Retail Theory Practice

This document discusses the changes in the UK fashion clothing market and provides strategies and tactics for retailers to respond effectively. It explores the impact of customer preferences, market structure, technological advancements, and marketing-related changes. The document suggests that Next plc can adopt Porter's Generic Model and Ansoff matrix to drive growth and increase sales. It also recommends tactics like training and development and performance appraisal to adapt to market changes.

Retail Theory Practice

Table of Contents
INTRODUCTION...........................................................................................................................1
CHANGES WITHIN THE MARKET ...........................................................................................1
RESPONSES TO CHANGES ........................................................................................................3
Strategies in response to changes ...............................................................................................3
Tactics ........................................................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
The term “ retail” refers to a process of trading consumer products and services to the
people, by using different modes of promotional tools or channels of distribution to earn a
maximum revenue with more profit margins. They satisfy the demand of the customers through a
supply chain. In this modern retailer takes a various operational decisions that involves product
assortment, types of outlet and warehouse, support service and many more. Next plc is one of the
British multinational clothing, home products retailer and footwear, headquartered in Enderby.
It has around 500 stores in UK. This report consider the relevant changes in UK fashion clothing
market and suggests some strategies and tactics that retailer should use to respond the major
changes that occur in the UK fashion clothing market (Pantano and Timmermans, 2019).
CHANGES WITHIN THE MARKET
A Retail marketing is the process of promote awareness and interest of their products
offerings in order to generate sales form their consumers. Changes are occurred in every business
, so that company can operate their business and earn more profits and market share in UK.
Changes in fashion clothing sector in UK occur because of there is a change in people taste and
preferences. It is an essential strategy which provide an opportunity to purchase goods and
services from multiple stores. If company work according to changes occur in the society helps
the business to earn more profits and stability in the current market. There are some changes that
occur in the fashion clothing sector that also affect the Next plc sales. To become a luxury and
designer fashion store in UK, manager of Next plc analyse and identify the changes that are
explained below (Hagberg, 2016). Preferences- In current and present scenario, organisation mainly focus on the customer
preferences. Because of constantly change in the needs, wants and demand of the
consumer, company can properly examine them and make and manufacturing the
products so they will earn more profits and more market growth in the market place. For
a company, customers are a sea of knowledge and insights and to develop and modify the
products and services, manager of company constantly evolving taste and prefrences of
customer. And when the customer remain for a long time with a company they become a
loyal towards the company. In context of Next plc, manager constantly and regularly
identify their customers taste and preferences and the trend they follow in clothing sector.
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Preferences of an individual are based on social and economic factor in which an
organisation can manufacture their product offerings. Now a days customers buy those
products which have low priced and have best quality products. For this manager of Next
plc produced and developed a product at low price product with high quality this will
attract more and more customers in the market place. Therefore, by adopting this change
company can produced those products which has low cost with high quality and also does
not harm the environment. According to preferences manager of a firm make some
appropriate strategy(Karrholm, 2016). Market structure- In this factor, changes can be occurred on the basis of political factor
of the UK. Because of Brexit occur in the country, it affects the sales of the company and
overall business activities. It includes intervention of government in the company, their
tax policy, interest rates and labour etc. in context of Next plc, company face some issues
related to the decisions from the government like new tax rate that affect the employees
performance and customer demand. And there is Brexit also occur that affect the
company supply chain and sales in a negative way because they the price of the products
are high and many customers cannot afford it. For this manager can analyse and plan
some strategies to maximise the sales with decreasing production cost (Banerjee and
Mishra, 2017). Technological factor- Adoption of new technology is the demand of current environment
and customer and every company can follow this trend to be successful in the market and
longer sustainability. Technology can be used in promoting the goods and services,
making the product offerings that help in achieving the market goals and increase sales.
In context of Next plc, manager can appoint and hire employees who are well
experienced of using technology. Change in technology is the greater change that a
company can follow to increase its market share by maximising the profits margins. To
be an effective use in this trend organisation can make some tactics that help in applying
new technology to increase sales and profits in different outlet of the company.
 Marketing related changes – This type of change is related to the human resources of the
company and it is an essential change for better productivity and efficiently working in
the organisation. Marketing related changes includes the marketing and sales manager
work. If they efficiently do their work than it will increase the sales and profit margins
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for the company. In context of Next plc, manager mainly focus on the human resource of
their company to increase the sales and profits. Provide healthy environment for
employees gives a productive results to a firm. If the employees are satisfied with their
work, they give prominent results for the company (Wertheim-Heck and Spaargaren,
2016).
RESPONSES TO CHANGES
Strategies in response to changes
There are some strategies that a fashion clothing store adopts as per the changes
mentioned above as per the today's world. In context of Next plc, manager should adopts
changes by using and applying this strategies that are given below (Morgan, 2015).
Porter's Generic Model
As per the market analysis above, it could be stated that the UK customer market is
witnessing some key changes with respect to the preferences, as they require the products that
are affordable, as well as associated with high quality. Hence, it is very important that a strategy
is formulated for the firm to ensure that this demand is appropriately met. Hence, for this
purpose, Porter's Generic Model is being applied, which would be helping the company in
determining the most appropriate strategic option for future growth. Thus, this model is
elaborated below:
 Cost Leadership:
One of the options available to Next PLC is cost leadership. Within this strategy the
company's aim would be to produce and manufacture the goods at lowest cost possible, which
would be helping the organisation in relation to enhance their scale of production. One of the
main benefits of this strategy is that the commodities could be produced at high quantity, which
would help the company in expanding its market in an appropriate manner. However, the
company would not be enjoying the market domination for long term with this strategy once
other companies starts to provide their offerings at a low cost range (Scuotto and et. al., 2017).
 Differentiation:
Within this strategic option, Next PLC would be working towards creating a unique
offering within the sector in a dimension which the customers perceive as valuable. If Next PLC
applies this strategy, then the firm could enjoy benefit of high revenue, considering the fact that
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it would be providing exclusivity with its product that would create monopoly for the company
in the market. However, the firm would be required to adopt repeated market research to ensure
that the strategy provides Next PLC with long term benefits.
 Focus:
Within this strategy, the organisation would be emphasising on an appropriate market
segment and would modify its strategy in order to satisfy his demands. This strategy is divided
into two effective parts that are related below:
◦ Cost Focus: Within this aspect, the company would be lowering down their cost of
offerings for only their target market. For rest of the market, the organisation would
be carrying on with its strategy related to those segments(Pedersen, Gwozdz and
Hvass, 2018).
◦ Differentiation Focus: For differentiation strategy, the company they will be
producing variety of offerings for a particular segment in an appropriate manner.
One of its major advantages is that the firm could ensure diverse implementation of both
the strategies mentioned above to create more opportunities for the marketplace. However, the
cost of implementation of this strategy would be incurred more that the other two with
uncertainties surrounding is success.
Thus, out of all these strategies, Next PLC must adopt Cost Leadership as a prominent
strategic option to grow within the marketplace. The reason for this is because it would
appropriately fulfil the customers' demands of having high quality products at an affordable price
range. Moreover, in order to overcome its weaknesses, the company is required to introduce
calculative differentiation that would provide the company with effective competitive advantage.
Ansoff matrix
According to the above market analysing, UK has consider some changes in fashion
clothing store for this company can identify the changes in market structure which is very useful
earning more profits and increasing sales for the firm. For applying this changes Next plc can
adopt Ansoff matrix and evaluate the opportunities for capturing large market of the country.
This strategy is also called product and market expansion grid. By using this tools firm can
analyse the growth strategies. This matrix can be explained below(Joo and Ha, 2016). Market penetration- This strategy is mainly focus on increasing sales by selling existing
product in the existing market. It is the safest strategy that a company can follow. By
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adapting this quadrant firm can penetrate their product prices as per the demand of the
society. In this marketer can adopts some strategies to increase the sales and profits like
decreasing prices to attract more customers and make new customers, maximise
promotional schemes, effective channel distribution, win and beat the competitors in the
same market place. In context of Next plc, if company can adopts this strategy because
of unstable political factor occur in the UK because of Brexit. It affects the economy and
income of the consumers in the nations. In this situation sanitisation can make effective
strategy so they stay in the market for time and earns more profits (Goworek, Perry and
Kent, 2016). Market development- By using this strategy, marketers increase the sales by using
existing product in the new market. By expanding the business in new geographic area,
new customer segment etc. If Next plc, adopts this grid of Ansoff matrix than they
expand their market in new location with its existing product to increase the sales and
profits. For this they make some plans like develops a business by catering to different
customer segment, entering into the domestic market or entering into the international
market. For example if the company can expand their on global level than they follow
some rules and examine the foreign country culture. Product development- In this strategy Next plc increases its sales by introducing new
product in the current market place. It is somehow typical and risky in a way that the
customer adopts its or not. For this they spend more on research and development to
understand the current market trends. And in this they properly examine the competitors
to develop the new product or managing the activities of the organisation.
 Diversification – Within this matrix, Next plc emphasis on developing new product and
sell it into the new market. It is the riskiest step because the market and the customers
both are new to the organisation. For this company first examine the whole market as
well the customer preferences and than make a innovative product. If this strategy works
company earn more profits and revenue(Shriver and Bollinger, 2015).
From the above mentioned strategy Next plc should follow market penetration strategy where
they sell the existing products and in the current market to increase the revenue and sales. For
this company can lowering the prices of their product offering. Because of Brexit occur in the
UK and this will affect the total economy of the country and income of the consumer. To stably
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stay in the market organisation lowering the amount of their products and services so they attract
more and more customers in the current market.
Tactics
To adopts the above changes Next plc can consider some tactics for this that are
explained below-
Training and development
This type of technique is considered as an oldest and a effective tactics that many
company can apply to increase the sales and market revenue in the market. Is is the main
function for human resource management department. By using this tactics firm can make an
effort to identify and find the best talent in each employee and providing the task according to
that. For this company provide training and development session to improve the hidden talent of
the employees. In this manager of Next plc, use new technology to promoting their product
offerings for this firm provide proper training and development session to their marketers so they
effectively work and earns more profits by attracting many customer. In this manager can
provide a healthy environment to their employees so they work effectively and adopts the
changes that was occur in UK customer fashion. Firm can give proper training to their employees
about how they promote their offering by using various innovative technology and attract wide
range of customers. This strategy is amended constantly to capture the whole market for a long
period of time(Komu, 2017).
Performance appraisal
It refers to a constantly review each and every employees performance on their job and
their overall contribution to a company. This factor is also known as annual review that evaluates
all the staff members skills, achievement and growth in the organisation. This tactics reflect the
changes related to marketing relating changes. To follow this change, performance appraisal is
the best tactic for the company. In context of Next plc, managers time to time evaluate the
performance of their employees so they work very productively and efficiently. Company follow
adequate feedback to each and every employees on their performance so they will feel motivated
and contribute their efforts in earning more and more profits. The main objective of using this
tactics is to identify the strength and weaknesses of every employees and according to that they
place right candidate on the right place it will reduce the time and save the cost of the company
and helps in earning more revenues. Secondly they influence the good working habits of each
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and every staff members in the company. It will help in increasing more profits and market
share.
CONCLUSION
From the above described report it has been concluded that retail practices consider
sales , distribution of products and services of the organisation. Therefore, every customer can
get goods as per needs and wants. In UK fashion clothing store there is some changes occur like
preferences, market share, technological and marketing related changes etc. this all generate in
Next plc. This changes affect the business in many ways for this company can use some
strategies and tactics to adopts these changes in an effective way so it will earn more profits and
revenue in the current market. By using this strategies and tactics company can sustain for longer
period of time with more market share.
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REFERENCES
Books and journal
Banerjee, M. and Mishra, M., 2017. Retail supply chain management practices in India: A
business intelligence perspective. Journal of Retailing and Consumer Services. 34.
pp.248-259.
Goworek, H., Perry, P. and Kent, A., 2016. The relationship between design and marketing in
the fashion industry. Journal of Fashion Marketing and Management.
Gutiérrez Montenegro, N.C., Perez Marquez, A.A. and Velasquez Villalobos,
C.C., Identificación de errores cometidos en el proceso de despliegue de la política:
caso Megaexpress SAS y Merca express LTDA (Doctoral dissertation, Universidad del
Rosario).
Hagberg, J., 2016. Agencing practices: a historical exploration of shopping bags. Consumption
Markets & Culture. 19(1). pp.111-132.
Joo, S. and Ha, J., 2016. Fashion industry system and fashion leaders in the digital era. Journal
of the Korean Society of Clothing and Textiles. 40(3). pp.506-515.
Karrholm, M., 2016. Retailising space: Architecture, retail and the territorialisation of public
space. Routledge.
Komu, C.W., 2017. Factors That Affect Relative Product Quality of the SMEs in the Kenyan
Apparel Industry (Doctoral dissertation, United States International University-Africa).
Morgan, E., 2015. ‘Plan A’: Analysing business model innovation for sustainable consumption
in mass-market clothes retailing. Journal of Corporate Citizenship. (57). pp.73-98.
Pantano, E. and Timmermans, H., 2019. Smart Retailing. Springer International Publishing.
Pedersen, E.R.G., Gwozdz, W. and Hvass, K.K., 2018. Exploring the relationship between
business model innovation, corporate sustainability, and organisational values within
the fashion industry. Journal of Business Ethics. 149(2). pp.267-284.
Scuotto, V. and et. al., 2017. The performance implications of leveraging internal innovation
through social media networks: An empirical verification of the smart fashion
industry. Technological Forecasting and Social Change. 120. pp.184-194.
Shriver, S. and Bollinger, B., 2015. A structural model of channel choice with implications for
retail entry. Shriver: Columbia Business School, Colubia University.
Wertheim-Heck, S.C. and Spaargaren, G., 2016. Shifting configurations of shopping practices
and food safety dynamics in Hanoi, Vietnam: a historical analysis. Agriculture and
Human Values. 33(3). pp.655-671.
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