Retail Theory and Practice Assignment | Zara
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Added on 2021-02-19
Retail Theory and Practice Assignment | Zara
Added on 2021-02-19
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Retail Theoryand Practice
Table of ContentsINTRODUCTION...........................................................................................................................3MAIN BODY...................................................................................................................................3a) Key changes in UK fashion and clothing market....................................................................3b) Strategies and tactics to be used by the retailer to respond the major changes being occurredin the fashion clothing market......................................................................................................7CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONRetail is the process of selling the goods to the consumers from number of distributors inan intention to earn profits. Retail theory refers to the evaluation of how the retailers enter themarketplace. However, there has been different trends in the retail industry since the evolution oftechnology in the business. UK cloth retail market is on the urge of higher growth in past fewyears and is expected to rise about 16.6% by next five years. This report is based on Zara whichis a Spanish fashion retailer that deals in clothing and accessories. The report will include the keychanges in UK fashion clothing market. The report will also highlight the different strategies andtactics that can be used by the retailer to respond the changes in fashion clothing market.MAIN BODYZara is a Spanish clothing retailer dealing in clothing and accessories serving in the areasworldwide. Zara has 10,000 retail stores across the world and earns the total revenue of $18.9billion. Zara was founded in 1975 by Amancio Ortega and Rosalia Mera and currently thecompany has its existence in every corner of the world. It is an eco-friendly company andproduces 100% toxic free clothes. The company is popularly known for its latest fashion trendsand apparels as per the desires of the customers. Zara has its reach in 88 countries consistingwith over 6500 outlets. The company has also its presence in online store and its website. Thesupply chain of Zara provides the company a competitive advantage in different markets. Theproducts of Zara are the fashion trendy along with the low prices as it provides latest fashion asmore reasonable and lower prices as compared to other international brands. Zara uses theunique business model to bring new products and fashion in the shortest possible time. Thismodel garbs the attention of its customers and also the company initiates 50% discount twice ayear which makes the customers eagerly wait and shop during this discount(Miller, 2018). Thecompany does not depend on the advertising and promotion but it promotes its brand byestablishing new store and the brand promotion is being done on social media such as Facebookand Instagram. This makes the company having strong online presence and a source ofcommunication with their customers.a) Key changes in UK fashion and clothing marketRelevant changes within macro environment- Every business organisation can identify thosefactors which are creating negative impact on the productivity as well as profitability aspect of
the company growth. For determining the key relevant changes in the macro environment,PESTLE analysis is considered as one of the most effective tool. It helps in analysing as well asmonitoring of the factors of macro environment which impacts the performance level oforganisation. Zara will the help of PESTLE analysis can determine such factors:1.Political Factors – Because of change in the government, there can be instability in thepolitical aspects of that economy as well in form of change in policies, rules, provisionsetc. This has to be adhere by every business enterprise either retailer or wholesaler whileconducting of their business operations in that part. As one of the leading UK retail andfashion sector industry, Zara has to face many political issues. With the ongoing changesin the government and political policies, Zara has to make compliance of every applicablegovernment as well as political policy, rules and regulations of different countries inwhich it is having its business operations. Also, Zara has to manage different norms andstandards as laid by the different government of the different countries, failure of whichcan result in non compliance and reduce in quality performance. With unstable politicalpolicies in the current market, Zara has to understand the requirements of its customers.2.Economical Factors – As change in economic condition takes place, retail industrysector also needs to ensure factors which are going to impact their business performance.Fluctuation in the Inflation rate, exchange rate has to be understand and studied by retailsectors before carrying on business operations in new marketplace. The performance ofZara in sales and marketing field is creating impact on the economic performance of thecountry in which it is operating by having different economic cycles. Also, by havingincreased globalisation and liberalisation policy related to trade and commerce, Zara hasbeen able to invest into different regions of the country which was not possible earlier. Ithas provided ease to Zara for expanding its business operations in different businessregion which was far off limits earlier (Rastogi, and Trivedi, 2016).3.Social Factors –Every economy or marketplace has its own beliefs, values and thoughtswhich forms basis for its customers and influences their buying behaviour as well. Thishas to be studied by the retail sectors before entering into any market segment. As it willhelp in satisfying the customer needs and provides market share as well to them. Byhaving good and proper understanding of thoughts, belief, values, cultures as well as ofthe concepts of its customers across the world, Zara has been able to overcome its social
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