The United Kingdom is well known for its fashion centers and especially retail fashion. Many shopping centers and outlets concerning famous brands abound in the UK. However, it is important to note that the retail shopping in the UK has witnessed a downward trend for the last few decades (Ft.com 2018). Many fashion experts believe that the trend has occurred owing to the increase in availability of fashion clothing online. Others are of the view that the lack of big names at the brick and mortar outlets has contributed to this downward trend.
The given report tries to analyze the status of fashion retail by first explaining the basic concepts of retail. The report then analyzes Marks and Spencer Fashion Retail Industry based in UK. It evaluates the macro and microenvironment of the company with a focus to understand UK’s fashion retail scenario. Further, the report focuses on the consumer behavior regarding the brick and mortar retail outlets and tries to analyze the declining attitude of buying from such retail stores. The report also provides recommendations for the company to survive and grow in future by addressing key areas of its management.
Retail shopping mainly involves physical interaction of the seller and the consumer for the buying and selling of any product or service. It could be grocery, food, banking, clothing or any other product or service. In addition, it also involves providing customized services to the consumers (Hristov and Reynolds 2015). The prime focus of retail industry is to develop products and services that are affordable and attracting to the consumers. Retail marketers focus heavily on the consumer needs in order to ear maximum profit for the company.
Retailing has witnessed marked transformation from the earlier years. According to Wiese, Zielke and Toporowski (2015), this transformation can be attributed majorly to three emerging trends:
Increased diversity of retailers – In the last two decades, countless new formats of retail has been developed. Customers can now buy the same products from an array of retailers.
Growing industry concentration – Unlike the past decades, the retailing industry now comprises only a few big names. Small outlets have either been merged or replaced by the giants of the industry.
Globalization affect – It has influenced almost all aspects of human life and retail management is no exception. Globalization has enabled retailers to acquire a global presence successfully and thus improving their assets (Lysonski and Durvasula 2013).
Fashion retail
Fashion retail is a part of the retail management that is concerned mainly with clothing. The fashion retail industry is enormous and attracts billions of customers worldwide. Fashion retailing is an important aspect of the textiles industry and plays a vital role in boosting the economy of any country (Pederzoli 2016).
Fashion retailing has grown since the inception of the World Wide Web over the past few decades. The introduction of Information and Communication Technology (ICT) and its application by fashion retail industries has further provided a boost to the field. McCormick et al. (2014) have pointed out the influence of ICT in the fashion industry by stating that it has given rise to “new business models such as e-commerce”. The authors compare the trends of fashion retail of the past to that of the present, which reveals interesting facts. In the past, growth for the retailers often used to come from increases in the store spaces. However, rise in online shopping has had an influence on fashion retail stores; it shifted the retailer’s focus from going multichannel to Omni-channel.
Marks and Spencer made its humble beginnings in the year 1884, when a Jewish merchant named Michael Marks opened Penny Bazaar in Leeds, the first of its kind in UK. However, the company that exists today was formed in 1894 when Tom Spencer came into partnership with Michael Marks (Corporate.marksandspencer.com 2018). The company sold a variety of items that included food, grocery, fashion accessories and clothing amongst others. One of the unique features of the company was that it was the only shop in those periods that displayed every product in trays at the front of the store. The report’s chief focus is to analyze M & S as a fashion retail industry.
Today, M & S boasts more than 900 stores across UK and 468 around the world and online stores as well and apart from dealing with quality food products; it sells womenswear, lingerie and menswear. According to its 2017 Annual Report, the company generated overall revenue of 10.6 billion pounds, which was 2.2% better than the previous fiscal year. However, the giant retailer saw a decline in its fashion retail with 3.8 billion pounds revenue generated in 2017, 2.8% less than the previous year (Annualreport.marksandspencer.com 2018).
In order to identify the key relevant changes in the fashion retail scenario of UK, a PESTLE analysis of M & S has to be conducted (See Appendix B for table).
Political – The marketing world in UK received a heavy jolt after Brexit, as many non-UK firms, retailers, and employees working in British retails had to leave the country. It also meant that UK retailers like M & S had to follow no longer any rule or regulation passed by the European Union (Daly 2016).
Economical – The constant changes in the global and domestic trade and economic policies have had a great affect on M & S like other firms. One of the most visible changes has been the currency impact of Brexit that compelled the company to involve in conflict with other retailers over product costs.
Social – The initiatives taken by M & S like Plan A which comprises the ethical and environmental responsibilities of the company compels it to compromise on internal costs. Apart from that, incidences like product recalls and being designated as ‘non-trendy- store also affects business.
Technological – It is evident from the presence of the company’s online store that technology did boost fashion retail in the UK. Previously, consumers had limited options to choose from, which also created a kind of monopoly in the market. However, with the advancement in technology, consumers now have unlimited options (Blázquez 2014). This has also given rise to health market competition and improved quality of products and services.
Legal – It is obligatory for every firm to follow all the legal procedures while doing business to ensure smooth functioning of the firm. In case of M & S, it had to face some legal issues that led to the downslide in its profits. In one such case, the retail firm lost to BNP Paribas, its former proprietor, over rent claims (Telegraph.co.uk 2018).
Environmental – With the increasing threat on the environment, big firms have increased responsibilities to ensure they do not cause further harm to the environment. The Plan A of M & S addresses this issue. The company endeavors to produce clothes that are made entirely of cotton, which is yielded naturally without any use of chemicals.
Changes within micro environment
In order to sustain in this competitive market, the retailer has to analyze all its strengths and weakness and learn about its competitors. A SWOT analysis can be conducted to understand better the microenvironment of M & S (See Appendix A for table).
Strength – M & S has a strong offering that aligns with updated trends in the industry. It is the first retail firm to introduce naturally woven cotton clothes that had a mix of both style and comfort. Further, it has the merit of a huge local and global presence boasting over 1400 stores across the globe. M & S also has its own branded label that further gives it an added advantage. Its CSR that is Corporate Social Responsibility is one of the best in the market owing to its innovative Plan A strategy (Marks and Spencer 2018).
Weakness – In the past few decades, the company’s financial performance has seen a downward trend that has affected it severely. The company reported a fall of a whopping 64% in its annual profits owing to weak sales in the clothing section. Another weakness is its over reliance on UK markets that make it susceptible to local market conditions. Further, consistent recall of products also caused damage to its reputation and sales as well.
Opportunities – One of the biggest opportunities for M & S is to invest in the Indian market, one of largest markets for global firms in the world. Further, by focusing more on online presence, the company can reshape its business. With a better pricing strategy and reshaping of its clothing section by offering comfortable and affordable clothes, M & S can bolster its profits.
Threats – Apart from the negative effect of Brexit that caused the Sterling to depreciate, M & S has the challenge to sustain the onslaught of other fast emerging retailers especially in the clothing segment. The list of competitors is long and includes names like ASDA, Next, TESCO and so on (Forbes.com 2018). However, with the change in its leadership, M & S hopes to turn the tides in its favor by regaining customer faith.
Strategies and tactics to be used
Analyzing the macro environmental factors of M & S makes it easier to outline certain strategies that the firm can utilize in order to regain its dominant position. Although, there is not much concern for its food segment, but the clothing section needs novel strategies.
Value chain analysis – The Company has a strong hold when it comes to sustainable business having been designated as one of the best environment friendly business globally. However, it needs to upgrade its branding strategy and focus more on market segmentation. The company’s operations also have to be smooth and simple in order to cater to the changing needs of the customers. Further, M & S has to strengthen its online presence and make sure that there are no more cases of security breach as had happened in 2015 (Theguardian.com 2018).
Sales and Marketing – In one of its marketing strategies to promote clothing, M & S launched an ad campaign focusing primarily on women. In the campaign, the company highlighted women empowerment using the tagline “you have one life so spend it well”. However, the campaign failed miserably as it did not fathom the impact of Brexit on the cost of living in the UK (Campaignlive.co.uk 2018). It then changed the campaign and shifted its focus on family clothing. It is thus clear that M & S must reposition its brand and highlight its strength, which is sustainable and comfortable clothing.
Services – M & S has the advantage of having bricks and mortar stores as well as online stores. In order to have an edge over its growing competitors, the company needs to focus majorly on its in-store service such as ensuring items are always in stock and no delay in meeting customer demands. One of its biggest strength is its CSR policy and this can be utilized as a tool to overcome challenges in the competitive market (Fashionunited.uk 2018).
Marks and Spencer is in the phase of regaining its previous reputation as the leading retailer in the UK and the world as well. However, it has to comprehend the situation deeply and be a step ahead than its competitors. The following recommendations are made for M & S to follow:
Conclusion
A leading retailer of food and clothing and other home items in the UK, M & S certainly has a lot of potential to grow as the largest retailer in the world. Boasting of more than a thousand stores across the globe and a strong online presence, M & S continues to carry on its century old legacy. However, in the last few decades, the company witnessed severe failures in almost all aspects of its business. The report focused primarily on the macro environmental factors of M & S and analyzed the various factors that witnessed changed in the recent years. In addition, the report highlighted the micro environmental factors and revealed the strengths and weaknesses of M & S including its biggest competitors. The impact of events like Brexit and the resultant Sterling depreciation on M & S’s performance has been evaluated as well. It has been observed that many factors contributed to the poor performance of M & S especially in its clothing segment that included poor ad campaigns. The report has made recommendations for the company to follow in order to revive its lost position in the fashion retail sector
References:
Annualreport.marksandspencer.com 2018. M&S Annual Report 2017. [online] Annualreport.marksandspencer.com. Available at: https://annualreport.marksandspencer.com/ [Accessed 3 Mar. 2018].
Blázquez, M., 2014. Fashion shopping in multichannel retail: The role of technology in enhancing the customer experience. International Journal of Electronic Commerce, 18(4), pp.97-116.
Campaignlive.co.uk (2018). Will the new M&S brand strategy boost the retailer’s fashion and food credentials?. [online] Campaignlive.co.uk. Available at: https://www.campaignlive.co.uk/article/will-new-m-s-brand-strategy-boost-retailers-fashion-food-credentials/1433486 [Accessed 3 Mar. 2018].
Corporate.marksandspencer.com 2018. About Us. [online] Marks and Spencer. Available at: https://corporate.marksandspencer.com/aboutus [Accessed 3 Mar. 2018].
Daly, S., 2016. The Taxing Consequences of Brexit. King’s Law Journal, 27(3), pp.463-472.
Fashionunited.uk (2018). Marks & Spencer ranked first in new human rights benchmark. [online] Fashionunited.uk. Available at: https://fashionunited.uk/news/business/marks-spencer-ranked-first-in-new-human-rights-benchmark/2017031423872 [Accessed 3 Mar. 2018].
Forbes.com (2018). Forbes Welcome. [online] Forbes.com. Available at: https://www.forbes.com/sites/laurengensler/2017/05/24/the-worlds-largest-retailers-2017-walmart-cvs-amazon/#15b36fa020b5 [Accessed 3 Mar. 2018].
Ft.com 2018. UK fashion market suffers steepest decline since 2009. [online] Ft.com. Available at: https://www.ft.com/content/c55cd612-945f-11e6-a1dc-bdf38d484582 [Accessed 3 Mar. 2018].
Hristov, L. and Reynolds, J., 2015. Perceptions and practices of innovation in retailing: Challenges of definition and measurement. International Journal of Retail & Distribution Management, 43(2), pp.126-147.
Lysonski, S. and Durvasula, S., 2013. Consumer decision making styles in retailing: evolution of mindsets and psychological impacts. Journal of Consumer Marketing, 30(1), pp.75-87.
Marks and Spencer. 2018. Plan A. [online] Available at: https://corporate.marksandspencer.com/plan-a [Accessed 3 Mar. 2018].
McCormick, H., Cartwright, J., Perry, P., Barnes, L., Lynch, S. and Ball, G., 2014. Fashion retailing–past, present and future. Textile Progress, 46(3), pp.227-321.
Pederzoli, D., 2016. ICT and Retail: State of the Art and Prospects. In Information and Communication Technologies in Organizations and Society (pp. 329-336). Springer, Cham.
Telegraph.co.uk 2018. M&S loses legal scrap with BNP Paribas over £1.1m rent bill. [online] Telegraph.co.uk. Available at: https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/12028967/MandS-loses-legal-scrap-with-BNP-Paribas-over-1.1m-rent-bill.html [Accessed 3 Mar. 2018].
Theguardian.com (2018). Marks & Spencer shuts down website due to technical glitch. [online] the Guardian. Available at: https://www.theguardian.com/business/2015/oct/28/marks-spencer-shuts-down-website-due-to-technical-glitch [Accessed 3 Mar. 2018].
Wiese, A., Zielke, S. and Toporowski, W., 2015. Sustainability in retailing–research streams and emerging trends. International Journal of Retail & Distribution Management, 43(4/5)
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