UK Fashion Retail Industry Analysis: A Strategic Report on M&S

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This individual report provides a comprehensive analysis of the UK fashion retail industry, with a specific focus on Marks and Spencer (M&S). The report begins with an introduction to retail and fashion retail, highlighting M&S as a key player in the market. The main body of the report utilizes a PESTLE analysis to examine the political, economic, social, technological, legal, and environmental factors impacting the industry. It also uses Porter's Five Forces to analyze the microenvironment, including existing rivalry, the threat of new entrants, the threat of substitution, and the bargaining power of buyers and suppliers. The report then presents strategic recommendations for M&S, focusing on effective communication with the target audience, offline events, window displays, packaging and point of sale marketing, and social media marketing. The report concludes with a summary of the key findings and recommendations aimed at helping M&S maintain and increase sales in the competitive UK fashion retail market. References are also included.
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INDIVIDUAL REPORT
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Relevant changes within the UK fashion retail industry.............................................................3
Changes in Micro environment...................................................................................................5
Strategies......................................................................................................................................6
Recommendations........................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1
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INTRODUCTION
Retail basically involves exchange of goods and services in a limited quantity and is
generally done to the ultimate consumer i.e. the one who is purchasing it for consumption
purpose rather than for further selling etc. This is usually done through various stores or outlets
which can be nine as well as offline. Fashion retail is particularly referred for a company or a
group of company that deals in fashionable products and commodities and the items that are
traded by them usually comprise of clothes, jewelleries, accessories etc. and other wearable
things that a consumer can buy (Chan, Ngai and Moon, 2017). Marks and Spencer is an
international company dealing specially in high quality premium sector clothing, home
accessories and food products. With around 80787 employees being employed at various
locations distributed all over the world through 1463 stores, the Marks and Spencer Company
has a strong physical presence and is a big part of the lifestyle of people in multiple number of
countries. Apart from the strong offline presence i.e. through stores and malls, the online
presence of the company is strong as well by providing extremely god quality cloth at affable
prices. The company usually targets customers belong to medium upper or upper class segment
by providing a wide range of luxurious products. Apart from strong online as well offline
presence, the company has also conducted a series of aggressive marketing campaigns in order to
gain the customer base and regularly be in news regarding their clothes and merchandise. In the
current report, the major changes that the fashion retailers specifically Marks and Spencer are
facing in UK’s economy will be discussed along with an analysis of micro environment as well.
Further, in this report, specific strategies and tactics that can be used in order to meet the micro
as well as macro challenges have been discussed. Lastly, this report will also present the relevant
conclusions and recommendations that can be made with respect to Marks and Spencer that will
help the company in increasing and maintaining their sales.
MAIN BODY
Relevant changes within the UK fashion retail industry
In order to analyse the entire macro environment regarding the fashion retailing industry
of UK, the best tool that can be used to analyse various aspects of the macro environment is
PESTLE Analysis tool can be used.
Political Factors: In UK’s economy one of the major factor that has been impacting the political
environment recently is Brexit. The decision of UK to leave the European Union has impacted
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the operation of Marks and Spencer in a major way. After Brexit, the various trade policies and
tariffs of the economy have changed and this has impacted the manner in which trade is carried
out in entire economy of UK (Burns, Mullet and Bryant, 2016). This is a factor which has
impacted the Marks and Spencer negatively and can further impact due to loss of numerous
suppliers of the economy. The cost of the clothes for the end consumer will increase as a result
and this can even impact negatively.
Economic Factors: The economic factors involve various aspects of the economy in which the
company is operating and they all impact the trade and tariff policies adopted by the company. In
recent years there have been number of competitors in the economy that have been popping up
and this has given rise to the competition because consumers can get an equal or a marginally
good quality product at cheaper rates and this has changed the shopping habits or discourse of
the customers in UK. Further, the entry of foreign companies in UK like Coach, Michael Kors
etc. has impacted the sales of Marks and Spencer negatively.
Social Factors: The entire fashion industry of UK has been always concerned with the societal
norms and traditions. In order to study the social environment in a better manner, Marks and
spencer can be taken as an example to study in a better manner the entire trend in the industry.
Due to the fact that Marks and Spencer has been operating in UK since a long time period, the
customers of UK treat it as a common name and therefore, it has become non-trendy i.e. younger
people are deviating from this brand and they are moving towards a trendier brand. However,
other industries in which Marks and Spencer’s is operating i.e. the food sector is also declining
because many companies have emerged and specially the ready to eat food sector has been
declining regularly (Gardetti and Torres, 2017). Apart from this, the trend of including those
brand ambassadors or policies that are socially challenging or have been criticized unjustly are
always supported and promoted by the company which has made it loved-hated brand.
Technological Factors: There have been a variety of factors that have been incorporated in the
entire fashion industry of UK i.e. the company regularly innovates and integrates later
technological developments in their shopping experience. M&S was one of the first fashion
retailers in UK to incorporate online shopping when the trend has just begun. Although, the
fashion industry of UK has always lagged behind in adopting technological changes, it is some
of the leading fashion retailers in UK like Marks and Spencer who have brought innovation in
the entire economy. Recently, contactless payment card technology was introduced by Marks
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and Spencer exclusively in UK which was an extremely innovative and robust technological idea
supported by many customers.
Legal Factors: For the fashion industry, the legal environment has always been supportive and
the various acts and regulations have been passed which are in their favour. Although recent
Brexit might have posed some challenges for the industry yet policies such as free trade have
encouraged the industry (PESTLE Analysis Of The Fashion Industry, 2018). However, there are
factors like tax restrictions, export restrictions, inflation etc. that has led to decline in the ease
with which trade can be conducted.
Environmental Factors: Marks and Spencer has been operating in the fashion retail industry of
UK since a very long time period. The fashion industry of UK has always moved towards a more
sustainable and eco-friendly production. It has been the efforts of the companies to produce their
garments using a material that is increases sustainability. Therefore, the entre fashion industry
has had a positive impact on the environment. However, there are certain industries or smaller
companies that are not concentrating on an environment friendly production in the clothing
industry.
Changes in Micro environment
On order to analyse the competitive environment in which the company operates in UK,
the best tool that can be used is Porter’s Five Force Analysis (Yang, Song and Tong, 2017).
There are five factors in Porters Five Force Analysis and these can be studied in following
manner:
Existing Rivalry (Medium): The current rivalry in the fashion industry is extremely high where
the completion has increased tremendously. But M&S is an established brand and has a huge
number of loyal customers who are not easy to break and therefore, despite increasing
competition their updated and innovative marketing plans have contributed in regularly
increasing their market share.
Threat of New Entrants (Low): It is very easy to enter this new market of retailing industry and
this can be done with significant ease. However, M&S has already established themselves and
therefore it is tougher to compete them. Therefore, this threat is relatively low for the company.
Threat of Substitution (High): In fashion retail industry, it is extremely easy to copy and modify
the unique designs. For marks and Spencer as well the industry is extremely competitive since it
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is easier for smaller brands to imitate their products and sell them at a cheaper rate thus
decreasing their revenue.
Bargaining Power of Buyers (High): In retail industry, the bargaining power of customers is
extremely high. Since Marls and Spencer is a huge company and the market of UK is regularly
getting infiltrated by the foreign company’s products (Barnard, 2017). The bargaining power of
buyers has become extremely high.
Bargaining Power of Suppliers (Low): Currently, the retail industry has been expanding and the
brand label of M&S gives them and upper hand over their suppliers thus reducing their
bargaining power.
Strategies
With the technological development across the world, it has created both the positive as
well as negative impact on the business operations of most of the business organisation. Marks
and Spencer is thus required to adopt such techniques and business processes which can assist it
in gaining competitive advantages in the market place. The changing dynamics of the retail
sector industry has made emphasis on the many retailers to make changes in their marketing as
well as promotional activities, plans by making strong as well as effective strategies such as low
cost business operations, flexibility and best designs, quality products along with speedy
delivery.
By making use of effective business strategies, it can help Marks and Spencer in
maintaining its profitability position in the market place. Most customers nowadays across the
globe follows the trend of see now and buy now as per the latest fashion styles (Robinson and
Hsieh, 2016). This has created a problem for many retailer in the fashion industry to make
decision related to the production and related decision making. With the help of following
marketing strategies and plans related to clothing store, it will help of Marks and Spencer in
pacing with changes:
1. Effective communication with Target Audience – It is very much important to ensure
that whatever message M & S wants to deliver to its customers, is reaching them in same
manner and form. Understanding the targeted audience will help the company in
delivering required product and services of the customer in timely manner which will
yield satisfaction to customers. It will thus adds to the business value and will help the
company in building customer loyalty base as well as brand image. Along with requisite
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demand of its targeted audience, it is also important to formulate plans and strategies for
offering services and delivery of products to them across the globe.
2. Conducting offline events so as to de - virtualize audience group – By organizing
activities such as kick off of a new season with the help of fashion show, show rooms,
offering of special discount over sales price to selected customer, celebrating any special
event or business anniversaries etc. will attract large number of customers (Ayers and
Odegaard, 2017). Another manner to keep pace with changing retail sector is to provide
schemes such as end of season sales, special sales for liquidating leftover clothes.
3. Window display – Is considered as one of the most important business technique which
can help the company in boosting its sales level. Window display is a process of
presenting the product with other supportive materials in such manner that attracts
customers by just having a look on it. There should be always some new innovative as
well as creative ideas for displaying own products with the help of proper lighting effects.
Time should be decided for displaying it on window of the show room and should be
change after some time.
4. Packaging and marketing at Point of Sale – By doing attractive packaging and
labelling, it attracts large number of customers of every age group. It is thus required by
M & S to ensures that packaging should be done in environment friendly manner thereby
making use of recyclable packing material. Conducting marketing activities with unique
techniques like road show, discount on future sales coupon etc. can help Marks and
Spencer in retaining its customer base across the globe (Chan, Ngai and Moon, 2017).
Thus, among top of all it is very essential to always deliver better quality products and
services as per customer demand.
5. Social Media Marketing – By making use of social media websites and application,
most of the companies nowadays is gaining customer attention. Marks and Spencer by
displaying and posting its products images on different social media pages such as
Facebook, Twitter, Pinterest, You tube etc. can conduct its advertisement activities
smoothly. Retailers in the fashion industry can make use of this strategy for capturing
large market share thereby increasing its customer base as well. It assists the company in
undertaking its promotional activities in much cost effective manner as these retail
companies can reach its globe customer easily from any where in the market place. Thus,
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it will provides Marks and Spencer with the option of building brand image and improved
customer satisfaction level.
Recommendations
For meeting the ongoing challenges in the retail sector industry, it is very much important
for every retailer including Marks and Spencer to consider following recommendations:
1. Preparation of agenda as per which events or any special activities planned will be
conducted on time so as to make customer aware of ongoing fashion styles and trends.
2. Making use of effective as well as proper marketing and advertising tools and techniques
from the perspective of undertaking promotional activities in the market place. This will
provide customers with knowledge about new fashion styles as prevailing in the trend.
3. By taking advantages of effective communication channels as well as using social media
sources, M & S can make its targeted audience updated with the latests fashion and styles
icons as prevailing in the market place (Macchion and et.al., 2015).
4. It is also required on the part of Marks and Spencer to conduct market survey and
research so that it can have deep insight about customer demand and taste. This will help
the company in undertaking production and manufacturing operations accordingly thus
can make timely delivery thereby adding to the company brand image as well.
5. By understanding the marketing as well as business strategies as adopted by the rivalry as
well as profit making companies of the same service sector, Marks and Spencer can also
gain competitive edge and increase its customer base.
CONCLUSION
From the above report it can be concluded that by having sound business plans and
strategies, every business organisation can capture large market share along with increase in
profitability aspects. It is very important on behalf of Marks and Spencer to understand requisite
changes which are required to be made in business processes and adoption of better improved
techniques from time to time for remain competitive in the market place. By ascertaining both
the macro as well as micro environmental factors, retail business company can make plans
accordingly so as to gain competitive advantages.
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REFERENCES
Books and journals
Ayers, J. B. and Odegaard, M. A., 2017. Retail supply chain management. CRC Press.
Barnard, M., 2017. Fashion theory: A reader. Routledge.
Burns, L.D., Mullet, K.K. and Bryant, N.O., 2016. The business of fashion: Designing,
manufacturing, and marketing. Bloomsbury Publishing USA.
Chan, A. T., Ngai, E. W. and Moon, K .K., 2017. The effects of strategic and manufacturing
flexibilities and supply chain agility on firm performance in the fashion industry. European
Journal of Operational Research. 259(2). pp.486-499.
Gardetti, M.A. and Torres, A.L., 2017. Sustainability in fashion and textiles: values, design,
production and consumption. Routledge.
Macchion, L. and et.al., 2015. Production and supply network strategies within the fashion
industry. International Journal of Production Economics. 163. pp.173-188.
Robinson, P. K. and Hsieh, L., 2016. Reshoring: a strategic renewal of luxury clothing supply
chains. Operations Management Research. 9(3-4). pp.89-101.
Yang, S., Song, Y. and Tong, S., 2017. Sustainable retailing in the fashion industry: A
systematic literature review. Sustainability, 9(7). p.1266.
Online
PESTLE Analysis Of The Fashion Industry. 2018. [Online]. Available through: <
https://pestleanalysis.com/pestle-analysis-of-the-fashion-industry/>
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