Analysis of UK Fashion Retail Market: A Case Study of Tommy Hilfiger

Desklib provides past papers and solved assignments for students. This report analyzes Tommy Hilfiger's position in the UK fashion retail market.

1FASHION RETAIL MARKET
UK FASHION RETAIL MARKET of TOMMY HILFIGHER
Name of the student
Name of the university
Author’s note

2FASHION RETAIL MARKET
Table of Contents
Introduction......................................................................................................................................3
Key relevant changes within the UK fashion retail.........................................................................4
Relevant changes within the micro environment.............................................................................5
Strategies and tactics that can be used.............................................................................................6
Recommendation.............................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
Appendices....................................................................................................................................12
Appendix 1:...............................................................................................................................12

3FASHION RETAIL MARKET
Introduction
In the global fashion world, the group of companies can involve in the number of action for
supporting their business and establish their brand in the global market. The action of fashion
retailing is involved of the tasks from the manufacturing the fashion items to offering them to the
customers for selling. On the other hand, the fashion retailers buy the products from the different
organisations and market them. In the fashion industry, the giant companies do their
manufacturing and retailing them into the market under the same brand. However, many
companies have to depend on to the retailers for selling their products in the market. In this
study, Tommy Hilfiger, a giant in the fashion industry has been examined in the light of retailing
(Global.tommy.com. 2019).
Tommy Hilfiger as one of the premium clothing company started their journey in 1985. The
company deals with the manufacturing of the premium clothing to retailing them into the global
market. The company also produces premium products such as accessories, footwear, cosmetics
and home ware at the same time. The brand was taken over by Phillips-Van Heusen (PVH Corp)
in the 2010, and the amount has been paid for dealing was 3 billion dollar (Global.tommy.com.
2019). Apart from Zara, Burberry and Ralph Lauren, in the international market of fashion,
Tommy Hilfiger has been able to secure their place as one of the most prolific premium brand.
The head quarter of the company is based in New York, which is also known as the fashion
capital of the world. Moreover, over the world, they have their seven flagship stores.
The estimated number of workers working in the different stores of the organisation around the
world is about 9100 and the probable revenue of the organisation in 2017 – 2018 fiscal years is
about 69 million dollar (Global.tommy.com. 2019). The company takes help from the
manufacturing units around the country however; most of their products are being manufactured
in the third countries like Bangladesh. Recently, apart from their flagship stores, the company
also started to sell their products in collaboration with the different E-commerce companies. In
addition to it, they have their own online shops to serve their customers irrespective of countries.
Apart from that, in almost all the developed and developing countries, they have their stores.

4FASHION RETAIL MARKET
Key relevant changes within the UK fashion retail
The changing face of the UK fashion retail industries can be identified as the result of
globalization. It has been seen that the fashion retail industry in the UK has been experiencing a
large growth in the recent years (Ozuem and Azemi, 2017). At the same time, they are also
considered as one of the most competitive market in the world. The reason behind this is that the
giant fashion retail companies such as Zara, Marks and Spencer and Tommy Hilfiger has been
concentrated in this market. The current value of the industry in the recent economic years is
about 39.8 billion dollar, which proves that fact that the growth of the market is about 3.4% in
respect to the previous year (Global.tommy.com. 2019). However, in order to find the key
changes in the industry, the external analysis of the market can be done.
Political factors: One of the major political factors that can harm the business of the mentioned
company, Tommy Hilfiger, rather the whole fashion industry of the UK is Brexit. Due to the
Brexit implementation, Britain may leave the EU, which would be negatively, affecting the
business of the sector, as it will resulted into the reduction of transactional effect (Parker and
Wang, 2016.). Due to this adverse transactional effect, the profit margin of the giant fashion
companies such as Zara, Marks and Spencer and Tommy Hilfiger will be reduced. On the other
hand, the uncertainty in the business market can also be experience by the organisations within
the industry.
Apart from that, most of the fashion retail organisations in the UK market import their products
from the developing countries such as Bangladesh and India. The growing political problems in
those countries can also affect the business sector.
Economical factors: Although the UK population has been growing with the time, the ageing
population is also developing in number as the life expectancy rate of people in the first word
countries such as UK has been increased. As a result, the target customers of the fashion retail
companies need to be changed. At the same time, it is also can be seen that GDP of the country is
being fluctuated in the recent years, which is also negatively affecting the buying capacity of
people (Rashid and Barnes, 2017). Due to the inflation and recession generated from 2010 and
2008, the rate of unemployment has been increased in the country, which also affected the
business scenario of the country, including the fashion retail industry.

5FASHION RETAIL MARKET
Social factors: The changing nature of the people can be seen as one of the social change that
affected the fashion retail of the country. Due to the increased life expectancy of the people, it
has been seen that the target customers of the companies dealing in the fashion are changing.
Moreover, the ever-changing concept of fashion such as the plus size fashion is also affecting the
companies (Wood et al. 2019). Some studies have shown the fact that due to overweight, people
tends to avoid certain retail fashion companies like Tommy Hilfiger.
Technological factors: The technological changes that have been developed in the industry of
fashion retail market of the UK are mostly consisted of the introduction to the e-commerce and
online shopping. Most of the people that belong to the recent generation are being used to shop
their products through the online websites. These new channels of distribution of the fashion
products are competitive space due to the low cost of distribution and operation and the ease of
use for every age group (Choi and Shen, 2017).
Environmental factors: In the recent years, the number of environmentally conscious or ethical
consumers has been increased in the fashion retail market of the UK. People are getting
conscious that the products they are using should be made ethically and no living things would
be harmed due to the whole process. It is also making the companies in the industry to look after
the issue on a serious note.
Legal factors: It is also can be seen that the introduction to the Workplace Pensions legislation in
the organisations in the fashion retail industry has been developed in order to provide the people
in industry to have their pensions (Peng et al. 2016). Almost all the reputed organisations are
developing in compliance with this law in their production process.
Relevant changes within the micro environment
Developing competitors: The UK market of fashion retail is consisting of the giant fashion
brands such as Zara, Marks and Spencer, Primark and Tommy Hilfiger. Therefore, the
concentrated base of competitions among the companies can be understood. It is also can be
stated that this developing competition among the fashion retail companies will help to generate
better revenue for the country (Fernie and Grant, 2015). The economic condition of the country
can be developed through it. On the other hand, it also can be seen that the consumption of the

6FASHION RETAIL MARKET
total market share, the organisations are helping (Kent et al. 2016). On the contrary, the products
and services of the companies can also be enhanced to achieve the competitive advantage. As a
result, it can be stated that increasing the number of competitors can help to enhance the
condition of the concerned field.
Changes in the target market: Most of the premium companies that are being developed are
required to change their concept of the target market. In case of the premium clothing, most of
the premium companies use the standard fashion size. Due to the consumption of junk foods and
bad lifestyles, obesity among the British men and women is being developed (Crewe, 2016). It is
also can be seen that there are shoppers, especially females, that try to avoid certain premium
clothing companies due to the lack of the clothing in their size, or rather not finding the variation
of clothing in their size. Therefore, many of the companies are introducing the plus size which
also making them shift from their usual target market (Thompson and McLarney, 2017).
The shifts in the target market are also can be identified among the fashion retail industry of the
UK due the major ageing population. It has been seen that in the UK, the ageing population is
increasing in respect to the young generation of the country. The population of the age group of
55 – 75 has been occupied almost one fifth of the whole population of the whole UK. Therefore,
the shifts can be seen in the target market of the clothing companies. Therefore, the economical
changes can be seen in the UK society (Kent et al. 2018). The rate of the higher disposable
income is being reduced and the people cannot be able to spend much for the premium fashions.
On the contrary, the fashion retail companies also have to introduce new range of fashion
apparels and accessories in order to target this population.
Strategies and tactics that can be used
In order to manage the changes that have been identified in the UK fashion retail market, the
some strategies and tactics can be arranged. These strategies are required to develop according to
the changes and the business management theories are implemented in order to justify those
strategies.
Rapid use of internet: One of the changes that has been developed over the years and considered
as one of the changes that has been developed in the industry and helped to develop the business

7FASHION RETAIL MARKET
of the companies that market the premium clothing and accessories. However, in order to
manage the situation, the multichannel strategies are required to be developed (Pantano, 2015).
The multichannel strategies will help the organisation to develop the direct and the indirect
channel to market their products. In order to get the products or to have information related to the
products and the services of the premium companies such as Tommy Hilfiger, the management
can develop the FAQ or frequently asked question segment in their website (Pantano, 2015). On
the other hand, the organisation can also develop their CRM or customer relationship
management system to serve their customers.
The STP process or the segmentation, targeting and position can also be implemented in this
case. The management of the company, Tommy Hilfiger can identify newly develop customer
segment and their choice. The segmentation according to the demography will also help the
organisation to target their customers according to their choice products. Moreover, for involving
the customers into the business and makes informed about the new products and services, SMS
and newsletters can be sent (Ozuem and Azemi, 2015).
On the other hand, the use of information analytics can be developed in the premium companies
like Tommy Hilfiger. The management can identify their target customer segment through this
and they can be informed. Their queries can also be answered through this.
Changes in customers’ choice and demand: The implementation of the segmentation, targeting
and positioning in the premium companies such as Tommy Hilfiger can be developed in order to
identify the changed choice and demand of the target customers of the company. It has been seen
according to the demographic and geographic segmentation of the potential and the existing
consumers, the company set their different target market (Thompson and McLarney, 2017). The
choice of the British customers would be different from that of the American customers.
Therefore, in order to attract both kinds of customers, the implementation of segmentation,
targeting and positioning should be developed (Crewe, 2016). As it is evident that in the British
market, the ageing population as well as the obese customers is making the fashion retailers to
introduce their new collection, the changed choice of customers can be identified. On the
contrary, in the American market, the companies have to produce different range of products as
the consciousness and fashion trends are different there.

8FASHION RETAIL MARKET
Competitors analysis: For achieving the competitive advantage from the other companies
prevalent in the same industry, the management in Tommy Hilfiger, should have to analyse the
collection of products that has been introduced by their competitors such as Primark and Zara. In
order to get the information, regarding the competitors, 4Ps of marketing can be applied. The
marketing environment of the companies and their product objectives can be understood through
this (Ryding et al. 2016).
Recommendation
In order to manage the problems that has been developed in the premium fashion retail
organisations, some recommendations can be developed and they can be used in order to change
the problems regarding the identified challenges in UK fashion retail industries.
Consumer-friendly website: Companies like Tommy Hilfiger has to develop their online
presence in order to get more consumers from the different corners of the world. It has been seen
that the online presence of the Tommy Hilfiger is not that consumer friendly in respect to the
other companies like Primark, Marks and Spencer and others (Fernie and Grant, 2015). As most
of the young people like to shop their products through online website, better online presence of
the company will help to develop the competitive advantages for them. Better online presence
will also help the organisation to track the traffic trend of the site and through the information
analytics, they would be able to set new specification for their target market.
Introducing new collections: For attracting the new customers according to the new
segmentation and target market, the organisation would have to introduce new range of products.
As it has been seen from the external macro analysis of the company that new ageing population
is developing in the UK, Tommy Hilfiger have to introduce new collection for attracting them
(Pantano, 2015). In fact, it is also evident that many of obese men and women like to avoid the
Tommy Hilfiger premium collection as they find that they would not able to find anything that
fits into their size. Thus, for them, the company required to develop new collection.
Developing affordable collection: Although Tommy Hilfiger is being recognised as a premium
company since their beginning, the company could not be able to many stores except their
flagship stores in the developed first world country. In order to spread their products across the

9FASHION RETAIL MARKET
world, it is needed that the organisation should introduce the range that should be affordable for
the common people.
Conclusion
To sum up the study, it can be stated that the UK fashion retail industry is being developed as
one of the industries that earn a huge amount of revenue for the country. The mentioned
company has been able to earn a position as one of the prolific premium clothing and accessories
companies of the world and thus, they have to compete with the other giants in the concerned
industry. Therefore, it can be stated that for developing the retailing for their products, Tommy
Hilfiger have to compete with other competitors and they have to change their target customer
for better and successful results in the retail market.

10FASHION RETAIL MARKET
References
Choi, T.M. and Shen, B., 2017. Luxury fashion retail management. Springer Singapore:.
Crewe, L., 2016. Placing fashion: Art, space, display and the building of luxury fashion markets
through retail design. Progress in Human Geography, 40(4), pp.511-529.
Fernie, J. and Grant, D.B., 2015. Fashion logistics: Insights into the fashion retail supply chain.
Kogan Page Publishers.
Global.tommy.com. (2019). Tommy Hilfiger Global | Latest Collections Info. [online] Available
at: https://global.tommy.com/ [Accessed 6 Mar. 2019].
Hyseni, H., Brown, C. and Gannon, M., 2015, July. Shopping and socialising: online journey to
product evaluation and purchase in fashion retail. In ECSM2015-Proceedings of the 2nd
European Conference on Social Media 2015: ECSM 2015, Academic Conferences (p. 207).
Kent, A., Dennis, C., Cano, M.B., Helberger, E. and Brakus, J., 2018. Branding, marketing, and
design: Experiential in-store digital environments. In Fashion and Textiles: Breakthroughs in
Research and Practice (pp. 275-298). IGI Global.
Kent, A., Vianello, M., Cano, M.B. and Helberger, E., 2016. Omnichannel fashion retail and
channel integration: The case of department stores. In Handbook of research on global fashion
management and merchandising (pp. 398-419). IGI Global.
Ozuem, W. and Azemi, Y. eds., 2017. Digital Marketing Strategies for Fashion and Luxury
Brands. IGI Global.
Pantano, E. ed., 2015. Successful technological integration for competitive advantage in retail
settings. IGI Global.
Parker, C.J. and Wang, H., 2016. Examining hedonic and utilitarian motivations for m-
commerce fashion retail app engagement. Journal of Fashion Marketing and Management: An
International Journal, 20(4), pp.487-506.

11FASHION RETAIL MARKET
Peng, F., Vecchi, A., Al-Sayegh, M. and Hamilton, S., 2016. How to Use Sizing Technology and
Fashion Metadata to Improve the User Experience for Online Fashion Retail. In Handbook of
Research on Global Fashion Management and Merchandising (pp. 261-279). IGI Global.
Perry, P., Kent, A. and Bonetti, F., 2019. The use of mobile technologies in physical stores: The
case of fashion retailing. In Exploring Omnichannel Retailing (pp. 169-195). Springer, Cham.
Rashid, A. and Barnes, L., 2017. Country of Origin: Reshoring Implication in the Context of the
UK Fashion Industry. In Reshoring of Manufacturing (pp. 183-201). Springer, Cham.’
Ryding, D., Vignali, G., Caratù, M., Wang, Y.Y. and Carey, R., 2016. 21st century luxury
fashion retailers’ marketing strategies for customer satisfaction: UK perspective. Int J Bus
Glob, 16(1), pp.79-103.
Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by
next Plc have on themselves and their competition in the UK Clothing Retail Market?. Journal of
Commerce and Management Thought, 8(2), p.234.
Wood, S., Coe, N.M., Watson, I. and Teller, C., 2019. Dynamic Processes of Territorial
Embeddedness in International Online Fashion Retailing. Economic Geography.

12FASHION RETAIL MARKET
Appendices
Appendix 1:
Classifications Factors
Political Effect of Brexit
Economical Increased life expectancy rate, inflation, recession
Social Ageing population, Obesity
Technological Online presence, attachments with e-commerce
companies
Environmental Ethical and environment conscious customers
Legal In compliance with Workplace Pensions legislation
Appendix 1: PESTEL analysis of UK retail fashion market