Retail Theory and Practices: Dynamics, Changes, and Analysis of UK Fashion Retail Industry

The summary of the given data revolves around the UK fashion retail industry and focuses on the dynamics of the industry, changes taking place, and the analysis using PESTEL and Porter's Five Forces Model. It highlights the impact of political, economic, technological, social, legal, and environmental factors on the industry. The chosen company, JD Sports Plc, is introduced along with its operations and financial performance. The summary also emphasizes the high competitive rivalry in the industry and provides recommendations for the company to manage the impact of changes effectively.

Running head: RETAIL THEORY AND PRACTICES
Retail Theory and Practices
Name of the Student
Name of the University
Author Note

1RETAIL THEORY AND PRACTICES
Table of Contents
Introduction to Retail:................................................................................................................3
Introduction to the Company:....................................................................................................3
Key Relevant Changes in the UK fashion Retail industry:........................................................4
PESTEL:................................................................................................................................4
Political:.............................................................................................................................4
Economic:..........................................................................................................................5
Technological:....................................................................................................................6
Social:.................................................................................................................................6
Legal:..................................................................................................................................7
Environmental:...................................................................................................................7
Porter’s Five Forces Model:...................................................................................................7
Competitive Rivalry: High.................................................................................................7
Threat of New Entry: Moderate.........................................................................................8
Bargaining Power of the Suppliers: Low...........................................................................8
Bargaining Power of the Buyers: High..............................................................................9
Threat of Substitutions: High.............................................................................................9
Key Changes:.............................................................................................................................9
Recommendations:...................................................................................................................10
Conclusion:..............................................................................................................................11
References:...............................................................................................................................12
Appendix:.................................................................................................................................14

2RETAIL THEORY AND PRACTICES
PESTEL Analysis:...............................................................................................................14
Porter’s Five Forces Model:.................................................................................................15

3RETAIL THEORY AND PRACTICES
Introduction to Retail:
Retail industry is observed to be one of the fastest growing industry in the modern
business context. The mentioned industry is seen to be ever-changing and is able to
contribute in a significant manner to the economy of many of the countries. The conceptual
definition of the term is seen to be more concerned on buying and selling goods and the
services (Dunne, Lusch and Carver 2013). On a different way, it can be termed as the
business operations that is conducted for the appropriate delivery of the goods and the
services to the customers in accordance to their demands in a competitive and affordable
price (Verhoef, Kannan and Inman 2015).
The mentioned industry is notably involved in the meeting with the customers for
effective understanding of the preferences of the customers so that the organizations of the
mentioned industry be able to design the products in accordance to the preferences of the
customers for better sales (McCormick et al. 2014). Adding to this, the success of the
organizations, operating in the mentioned industry is seen to be significantly based on the
effective and end to end coordination of the business activities which includes design stage of
the products, delivery of the products along with the post delivery services of the products.
The paper is focused in the elaboration of the dynamics of the UK fashion clothing industry
and evaluates the changes that are taking place in the mentioned industry. In addition to this,
the paper focuses in the description of the tactics that a chosen company, JD Sports, is in
need to undertake for the effective management of the impact of the changes through their
business activities.
Introduction to the Company:
The chosen company for the project is JD Sports Plc. The chosen company operates
in the retail industry has notable amount of expertise in operating as sports fashion retail

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company. The company was established in the year 1981 in Bury, Grater Manchester, United
Kingdom (Jdsports.co.uk 2019). The company is seen to offer clothing and sportswear
accessories to the customers. Many of the business researchers are able to comment on the
quality of the products of the chosen company and termed it to be a competitive advantage
over the competitor organizations. Along with that, the increasing preferences of the people
of UK regarding the fitness and sporting activities is observed to be crucial in the increasing
consumption of the products of the chosen company. Apart from that, the excellence in
leadership of Peter Cowgill, the executive chairman of the chosen company is seen to be
significant in the generation of a revenue of 2378.7 million pound in the year 2017 for the
chosen organization (Jdsports.co.uk 2019).
In addition to this, the brilliance in the operations of the 32125 number of employees
in the chosen organization is significant in the generation of 239.8 million pound as operating
income in the year 2017 along with 184.6 million pound as net income in the same year
(Jdsports.co.uk 2019). The chosen organization is owned by 4 major and various minor
shareholder groups where Pentland group is observed to have the maximum share with 58%
of the total share (Pentlandbrands.com. 2019). Adding to this, Aberforth Partners, Fidelity
Management, Peter Cowgill are observed to hold 10%, 5% and 1% of the total share
respectively (Aberforth.co.uk. 2019). On the other hand, the minority shareholders of the
chosen organization are observed to hold a share percentage of 20% (Jdsports.co.uk 2019).
Key Relevant Changes in the UK fashion Retail industry:
PESTEL:
Political:
The impact of Brexit on the UK fashion retailing industry is seen to be high. The
organizations operating in the chosen country sis expected to be affected with the change in

5RETAIL THEORY AND PRACTICES
their business conduction as an immediate impact of the Brexit. It is seen that the
organizations operating in the region but belonging to the other nations of the European
Union are expected to be the most affected entities. The change that the industry is expected
to face as an impact of the Brexit is strict implication of the rules and legislations on the
global business conduction (Fernie and Sparks 2018). As the fashion retailing industry in the
modern generation is seen to experience the participation of the customers across the globe,
the impact of the Brexit will increase the complexity of the operations. The sourcing of the
raw materials from the International suppliers is also expected to be affected with the case of
Brexit (Kiefel et al. 2018).
Economic:
The current revenue of the chosen sector of the UK business industry evaluated to be
24914 million US dollars (Statista.com. 2019). The revenue in the chosen business sector of
the mentioned nation is expected to have a growth of 6.1% in the time span of 5 years starting
from the 2019 to 2023 and that will certainly make sure that the market volume of the
mentioned business sector reaches 31537 million US dollars in the year 2023 (Statista.com.
2019). Hence it is pretty evident that the UK fashion retail industry is expected to achieve a
significant growth in recent years. However the organizations operating in the mentioned
industry is in need to make sure that they be able adapt to the ever changing demands of the
mentioned industry. One of the major changes that will have significant impact on the
economy of the organizations is expected to be the reduction in the cycle times for the
designs (Choi 2013). Many of the modern organizations are seen to have comparatively lower
cycles of design or lead times for a particular design. However, in order to achieve the
preferences of the customers with a sense of urgency, the organizations are expected to invest
heavily in the increment of the cycles of the designs.

6RETAIL THEORY AND PRACTICES
Technological:
In the modern business conduction, the application of the technology is considered to
be a major aspect. As the people of the mentioned country are well- accustomed with the
usage of the technology and the innovative gadgets in their daily life and as the main targeted
segment of the market that is the youth generation are seen to be significantly tech-savvy, the
main stream business conduction of the mentioned sector is expected to be notably influenced
with the presence of the technology (Rhodes and Brien 2014). The achievement of the
preferences of the customers regarding the design and the quality of the products that are to
be offered to them, are seen to be significant for the organizations in designing the products
that will have the potential to get well consumed by the customers. Adding to this, the
application of the technology is seen to reduce the difficulty in achieving the preferences of
the customers in the modern generation (Piotrowicz and Cuthbertson 2014). Apart from this,
the technology is seen to produce the much needed scope to the organizations of the
mentioned business sector in communicating regarding the products and the services that are
designed by them for the customers in a lot more efficient manner. Hence the changes that
the organizations are expected to be managed by the organizations are pretty evident.
Social:
The social aspect of the mentioned business sector has notable significance. The
organizations of the chosen business sector is in need to make sure that their customer
relationship management is well decorated for the effective understanding of the preferences
of the customers and is in need to have the much required sense of urgency in their operations
to act faster than the rest so that they be able to achieve the preferences of the customers in
their design at the first place. This will certainly increase the involvement of the customers
towards the companies as a result of the increased customer satisfaction (Yu, Ramanathan
and Nath 2014). Along with that, formation of the community for the organizations operating

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in the sector will be better achieved. Apart from this, in the modern business world, the
preferences of the customers regarding the clothing in accordance to their body shapes, the
nose piercing, hair-dos, ear piercing or multiple tattoos is seen to be a major demand. As an
effect of the modernization, the organizations that will be able to achieve those demands of
the customers in the best way possible will certainly gain the maximum profit.
Legal:
The impact of the legal aspect on the chosen business sector is seen to be limited. The
main focus of the legislations framed to conduct the business in ethical manner is observed to
be the legislations regarding the ethical sourcing of the materials, the formation and
implementation of the pay structure and rewarding policy along with the discrimination and
sexual harassment of the employees in the organizations operating in the chosen business
sector.
Environmental:
In addition to the legal aspect, the impact of the environmental aspect on the chosen
business sectors is also seen to be limited. The sourcing of the raw materials for the fine
design and effective manufacturing of the products is seen to be the only aspect factors that
are associated with the mentioned aspect.
Porter’s Five Forces Model:
Competitive Rivalry: High
The UK fashion retail industry observed to face tough competition from a number of
organizations. The quality of the products, the effective management of the lead times, the
increment of the urgency in the supply chain of the organizations, the conduction of the
training and developmental activities with precise focus on the improvement of the quality in
manufacturing, the increment in the production and the achievement of the skills and the

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competencies for the effective management of the customer preferences and the queries were
observed to be the base of the competition. Adding to that, the industry has some strong
market leaders in the form of Burberry, Next Plc., Mark & Spencer and ASOS
(Fashionunited.uk. 2019). The market domination of the mentioned organizations and the
level of competition that the chosen organization faces in the industry are pretty visible with
the fact that Burberry had a market capitalization value of 10 billion Dollars
(Burberryplc.com 2019). Apart from that, the market capitalization value of Next Plc, Mark
& Spencer and ASOS are seen to be 7.16 billion dollar, 6.18 billion dollar and 6.18 billion
dollar respectively (Nextplc.co.uk. 2019). Adding to this, the number of new organizations
entering the market is seen to be significant in making the market populated.
Threat of New Entry: Moderate
The evaluation of the mentioned industry indicates that the concern regarding the
infrastructural presences and the effective mechanism for achieving the preferences of the
customers in a better manner than the existing organizations are seen to be the major
obstacles for the new organizations in entering the market. However, the 24914 million US
dollars market revenue of the chosen business sector is seen to be an influential factor for the
new organizations in considering their entry into the market (Jdsports.co.uk 2019). Hence the
intention of the new organizations in entering the UK market of fashion retailing is seen to be
moderate.
Bargaining Power of the Suppliers: Low
The organizations, operating in the mentioned industry are observed to achieve
notable number of suppliers with the quality of on-time delivery, accurate delivery and
capability of providing the desired quality in their supply (Blázquez 2014). Adding to this,
the main objective or wish of those suppliers are seen to be bulk purchases and the production
of the appropriate compensation from the part of the companies. Under such situation, the

9RETAIL THEORY AND PRACTICES
suppliers are seen to provide the notable amount of discount to the organizations which
purchases in bulk amount. As their individual impact on the companies are observed to be
less, the bargaining power of the suppliers are observed to be low.
Bargaining Power of the Buyers: High
With the considerable amount of organizations applying competitive pricing policy
along with effective maintenance of the quality of the products that they are offering to the
customers, the bargaining power of the buyers are seen to be notably high.
Threat of Substitutions: High
As the industry is seen to experience the representation of the notable number of
established business organizations with lower pricing policy and quality products, the
customers are seen to have multiple options to choose from. Hence the threat of substitutions
for the organizations in the chosen industry is seen to be expressively high.
Key Changes:
As mentioned above, the mentioned industry is seen to face some significant changes
over the years. The notable importance that the organizations operating in the mentioned
industry is providing over the CRM is of great significance in specifying the change in the
approach of the organizations in customer dealing (Insley and Nunan 2014). As the
competition in the chosen market is high, the organizations are notably focused in achieving
the preferences of the customers so that they be able to design the products in accordance to
the wishes of the customers. As this had a major impact on the repetitive purchases of the
customers, the organizations are expected to restructure their public relations strategies for
the effective business conduction. With the idea of the excellence of the modern technology
in achieving the preferences, views, opinions and factors triggering the frustration of the
customers, the organizations are observed to focus on the efficient business conduction

10RETAIL THEORY AND PRACTICES
through the online websites (Insley and Nunan 2014). Along with that, the organizations are
observed to increase their social media activities to engage with the customers in a more
efficient manner. The usage of the social media platforms such as the Facebook, Instagram,
Twitter or YouTube has significantly increased from the part of the business companies for
better customer interaction.
Adding to this, the organizations are seen to be more focused in conducting the
exhibition for sales in different locations other than their stores (Lea-Greenwood 2013). This
enables them to reach to the doorsteps of the customers with their products and along with
that, helps the organizations to achieve the customer reviews as well. With the effective idea
of the social shopping and the conduction of the promotional events through the social media
platforms, the companies are able to conduct the instant fashion recognition which helps it in
the design of their products. Adding to the point of customer preferences, the modern
customers are seen to be more inclined towards cloths which can effectively increase the
beauty of their tattoos, hair-dos, ear piercing or the nose piercing. Under such situation, the
organizations are expected to design their products with the idea of these sort style
preferences. Apart from that, one major change that the industry is seen to face is the
reduction in the duration of the cycles for the designing (Choi 2013). Earlier, the
organizations were seen to have limited number of cycles per year for the changes in design
whereas the changing preferences and trends of the modern customers are seen to force the
organizations to increase the number cycles per year for the designing.
Recommendations:
The chosen organization is in need to increase the social media activities for
achieving the views, opinions and the preferences of customers along with for the conduction
of the online promotion of their products. In addition to this, the increment in the social

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media activities will certainly enable them to provide better care for the customer grievances
and the queries. Apart from this, the chosen organization is in need to increase the number of
cycles for the designing of their products so that they be effectively achieve the varying
preferences of the customers and the modern market trends. In addition to this, the exhibition
for sales will also be much needed option for the organization to provide an increased market
limelight to their products.
Conclusion:
On a concluding note, the fashion retail industry is seen to experience a major blow
due to the case of Brexit. However, industry still offers a lot to take for the organizations
operating in it. The success of the organizations in the modern era is observed to be
dependent on their capability in achieving the manufacturing of the products in accordance to
the preferences of customers. With an accurate strategy for the effective management of the
customers and their requirements along with establishment of the infrastructural
requirements, the new organizations have the chance to enter the market and achieve the
desired growth in an efficient manner.

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References:
Aberforth.co.uk. 2019. Aberforth Partners. [online] Available at:
https://www.aberforth.co.uk/
Blázquez, M., 2014. Fashion shopping in multichannel retail: The role of technology in
enhancing the customer experience. International Journal of Electronic Commerce, 18(4),
pp.97-116.
Burberryplc.com 2019. burberry Corporate Website Home. [online] Available at:
https://www.burberryplc.com/en/index.html
Choi, T.M. ed., 2013. Fast fashion systems: Theories and applications. CRC Press.
Dunne, P.M., Lusch, R.F. and Carver, J.R., 2013. Retailing. Cengage Learning.
Fashionunited.uk. 2019. UK fashion industry statistics. [online] Available at:
https://fashionunited.uk/uk-fashion-industry-statistics/
Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues and
new challenges in the retail supply chain. Kogan page publishers.
Insley, V. and Nunan, D., 2014. Gamification and the online retail experience. International
Journal of Retail & Distribution Management, 42(5), pp.340-351.
Jdsports.co.uk 2019. JD Sports Plc.. [online] Available at: https://www.jdsports.co.uk/?
&gclid=EAIaIQobChMIiamot7CL4QIVFIiPCh3tnA6vEAAYASAAEgIXDPD_BwE&gclsrc
=aw.ds
Kiefel, M., Olivas Osuna, J.J., De-Lyon, J., Bolet, D., Gartzou-Katsouyanni, K., Bulat, A.,
Jablonowski, K. and Kaldor, M., 2018. Understanding Brexit: impacts at a local level: Pendle
case study.

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Lea-Greenwood, G., 2013. Fashion marketing communications. John Wiley & Sons.
McCormick, H., Cartwright, J., Perry, P., Barnes, L., Lynch, S. and Ball, G., 2014. Fashion
retailing–past, present and future. Textile Progress, 46(3), pp.227-321.
Nextplc.co.uk. 2019. Home. [online] Available at: https://www.nextplc.co.uk/
Pentlandbrands.com. 2019. Home - Pentland Brands. [online] Available at:
https://pentlandbrands.com/
Piotrowicz, W. and Cuthbertson, R., 2014. Introduction to the special issue information
technology in retail: Toward omnichannel retailing. International Journal of Electronic
Commerce, 18(4), pp.5-16.
Rhodes, C. and Brien, P., 2014. The retail industry: statistics and policy. House of Commons
Library www. parliament. uk/briefing-papers/sn06186. pdf.
Statista.com. 2019. • Statista - The Statistics Portal for Market Data, Market Research and
Market Studies. [online] Available at: http://statista.com/
Verhoef, P.C., Kannan, P.K. and Inman, J.J., 2015. From multi-channel retailing to omni-
channel retailing: introduction to the special issue on multi-channel retailing. Journal of
retailing, 91(2), pp.174-181.
Yu, W., Ramanathan, R. and Nath, P., 2014. The impacts of marketing and operations
capabilities on financial performance in the UK retail sector: A resource-based perspective.
Industrial Marketing Management, 43(1), pp.25-31.

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Appendix:
PESTEL Analysis:

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Porter’s Five Forces Model: