Retail Sector Trends: A Case Study of Marks and Spencer

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INQUIRY PROJECT
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INTRODUCTION
This research project provides the understanding of the recent trends of the retail
sector with the use of the specific sources. The literature search will be done for finding
the data for the same. Marks and Spencer have been selected for this assignment and
analysis for the same has been done with the use of the specific business models.
Further, the background of the Marks and Spencer has been provided and the data has
been collected. The organization performance against the trends of the industry has also
been identified. Further, the recommendations and action plan has also been provided.
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RETAIL TRENDS
The retail sector is the backbone of each nation’s economy and it helps to grow the
economy faster. It is the major source of the increase in the GDP in the UK’s retail
industry. It is the significant for the economy as it has affected the economy in the
positive and negative manner both. There are three million workers working in the retail
industry and retail industry provides employment high than any other sector in UK. It
holds an upmost importance for the UK’s economy (Dunne et al., 2013). And in the year
2017 it has produced and generated sales of £395billion in retail and in the year 2018
the sector has produced business of 319,000 in retail. 2018 year was very challenging for
the retail business as it has been gone through store closures, failures in business. Retail
industry is in high pressure. Many of retailers are not in comfortable position as the
margins are not up to the mark between rise in costs and weakening of demand (Smith,
2019). Also, the confidence of consumers also feel in the second half of the year 2018
and this has results in the non-certainty for the ongoing and trade ware between US
and China and consumers remains cautions for the same. The other trend can be seen
for the rise in the cost as the wages has been high in the year 2018 and prices of
commodity, business rated and pensions remains also high. Ending of 2018, e-
commerce was twenty percent of all retail sales (Mohanraj and Divya, 2018). The sales
of the organization was high and it takes place with-in the store only. The online channel
is becoming the fastest channel and with the help of this transformation there id the
requirement to balance the investment with the profit. Businesses are struggling and
fighting to survive. In the last some year there is the increase in the number of the
disclosures of store as retailers having the excessive pressure for restructuring their
businesses (Retail economics, 2019).
The retail industry has been experienced an important revolution over the past decades
and it will evolve and continues. There are main five trends that can be seen to shape
the retail sector and which are considering the brand as a culture and glass box.
Consumers are shopping with the help of emotions instead of the wallets. The changing
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attitudes and preferences in regards to the corporate responsibility have impacted the
retail brands. With the rise and growth of the retail sector of UK the effect has been
seen over many areas and which are employment, economy, profit etc. The recent
trends in the retail industry and sector include the experiential retail that reflects
nowadays in the retail industry. They draw their focus towards the customer-centric
approach where the customers can interact with the brand and product rather than
being a passive participant. The other trend is the augmented reality and virtual reality.
Here the retailers begin to experiment with the virtual commerce that leverages the
augmented and virtual reality (Dunne et al., 2013). The experts have noticed that by the
2020, the retail industry will be at the top spending industry on VR and AR. As for
example, IKEA has launched a new VR experience that has provided the experience to
the shoppers to experience the 3D Kitchen. Also the multi-channel retailing has gained
the popularity. The latest and most common example of this is the Mobile shopping and
online presence. As for instance Future Retail owns brick and mortar stores while they
are also tied with the e-commerce websites to sell their products (Walsh, 2017). The
other trend is the hyper personalization that shows the increase in the personalization
by creating the consumer and retailer relationship. Last not the least the retail industry
is also working for the creation of the human interaction-free experience for their
customers. The automation has been accepted in all retail store. The example is the Big
basket as they have placed physical kiosks containing consumables and grocery items in
several apartment complexes (Smith, 2019).
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ANALYSIS OF THE ORGANISATION
BACKGROUND OF ORGANIZATION
Marks and Spencer: The name of the organization is based on the founder of the
organization which is Michael Marks and Thomas Spencer. There are approx. 703 stores
of Marks and Spencer in UK with the main headquarters in London. It is one of the
largest departmental store chains in the UK. This organization sells the products like
drinks, food, apparels and household items. They go for diversification by addition of the
new product line for the financial products like insurance and credit cards. This
organization also believes in the values for providing the affordability and quality and
also the good services (Nash, 2019). Marks and Spencer was originated in the year 1984
and it became the first retailer that has made the profit of approx. £1 billion. After
making this profit, the organization has dropped down into crises. As per the research it
has been found that the over 21 million visitors visit the retail store for each week
across the world. It has also been analyzed that the M & S treat their customers with
high class quality, value for money prices and fashionable clothes. Marks and Spencer
employs approx., 78000 people in the UK branch alone (Marks and Spencer., 2019).
Primary data and Secondary data
The company analysis has been done with the assistance of primary data and secondary
data. The primary data was collected with the help of the interview method and the
interview was conducted with the store manager of one area of Marks and Spencer.
Also secondary data was collected with the help of the literature review. This has
provided the detailed information about the company performance (Pantano et al.,
2017).
With the help of the primary and secondary data it has been observed that the
workforce of the Marks and Spencer are very competent but the technology used are
not so compatible. The organization is earning their 90% of the revenues from the
market of UK. Marks and Spencer is known for the vast and broad variety of the lingerie
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and Women’s wear section. It has been regarded a one of the retail chain which is
expanding and growing its business through increasing the market share. It deals with
mainly the sales of luxury products, clothes and food items (Peres et al., 2017).
Performance of organization against trends of industry
Marks and Spencer has suffered a high loss from the cost of their structuring
programme. The overall sales and marker share at M&S contributed to 49% of the entire
business from the clothing and home accessories. The rest of the 51% of sales comes
from the food items such as breads, fresh baked cakes, groceries, cookies etc (Marks
and Spencer., 2019).
Figure 1: Marks and Spencer revenue
Source: Marks and Spencer., 2019).
The global revenue of the Marks and Spencer in 2019 is 10.4bn GBP. UK is among the
country that generates the highest revenue. The opinion of the customer towards the
product is having the high and they have given five star rating. Marks and Spencer is not
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performing well as it is not adopting the updated technology in the organization. Also
the latest trend in the retail industry is not being used by the organization although
Marks and Spencer is trying to sell the products via online media Marks and Spencer.,
2019).
STRENGTHS
Higher brand recognition: Marks and Spencer is the market leader in its industry. And it
is well known in the market due to its quality and it is providing in the past years. The
organization is having the multichannel presence.
Wide products variety: Marks and Spencer is having the wide products variety in each
store that helps their customers to select the best. It is having more than 1500 suppliers
and more than 500 different varieties and it also includes 500 different types of pre
prepared vegetables, fruits and salads.
Strong e-commerce infrastructure: Marks and Spencer is leveraging on their expertise
that is developed in the E-commerce market of UK for spreading their wings in abroad.
The organization is investing heavily on systems, IT and logistics and it is also the
strategy of the organization (Marks and Spencer., 2019).
WEAKNESS
Manual working increases the costs: Marks and Spencer follows the old methods rather
than the new methods which increases the cost of the organization and also the time.
Inability of foreign market penetration: Marks and Spencer has the presence in UK and
US and Europe. The organization has opened many stores in Middle East and Asia but
they were not successful to win the customers because of the designs are not traditional
and western (Marks and Spencer, 2019).
Supply chain Scale: One of the main weaknesses is the poor scalability of the supply
chain of the Marks and Spencer. The organization is not successful to scale the supply
chain to be delivered in all locations.
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RECOMMENDATIONS
Marks and Spencer must track the trend of the retail sector and should make the
strategies according to that for the business growth. The trend of the online shopping is
increasing and the Marks and Spencer think more about the online shopping. The new
technology must be enabled in the organization. Marks and Spencer must enable the
virtual reality experience in the organization. Marks and Spencer can also go for the
customization of the product. The organization can train their staff and make them
competent to provide the product according to the needs and requirements of the
customers (Swaffield et al., 2018).
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ACTION PLAN
Period Action Estimate
d
duration
Start
date
End date Delivera
ble
Com
ment
Retail trends Industry data and literature
search
6 days 03/06/2
019
08/06/201
9
Yes -
Write up of retail industry
trends
4 days 09/06/2
019
12/06/201
9
Yes
Other 2 days 13/06/2
019
15/06/201
9
Yes
Analysis of
your
organisation
Background of chosen retail
organisation
10 days 16/06/2
019
25/06/201
9
Yes -
Primary data (interviews,
questionnaires etc) and
secondary data
8 days 26/06/2
019
01/07/201
9
Yes
Organisational performance 7 days 02/07/2
019
08/07/201
9
Yes
Other 2 days 09/07/2
019
10/07/201
9
Yes
Recommendati
ons
Write up and action plan 7 days 11/07/2
019
17/07/201
9
Yes -
Misc/Other Referencing 3 days 18/07/2
019
20/07/201
9
Yes -
Appendix 2 days 21/07/2
019
23/07/201
9
Yes
Submit to
Turnitin
1 day 24/07/2
019
25/07/201
9
Yes -
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CONCLUSION
It can be concluded from the above report that the retail sector is the growing sector.
All the retail industries must consider the current trends of the retail sector. This
assignment has provided the understanding of the current retail trends that can be
utilized by the Retail Company and industry. Further the analysis of the performance of
the Marks and Spencer has also been done along with the company’s background. The
strength and weakness of the organization is also being discussed in the report.
Moreover this report has also provided the understanding of the recommendations and
action plan for the current project.
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REFERENCES
1. Alexander, N. and Doherty, A.M., 2009. International retailing. Oxford university
press.
2. Dunne, P.M., Lusch, R.F. and Carver, J.R., 2013. Retailing. Cengage Learning.
3. Marks and Spencer., 2019. (Online Available at:
https://corporate.marksandspencer.com/annualreport last accessed: July 2019)
4. Mohanraj, P. and Divya, S., (2018). Customer Preference Towards Online
Shopping-An Empirical Study. ZENITH International Journal of Multidisciplinary
Research, 8(6), pp.1-1
5. Nash, J., (2019). Exploring how social media platforms influence fashion
consumer decisions in the UK retail sector. Journal of Fashion Marketing and
Management: An International Journal, 23(1), pp.82-103.
6. 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.
7. Peres, I.T., Repolho, H.M., Martinelli, R. and Monteiro, N.J., (2017). Optimization
in inventory-routing problem with planned transshipment: A case study in the
retail industry. International Journal of Production Economics, 193, pp.748-756.
8. Retail economics., 2019. UK RETAIL STATS & FACTS [Online available at:
https://www.retaileconomics.co.uk/library-retail-stats-and-facts last accessed
July 2019]
9. Smith J., 2019. Overview of the retail sector in the UK. [Online available at:
https://www.prospects.ac.uk/jobs-and-work-experience/job-sectors/retail/
overview-of-the-retail-sector-in-the-uk last accessed July 2019]
10. Swaffield, J., Evans, D. and Welch, D., (2018). Profit, reputation and ‘doing the
right thing’: Convention theory and the problem of food waste in the UK retail
sector. Geoforum, 89, pp.43-51.
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