small retail business more than 5 years (Doctoral
dissertation, Walden University).