Next Plc: Analysis of the UK Fashion Clothing Market Dynamics

This report provides a comprehensive analysis of the UK fashion clothing market, focusing on Next Plc's operations and strategic responses to market changes. It begins with an introduction to retail and an overview of Next Plc, a leading British fashion retailer. The main body of the report identifies key changes in the UK fashion clothing market, including the evolution of retail marketing from the 1950s to the present, with a focus on the impact of e-commerce and new distribution channels. A PESTEL analysis evaluates the political, economic, social, technological, environmental, and legal factors affecting Next Plc. Porter's Five Forces analysis assesses the competitive landscape. The report then discusses strategies and tactics that Next Plc could use to respond to the major changes occurring in the fashion clothing market, including the Wheel of Retailing theory and the impact of uncertainty. The report concludes with a summary of the findings.

Retail Theory and Practice

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
a) Identifies key relevant changes in the UK fashion clothing market.......................................1
b) Strategies and tactics that could be used by the retailer to respond to the major changes
occurring in the fashion clothing market....................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Retail is defined as a formative procedure in which process related to selling of products
as well as services is being done via numerous form of distribution channels in order to generate
maximum amount of revenue (Buckle and Thompson, 2020). Present report has been conducted
on, Next Plc, company operates their business functioning as a leading entity which is offering
products like, accessories, footwear, home products, clothing etc. In this report discussions has
been conducted on key relevant changes that are prevailing in UK clothing market and
suggestions to company to effectively respond towards occurring changes.
MAIN BODY
Overview of company
NEXT PLC is operating their business functioning as British fashion retail with having
headquarter Enderby, Leicestershire, UK. With their lucrative and high quality offerings this
entity is satisfying needs and demand of customers (Appiea, Ndletyana and Wilson-Prangley,
2020). Respective company is having commitment of their workforce which is making this entity
a leading organisation in retail industrial sector. Further it has been evaluated that with having
700 outlets and $1,694 stock turnover this company is offerings their services all around the
world. In addition to this, company is operating with three channels, namely, Next International
(chain of over 180 international outlets), Next Directory (home shopping catalogue and website)
and Next Retail (chain of over 550 retail branches).
a) Identifies key relevant changes in the UK fashion clothing market
Background of retail marketing-
Retail marketing is determined as a procedure within which retailers engage in the process of
generating awareness among individuals related to organisational offerings in order to influence
their purchasing behaviour (Dekimpe, 2020). In modern world this process process is becoming
complex within which there is an involvement of different form of selling methods.
Traditional distribution channel- With the help of this chain products and services
reached to customers. In this distributors, retailers, wholesalers and others are included.
1950’s Manufacturer is king- In the year 1950, products and services manufacture are
known as market king. Customers requirements are not high, this makes manufactures to
produce goods according to their wish.
1

1960’s Consumer is king- In this year, there was significant change in preferences, needs
and taste of customers, this makes entities to manufacture services as well as products according
to consumer requirements.
1970’s trade is king- By this year, trade gets included in retail sector which makes
business manufactures to undertake their production as per in accordance with fashion and trade
(Lee and Chow, 2020). It makes trade as a king that facilitate business organisation to
manufacture according them.
1980’s marketing emphasis-By 1980 business entities stated to involve marketing
importance. In this, products as well as services that are being produced by entities have major
aim towards earn maximum profitability with the advantage of marketing.
2000’s relation/ethical /societal influences on retailing- By this modern era entities
started to manufacture goods as per according to lifestyle and demand of consumers in order to
gain more profitability.
New distribution channels- In 2008-10 entities started to undertake advantage of
numerous form of distribution channels for example supply chain, direct selling, dual
distribution, selling through intermediaries, internet and websites and more. E-commerce is an
effective form of distribution channel that can be undertaken by Next plc to offer their services
and products worldwide. However company can face many issues like enforcement and
execution of international trade laws and legislations.
PESTEL Analysis
Pestle analysis is a strategic tool with the help of which an organisation can effectively
able to evaluate impact of factors that are prevailing in external environment. It further allows
them to formative strategies through which they can overcome adverse impact of the factors
while undertaking advantage of opportunities. Mentioned below pestle evaluation of Next plc is
being defined
Political Factor:
This factor mainly include the extent at which government or political parties
interferences are affecting business operations. In this elements relating to labour law, taxation,
interest rate etc. are included. It has been evaluated that Next plc performance and productivity
is being affected with the change of tax rate (Heding, Knudtzen and Bjerre, 2020). However,
2

with the advantage of stability in governance, respective organisation by undertaking corrective
measures can make significant improvement in their revenue generation ratio.
Economic Factor:
In this elements related to currency rates, economic growth, inflation rate are included.
All these factors are having direct impact of entity operations. It has been evaluated that Next plc
is affected with the financial crises that increases overall rate of unemployment. It affects entity
capability of revenue generation (Lu, Liu and Ma, 2020). For instance, only those individuals
who are employed affords to purchase company offerings. This economic condition can be
overcome by company by offering relatively competitive affordable products and services to
those customers in order ensure continuous growth.
Social Factor:
In this factor cultural and social changes are included which is having great tendency to
impact business activities and functioning of a company. According to the evaluation this has
been evaluated that Next plc get affected with social as well as cultural shift of individuals in UK
towards mode of delivery (Ganning and Miller, 2020). This makes entity to take advantage of
significant opportunity and offer their products and services by offering customers with the
facility of home delivery facility and online shopping. It increases satisfaction level of customers
along with entity profitability.
Technological Factor:
This factor revolves around evolvement of new and advanced technology as to facilitate
creativity and innovation in marketplace. This has been identified that Next plc by undertaking
significant advantage of technological opportunities can formulate apps through which they can
provide their customers with the facility to tracking new arrivals, discounts and more before
making their physical visit at store (Madsen and Petermans, 2020). With the help of this entity
can effectively develop strong relationship with the customers that further enhances their
profitability and futuristic growth opportunity.
Environmental Factor:
This factor of pestle analysis include measures and practices that are required to be abide
by organisations while performing their business operations in order to have positive
consideration towards environment. Next plc is affected with the increase in awareness among
individuals towards safety and prevention of environment and climate. This makes organisation
3

to undertake advantage of environment friendly measures to make significant reduction in
overall level of wastage. In addition to this it is also important for entity to ensure that production
and manufacturing activities are not generating harmful and hazardous gases.
Legal Factor:
In this factor legal obligations, government legislations and laws are included. With the
modification in standard base of wages Next plc get affected that can further by managed by
company management by practising fair or standards salary measures. With the help of this
entity can not only able to conduct their business operation as per according to government
standards but can also safeguard themselves from being get caught into any legal obligations of
penalties.
According to above mentioned analysis it has been evaluated that there are number of
changes that are affecting operations and functions of Next plc. However, all these can be
significantly responded with the formulation of effective strategies and policies. This will lead
entity to increase their capability for revenue generation along with maximising satisfaction base
of consumers in a well defined and effective manner.
Porter's Five Force Analysis
It is a strategic tool that allows an organisation to evaluate the extent of competition that
are prevailing in respective industrial sector. By taking advantage of this tool Next plc can
effectively able to determined competitiveness in retail segment. Mentioned below five forces of
this model in being duly evaluated in context with Next plc:
Threats of new entrants- This has been evaluated that threat of new entrant is low in
retail market due to the requirements of high amount of capital investment and presence of
numerous rules and regulations that are being imposed by government (Vo and Arato, 2020). It
increase Next plc growth and development opportunities, as in this company with the help of
innovation and creativity can satisfy maximum number of customers and can enlarge their
profitability base.
Bargaining power of suppliers- In UK retail industry bargaining power of suppliers are
relatively low for respective company. As it has been evaluated that most of the suppliers wants
to perform their business operations with leading and growing entities in respective industrial
area for continuous growth and profitability, Next plc is leading retail organisation thus this
4

allow entity to negotiate prices with suppliers. This enhances opportunity for company to serve
maximum amount of customers with high quality products and services at competitive or
affordable price base.
Bargaining power of buyers- Due to the presence of many retailing organisations like
prada and gucci buyers have power to shift their tend towards other brand. It facilitate high
bargaining power of buyers. In order to overcome this Next plc can undertake advantage of
various practices like innovation, creativity and low pricing strategies in order to gain more
competitive edge. It will further allow entity to maximise their overall rate of revenue generation
capability.
Threats of substitute products and services- There are number of organisations those are
offering same or similar kind of products and services to customers. This states threat of
substitute services and products high in retail marketplace. Next plc is facing threat of
substitution from entities like John Lewis, Zara and more. Thus, in order to gain more
competitiveness respective organisation is required to offer high quality of services and products
to consumers in affordable price range.
Rivalry among the existing competitors-
According to the evaluation, this ha been evaluated that there is relatively high level of
rivalry among prevailing competitors in retail sector. Along with this, it has been evaluated that
existing leading entities are providing similar kind of services as well as goods to customers. In
addition to this as per the evaluation, this is being determined that there is aggressive competition
among entities that are creating threat upon Next plc profitability and productivity. In order to
overcome this, it is essential for respective organisation to adopt new and advanced technology
as to increase quality of their offerings.
b) Strategies and tactics that could be used by the retailer to respond to the major changes
occurring in the fashion clothing market.
Uncertainty in the retail
This is being defined as future problems and challenges that an organisation can face in
respective industry. For example uncertainty in lifestyle, taste, preference etc. are some of the
factors which is having tendency to affect organisation operation (Caro, Kök and Martínez-de-
Albéniz, 2020). In terms with Next plc this has been evaluated that company get affected with
5

the uncertain problem of Brexit. Along with this continuous upgrade and update in technology is
also creating threat upon entity.
Wheel of Retailing
With the advantage of this theory entity can duly explain institutional change that
undertake place when large business house and innovators make their entrance in retail segment.
Mentioned below four steps of this model is being elaborated:
Establishing and penetrating in the market- At this step, respective theory mainly
emphasizes upon new retailers those who have entered with having low price as low profit
margins. In this low price is mainly because of the use of effective as well as innovative form of
cost cutting process.
Expanding in the market- When these retailing entities significantly gained effective
market experience then they tend towards enhancing their overall base of customers with an aim
to increase share holding and profitability in marketplace.
Stabilized business model attracting margins- At this stage, organisation ensure its
stability in respective industrial area and aim towards earning maximum profitability base by
undertaking advantage of high pricing strategy.
Entry of another retail competitor- At this step, number of competitors make their entry
in marketplace that duly creates high level of competition for already existing entities.
Models used to implement change
Conflict theory
They are the appearance in social philosophy as well as sociology mainly focus upon
materialist representation. Further it has been evaluated that this theory mainly draw attention to
power differentials like generally dominant ideology and class conflicts (Wang and Nie, 2020).
With the help of this effective understanding of structural inequality, competitors, war and
evolution can be gained. By taking advantage of this theory Next plc management can
effectively able to determine extent of competition that are prevailing in marketplace and can
further overcome those issues or problems that are causing high level of competition. Reason of
constricted resources, there can be high probability to increase the problems and conflict within
organisational workplace structure which can be easily understand with the help of this theory.
Change recommendations for the chosen company
6

 Next plc is being recommended to undertake advantage of high tech technology and new
distribution channels in order to increase their overall sales ration and gain attraction of
maximum number of customers. It will increase entity profitability and productivity.
 Due to shift of customers towards online purchasing company is having high scope. For
this, recommendation is to respective company is related to take use of online shopping
software and applications to serve customers in more geographical area. It maximises
their revenue generation capability.
 Entity is recommended to take use of effective pricing strategies like penetration. As
consumers mainly seeks for low price products with high quality. For this company by
taking advantage of innovative measures can offer high-quality offerings in affordable
price range.
In order to satisfy maximum number of customers with entity products and services
organisation can undertake use of formative evaluation of prevailing competitiveness in
respective market segment (Khakse and Mhasvekar, 2020). In terms with Next plc, entity can
undertake advantage of market evaluation through which they can determine actual needs and
requirements of consumers. In addition to this, by undertaking advantage of good pricing
strategies such as premium pricing, that will significantly lead towards creating impression of
luxury products with high quality. It will aid entity with increased brand awareness. It has been
identified that customers within UK are having high income level that makes them emphasize
upon high-quality products irrespective for price range. With the help of this strategy entity can
accomplish their goals and objectives in a well defined and effective manner.
CONCLUSION
According to the above mentioned report it has been evaluated that retail industrial sector
is a leading and growing segment which is not only satisfying needs and demand of customers
but are also providing employment opportunities to individuals. However there are numerous
form of relevant changes that are prevailing in United Kingdom fashion clothing market that can
be effectively responded by retailer by taking assistance of tactics or strategies like Pestle
evaluation and Porter's five force. It will allow them to accomplish their aims and objectives in a
well defined and effective manner.
7

REFERENCES
Books and Journals
Appiea, L., Ndletyana, D. and Wilson-Prangley, A., 2020. Empowering the next generation of
leaders. Emerald Emerging Markets Case Studies.
Buckle, M. and Thompson, J., 2020. The UK financial system: Theory and Practice. Manchester
University Press.
Heding, T., Knudtzen, C.F. and Bjerre, M., 2020. Brand Management: Mastering Research,
Theory and Practice. Routledge.
Lu, Y., Liu, Z. and Ma, L., 2020. Competing through logistics management: Studies on e-
retailing in China. In Supply Chain and Logistics Management: Concepts, Methodologies,
Tools, and Applications (pp. 1075-1094). IGI Global.
Ganning, J. and Miller, M.M., 2020. Transit oriented development and retail: Is variation in
success explained by a gap between theory and practice?. Transportation Research Part D:
Transport and Environment. 85. p.102357.
Caro, F., Kök, A.G. and Martínez-de-Albéniz, V., 2020. The future of retail
operations. Manufacturing & Service Operations Management. 22(1). pp.47-58.
Poulin, D. and Tran, S. eds., 2020. Information and communication technology and small and
medium sized enterprises: from theory to practice. Cambridge Scholars publishing.
Dekimpe, M.G., 2020. Retailing and retailing research in the age of big data
analytics. International Journal of Research in Marketing. 37(1). pp.3-14.
Lee, S.H. and Chow, P.S., 2020. Investigating consumer attitudes and intentions toward online
fashion renting retailing. Journal of Retailing and Consumer Services, 52, p.101892.
Vo, H.T.M. and Arato, M., 2020. Corporate social responsibility in a developing country context:
a multi-dimensional analysis of modern food retail sector in Vietnam. Agroecology and
Sustainable Food Systems. 44(3). pp.284-309.
Madsen, S.M. and Petermans, A., 2020. Designing retail-Unravelling coping strategies through
emphatic interviewing owner managers. Journal of Retailing and Consumer Services, 55,
p.101884.
Khakse, S.A. and Mhasvekar, A.D., 2020. Improvements to Overcome the Dilemma in the Retail
Supply Chain. NOLEGEIN-Journal of Operations Research & Management, pp.1-5.
Wang, C. and Nie, P.Y., 2020. Retail competition using free shopping shuttle bus
strategies. Managerial and Decision Economics.
8