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Report on Retail Theory and Practice

   

Added on  2020-06-03

13 Pages4145 Words193 Views
Retail theory andpractice

Table of ContentsINTRODUCTION...........................................................................................................................1TASK ..............................................................................................................................................1a) Key relevant changes in fashion industry of UK clothing market.....................................1Cyclical Theory.................................................................................................................4b) Strategies and tactics to respond towards changes.............................................................5Macro environmental analysis ...............................................................................................7CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11

INTRODUCTIONThe term retail consists the sale of goods from a single point to the consumer in smallquantities for his end use. In other words, its a transaction of goods between the seller and theend user in small quantities to satisfy the needs of the individual and for their directconsumption. On the other hand, a retailer is the person who sells products and services directlyto customers; the person buys goods in large quantities direct from manufacturers as well asthrough a wholesale, and then sells smaller quantities to the consumer for getting maximumprofitability (Twigg, J., 2012). The supply chain process of retail consists of four players:manufacturers who produce the goods, wholesalers who buy from manufacturers and resell toretailers, and retailers who buy from wholesalers and then sell to consumers. The retail industry is vital to the UK economy; in 2016 alone it generated £358billionworth of retail sales. It is the largest private sector employer with approximately 290,315 bricksand mortar retail outlets in the UK. In addition, there are different retail shops in UK, such as-food & Grocery, home-wares, furniture, electricals, health and beauty, clothing, footwear etc. In this competitive era, the political and economic environment has changed markedly.Retail industry is known as one of the leading sector of the world; it encompasses the process ofselling products and services to customers by using multiple channels of distribution for earningprofits. In addition, retailers are liable for satisfying the demand of customers through aneffective supply chain. Retailers need to reduce costs and increase efficiency in a challengingmarket where consumer spending is being squeezed and costs are rising (Xia and et. al., 2012).At the same time they need to invest in online, refresh core systems, and develop smarter,personalised offers in addition to rethinking the role of their stores. ZARA is known as one of thelargest growing retailing fashion industry over the world. The fashion group has its own 2300stores and its own brands are – Massimo, Pull & Bear, Dutti etc. Apart from this, the presentassignment will describe different trends and challenges in fashion industry and strategies toovercome with them. TASK a) Key relevant changes in fashion industry of UK clothing marketThe retail sector of UK involves customers' spending in stores as well as online. In 2016,the total customer spending was around £388 billion in retail purchasing. Along with this, theretailing sector is the largest private sector employer with approximately 290,315 bricks and1

mortar retail outlets in the UK. Due to changes in purchasing power of customers, the market offashion retail is dismissed. It occurs because now people are spending on leisure activities, i.e.going and eating out rather than clothing (Twigg, 2012).ZARA is a Spain based clothing retailer which was founded in 1975 and it deals inclothing and accessories. The uniqueness of tracking as well as involving customers' preferencesmake the firm market leader in apparel industry. The main product lines of the company are –men, women and children are showcased by its stores as well as online market presence over theworld. In addition, the major competitors of ZARA are – Mango, H&M, Uniqlo, GAP andBenetton etc. The firm targets those people who have high and medium spending power andalways love to stay in fashion. Zara has approximately 2,266 stores across the globe whereas at31 January 2017, Zara had 66 stores across the UK. Zara is one of the world’s most successful fashion retail brands – if not the mostsuccessful one. With its dramatic introduction of the concept of “fast fashion” retail since it wasfounded in 1975 in Spain, Zara aspires to create responsible passion for fashion amongst a broadspectrum of consumers, spread across different cultures and age groups. Zara has recorded asharp fall in UK profits despite sales breaking through the £600m barrier for the first time. Zaraopened up the newly refurbished store in Westfield London (White City) after taking over nextdoor's Banana Republic to create one gigantic Zara shopping space. Mostly, stores of Zara offers a selection of women’s and men’s clothing for onlinepurchase directly in-store, along with the rest of the brand’s fashion ranges. Zara UK reportedpre-tax profits of £39.2m in its latest accounts submitted to Companies House, compared toprofits of £58.3m in the previous year.Challenges in fashion retail industry of UK: -Supply chain – The apparel sector supply chain encompasses contractors, suppliers,merchandisers, retailers, logistic players etc. The entire supply chain management process ofZara requires integration whereas managing logistics needs proper coordination over thesuppliers' network, distribution centres, stores and transportation providers. Traditional supplychains create isolated plans for inventory, production and distribution which are difficult tomanage. Consumerism – In today's business environment, customers hold the power ofbargaining; thus, retailing fashion industries are forced to be highly delicate towards consumers’2

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