Retail Theory: Zara's Strategies in the Changing UK Fashion Market

This report provides an analysis of Zara's strategies in response to key changes in the UK fashion clothing market. It begins with an introduction to Zara, a Spanish apparel retailer, and then delves into an analysis of the relevant changes in the UK fashion market using tools like PESTLE and Porter's Five Forces. These changes encompass political, economic, social, technological, legal, and environmental factors, as well as threats from new entrants, bargaining power of buyers and suppliers, rivalry among competitors, and the threat of substitute products. The report further discusses the tactics and strategies employed by retailers, particularly Zara, to respond to these major changes, emphasizing the importance of adapting to evolving consumer preferences, technological advancements, and competitive pressures. The analysis highlights how Zara utilizes strategies to maintain a competitive edge and achieve long-term goals in the dynamic fashion retail landscape of the United Kingdom. This document is available on Desklib, a platform offering a wide range of study tools and solved assignments for students.

Retail Theory and Practice

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Introduction of company (ZARA). ............................................................................................1
A) Analysis key relevant changes in UK fashion clothing market. ...........................................1
B) Discuss and suggests tactics and strategies which is used by retailer to respond on major
changes which is occur in fashion clothing market. ..................................................................4
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Retailing is define as buying and selling of many goods and services with involvement of
direct communicating with buyers. There is a effective contribution which is done by managing
many activities by which products are given according to desires & needs of customers. In
retailing there is a delivery services and post which is managed as according to requirement at
market segment. It is term as idea which is mainly analyse balance level in which there is a
adequate cycle which is transformed as also considered as low margin operations & low cost and
also some functions (Piotrowicz and Cuthbertson, 2019).
Fashion retailing is a business in which clothes are purchase from manufactures to sellers.
In this industry, retailers make sure about initial purchase of sales which is processed as per
ability and capability of buyers for buy clothes from their stores. Fashion merchandiser offers
their clothes as according to emerging and latest trends so by this requirement of customers are
fulfilled in efficient and effective manner.
MAIN BODY
Introduction of company (ZARA).
ZARA is a Spanish retailer of apparel which is based in Arteixo in Galicia ( Spain).
Company mainly deals in fast fashion and products which involves accessories, clothing, beauty,
perfumes and swimwear. This is a largest company in inditex group and also as world's largest
apparel retail store. This organisation have women's, men's and children clothing stores. Home
design of company is located in European stores (Rao, 2019). The products which are offered to
are mainly based on trending at market segment and consumer preferences. There is highly
supply chain ships which is as new products in their stores as twice in a week. As due to increase
in competitive pressures which is from online shopping market so in terms of ZARA is shifting
their focus onto online as well and also open fewer and large stores in future times. The chairman
of this company is Amancio Ortega which is undertaking all plans and strategies which leads to
success of organisation.
A) Analysis key relevant changes in UK fashion clothing market.
The fashion market defined as to promote the new segments of apparels, interest of
products which earn the revenue as well as sales through their consumers. According to season
there is need of changes in every business, so that customer attract towards the product and
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organisation able to operate their business. In which business earn more profit and market share
in united kingdom. The fashion industry has efficiently germinate, its around last 20 years. The
changing structure of the fashion corporation have pushed to retailers to desire low cost and
unveiled in design and structure quality and efficiency of market place, key methodologies to
maintain a good profitable perspective in the enhancing exigent market. This report overview the
changes on which happened in fashion corporation around since last 1990. It describes quick
fashion from a provider along with a customer point of view and build the structure to different
position research issue. Changes in fashion clothing and apparel in UK because people is looking
forward to grab new thing , preferences as well as new taste (Camilleri, 2018). It is an necessary
factor which have to apply on it which gives an opportunity to buy products and services from
different stores. If organisation work according to customer requirement it will gives gives
preference and changes in the context of preferences, market structure, technological factor,
marketing related changes.
Key changes in fashion retail of UK
Within UK, there are diverse number of changes that have occurred with passage of time.
In context to fashion retail of United Kingdom, analysis of changes by managers of ZARA is
undertaken through PESTLE Analysis that is as defined:
Political: The factor is associated to the ways and at what extent political parties
intervene in an economic system. Factors which are associated to the dimension that are key
cause of changes in an industry includes taxation policies, government structure, trade
restrictions and many more. In relevance to fashion retail industry of UK, it is analysed that
decisions of political parties includes Brexit and others have imposed restrictions on working of
entities among UK and EU due to while multiple retailers had to shift their businesses to other
countries that are either EU or UK. In UK, at present there is scenario of stable addition to fair
political system that helps retail companies, like, ZARA to develop better actions for capturing
larger market shares and improving productivity. However, UK's fashion clothing market have
faced changes in political decisions from the political authorities that collied with few difficulties
which relates decision which is taken by government in term of new taxation rate that impact on
the employee outcomes and consumer demand.
Economic: It includes economic performances that are concerned with demand and
supply, business cycle changes and hence forth that influences companies and economy of
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nations widely. At present, COVID-19 have resulted in various economic situations like financial
crisis that that enhances unemployment related situations. Moreover, there are changes analysed
in demand and supply of products because of which companies like ZARA have analysed
changes in skilled labour force, purchasing powers of consumers and many more within fashion
retail sector.
Social: In fashion retail sector of UK, there are multiple players that have made an unique
position in market and have enhances demand of products. In the industry, changes among
perceptions, attitudes and behaviours of customers are analysed by managers of retail companies
like ZARA. As per the current scenario, organisation mainly looking forward to the consumer
preferences. Because of urgency improvement in the need, wants and demand of the customer.
Organisation can properly justify them and build or manufacturing the goods so, they will
looking forward to earn more revenue as well as profit to take the growth of market in market
place. For an organisation, consumer are ocean of knowledge and prudence and develop their
modification of goods and services. Manager of organisation perpetually including taste and
preferences of the consumers (Hayes, 2018). If customer buy that particular product, customers
are loyal with their brand and with the organisation. In the relation of ZARA higher authority
continue analyse their consumer taste and preference, and trend that carry on in clothing sector.
Preference is depend upon various factors such as social and economic factor in which company
is responsible to build their quality of products and give the best services to the consumer as well
as with great offers. In current situation consumer are looking forward which have low price of
their products. For the manager of ZARA responsible for generate and developed the product at a
nominal price product with high quality goods. This thing will attract more and more consumer
in market place. Although if company looking forward to this changes it will give the advantage
to the organisation, it also can produced those goods which has nominal cost with high quality it
also impact on the atmosphere in positive way. As per the perspective of preference manager of a
organisation make some right terms and conditions or strategies.
Technological factor: Acceptance of new technologies it is very necessary for current
atmosphere as per the consumer and every organisation should follow this tendency for the
succession of an organisation for long term tactics. In fashion retail industry, there are multiple
technologies including artificial intelligence, search engine optimisation, etc are used that results
in changing working from labour intensive to capital intensive methods. Technology used in
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promoting product and services which makes the offer which help in acquiring aims, objectives,
market goals and enhancing sales of the company. In the relation ZARA manager look forward
for selection and hiring of the candidates which is habitual of using technologies. Improvement
in technology is bigger change that organisation must follow to enhance it market share through
expanding the profit margins. Which is effectively used in this trend company which make some
strategies. Which help in to implement new technology to enhance sales and generate revenue
along with profitability in various outlets of the organisations (Ehlenz, 2018).
Legal: It includes rules, policies and regulations which are governed through government
of a country in order to benefit economy of the nation and the companies which operate within it.
Currently, political parties of UK have made changes in legislation that are health and safety at
workplace in retail sector. Political leaders of UK have became strict and undertaken measures to
eliminate discrimination among workforce. In contrary, managers of ZARA works ethically and
have changed their decision-making about adoption of multiple measures for providing safe and
secure work environment.
Environmental: In UK fashion retail industry, changes that are analysed includes using
eco friendly materials that meet customer perceptions for saving environment from harmful
elements. UK government have devised aspects or practices to protect environmental resources
that retailers uses in the industry. As ZARA operate within retail industry, its employees have
experienced changes in practices by entities regarding usage of natural reserves like crops,
garments as well as fibres that are used in production of fashion products.
Relevant changes within micro environment
Certain numbers of changes in micro environment of retail fashion industry are examined
by professionals of ZARA through Porter's five force analysis that assist in analysing
competitive environment of a business. The forces involving changes in internal environment of
ZARA are as follows:
Threat of new entrant: Retail fashion industry is a profitable market that attracts new
entrants with innovate ideas. This results in eroding profitability of exiting players. However,
there are certain changes analysed by managers of ZARA in regulations or policies for new
entrants in the UK fashion retail sector through which ZARA strengthens it position,
Bargaining power of buyers: It explains easiness of buyers to drive product prices of
company. Buyers expect high quality products at low prices and switches to others companies in
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UK retail industry when similar products are available at lesser prices. In the industry, demand,
perception, beliefs and other aspects of buyers changes gradually that decreases customer size of
ZARA resulting in high bargaining powers of buyers.
Bargaining power of suppliers: The force defines about how easy it is for suppliers to
drive prices of products. In retail industry of UK, there are multiple number of suppliers that
have different ways of working and makes changes in their behaviour in context to organisation.
When suppliers offers materials to retailer at high rate and sacrifice quality then the changes
results in incompatibility of company like ZARA that reduces its shares in market and generating
less income.
Rivalry between existing competitors: Key driver of competition in UK fashion retail
industry includes number together with capabilities of rivals within the market. Within the
industry, there is high rivalry among competitors as various companies such as Burberry, Ralph
Lauren, Gucci, Hugo Boss, Chanel, Louis Vuitton and many more that are competitors of ZARA
operates in it. When one company made changes in their tactics of working then other also
makes changes in business practice.
Threat of available substitutes: Substitutes are those products which offers similar
satisfaction to customers. In case with UK fashion retail industry, close substitutes of offerings of
ZARA exists within the market that enhances likelihood of switching of customers towards
options for responding price changes.
B) Discuss and suggests tactics and strategies which is used by retailer to respond on major
changes which is occur in fashion clothing market.
Strategies: This is define as general plan which helps in achieving one or more long term
goals under condition of uncertainty. It is important because resources which is available for
achievement of goals which is usually limited. It mainly includes setting priorities and goals
which helps in determining actions for attaining goals and mobilises resources in such manner
for executing actions (Sit, Hoang and Inversini, 2018). There are many strategies which fashion
clothing company have to adopt as according to changes which is mentioned above. In terms of
ZARA, managers can adopt changes by implementation of strategies with use of Porter's Generic
Model which is discussed below:
Porter's Generic model: When market is analysis it is stated as UK technological,
environmental and social factors have need some changes which is mainly based on preference
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of customers in which they needs products which are affordable as high quality in their goods.
So it is very important as ensure demand and supply of market segment which is effective. The
model which is used for this is known as Porter's generic model which is applying for examining
strategic option which is use for growth and success. In terms of ZARA, this model is discussed
below: Cost leadership: According to this strategy the main objective is for becoming lowest
cost producer in industry. This strategy is mainly associated with large scale business
which is offered standard products which is considered as relatively little differentiation
which helps customers. In terms of ZARA, they have motive for manufactures services
and products which is at possible low price which helps in enhancement of scale of
production (Fildes, Ma and Kolassa, 2019). Advantage of this type of model is as
products which are produced in bulk which helps in exploring business in effective
manner. But on other hand when organisation is using this strategy they are not enjoying
long term stability so this leads to factor which is for competitors as they start to provide
goods at low cost. Differentiation: With this strategy business generally targets large market and also have
motive for attaining competitive advantage by differentiation all over the industry. This
strategy mainly includes selecting one or more criteria which is used by buyers in market
and after this positioning company in unique manner. In context of respective
organisation, managers have to introduce new products and services in fashion sector
which are valuable for buyers in efficient and effective manner. As when ZARA use this
strategy company may enjoy maximum profits this is due as there are many products
which helps in generating monopoly for company in competitive market segment. So for
this firm have to focus on research and development on regular basis which helps in
gaining long term benefits for company (Dholakia, Dholakia and Chattopadhyay, 2018). Focus: According to this strategy it is divided in two factors for which organisation have
to focus on satisfy demand of customer. These two factors are discussed below:
◦ Cost focus: In this factor company have to lower their price of services and products
which helps in targeting large markets. So for this company have to focus on this
strategy for focuses on their target customers and segments.
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◦ Differentiation focus: According to this strategy organisation have to produce
various services and products for important segment in efficient and effective way.
From above strategies there is a major benefits which is taken by organisation as by
implementing both the above strategies which helps in creation of opportunities in market
segment. When this strategy is execute this is incurred more than other two strategies as they are
also presenting uncertainties in surroundings which leads to success and growth of company
(Suhartanto and et. al., 2018).
From all of above strategies, generic strategy which is used by ZARA is called cost
leadership. This model offers company a distinct source of competitive advantage. As brand is
providing high end fashion at low prices. This strategy also helpful for overcoming its drawbacks
as they have to calculate differentiation which helps company for gaining competitive advantage.
Tactics: This is conceptual action or series of short which have main motive for
attainment of short term goals. This action have to be implemented for one or more specific
activities. For implementing changes in successful manner, manager of ZARA have to focus on
developing some tactics which are discussed below: Performance Appraisal: This is a process which constantly analyse performance of team
member at their workplace which helps in analyse their contribution in effective and
efficient manner. It helps in reviewing annual analyses of capabilities and skills of their
employees which is related to success and growth of organisation. When manager
adopting this tactic this helps them for changes as according to changes in demand of
market. In terms of ZARA, managers have to regularly analyse performance of their staff
which helps them for work in effective and efficient manner. So for this organisation
have to take follow ups on regular or & continuous basis of every member. This leads to
improvement in their performance quality and they also feel motivated as according for
achievement of task in specific time period (Parent and Ruetsch, 2020). The main
objective of adopting this tactic by manager of ZARA, which helps in examining strength
and weakness of their team members so the task which is given to right people at right
time. This tactic also helps in influencing working habits which helps for attainment of
high profits for organisation.
 Training and development: This method is effective and oldest tactic which company
have tom adopt for increase their profits and sales. This is consider as important function
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of human resource management. So for this organisation have to adopt this tactic for
analyse best talent in their employees which is helpful for assigning the task in easy
manner. In this tactic manager provide training and development programmes which is
helpful for identify hidden talent in their staff members. In terms of ZARA, managers
have to implement new technologies in offering their goods and services so for this
organisation have to give proper training and development programmes for their
employees. So by this customers are satisfy and organisation is attaining high revenues
and profit. So for this company have to focus on giving friendly environment to their
staff members which is helpful for accepting the changes in efficient and efficient manner
(Kervenoael, Bajde and Schwob, 2018).
CONCLUSION
Retail marketing is define as process which helps in promoting interest and awareness of
their products as provide in such manner which helps in generating sales with their customers. In
addition, changes is occur in every business which helps in attainment of more profits and
market share. So changes can be occur as changes in preferences, technological factor market
structure, changes which is related to marketing. Furthermore there are many strategies and
tactics which helps retailer for responding major changes which is occurring in fashion clothing
market segment.
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REFERENCES
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