Retail Theory and Practice: A Case Study of New Look

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Retail Theory and Practice
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Table of Contents
Introduction to retail........................................................................................................................3
Introduction to the company............................................................................................................4
Key relevant changes within the UK fashion retail.........................................................................5
Relevant changes within the microenvironment..............................................................................8
Suggest and discuss strategies and tactics that could be used.........................................................9
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................12
Reference List................................................................................................................................13
Appendix........................................................................................................................................16
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Introduction to retail
Retail includes trading services and goods to the consumers to generate profit. The retailers
satisfy the demand of the consumers through identifying by the medium of supply chain. It
provides goods to the customers through several distribution channels (Roggeveen et al., 2019).
Usually the retailers involved in fulfilling the order in small quantity rather than the wholesalers
who provide the customers with goods in large quantity. Fashion retailing includes marketing of
clothing and other fashionable items to the consumers. The fashion retailer specialises in current
trends of the era and provides the consumers with products that are in demand as well as are
creative in design. In the United Kingdom, the fashion industry has share of seven percentages in
the market. It has a value of 66 billion pounds in the UK. The fashion retail industry provides
employment to 555,000 people (fashionunited.uk, 2019).
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Introduction to the company
New Look is a fashion retailer based in the United Kingdom that has functions in different
countries. Tom Singh has established this private limited company in 1969. As per the annual
report newlookgroup.com (2018), it has approximately 895 locations in different regions. At
present, Paul Gilbert is the Non-executive Director of the organisation while Richard Collyer is
the CFO. Alistair McGeorge is the Executive chairperson and Roger Wightman is the chief
product officer. The products sold by the firm are apparels for men, women, and teenagers. It has
a chain of brick and mortar stores in foreign that includes Belgium, France, Malaysia, Singapore,
Indonesia, Thailand, Germany, Poland, Russia, and others. It employs 18,000 workers in these
regions. The annual revenue that the company has generated in the year 2014 was 1,528 million
pounds (apax.com, 2014).
Brait SA, an investment organisation, owns the firm. Christo Wiese, a South African
businessperson, controls it. The largest store of the firm is in Ireland that is located in the Jervis
Shopping Centre. New Look comes at number 32 according to sales in the list of top largest
companies of the United Kingdom. It also has online presence as it sells from its online website.
In the online platform, it provides discount to the customers to increase the rate of sakes. It also
sells accessories like bags, belts, hair clips, watches, necklace, earrings, and such other items. It
has different collection for men and women as well as has the range of new collection
(newlook.com, 2019).
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Key relevant changes within the UK fashion retail
Political factor
Brexit has affected the retail industry of the UK in a negative way by forcing them to pay for the
trade with the EU. Therefore, Brexit can affect companies like New Look, as the tariff rate
would increase in the products that are sold by the firm. The increase in the cost of the company
due to its dependency on exporting the products to EU and rest regions as well as in importing
the materials from these nations will affect the company in a negative way (fashionunited.uk,
2019).
PETA, a group of animal rights has urged customers to refrain from buying woollen products to
prevent animal cruelty (just-style.com, 2018). This can affect the functions of the New Look, as
it has to adhere to the policies of this animal rights group to avoid negative perception of the
customers concerning the operations of the firm.
Economic factor
The economic rate of the United Kingdom has been increased by 3% within three months as
reported in the month of May 2019 (ons.gov.uk, 2019). This will have a positive influence on
New Look, as the rise in the income of the people will increase the sales of its products.
Figure 1: Economic growth rate of UK
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(Source: ons.gov.uk, 2019)
The unemployment rate of the UK has been reduced from 4.4% in the year 2017 to 4.1% in
2018 (statista.com, 2019). This will have a positive effect on the business operations of the New
Look Company. The firm would be able to employ workers to carry out the different functions of
the company. The rise in the employment rate would increase the purchasing power of the
organisation that would influence the sales of the company.
Figure 2: Unemployment rate of UK
(Source: statista.com, 2019)
Social factor
Occasions and events determine the shopping decision of the consumers. For instance, during
festive seasons the customers spend more on shopping than non-festive occasions. The events
such as parties, farewell, and such events trigger the sales of fashionable products. Therefore,
New Look’s sales can be dependable on social factors like these to earn more revenue.
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People select apparels and accessories as per the culture of the native country. The sales of the
clothing of New Look depend on the preference of the customers as well as their attitude towards
the company and about its culture.
Technological factor
Online shopping is a new trend in the modern days that is popular among people. It is preferred
over offline shopping due to the convenience of the process of buying goods. New Look’s sales
will be augmented as it has also included an online shopping option. People can buy goods from
the online outlets that are easily available on the official website of the company.
Technology has enhanced the marketing function of the retail industry. New Look will be
affected affirmatively by this factor. Promotion of goods can be influenced by using technology
such as through social media.
Legal factor
As per the “National Minimum Wage Regulations 2019”, the companies of the UK should pay
the employees an adequate amount of salary (legislation.gov.uk, 2019). New Look will be
affected by this as it has to make decision to provide the works with sufficient remuneration.
According to the “Health and Safety at Work Act 1974”, the organisations of the United
Kingdom should provide healthy working environment to the workers to ensure that they would
be safe working there (rbkc.gov.uk, 2019). New Look will be affected by this legislation as it has
to comply with the legislation to avoid issues.
Environmental factor
Eco-friendly packaging such as use of jute bags and such are encouraged in the UK to avoid
plastic pollution so that there would be decreased in the landfill problems (Sutherland, 2018).
This can affect New Look, as it has to substitute the plastic packages with the eco-friendly
packaging material to enhance its image among the customers. This would require cost of the
business as well as there it has to invest in eco-friendly packaging materials.
Transportation of goods from one region to another would increase the carbon emission to the
environment that can lead to issues with the government. New Look in order to avoid clashes
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with rules of the law should maintain the “Minimum Energy Efficiency Standard” to control the
emission of carbon and other harmful gases (Stevens, 2017). Therefore, the environmental factor
will affect the operations of the company as it has to incorporate sustainable ways to carry out
various functions.
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Relevant changes within the microenvironment
Competitors of New Look such as ASOS, House of Fraser, Primark, and others can reduce the
sales of the business by influencing the decision of the customers in buying products from their
outlets (bbc.com, 2018). New Look in order to have competitive advantage from these rival
firms should make proper strategies in pricing the goods and enhancing the customer services. It
can enhance the features of the products to entice the buyers into purchasing them.
Customers of the company in both the physical stores as well as online platform can determine
the success or failure of the business. It is through their buying decision that the company can
generate sales to increase the prospect of the firm. Changing the preference of the customers can
affect the New Look. In order to influence the preference of the consumers, New Look should
enhance the appearance of the clothing collection by including differentiation strategy in
designing the products. It should provide the customers with products based on the culture of the
country. It can also try to include a range of goods that reveal foreign cultures to increase the
sales of the company’s products in different countries.
Suppliers who provide the company with raw materials also affect the growth of the company. It
is through the suppliers that the firm can produce goods preferred by the customers. Increase in
the bargaining power of the suppliers can augment the cost of the business as well. This would
affect the company negatively. New Look should manage the supply chain by using technology
such as bitcoin to enhance the functions of the organisation (Kshetri, 2018).
Employees of New Look play a major role in influencing the quality of the merchandises as well
as increasing the loyalty of the customers with their quality services. The demand of the
employees concerning the remuneration and other benefits can affect the functions of the
business as well as profitability. Therefore, the firm should provide them with adequate
compensation as well as monitor their performance to influence their performance quality in
delivering services as well as in manufacturing commodities. The company should make the
employees follow the code of conduct to enhance the culture of the organisation (Ferrell, 2016).
This will assist in influencing the image of the company as well as products’ sale. The firm can
also enhance the marketing activities of the employees by providing them with technological
devices.
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Suggest and discuss strategies and tactics that could be used
The tactics as well as strategies that can be suggested to the New Look for facing the challenges
described above are increasing the sales through online method by providing products in
discount method. This would reduce the cost of tariff and the firm can invest that money on
developing the technology used in the company for marketing purpose. The organisation should
use synthetic materials to make woollen goods and avoid using natural wool reared from sheep.
This would maintain the image of the firm and there will be no clashes with PETA. The
company should take advantage of the rise in the economic rate of the country by investing in
products of the firm. It should employ skilled people and include goods in various ranges. It
should produce apparels that would be fit for people belong from different cultures.
New Look should have a separate collection from special occasions and events so that the
customers would find it easier to select goods for festivities. The firm should control the
emission of harmful gases such as carbon dioxide and others in the functioning of various
operations of the company. This would avoid clashes with the government of the UK. New Look
should incorporate the utilisation of eco-friendly packaging materials so that there would not be
harmful influence on the environment that can create conflict with the society (Lewis et al.,
2017). It should provide minimum remuneration and other benefits to the workers. This would
keep the employees motivated towards their work. New Look should provide healthy
environment of working to the workers to make sure that they are comfortable. This would
enhance their performance as well as the turnover rate of the workers would be reduced.
New Look to have competitive advantage should provide the customers with the garments in
unique designs. It can improve the quality of material used in making products to attract
consumers. It should therefore make good connection with the suppliers to have high-quality
materials. The company should enhance customer service in the outlets as well as in delivery of
goods so that the consumers will stay loyal to the firm. New Look should motivate the
employees in adequately performing the tasks. The management should make regular
communication with the workers to improve the working condition as well as to solve their
problems related to work.
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CONFLICT
THEORY
Antithesis
New Entrant’s changes in
sales due to strategies of
established company
Synthesis
Changes in both the companies’
structure and functions
Thesis
Existing company’s
changes in sales due to
new entrant
Non-cyclical change theories such as conflict theory as per Pioch and Schmidt attributes change
in retail by the rivalry between the established and new business (Theodoridis et al., 2017). The
trading competition involves conflict in three stages such as thesis, antithesis, and synthesis. A
new entrant in the industry reduces an established retail organisation’s sales as the former
provides goods to the customers at low price; this is thesis. The established retail company to
face the challenge of new retailer imitate the major features of the latter that is antithesis. The
new retail company on the other hand to respond to the challenge alter its strategies
(nscpolteksby.ac.id, 2019). According to Pioch and Schmidt, the changes in both the companies’
strategies resulted in attainment of synthesis. This results in lack of differentiation between the
businesses. New Look has launched the products at low price in comparison to the established
companies like Marks and Spencer. The latter has modified its price and clothing range to meet
the challenges. New Look can evolve its business model to incorporate impressive stores in
premium locations.
(Source: nscpolteksby.ac.id, 2019)
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Figure 3: Conflict theory of retail

The firm can also include premium range in the garments collection. This would increase the
sales of the products as well as can give competition to high-end retail companies like ‘Marks
and Spencer’ (Burns et al., 2016). New look should use celebrities to make advertisement for the
goods. This will be helpful in enhancing the image of the firm and sales rate of the products as
the celebrities used in promotion van influence the buyers. In this way, it should follow the
conflict theory in dealing with the rivalry in trade. Through the utilisation of this particular
theory, it would be able to deal with the challenges of competitors within the same industry. This
theory would let keep the companies motivated into developing strategies to modify their
systems. New Look in this way would be able to make changes in the functions of the firm and
alter the features of the products. This would make the company adapt to the changes and face
the challenges of the competitors. This, the sales of the products will be increased due to the
enhancement of the perception of the customers concerning the changes within the company.
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