Analysis Of Fashion Retail Industry UK 1

Analysis of Fashion Retail Industry UK

Analysis of Fashion Retail Industry UK

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Table of Contents
Introduction to the Fashion Retail Industry of UK..........................................................................3

Overview of the Company...............................................................................................................3

Key Relevant Changes within the Macro-Economic Environment of the UK Fashion Retail
Industry............................................................................................................................................4

PESTL Analysis...........................................................................................................................4

Key Relevant Changes within the Micro-Economic Environment of the UK Fashion Retail
Industry............................................................................................................................................6

SWOT Analysis...........................................................................................................................6

Strategies, Tactics and Recommendations......................................................................................6

Conclusion.......................................................................................................................................7

References........................................................................................................................................8
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Introduction to the Fashion Retail Industry of UK

According to IGI Global, a fashion retail is a group of companies that is involved in
production of fashion apparel is a supply chain from a manufacturer to the consumer directly
through some brick and mortar or online means (Nash, 2019). It can also be defined as a type of
retailing business in which different accessories related to fashion are included such as apparels
or clothing (men and women and kids). If the retail sector of UK is to be discussed, it will not be
a false statement if one says that it is the largest sector which is providing highest number of jobs
in the UK. Items such as textile stores, clothing and footwear are among those which account for
around 3 billion Pounds in Britain (Statista.com, 2021). Among those top selling brands in the
UK, they are Marks and Spencer, Burberry and NEXT plc. and ASOS. Out of these top retailer
giants in UK market, this report will analyse the top third fashion retailer that is Marks and
Spencer in the UK market. In a research work conducted by Choi and Shen in 2017, it was
analysed that the current company asset value is 7 billion pounds where as 10.5 billion pounds of
annual sales comes in their bucket (Nash, 2019). The aim of this report is to analyse the macro
environmental factors with the help of PESTEL analysis and micro environmental factors with
the help of SWOT analysis. Moreover, the key strategies and tactics that can be improved have
also been identified and recommendations have been given.

Overview of the Company

A major British brand, marks and spencer is the top third UK retail store that is offering
some extremely high-end fashion clothing to men and women which includes different apparel
accessories, footwear and clothing. The company came into existence in the late 1884 by two
young men Thomas Spencer and Michael Mark in the UK (Scott & Walker, 2017). Across UK,
there are approximately 1300 stores till now out of which only 59 stores are outside the UK
while there are 874 stores that are working only in UK (Scott & Walker, 2017).

In Russia, at the moment, 44 stores have been operational and providing their customers
high-quality goods at affordable prices for almost 13 years (Scott & Walker, 2017). Over the
more than 130-year history of its existence, the Marks & Spencer brand has managed to win the
recognition and love of the most discerning customers around the world, becoming a symbol of
British quality and sophisticated everyday style.
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Every year, there are experienced and highly fashion sensed designers across the globe
who sit together and brainstorm new ideas that would delight their consumers in any way to
reach their expectations. This has resulted in being the top favourite retailer in the UK market.

In Russia, their first retail outlet was came into operation in 2005 and now they own 44
stores out of which 5 stores are located in Krasnodar, Omsk, Nizhny Novgorod, Novosibirsk,
Yekaterinburg, Rostov-on-Don and St. Petersburg. While in Moscow, they are operating 26 retail
outlets (Scott & Walker, 2017).

Key Relevant Changes within the Macro-Economic Environment of the UK Fashion Retail
Industry
PESTL Analysis
 Political factors

Clothing can be said to have highest revenues in the UK market and for that reason,
political factors have also been a key component while developing any strategies by marks and
spencer. The total contribution of the UK Fashion Retail market to the economy is around 32
Billion Pounds (Rashid, 2017). Although the UK retail market can be considered as politically
stable, still there are some concerns that could arise due to BREXIT, but as the political
situations of UK are stable, these are neglected to make any change. If the relationship with EU
is disturbed, then it will surely put pressure on the prices which could lead to price hikes (Rashid,
2017).

If current situation is discussed, them the most significant factor that can cause
disturbance in the market is due to Covid-19. As the retail stores are forced to shut-down, this
has already caused much disturbance in retail sector and by far, marks and spencer is also facing
difficulties in managing terms with the government as they are not allowing to open stores due to
this disease.

 Economic Factors

The manufacturing of clothes is expensive in UK comparatively to the rest of the parts of

the world. Therefore, many fashion industry producers consider China, Turkey, India and
Bangladesh for their production activities (Thompson & McLarney, 2017). It helps them in
reducing their production cost and makes their products affordable. However, not all the fashion
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industry brands are affordable. UK has a variety of options as per economic conditions.
Therefore, people belonging to the different economic classes can choose different products. It
also provides opportunity to different retailers to target and serve the different market segments.

 Social Factors

UK has several fashion designing institutes that are bringing forward its fashion retail
industry through the preparation of future fashion designers. In addition to this several fashion
events are held in UK for fashion industry promotion including London Fashion Week, the
Curve Fashion Festival, Glamour Beauty Festival London and Manchester Fashion Week. UK
fashion retail industry attracts a large number of buyers (Thompson & McLarney, 2017). As it
has been mentioned by Wholesome (2018) that more than 80 percent buyers buy clothes.
Moreover, those brands that are promoted by the celebrities are more preferred by the people.

 Technological Factors

It is undoubtable that more people are shifting towards the online shopping platforms. To
cope up with their demands, most retailers have also switched towards the e-commerce sites.
Other online platforms such as Amazon and eBay are also serving the online customers
(Thompson & McLarney, 2017). Since it is not easy to make brand reputation online, therefore,
amazon and eBay can be considered for selling and promoting the online products. However,
when it comes to the online platforms selling, the competition is high in UK.

 Environmental Factors

United Nations highlights that the fashion industry accounts for around 10 percent of
greenhouse gas emissions at global level (Paton, 2019). The energy consumption of the retail
fashion industry is greater than the shipping and aviation industry. This is concerning because
UK has the large number of clothes buyers and around 300,000 tons of clothes go to landfill sites
(Jin & Shin, 2020). Therefore, government is pressurized by the environment sustainability
groups to restrict the fashion retail industry and make it more accountable for environmental
sustainability.

 Legal Factors
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The rules and regulations for the UK fashion retail industry are strict. To avoid their
compliance mostly companies have shifted in foreign countries (Jin & Shin, 2020). This step has
saved their cost but made their customers dissatisfied.

Key Relevant Changes within the Micro-Economic Environment of the UK Fashion Retail
Industry
SWOT Analysis
 Strengths

Marks & Spencer has an experience of more than a century in retail industry. The
company has made several successful partnerships across the world. The company has also
gained a good reputation among its customers. Marks and Spencer is the second most visited
retail outlet in UK. Being a multinational company, it has its retail outlets in Europe, Asia and
Middle East (Choudhary & Piparo, 2020). The company also runs online stores on online
platforms. The company offers a variety of products and designer brands both on online and
physical stores.

 Weakness

The company sales decreased during 2019 due to the unavailability of the required cloths
and products. The poor supply chain management system had affected the brand image among
its customers. Public also perceives the Marks & Spencer as a provider for only elderly people
who doesn’t offer products and cloths for young people (Choudhary & Piparo, 2020). However,
the perception is wrong. The manual operations of the company are costly and time consuming.
It is the major drawback of the company as its competitors are technological advanced.

 Opportunities

Being a multinational company, Marks & Spencer has opportunity to expand at global
level in those countries which do not have its outlets. It can also increase the number of branches
in the already served countries (Choudhary & Piparo, 2020). The focus on customer
segmentation can lead towards the sustenance of the company among its competitors.

 Threats
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Due to the growing fashion retail industry, there is a threat of increased market
competition among different brands (Choudhary & Piparo, 2020).

Strategies, Tactics and Recommendations

1. Since the operations are performed manually at Marks & Spencer, they increase the cost
and time of the company. Marks & Spencer can learn from its competitors, the ways they
perform their operations on time with low cost. Moreover, their marketing strategies can
also be considered by Marks & Spencer to increase the sales.
2. The value chain operations of the company are not appropriate enough. It results in the
gap between supply of the products and customers’ demands. It can be improved by
redesigning the value chain system for the smooth operations of the company.
3. Marks & Spencer does not consider the environmental sustainability, therefore, a
corporate social responsibility should be designed in relation with environment to
promote sustainable activities and operations.
4. Since the company is not technologically advanced, which decreases the online potential
customers. Therefore, technologically can be incorporated in structures, operations and
processes to drive its growth.

Conclusion
Therefore, it can be said through the analysis of macro and micro environmental factors
that the fashion retail industry has the potential to grow and become a leading industry in UK. It
gives opportunities to the fashion retail brands such as Marks & Spencer to get the benefits from
this growth.
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References
Choudhary, B. and Piparo, T.L., Case Study–Strategy 2020 for M&S.

Jin, B.E. and Shin, D.C., 2020. Changing the game to compete: Innovations in the fashion retail
industry from the disruptive business model. Business Horizons, 63(3), pp.301-311.

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.

Rashid, A., 2017. The impact of country of origin on retail and wholesale brands in the UK
fashion industry. The University of Manchester (United Kingdom).

Scott, P. and Walker, J.T., 2017. Barriers to ‘industrialisation’for interwar British retailing? The
case of Marks & Spencer Ltd. Business History, 59(2), pp.179-201.

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.