Report: Retail Industry Trends, Next plc Analysis, and Recommendations

This report provides a comprehensive analysis of the retail industry, focusing on current trends and their impact, especially in the context of the COVID-19 pandemic. It examines the performance of Next plc, a major player in the UK retail sector, using both PESTLE and Porter's Five Forces frameworks to assess its political, economic, social, technological, environmental, and legal factors, as well as competitive forces. The report highlights key trends such as the shift to online shopping, the importance of localism, and changing consumer behavior. It then offers specific recommendations for Next plc to improve its performance, including compliance with government regulations and the effective use of digital tools. The report concludes by emphasizing the need for retailers to adapt to the changing market conditions and consumer preferences, ensuring long-term sustainability and profitability.

Inquiry Project

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
The trends in retail industry....................................................................................................3
Analysis of Next plc...............................................................................................................4
Recommendations..................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
In this report, the particular industry that has been taken into consideration is Retail
industry because it is covering huge area of the market. Basically, Retail industry is considered
to be the sector where a business owner effectively start making determinations like how
effectively we can cell different range of products and services to the targeted individuals and to
give competition to the rivals (Bodolica, Spraggon and Soueid, 2019). Retail industry
specifically focuses on meeting the requirements of customers which can be anything from
grocery from our clothes and any other type of daily basis products and services that are essential
for an individual. The particular organisation that has been taken into consideration is Next plc,
which was found by Joseph Hepworth in the year of 1864 and presently this organisation
headquartered at England, United Kingdom.
MAIN BODY
The trends in retail industry
In present time, global economy is dealing with outbreak of a disease named as COVID-
19, that has not only impacted negatively on health considerations of public belonging to United
Kingdom but it has also affected the economic conditions as well. The major concern is safety
and security of individuals and at present the trends within the Retail industry are carrying a
rapidly changing nature and this is because of the uncertain alterations within the policy is due to
pandemic (Pantano, Priporas, Sorace and Iazzolino, 2017). Considering the environment and
while focusing on the proper analysis which has been performed on the market there are a range
of trends that are available in the market that will be helping in taking right decisions so that a
business like Next plc may effectively gain ample number of benefits and some of these trends
are presented underneath: Shopping confidently: Due to outbreak of Corona Virus, it has been analysed that
individuals are pretty much and this led them to purchase products and services through
online channels. But, this also raise the concern in relation with security and safety of
personal information because there are many places that came in front of cyber crime
where hackers took the information of customers and started threatening them like they
will kill them and so on. Therefore, taking decisions in relation with purchasing of
different products and services, here it will be required by the retailer to consider and
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effective security and safety related program that will help shoppers to keep their
information secret at the time of shopping. Localism and community: Public transport is something that it was majorly being
affected by outbreak of coronavirus and it is pretty much needed for business
organisations to take help from local government like developing and effective
community that supports purchase of products and services with the help of local retailers
this will benefit both small retailers and supermarkets as well that are already dealing at
national or international level (Martino and et. al., 2017).
 Brands and products: From last two decades, it has been found that customers has
started trading among expensive and branded products or services. However, in terms of
trading of consumers specifically purchase cheaper products the initial time in order to
fulfil the needs but after that a try expensive products and then take decisions of choosing
one particular brand. This is something which is needed for an organisation like Next plc
to understand the delivering quality products or services will automatically help company
in sustaining in the market for a longer period of time.
Analysis of Next plc
As it has already been mentioned in the introduction section that Next plc was found in
the year of of 1864 by Joseph Hepworth and at present company has already gained appropriate
good well of being a famous supermarket in front of the customers that helps them in fulfilling
their requirements and needs in much effective and efficient manner (von Briel, 2018). In all
over the world, Next plc is considered to be a famous supermarket brand but just because of
COVID-19, their profitability and productivity got affected the most. Analysis of this particular
organisation is being done considering two different analysing tools and these are PESTLE
framework and Porter’s five forces model, which are discussed underneath:
PESTLE Analysis:
PESTLE Description
Political/Legal Next plc, which is performing at international level, political
elements like Brexit has impacted on business operations in both
positive and negative sense. Basically, United Kingdom's market
become open, which brought ample number of opportunities for
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foreign business organisations that were looking forward to
expand their business. This raised many concerns for Next plc
because they started facing difficulties in enhancing their profit
ratios and productivity and the reason that came in front was
continuously rising competition (Santoro and et. al., 2019).
Including this, if it is talked about the legal aspects then it can be
said that outbreak of COVID-19 has also raised various concerns
for Next plc, like there was a need of following the lock down
guidelines which is given by parliament of United Kingdom. This
is where revenue which was generated by Next plc in past few
years was affected negatively.
Economical This is considered to be one of the crucial factor which majorly
impacts on an organisation in both negative and positive manner.
In context with Next plc, company is already performing business
at international level where any changes within the global
economy might impact on profitability of this organisation. In
present situation of outbreak of COVID-19, it has been found that
United Kingdom's government has given tax rebate to
organisations that are dealing among different sectors. This has
also helped Next plc in raising benefits like resolving the issue of
paying salaries to the staff members and so on.
Social Over the years, it has become vital for companies to focus
different social factors as they carry both negative and positive
impact on company's performance level (Ying and et. al., 2020).
Different needs along with the requirements of staff gets change
from time to time and in present situation of global pandemic,
public is specifically worried about their health because of rapid
spread of COVID-19. This is where, these individuals avoids
purchasing products and services from physical stores therefore, it
brought various changes within purchasing behaviour of
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consumers. In present context, Next plc would also require to
make alterations like they would require to start selling products
and services through online channels. Consumers started focusing
on online retailers and this is where they also started avoiding
public transport which they usually used to do in order to visit
supermarkets and so on.
Technological Technology is said to be one of the crucial business influencer,
which is continuously changing trends from a really very long
time. Spread of COVID-19 virus has started bringing various
changes like, local retailers within this particular sector started
shifting from performing business through online stores than
physical ones (Sansone and Colamatteo, 2017). This has helped
them in reducing the chances of people getting connected with
each other, which can be considered as a reason behind rapid
spread of Coronavirus. Next plc is said to be an organisation
which is continuously promoting and offering techno-friendly
services to the customers, which has helped them in enhancing
sustainability in the future market and so on.
Environmental Another crucial element of PESTLE Analysis, which also impacts
on an organisation in both positive and negative manner.
Basically, due to lock-down people stayed at their home and just
because of this pollution got reduced approximately by 60%. This
is something, which also impacted positively on utilisation of
natural resources as environment healed itself, which has given
opportunities for customers to enhance sustainability in much
effective and efficient manner.
Porter's Five Forces Analysis:
Five Forces Description
Threat of new entrants Within retailing sector of United Kingdom, it has been found
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that threat of new entrance has been really very low and the
reason that came in front was that the existing organisations
like Big 4 Supermarkets has grabbed a good position in the
market. This might reduce the chances of getting these new
organisations to become less able to survive in the United
Kingdom's competitive business environment
Bargaining power of
customers
Customers' bargaining power within retail industry is also
really very low. Away with this, the explanation in this
situation of effective demand and supply graph also stays
unbalanced in nature (Hançerlioğulları, Şen and Aktunç,
2016).
Bargaining power of suppliers Over the years, bargaining power of suppliers has been
moderate in context with United Kingdom's retail industry (for
Next plc) because own store but due to the pandemic, the
factories are closed because of lock-down and different
companies have to depend on the external suppliers for
retailing activities.
Threat of substitute Threat from substitute products launched by companies within
retail industry is also really very low in nature and the reason
that came in front was the unstable economy along with the
barriers for the entry is quite wide which not so easy to
manage considering the current situation.
Existing rivalry Next plc, an international retail organisation carrying a leading
position within the market where it was found that position of
the company is not that much effective in nature and carrying a
saturated position within the market because of rivals like Big
4 Supermarkets and like Tesco, Walmart, Sainsbury's & many
more.
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Recommendations
Considering the above mentioned information, it is being analysed that Next plc is also
holding a good position within the market and carrying a stronger brand image in all over United
Kingdom. Company is continuously satisfying customers with potential products and services
that they are serving with quality (Hançerlioğulları, Şen and Aktunç, 2016). Including this, it is
also found that at present Next plc is going through ample number of difficulties like they are not
able to achieve their daily targets and because of this less productivity and profitability can be
seen. In order to sustain within the market, there are a few recommendations that can be given to
company and some of these are given underneath: Compliance with government rules and regulations: This is said to be the primal
recommendation that is specifically being given to Next plc that all the political
guidelines are required to be followed by them in any chance or in any case. On the other
hand, after analysing the overall situation of current pandemic it can be said that it will be
needed by organisation to undertake all the rules and regulations. Also, Next plc would
require to develop own policy that tends to follow considering guidelines and safety
regulations of prominent areas (Balaji and Roy, 2017).
 Effective use of digital tools and technology: Another recommendation that can be given
to Next plc is to take into consideration of digital tools along with the technologies and
the reason that came in front was that individuals would tend to ignore the current options
of going out from their place and shop. In present context, Next plc can effectively
launch an online website platform for the consumers to sustain within the market for a
longer period of time.
CONCLUSION
With the help of above mentioned information, it is summarised that the retail business
patterns are valuable for organization regarding winning increasingly more benefit and
accommodating in making due in outside condition. For this, retailers should know about the
outer market since economy isn’t steady and furthermore advantageous for the business. Thus, in
thinking about the current circumstance, organization likewise will make themselves more
versatile towards the progressions and compelling improvement that happens in industry with
respect to the best possible working and functioning according to the necessities and
prerequisites of clients. As far as this, patterns tare recognized by demonstrating the correct
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variances according to the necessities and inclinations of clients as far as changing the buying
conduct. Besides, Porter’s fiver forces along with PESTLE are utilized as far as distinguishing
different acts of organization and furthermore will in general arrangement with unmistakable
changes. Finally, scarcely any recommendations are given like noticeable utilization of
innovation, etc.
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REFERENCES
Books and Journals
Bodolica, V., Spraggon, M. and Soueid, M.A., 2019. Innovation drivers and trends in the retail
industry: an application to emerging markets and the case of the Gulf
region. International Journal of Comparative Management, 2(1), pp.51-66.
Pantano, E., Priporas, C.V., Sorace, S. and Iazzolino, G., 2017. Does innovation-orientation lead
to retail industry growth? Empirical evidence from patent analysis. Journal of Retailing
and Consumer Services, 34, pp.88-94.
Martino, G., Fera, M., Iannone, R. and Miranda, S., 2017. Supply chain risk assessment in the
fashion retail industry: An analytic network process approach. Int. J. Appl. Eng.
Res, 12, pp.140-154.
von Briel, F., 2018. The future of omnichannel retail: A four-stage Delphi study. Technological
Forecasting and Social Change, 132, pp.217-229.
Santoro, G., Fiano, F., Bertoldi, B. and Ciampi, F., 2019. Big data for business management in
the retail industry. Management Decision.
Ying, S., Sindakis, S., Aggarwal, S., Chen, C. and Su, J., 2020. Managing big data in the retail
industry of Singapore: Examining the impact on customer satisfaction and
organizational performance. European Management Journal.
Sansone, M. and Colamatteo, A., 2017. Trends and dynamics in retail industry: focus on
relational proximity. International Business Research, 10(2), pp.169-179.
Hançerlioğulları, G., Şen, A. and Aktunç, E.A., 2016. Demand uncertainty and inventory
turnover performance: An empirical analysis of the US retail industry. International
Journal of Physical Distribution and Logistics Management, 46(6-7), pp.681-708.
Balaji, M.S. and Roy, S.K., 2017. Value co-creation with Internet of things technology in the
retail industry. Journal of Marketing Management, 33(1-2), pp.7-31.
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