Retail Industry Trends and Marks & Spencer Analysis

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Contents
Introduction...................................................................................................................... 3
Current trends in the retail industry..................................................................................4
Analysis of Marks and Spenser........................................................................................8
SWOT analysis of M&S................................................................................................8
Marks and Spencer Porter’s five forces-.......................................................................8
Conclusion..................................................................................................................... 11
References.....................................................................................................................12
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Introduction
This inquiry-based report will explain the current and recent trends that are taking place
in the retail industry. The analysis of Marks and Spenser organization will be made by
using the business model such as SWOT and Porter’s five forces.
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Current trends in the retail industry
Retail refers to the process of selling consumer services or goods to customers through
various distribution channels in order to earn a profit. The retail industry is growing at a
faster pace in the whole world. The great transformation can be seen in the retail
industry with the new driving channels and it can be said that the retail is re-invested;
following trends can be seen in the retail industry –
1. The physical stores are being expanded by the digitally native brands such as
Casper, Warby Parker, glossier, and Bonobos that started their online business. It is
expected as per the views of experts of real estate that in the next five years 850 stores
of bricks and mortar are predicted to get open (Pantano, 2014).
2. For bridging the gap between physical and digital the leveraging of augmented
reality (AR) technology is used by the retailers. The features of AR have been
launched by the mega-brands like Amazon, Lowes, and Target. This innovative
technology of retail is becoming accessible by the Shopify for the smaller brands
through Shopify AR. An easy-to-use tool kit can be provided by this feature for creating
own AR experiences.
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3. Artificial Intelligence (AI) powered trend of retail, visual search allows shoppers for
finding and buying products by snapping of the photo. In just one click, with the help of
the AI the products can be identified across different sites and retailers (Gregory, 2015).
4. Pop-up shops are becoming popular nowadays in the field of digital-gone-offline as
it is expected that temporary retail can generate around 80 billion dollars on an annual
basis. The excitement that has never seen before and the scarcity principle are
leveraged by the temporary storefronts for providing an experience that can drive
shoppers for showing-up and buying.
5. The delivery of the products and services are getting faster. It can be seen that drone
technology is used by the Amazon prime Air for delivering the order of shopper in thirty
minutes or less. The same day delivery is now offered by around 51% of e-commerce
retailers.
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6. The shoppable posts of Instagram and Instagram stories have taken off in the last
few years. The feature of social shopping is used by 41% of brands of e-commerce.
Social shopping rise can be used by the retailers by partnering with the influencers of
social media and resources and time are dedicated for building the shoppable social
profiles on Pinterest and Instagram (Łopaciuk, and Łoboda, 2013).
7. The selling of private label products is growing faster three times in comparison to
branded products. The legacy brands can get help from the private labels by staying
relevant in the landscape where more care is made by the shoppers on affordability and
quality.
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8. The brands and products are being evaluated easily on the basis of the values and
ethics of the company. The customers have become more conscious regarding the
ethos behind the business the customers buy from. Customer loyalty and trust can be
established by offering ethical issues and genuine transparency.
9. Robots use will increase with the passage of time. The company such as Amazon is
making an investment in robots for helping ship items and helping packs. In 20% of the
fulfillment centers robots are there with the retail giant and this number is anticipated to
grow.
10. With the customization, shoppers can purchase the product tailored particularly for
styles and needs. Personalization is referred to enabling shoppers for building the
products and customizing them. the stores of bricks and mortar and e-commerce are
offering different options than before for customizing the purchase from embroidery and
monograms for fully unique color schemes (Hortaçsu, and Syverson, 2015).
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Analysis of Marks and Spenser
Marks and Spencer are known as the leading retailer with the unique and strong
heritage of the values of the brands. The company is engaged in selling of high quality
of clothing, food products, and home products. It is a multinational retailer and its
headquarter is in London, U.K.
SWOT analysis of M&S-
Strengths Weaknesses
 The strong infrastructure of e-
commerce
 Strong focus is on customer’s
experience enhancement
 High brand recognition
 A large number of outlets and
stores
 Reliance on UK markets is too
much that makes the company
vulnerable to marketing conditions
in the local country.
 The poor performance of the
finance
 Customer confidence is losing due
to the frequent recalling of products
Opportunities Threats
 Planning for making an investment
in Indian markets
 Simplification of the model of
operation
 Reshaping of the segment of
clothing
 Strong online opportunities
 The trends are changing in the
clothing space
 Sterling depreciation post Brexit
 Stiff competition in the food sector
of the UK (Roth, 2017)
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Marks and Spencer Porter’s five forces-
 Threats of new entrants- Innovation is bought in the retail industry due to the
new entrants and it has put pressure on M&S to lower its strategies of pricing,
providing value propositions to the customers and reducing the costs. All these
challenges are required to be managed by the M&S and effective barriers are
required to be built by the company for safeguarding its competitive edge.
 Bargaining power of suppliers- The raw-material is bought from different
suppliers by the companies of the retail industry. The margins of M&S can be
decreased by the suppliers who are in the dominant position that the company
can earn in the market. In the sector of consumer services, the negotiating power
is used by the powerful suppliers for extracting the higher prices from the firms
that are engaged in the field of retail. The overall profitability in the retail sector
has been affected by the bargaining power of suppliers (Mathooko, and Ogutu,
2015).
 Bargaining power of buyers- The preference of buyers is to buy the best
products and services that are available in the market with the payment of the
reasonable price. The long-term profitability of M&S will be hindered by this
pressure. The customer base of the company is very powerful that demands for
the higher bargaining by the customers and the company has to offer discounts
and various attracting offers so as to maintain its customers; base.
 Threats of substitute products and services- There is a low threat for the
substitute products in the food and clothing sector. However, there is a threat to
M&S that its food and various apparels can be substituted by the products that
are offered by the other retailers. Waitrose is considered as the direct rival in the
market of food while the high-quality cloths and apparels are offered by Peter
Jones and John Lewis. Cheaper alternatives also offered by the Asda and Tesco
and are engaged in selling the dinner jackets. This is affecting the profitability of
M&S (Dobbs, 2014)
 Rivalry among the competitors that are existing- There is big competition
prevailing in the retail industry. The venerable competition is faced by the M&S
as not only apparels but foods are also sold by the company along with the
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household items. High competition is thus being faced by the company from
supermarkets such as Sainsbury’s, Asda, and Tesco and competitors of the cloth
sector include Next, Topshop, John Lewis, and Zara. M&S has recently engaged
in cutting prices of apparels and is trying to be all the things to all the people
which is creating risks for the company of brand devaluation.
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Conclusion
Hence, it can be concluded from the overall business report that the retail industry is
having various new and innovative trends and these trends are benefiting the
companies of the retail industry to a great extent. Marks and Spencer have a very
strong brand image and many strong opportunities are provided to the company fro
expanding its business through online selling.
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References
 Pantano, E., 2014. Innovation drivers in the retail industry. International Journal
of Information Management, 34(3), pp.344-350.
 Gregory, J., 2015. The Internet of Things: revolutionizing the retail
industry. Accenture Strategy.
 Hortaçsu, A. and Syverson, C., 2015. The ongoing evolution of US retail: A
format tug-of-war. Journal of Economic Perspectives, 29(4), pp.89-112.
 Łopaciuk, A. and Łoboda, M., 2013, June. Global beauty industry trends in the
21st century. In Management, knowledge and learning international
conference (pp. 19-21).
 E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set
of industry analysis templates. Competitiveness Review, 24(1), pp.32-45.
 Mathooko, F.M., and Ogutu, M., 2015. Porter’s five competitive forces framework
and other factors that influence the choice of response strategies adopted by
public universities in Kenya. International Journal of Educational
Management, 29(3), pp.334-354.
 Roth, S., 2017. Parsons, Luhmann, Spencer Brown. NOR design for double
contingency tables. Kybernetes, 46(8), pp.1469-1482.
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