Essay about Retail Theory and Practice
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Retail Theory and Practice
The retailing sector impacts everyone’s life and the economy. It contributes to the Gross Domestic Product of countries and employs a huge number of people. In the UK it contributes about 10.5% and it employs about 2.4 million (Fernie et al., 2013). Currently, the retail sector has changed greatly as they have moved from being small-scale family-run businesses to powerful multinational corporations. For instance, Mark and Spencer is a UK multinational retail company. It has a great impact on the economy as it has 80,787 workers (Marks and Spencer, 2018). Retail involves business activities that include the selling of goods and services to ultimate consumers (Clodfelter, 2013). Nevertheless, retailing does not require a store, one can use catalog sales, vending machines, and internet sales. The success of a retailer is influenced by consumer satisfaction. Fashion retail is influenced by factors such as consumer characteristics, geographic data, behavioristic data, and psychographic data. The paper will focus on Marks and Spencer to understand the retail theory.
About Marks and Spencer
Marks and Spencer retailing is among the UK’s top retailer. It is committed to ensuring that every moment is special. They do this by providing high-standard products and their brand clothing (Marks and Spencer, 2018). The retail company was started in 1884, its first store was located at Penny Bazaar in Leeds. Over the years, the company has expanded its stores to cover a huge worldwide base. It has 1035 stores in the UK and four hundred and twenty-eight international stores (Marks and Spencer, 2018). The company has 80,787 employees and occupies fifty-six international territories. It derives £3.7bn from its clothing and home products. The company’s profit before tax and changing items is £590.9m.
Marks and Spencer is a unique retailer and it has a huge heritage of brand values and clients. The company focuses on offering great value to their customers’ money (Marks and Spencer, 2018). It serves about thirty-two million clients. Marks and Spencer use various channels to reach out to their clients. It has increased its plan to operate larger and more inspirational clothing stores (Marks and Spencer, 2018). The organization has expanded its operations to include online stores. It plans to deliver one-third of its clothing within five years. The plan is set to help the organization it remains competitive and maintains its market share. The online presence is meant to help the company reflect the change in customers’ shopping habits. Its stores are located across high streets as well as out of town retail parks which allows it to reach out to its client base. Marks and Spencer are ensuring that their clients have an easy shopping experience.
Key Relevant changes within the UK fashion retail
There are various changes taking place in the UK affecting the retailing sector. They include increased e-commerce, an increasing population, the athleisure trend as well as an increasing demand from clients (Clodfelter, 2013). The changes have helped in pushing the fashion retail sector forward.
PESTLE analysis will help in assessing the major changes within the UK fashion retail (Berry, 2017). Currently, there are various external environments that affect Marks and Spencer. PESTLE analysis will help in assessing key factors that influence the macro-environment of the retail sector for Marks and Spencer. Factors such as political, social, environmental, economic, technological, legal, as well as environmental aspects influence Marks and Spencer. In macro-environment, the organization is required to follow various government and environmental regulations of protecting natural resources as well as the environment. It has to follow proper waste management processes. Marks and Spencer retail needs to ensure that it builds and maintain a long-term relationship with the vendors and clients.
Various pollical factors affect Marks and Spencer. For instance, the ever-changing political climate influence the government. For instance, Brexit has a huge implication for companies in the UK. Following the Brexit, UK experienced a fall of the Sterling Pound (Clodfelter, 2013). It caused an increase in costs for many retailers buying products from abroad. However, it has also has boosted tourism as the luxury market has benefited from international buyers looking for a bargain. Also, the decrease in sourcing costs because of the free trade. Another political factor affecting Marks and Spencer is the transforming government and taxation policy. The change in government may have a major impact on how a company operates.
The economic outlook is not certain and there is a high chance that it may affect the retail sector. Individuals may not have extra money to spend on buy luxury products such as clothing (Armstrong, Kotler & Opresnik, 2017). Marks and Spencer have been affected by the change which forces them to introduce competitive offers to help them remain competitive. Also, the Brexit vote has influenced Marks and Spencer as it competes with small retailers due to the increase in product price.
The society has greatly changed, thus affecting marks and Spencer. There is high competition in the market created by social class (Armstrong, Kotler & Opresnik, 2017). It has affected the way organizations respond to the issues. Marks and Spencer retail has been forced to keep up with the current trends to remain competitive. For instance, it has a range of current trends to ensure that their clients are interested.
Currently, there is an increase in the use of technology. Hence, there an increase in security, risk and compliance concern among retailers. One of the main trends and growth drivers of the fashion retail sector is the omnichannel revolution. 15% of clothing retailing in the UK is done online (Clodfelter, 2013). The changes have increased chances of cyber-breaches that can lead to exposure data of millions of users as well as their credit card records. Marks and Spencer have partnered with SureCloud to help in minimizing cases of cyber-breaches (SureCloud, 2016). It assists in managing the company’s external and internal regulatory supervision and compliance processes.
Marks and Spencer are forced to update its operations due to the ever-changing legislation. The company is forced to keep up to date with new laws (Marks and Spencer, 2018). For instance, they have to re-train their employees to keep up with the changing legislation.
Marks and Spencer are forced to change its business environment to meet the clients’ needs. For instance, clients are demanding for environment-friendly products. They are concerned with climate change and environmental factors. Marks and Spencer have introduced clothe ware range that uses minimal energy, chemicals, and water during the manufacturing process (Marks and Spencer, 2018). The company also plans to introduce a sustainable manufacturing process to meet clients’ needs.
Important changes within the microenvironment
The UK fashion retail market offers access to huge domestic and international customer base. Over the past years, the retailing sector in the UK has greatly changed especially in terms of growth (Hallberg, 2017). Clothing retailing occupies an eighth of total retail sales. Hence, it contributes 1.2% to the overall GDP of the UK. Currently, the UK retail sector is experiencing various changes. The changes include the decreasing mass production, various fashion seasons and changed structural features in the supply chain (Hallberg, 2017). The transformations have made retailers to focus on low cost and changing their design, quality, and delivery.
The fashion retail sector is highly competitive and organizations are forced to change their product ranges (Bhardwaj & Fairhurst, 2010). The fashion retailers have to change their fashion trends based on the changing seasons. There is a rise in small collections of products. Therefore, fashion retailers are influencing their clients to visit their shops more frequently due to the shorter life cycle of their products. One of the main trends and growth drivers of the fashion retail sector is the omnichannel revolution. 15% of clothing retailing in the UK is done online.
The changing fashion retail sector has led to the emergence of various competitors. Marks and Spencer have different competition. Next is one of the Marks and Spencer retail company competitors. It is a retail company dealing with clothing, footwear, accessories as well as home products (Next PLC, 2018). The company was started in 1982. Marks and Spencer retail company maintains higher quality products and increased consumer satisfaction (Plunkett, 2007). The approach led to a short-term decrease in sales. However, it led to a long-term rise in confidence among my clients. Most of the clients in the UK focus on both value and quality when purchasing clothes. Therefore, clients prefer to purchase clothing from Marks and Spencer rather than buying from other organizations.
Primark is the major competitor of Marks and Spencer. It has its headquarters in London and was established in 1969 (Primark, 2018). The organization is a fashion retailer and it generates 4.77% the revenue of Marks and Spencers. Crew Clothing is another leading competitor (Crew Clothing, 2018). It has its headquarters in London, England. It was founded in 1993 and its revenue is 0.13% of Marks and Spencer’s revenue. The organizations are adopting online retail due to the changing market sector. Therefore, Marks and Spencer are forced to open an online selling platform to reach out to its clients base.
Strategies and tactics that can be used
Social changes have a huge impact on the fashion retail sector. Changes in consumer preferences and strengths affect Marks and Spencer. They are forced to introduce discounts to entice the clients. Customers are widening their options so that they can get the best offers. Therefore, Marks and Spencer can focus on increasing store loyalty to deal with the changes (Bhardwaj & Fairhurst, 2010). An integrative theory of support preference as well as behavior helps in understanding the differences in the significance placed by people on different attributes.
Shopping positionings and shopping choices are considered to be self-determining influence factors of creating a choice of shopping outlets. Shopping orientation also influences the supposed image of a retail store. Therefore, shopping orientation and perception of store attributes are important when choosing a store (Bhardwaj & Fairhurst, 2010). They influence the loyalty of the clients. Also, consumer service influences clients’ loyalty. It also influences customer loyalty through client satisfaction. Therefore, using the approach, Marks and Spencer will remain competitive despite the changing social changes. It should focus on increasing customer loyalty.
Political changes also have a major influence on Marks and Spencer. The company can use cognitive continuum approach to help in assessing the impact of client shopping activities as well as retail information presentation aspects on client perceptions of experiential value (Fernie, Fernie & Moore, 2015). The nature of a client’s shopping activity affects client outlook of effectiveness, economic value as well as enjoying the shopping experience. Retailers need to understand the demographic and attitude effects that influence consumption behavior (Bhardwaj & Fairhurst, 2010). They can use a two-stage method that assists brands as well as retailers to targeted products as well as promotions correctly. The strategy includes considering local setting stores and understanding individuals that visit every step. In most cases, high discounts and promotions based on quantity do not mean that a company will generate a huge consumer base.
Other factors that influence a buyer’s behavior include purchase context and personal traits. Personal values are vital determinants of consumer behavior. Therefore, organizations can use value-attitude behavior model (Bhardwaj & Fairhurst, 2010). It will help organizations such as Marks and Spencer understand customer behavior. In some cases, shopping intentions do not influence power values in the business sector. Research shows that current time orientation leads to impulsiveness and prudence. Marks and Spencer ought to adopt the strategies to help it deal with the political factors affecting its operations.
Marks and Spencer can also use cognitive continuum theory to deal with the macroeconomic changes. It will help in assessing the effect of client shopping activities and retail data of client shopping tasks (Fernie, Fernie & Moore, 2015). The approach will help the company deal with changes that are taking place. The nature of a client’s shopping task affects consumer perceptions. Marks and Spencer can also use Retail Life Cycle theory. The approach will help it gain cost advantage which will help it remain competitive despite the different changes taking place (Fernie, Fernie & Moore, 2015). It will help the company in terms of growth. The Retail Life Cycle theory is important as it helps in the evolvement of retail formats. For instance, the retail sector is evolving as organizations are adopting different retailing approaches. Retailers need to consider portfolio approach to brand management and offers a coherent balance of risk, cost, as well as opportunity. The current use of Retail Life Cycle shows that in future retailers need to understand that an acceptable return on investment should be secured within the transforming time scale. The strategy will allow Marks and Spencer to expand its operations and increase its revenue.
Technological changes also have a major impact on the retailing sector. Although it leads to new purchasing channels for clients, it has a negative effect due to increase security issues (Clodfelter, 2013). Hackers can access clients’ personal information thus, making them lose trust with the company. Therefore, Marks and Spencer should focus on ensuring that they gain their clients’ trust. They can do this by introducing approaches that will help in protecting the consumer. Marks and Spencer can work with a technology company that will help in safeguarding their online platform.
The organization should focus on ensuring that the customers are satisfied. It will help in improving the relationship with the clients. In this case, the company can enhance its services to help it achieve high customer satisfaction (Clodfelter, 2013). Marks and Spencer should focus on providing quality customer service. It helps in improving the relationship with the clients. Marks and Spencer can also use segmentation approach to understand customer needs in a personalized approach. They ought to make sure that they understand the clients’ issues and needs. Marks and Spencer should open a personalized online selling platform to track their clients.
Marks and Spencer should focus on customer satisfaction to deal with the challenges facing the retail sector. Mainly, consumers focus on their satisfaction and shopping ambiance. Organizations should come with strategies that will help in increasing customer satisfaction (Paul & Mekoth, 2016). The approach will help them remain competitive in the changing business sector. They should also be friendly to their clients. Other factors that Marks and Spencer ought to consider is shopping orientation. It will help in creating the perceived image of a retail store. It will influence the clients’ loyalty.
The consumer service also helps increase customer loyalty. It influences customer loyalty through client satisfaction (Paul & Mekoth, 2016). Therefore, using the approach, Marks and Spencer will remain competitive despite the changing social changes. The company should focus on understanding customer behavior. In some cases, shopping intentions do not influence power values in the business sector. Research shows that current time orientation leads to impulsiveness and prudence. Marks and Spencer ought to adopt the strategies to help it deal with the political factors affecting its operations. Also, Marks and Spencer should also ensure that it updates its operations due the ever-changing legislation (Paul & Mekoth, 2016). Additionally, Marks and Spencer ought to focus on making sure that they gain their clients’ trust. They can do this by introducing approaches that will help in protecting the consumer. Marks and Spencer can work with a technology company that will help in safeguarding their online platform.
The UK fashion retail market offers access to huge domestic and international customer base. Over the past years, the retailing sector in the UK has greatly changed especially in terms of growth (Hallberg, 2017). Clothing retailing occupies an eighth of total retail sales. Hence, it contributes 1.2% to the overall GDP of the UK. The research paper focuses on different external factors affecting the retail sector. There are different changes taking place in the sector that affects how organizations perform. Marks and Spencer are influenced by different factors that include political, environmental, social, legal and environmental. However, the organization can adopt various approaches that would help the company deal with the changes. Marks and Spencer should focus on customer satisfaction to deal with the challenges facing the retail sector.
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