Retail Theory and Practice: Analysis of H&M in the UK Fashion Market

This report delves into the realm of retail theory and practice, specifically within the context of the UK fashion industry, using Hennes & Mauritz (H&M) as a case study. It begins with an introduction to the retail sector, defining its scope and significance, followed by a detailed overview of H&M, including its global presence, brand portfolio, and business strategies. The report then examines key changes impacting the UK fashion retail landscape, employing a PESTEL analysis to assess the influence of political, economic, social, technological, environmental, and legal factors. It further explores the micro-environment, focusing on competitive dynamics, consumer behavior, and the impact of globalization. The report highlights the importance of adapting to consumer preferences, technological advancements, and environmental concerns. Ultimately, the report suggests strategies and tactics H&M could implement to navigate these changes, offering recommendations and concluding with a comprehensive overview of the key findings and their implications for the future of the retail industry.

Retail theory and practice.

Table of Contents
Introduction to retail....................................................................................................................3
Introduction to company.............................................................................................................3
Key relevant changes within the UK fashion retail:...................................................................4
Relevant changes within the environment..................................................................................6
Suggest and discuss strategies and tactics that could be used.....................................................7
RECOMMENDATIONS. ..............................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

Introduction to retail
Retail sector is an large sector in which includes all shops that sell goods and services to
the ultimate consumer and they buy for their personal use not for business purpose. In retail
sector includes shops from kiosks and small grocery stores to the large chain of supermarket and
large departmental stores. It is one of the final stage in distribution process. There are
approximately 2,90,000 retail outlets in UK with total revenue in £ 366 billion in 2017 and more
than third proportion of consumers spends in shopping through retail stores. It is one of the
largest private retailer by 2.9 million employees in UK. Proportion of retail sales by online sales
mode in 2017 is 4.3%. Retailing basically concerned with understanding the taste and
preferences of consumers by developing good merchandise assortment and display it is in stores
in effective manner to attract large no. of consumer base. Retailing is one of the most intrinsic
part of every day life and in UK billion dollar conglomerates provide the large retailing services
in which Wal mart, McDonald, marks and Spencer etc..
Introduction to company
This report is based on Hennes & Mauritz AB is an Swedish multinational
clothing retail company that deals in fast clothing of women, men and teenagers with children's.
H&M associated with various outlets within 62 countries with more than 4500 stores and
employed more than 1,77,000 employees. In their group includes nine clearly defined brands
name in which COS, Monki, Weekday and other various brand operate under it (Kitchin and
Tate, 2013.). It provides lot of stylish products to their consumers and invest in advance supply
chain, technological advertisements and use analytics and Artificial intelligence to give best to
their consumer base. To engage with their consumer base they provides an inspiring experiences
by connecting with them by social media and research about how and when and where
consumers choose to purchase their products. They focus on integration of their physical stores
with the digital mode of communication so that they can enlarge their business opportunities. It
started its business in 1947 with single store for women's in Sweden and become global fashion
brand in whole world. Now at present it deals in 71 markets and grab attention of their consumer
by digital mode of transmission (Schwarz and Hunter, 2012.. ). They aimed to open new stores

by continuous development and strong store portfolio. It has large chain of proficient employees
around the world and share value driven to work central for consumers. In future It work towards
a sustainable approach in fashion industry by using circular and renewable energy so that cost
should be saved. They bring out the resources that are sustainable in nature and eco friendly also.
To motivate their employees they use innovation in work and proceedings with imposed
transparency by value chain. It has 73% of employees in position of responsibility is women and
it focus on empower the women workforce (Viljoen and Wiskerke Eds., 2012.).
Key relevant changes within the UK fashion retail:
Every industry face some changes in condition of while it deal in international market
and changing in work and conditions of market that directly impacts on their business. H&M is
one of the Swedish multinational chain of retailing and deals in large consumer base. Some
relevant changes that occur in that industry which should be describe with help of PESTEL
analysis that are as follows:
Social changes:
In retail fashion sector which one of the most optimism in that industry plagued by
uncertainty. The fashion industry moving a seismic shift and look ahead and reveal some top
trends that give shape to that industry. It adopts some massive changes for long term that is the
backdrop that happening in an environment. The global fashion industry is moving towards the
digital adaptation by accessing consumer needs and reach with them through online sales apparel
(Bodie, 2015). On an average people spends eight hours a day on online, the modern shoppers
feel comfort by using digital channels and content change as changes in consumer purchase path
from a traditional linear mode and consumer wants continuous brand experiences all time.
Consumers expect perfect functionality and support that is immediate every time and become
habitual for frequent delivery and consumers focus on more purchase decision by social media,
peer reviews and influencer marketing. Further consumers become less brand loyal and want to
switch brands for discount that offer by other companies by 30% or more than it. On other hand
companies to connect with large consumer base move towards online movement and steep
decline in brick and mortar stores and focus on reducing operating cost of stores and connect
with each other and innovate in them so that they can enlarge business opportunities (Pantano,,
2014). Consumer become conscious towards sustainability and become conscious towards
environment .In case of H&M today it recycled or use sustainable sources about 57% and that

helps in increase its profitability by 35% in an year and its goal is to use only recycled products
by 2030. H&M to boost their sales by using curated list of items by blogs post on different social
media, using pictures that love by consumers and attracting content and information. Its
operators sends with the twitter by hashtags and current headlines that attract their potential
readers towards their products and by click on it, they can connect directly with mobile site with
images and bring each item on online page of consumer. It largely connects with their consumers
with the help of social media by reducing brick and mortar stores that reduce their operating cost
in market (Baker and Saren eds., 2016.). H&M picks that are short and to the point and content
that directly connect with their consumer base. But it is anywhere lack in compensating needs
and demand of consumers for example H&M have $4.3 billion pile of clothes and accessories
that are unsold inventory and it raises question that it not able to adapt for fierce competition and
changing consumer demand.
Economic factors:
some relevant changes occurs in that industry by economic sector that is one of the most
prosperous industry in which it has been growing 4.78% yearly rises year by year. In 2020
market size should be rises by $1.65 trillion at worldwide ( Fournier, Breazeale and Fetscherin,
eds., 2012). It is one of the most prosperous industry because people are more demanding and it
deals in UK market and due to the Brexit which brought currencies across in Europe that shows
report of 2017 that rose by 7% . hence some inflationary measures impacts on their profitability
level to gain large consumer base. While it deals in different nations and fluctuations in
environment impacts negatively on their works and proceedings.
Technological factors:
In technological factors consist of adopt new tools and techniques to give best attributes
to satisfy consumers wants and needs in proper way. To provide best attributes and functions to
the consumers organisation have to use various techniques to reap possible benefits. In order to
H&M is an global retailer and currently grappling with hurdles or complexities to change in their
supply chain because of digitalization and they are not able to connect rapidly according to
consumer changes and preference ( Fournier, Breazeale and Fetscherin eds., 2012). It aimed to
adopt technological advancement by to decrease inventory cost and huge breakdowns to reduce
inventory and their cost. To beat its competitors H&M aimed to showcase the cutting edge
technology with help of digitalization. It uses various apps and voice applications and partnered

with Monki brand to give unique creation. To satisfy their consumer base and use the more
personal applications that have exclusive human voice. To give best services it uses artificial
intelligence and other relevant tools that helps in increase the productivity level. On other hand
that they face problem that H&M adopt changes and technology but unable to hand over to their
employees due to lack of proper training and lack of knowledge to improve production capacity.
It adopt advance technology but some transparency issues and data security issues face by
organisation.
Hence fashion retail industry is one of the most dynamic and prosperous industry that have
occurs some major changes that sometimes proved fruitful and hazardous in economic progress
to gain economic advantage and lead towards to grab large share of consumer base.
Relevant changes within the environment.
In micro environment consist of factors that affect business and their various factors such
as decision making, performance level. In micro-environment consist of factors in which
customers, suppliers, competitors and employees with shareholder and media are the most
important factors that helps to organisation to gain large market share and lead in economic
environment (Badot and Filser, 2013..). Due to globalization the whole world connect with each
other and it increase the expectations of consumers and it forces to organisation to bring some
changes in their internal and external environment so that they can fully satisfy their expectations
in proper way.
Competitive environment:
competitive environment is an dynamic external environment in which an business
operates and functions. The more similar products the sellers offers the more competitive
environment it frames (Hayes, 2018.). In case of H&M it deals in fashion retail industry and
provides wide range of clothes for all age group of people. H&M offers fashion for consumers
with quality at best price range. In 2007 it created or launched chain of products in which
collection of style that is new concept. That concept denotes about higher prices for high earning
people. Its adaptation capabilities shows that it can easily diversify its market base and keenly
target consumers. It produces sports wear, masculine and feminine clothes and other accessories
also. It connect with social and digitalization to connect with large consumer base and consider
the major role of advertisement to connect directly with consumers. It avails different ways to
sell its products such as by stores, internet and catalogues. It spends lot of money on

communication and promotions. Its main competitors are inditex, Arcadia group, American
Eagle outfitters, Boohoo are the fierce competitors. It is one of the most popular brand name in
retailing fashion industry by offering products to large no. of consumers by accessing their needs
and wants in proper way. It has its own price range and visual concept that differentiate to their
competitors. In present scenario competition is so much fierce and to beat competitors
organisation have to frequently new rules and regulations that proved beneficial in organisational
growth and enhancement by accessing the rules and policies of the competitors. In same industry
the strategies of an firm differ from each other that enchant to consumers ( Davies, 2012.). In
such case H&M and Zara have different strategies when they offer products. H&M offer
products of women wear in bulk and emphasis on communicate through advertising and
promotions. On other hand Zara apparel split in considering retailer’s by coverage into women's
wear. Changes in internal structure of organisation also impacts on their works and proceedings
to combat with adverse situations. It sometimes unable to rapidly adopt changes according to the
competitor because fashion industry requires rapidly changes.
Changes in consumer attitude:
In recent time consumer are more demanding and require frequent changes in products
and services because they have lot of choices. Clothing is one of the important factor that work
as a overall style statement. The consumption pattern of clothes rapidly changes in recent time as
price of clothing have fallen down to “ cheap chic” clothes and people purchase them and
discard in some time (Rryan, 2012.). To satisfy that criteria organisation have to produce clothes
that are low in price and give delighted experiences to their consumer base. In case of H&M the
consumer wants services all time when they want to purchase from them and consumers
demanding after sale services and frequent delivery of products. Consumers always want
discounted products and services and connect with the social media so that they can easily access
to the new and recent trends of that brand and can easily access with them.
Suggest and discuss strategies and tactics that could be used.
Every industry faces some challenges and some reap benefits out of them. To remove or
eradicate problems and issues organisation have to adopt some proper measures that prove
beneficial to reach at desirable outcomes and goals (Nepal and Jamasb, 2015.). Changes occurs
in environment and in industry in rapid manner to resolve that changes organisation have to

collect various issues or concerns and find out cause of that problem and accordingly solve in
proper way.
Changes occurs in micro and macro factors that directly impacts on works and proceedings of an
organisation. In case of H&M in macro factors they faces some economic changes and
technological changes and majorly social changes in society.
Social changes and strategies:
In that macro factor environment and in context of fashion industry which one of the
most dynamic industry and to cope up with these changes marketers have to spend lot of amount
on frequent changes in needs and wants of consumers. To resolve issues that H&M unable to
adopt rapid changes that occurs in that industry for that it uses change management strategy in
which it promote and scale innovation at large scale and bring transparency in their works and
proceedings (Harper, Randall and Rouncefield, 2012.). Give proper training and development
before adopt any changes in organisation. To adopt changes it give important information to how
these changes profitable for employees and enhance their motivation level.
Competitive environment and relevant strategy:
the another main problem or issue before H&M is that it has an international brand name
and lot of competitors exist in front of it. In their major competitors are American Eagle
outfitters, boohoo, Arcadia group are their fierce competitors and fashion industry requires
frequent changes according to consumers demand and sometimes it is unable to adopt changes,
to resolve that issue they focus on positioning strategy that builds an distinctive image in mind of
consumers for products of H&M (Mackellar, 2013). It provides consumers most fashionable
products, high qualitative at best price that possible for them. It offers variety of clothes in which
women's clothing, men's business and children's wear with footwear and other accessories.
Change in consumer attitude and strategy:
fashion industry is one of the most dynamic and prosperous industry in which H&M
deals. To cope up with relevant changes organisation have to changes occurs in that industry. In
fashion industry organisation have to access the needs and wants of consumer and also access the
competitors and accordingly brings changes in organisational works and proceedings. In order to
resolve that issue or concern organisation have to focus on their consumer base by using STP
with help of that it can easily target their consumer and thoroughly research about taste and
preferences of that group of people and build product accordingly. H&M is an store which based

and built on basis of segmented target market. In the year of 1947 it deals only in women
segment and after that it deals in different kinds of product in which products of men and
children's clothing. When it target its market base it not consider the person who purchase their
products but actually people who like or love their products. It deals in people of all ages and
bifurcate on different bases but it requires to bifurcate people taste and preferences more keenly
so that they can give best products to their consumer base (.Shanks and Tilley, 2016.). In that
aspect consumers want comfortability in each and every activity and they become techno savvy
so for that organisation have to build advance websites and adopt techno oriented products and
services.
RECOMMENDATIONS.
For an organisation to achieve desirable goals and objectives firstly collect important
information and insights by gather issues or concerns that face by organisation. In case of H&M
instead of multinational organisation it faces many issues and concerns such as it faces fierce
competition level, frequently changing needs and wants of consumers and change in attitude and
buying pattern of consumers. So the major problem before H&M is that it is lack in satisfying
needs and wants of consumers in proper manner in comparison to their competitors because as
per the information lot of piles of clothes remain unsold and become cause of loss for
organisation (Ridley-Duff and Bull, 2015). To resolve that issue or concern the best strategy is
change management strategy because fashion industry is one of the most dynamic industry and
to adopt changes organisation have to mould their employees accordingly in that aspect they give
important insights and knowledge to their employees to achieve changes in that scenario and
how they are beneficial for an individual to attain goals and objectives in proper way. This
strategy is one of the most fruitful for them because they have large employees that helps in
achieving goals and objectives while deal in multinational market and with the help of their
knowledge and skill they give their best in organisational growth.
CONCLUSION.
From the above report it has been concluded that to achieve success and desirable
outcomes organisation have to acknowledge each and every aspect and accordingly take action.
For an organisation micro and macro environment plays very important role in organisational
development and enhancement. To adopt changes that occurs in every industry for that
organisation have to give knowledge and attributes so that they can give their best in

organisational development. Observation of consumers needs and wants is an important factor to
satisfy their both current and future needs in proper manner.

REFERENCES
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