Boohoo Group Plc: Adapting to Changes in the UK Fashion Retail Market

This report examines the key changes in the UK fashion retail market and analyzes the strategies and tactics used by Boohoo Group Plc, an online fashion retailer targeting 16-30 year olds, to respond to these changes. It begins with an overview of Boohoo Group, highlighting its business model, product range, and global presence. The report then delves into the macro and micro environmental factors affecting the UK fashion retail industry, using PESTLE and Porter's Five Forces models to assess the political, economic, social, technological, legal, and environmental influences, as well as the bargaining power of suppliers and consumers, competitive rivalry, threats of new entrants and substitutes. Finally, the report discusses strategies such as establishing manufacturing plants in the UK, staff training, and utilizing both traditional and digital marketing to adapt to the evolving market.

Retail Theory and Practices

TABLE OF CONTENTS
Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Overview......................................................................................................................................1
Key relevant changes with the UK fashion retail........................................................................2
Strategies and tactics used by the retailer to respond the change................................................5
RECCOMENDATION....................................................................................................................6
CONCLUSION................................................................................................................................6
REFRENCES...................................................................................................................................8

INTRODUCTION
Retail is an activity of selling goods directly to the consumers in the small quantity for
their consumption. The selling can be done through various sales channels like online, retail
shop, through direct sales or mail. The aspect of the sale as a retail transaction that uses the end
user is the buyer. Retailers satisfy the demand of the customers by identify the supply chain.
Business directs its marketing efforts by satisfying its consumer by the organization of selling
goods and services by the means of the distribution (Fram, 2018). Fashion industry is surrounded
to design, distribution, manufacturing, retailing, marketing and promotion of all types of the
apparel for men’s, women and children’s from the designer clothing to ordinary clothing. Total
number of the retail outlet in UK in 2020 is 306,985 and there retail sales is approximately $403
billion in 2020 and more than third proportion of the population sped on the retail stores. In this
report discussed about the key relevant changes in the internal and the external environment in
the UK fashion clothing market and discuss the strategies and the tactics used by the retailers to
respond the major changes occurs in the fashion industry.
MAIN BODY
Overview
The report is based on the Boohoo group Plc based on the online fashion retailer that aimed
the age group of the 16 to 30 years of people. It is founded in 2006 by the Mahmud Kamani and
Carol Kane. Its headquarters are in the Dale Street, Manchester and the United Kingdom. It is
specialises in its own fashion clothing brand with its 36000 products. Boohoo differentiate itself
from its competitors as it’s over clothing range of its own brand with average price that
comprises of the 9000 clothing line. It sells its products to over 100 countries and in a major
market of the UK, US, France, Europe and many more. In Boohoo the total employees at the end
of the year 2020 is 2619. Boohoo has classified its clothing under the brand name as Boohoo,
boohoo Man, Pretty little thing, Nasty Gal, Miss Pap, Karen Millen and Coast. It provides
various stylish clothes to their customers by invest in the supply chain, technological
advertisement, use various analytics and the artificial intelligence for the best for their customer
base. To engage and be active with the customers they provide and inspire their customers by the
help of the social media (Boardman, Henninger, and Zhu, 2020). It has best distribution channel
with over 3500 workforce distributors in the 2020, to ease the distribution and borough the heart
of the UK by providing the skilled and the varied workforce.
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Key relevant changes with the UK fashion retail.
Every industry in the market deals with the changes in the international market and in their
work environment that directly impact to the business of the organisation. Fashion industry in the
UK market is also changing with the changing environment. The internal and the external
environment of the fashion industry are changes significantly and can be analysed with the Pestle
and the Porters 5 force model.
Macro environment
Political
The fashion retail industry of the UK has a global reputation. Political stability in the UK
gives the positive impact on the fashion retail industry. Brexit uncertainty causes concerns for
many organisations. In recent lockdown and the economic changes bit the industry very hard.
Industry needs financial support from the government to sustain in the market (Helmold, 2019).
Without the support from the government half of the fashion retail industry has on the risk for
walk into the unsustainable future. If the country exist the trade relations with the Europe than
the fashion industry has to spend $ 1 billion extra in each year that cause to price hike in many
clothing items. Many politicians impact the fashion industry by influence them by their styles of
apparels to the customers. It is worth to note that sometimes that clothing is beyond the fashion
and be expressed by the political statements.
Economic
In UK clothing manufacturing is expensive. So many retail industries produce their items
in countries like Bangladesh, Sri Lanka, India, Turkey and China. Producing in these countries
helps the retailers by reducing the production cost and sells the products at the affordable price.
Not every retailers sell the products at cheap prices some are expensive as well. This shows that
customers of the UK have different options depending on their economic circumstances. At the
time of the recession fashion industry retailers affects badly (Perera, 2017). Fashion industry can
adapt the changes quickly. It is also noticed that trend of the rentable clothing is influence
including formal and casual. It is very cost affective and have several options in the outfits to
choose according to the taste of the person.
Social
In UK there are various numbers of the colleges and the universities that are preparing
the fashion designers for tomorrow. Various British brands lead a good position in the famous
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brands in the world. People in the UK are heavy buyers of the fashion products. Fashion industry
is adapting the digital technology to access the customer needs and reach wide customer base
through online sales of the apparel. The modern shoppers who on an average spend 8 hours on a
day online feel comfort with the digital channel for the shopping (Shtal, and et.al., 2018).
Consumer became less brand loyal by changing the brands that are offering the best discount on
the online shopping. With the use of the social media company can influence them about the
recent schemes and the discount. Customers are now more conscious towards the environment
and the sustainability.
Technological
With the recent trends in the digital technology fashion industry started their business
online, to grab the market and it is most convenient for the people in this era. Most of the people
are prefer to shop online instead of visiting the shops. From the online shopping there are various
filters that help to find the best fit products for them. Internet is boomed with the online
shopping. Wirth the use of the recent technology the supply management is also improved.
Legal
In UK the rules and the regulations are set for the fashion retail industry and these rules
and regulations are strict that leads to many companies by outsourced its operations in different
countries. With the use of the digital technology various cyber threats and the security of the
customer data can be misused. Various legal actions are set for to control it.
Environmental
In UK the fashion industry is responsible for around 10 percent of the global greenhouse
gas emissions. Combination of the consumption of the international aviation and shipping
industry, Fashion industry consume more energy from them (Ball, 2020). In UK 80 percent of
the buyers purchase clothes that they never wear and are responsible for burning the 300000 tons
of the clothes every year. For this various campaign groups forces the government to pressure the
fashion industry to be more responsible and contribute to the sustainable environment.
Micro environment
Porters 5 force model
Bargaining power of suppliers
Supplier has bargaining power high when the raw material is in a scarce quantity. When
the supplier of the particular product or raw material is limited their bargaining power rises. The
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UK fashion market has presence of the few suppliers that is because of the high cost of the raw
materials. Suppliers in the UK market also use traditional practices in their operations that lead to
high prices of the products. It’s a major concern for the fashion industry with the rise in the cost
of the real estate. This analyze that suppliers have high bargaining power in the fashion retail
industry in the UK (Hales, and Mclarney, 2017). Many of the manufacturing departments are
outsourced their departments in the country where the cost of labor is low.
Bargaining power of the consumer
Bargaining power of the consumer came when the market has a presence of various
numbers of the players that have large product lines. With the large number of the competitors
customers have various options. In the present UK market there is large number of player in the
fashion retail industry. To suit every type of customers many of the players are high value of
their brand. They provide various choices to their customers. As in the UK market customers has
high bargaining power.
Competition from the existing player
In the UK there are various large numbers of the global payers that have daunting brand
image and the product line that is impressive to the targeted customers. In almost each and every
target market the competition exit. UK fashion industry has high competition that has high
impact from the exiting firm (Kreps, 2019). Market leader in the industry formulated the policies
that help to win the customers in the favor of their brand. Fierce competition in the market
promoted various players to enter into the new market.
Threat of new entrant
For the existing players new entrants are not a sufficient threat. This is because present
UK market is filled with the big brands and high cost is build for the new players to enter in the
UK market. New entrants have to find the unique way to popularize their own products in the
name of their brand and build as a novel brand. New player do not have the significant power to
challenge the existing player in the UK fashion retail industry.
Threats of substitutes
Substitutes are the products that are similar to the original products. Customers Segments
of the well known brand are highly niche in their nature and don’t switch to the substitutes that
have low price products (Kabeyi, 2018). In the retail fashion industry it is negligible for the
fashion industry as they are just for the competition.
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Strategies and tactics used by the retailer to respond the change.
Strategies and the tactics used by the UK retail industry to adopt the change effectively so
sustain in the market and gain the market share. Different strategies used by the brands in the UK
fashion industries are
Open the manufacturing plant in the UK
Various big player of the UK fashion retailer manufacturing of the brands are done in the
different countries and then exported to the UK. After the exit of European Union in the UK
tariffs are imposed on the imports that lead to increases the prices of the product of the brand
(Von Wirth, and et.al., 2019). To avoid the import tariff Boohoo has to start manufacturing their
products in the UK market only rather than importing the stock. Even after the Brexit it will not
be simple to transport the goods under the free trade terms to the UK.
Staff Training
With the ever change in the trends in the retail fashion market is one of the challenge. To
register the new design in the fashion market leads to large sales today and also became old
fashion within a year. If those clothes are spends the year on the shelves leads the customer to
start ignoring and move towards substitutes for the new fashion. With the using of the trends to
sells the clothes, staff training is an essential part. Staffs are well trained so that they know how
to respond in the ever changing trends in the fashion market. With the adaption of the new
technology Boohoo should gave training to the staff how to use the new adapted technology.
Staffs are trained for effective interaction with the customers so that customer bought the product
and maintain the purchase in the future. Every staff member is trained to build the good customer
relations.
Use both traditional and the digital marketing strategies
With the recent trend of using the digital technology where the young youth are
extremely using in their regular operations and are very comfortable with this, industry has to
their marketing from the social media platforms so that customers are aware about the recent
schemes or discounts and sell the products online to attract wide customer base and increase the
sales (Appelbaum, and et.al., 2018). Traditional marketing is done by the channels like
television, print media, radio etc. to target the customers that are not comfortable with the digital
technology. By the use of the both channel the reach of the people increased and boosts the sales.
Continuous Innovation
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To make the more sales in the business people continuous innovate the strategies.
Innovation can be done by the retailers to compete with the competitors. A big challenge faces
by the UK fashion retail industry is to increase the competition from the other retailers.
Competition can be reduced by the tool of the innovation (Drummond, O'Toole, and McGrath,
2020). With the use of resources effectively for the innovation of the apparels leads to boost the
sales. With the best innovative product increase in the customer base leads to profit for the
industry.
Sustainable Environment
With the ever changing environment firms in the retail fashion industry affects a lot.
Clothing industries harm the environment a lot. To minimize the environment degradation firm
has to adopt the sustainability in their operations. UK people who are spending their maximum
earning on the fashion and don’t use it affectively and burn out the clothes leads to wastage of
the resources various campaigns are to set by the government (Boardman, Henninger, and Zhu,
2020). Boohoo has to adopt the sustainability in the operations by reducing the carbon emissions
and ban the use of plastic and use the waste to reuse or recycle.
RECCOMENDATION
From the report it recommended that to avoid the trade tariff after the Brexit Company
should open their manufacturing plant in the UK, so that the prices of the products get affordable
for every segment of the customer group. To boost up the sales company should use various
channels. Online shopping and the retail shopping both are important. Use of the digital
technology is very popular and use of this technology helps to boost the sales and attract more
customer base. From the regular innovation to get advantage of the over the other competitors so
that company can sustain in the market by attracting large the large customers. With the increase
in the consciousness of people towards the environment company has to adapt the sustainability
in the organization and ban the plastic uses and reuse or recycle the waste came from the
production.
CONCLUSION
From the report it concluded that retail is an activity to sell the goods or services directly to
the end users or the customers. The fashion retail sector of the UK is large in number having
306985 retail stores and $403 billion sales in 2020. Many of the fashion brands of the UK are
open their retail stores globally and also stated online selling one of them are Boohoo that sells
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their products online to cater wide customers base and boost their sales in under different brand
name. After the Brexit in the UK fashion industry affects a lot and various changes is required.
Relevant changes is occurs in fashion retail industry of UK is analyzed by the micro and macro
environment with the relevant theories of Porters five force and PESTLE analysis. Effective
strategies and the tactics are used by the Boohoo to respond to the change easily.
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REFRENCES
Journals and books
Appelbaum, S.H., and et.al., 2018. Impact of business model change on organizational
success. Industrial and Commercial Training.
Ball, P.J., 2020. Macro energy trends and the future of geothermal within the low-carbon energy
portfolio. Journal of Energy Resources Technology. pp.1-39.
Boardman, R., Henninger, C.E. and Zhu, A., 2020. Augmented reality and virtual reality: new
drivers for fashion retail?. In Technology-driven sustainability (pp. 155-172). Palgrave
Macmillan, Cham.
Drummond, C., O'Toole, T. and McGrath, H., 2020. Digital engagement strategies and tactics in
social media marketing. European Journal of Marketing.
Hales, G. and Mclarney, C., 2017. Uber's Competitive Advantage vis-à-vis Porter's Generic
Strategies. IUP Journal of Management Research. 16(4).
Helmold, M., 2019. Tools in PM. In Progress in Performance Management (pp. 111-122).
Springer, Cham.
Kabeyi, M.J.B., 2018. Michael porter’s five competitive forces and generetic strategies, market
segmentation strategy and case study of competition in global smartphone
manufacturing industry. IJAR. 4(10). pp.39-45.
Kreps, D.M., 2019. Microeconomics for managers. Princeton University Press.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Shtal, T., and et.al., 2018. Methods of analysis of the external environment of business activities.
Von Wirth, T., and et.al., 2019. Impacts of urban living labs on sustainability transitions:
Mechanisms and strategies for systemic change through experimentation. European
Planning Studies. 27(2). pp.229-257.
Online references
Fram, L., 2018. What Is Retail? (Definition, Store Types, and Software). [Online]. Available
through <https://learn.g2.com/what-is-retail>. [Accessed on 6 May 2021]
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