With the past few decades, there has been a huge growth in retail trade across the world, especially in countries like UK, USA where the retail market has reached a new milestone. Behind this growth and development, some of the elite companies like H&M, Zara, Marks & Spencer which are and continue to contribute in the retail sector. It cannot be denied that due to the heavy competition among fashion retail companies, consumers have a variety of options to buy the most suitable product for them. The fashion industry is constantly evolving and developing so it is important for fashion retail companies to consider a 360-degree examination of the market. Therefore, amidst the ever-increasing increase in customer preferences and competition, this research will emphasize the ways in which Marks & Spencer functions. Apart from this, it will also discuss some of the major changes in the retail market that the company needs to consider in order to leave a footprint in the fashion retail market. Finally, the study will also provide recommendations for the company to continue growing and growing in the market.
Marks & Spencer is one of the leading retail companies that specialize in offering food products, home products and clothing in the United Kingdom and globally. Today, the company functions as a great value product of its own brands, selling high-end products from over 100 websites and 1,509 stores internationally. Together with 70,000 manpower across their stores, supply chain and warehouses serve around 30 million consumers each year (Marks and spencer, 2022). Moreover, the company also offer a range of financial services such a s insurance and saving, credits cards. As of April 2022, the company's market cap is approximately $3.89 billion. This makes the company the "2678th most valuable corporation" in the world according to statistics (Companies market cap, 2022).
With the passage of time, it is important to know that the fashion industry of the United Kingdom has experienced some substantial variations. The firms working in the fashion retail area needs to aware the varying behaviour of the market and emphasize proposing consumers with valued goods and service. As in figure 1 it clearly shows that consumer spending has decreased in 2019 indicating that Mark & Spencer needs to adopt strategies to increase consumer spending. Moreover, figure 2 below shows that after Covid-19 people spend more on cloths so it shows positive sign for growth and development of the company.
It can be said that Mark & Spence is no different. The company needs to examine the varying demands of consumers in order to aware the changing nature of fashion retail sector. The company already experienced extreme variations in regard of attracting and developing new clothing for their consumers. If the organisation examines the variation demands of the customers, then it will aid the company to fortify their customer base in a significant manner and also enhance their bonding with the consumers. A detailed PESTEL analysis will be used to understand the changes in fashion retail in the UK.
Changes in the Fashion Retail Market
Political Factors: While policies related to free trade have been a huge political advantages for the company. However, after the commencement of the Brexit, certain of these policies has no longer apply to Mark & Spencer. By the end of 2021, the company stated it is closing eleven of the stores in France due to supply issue since Brexit (BBC News, 2022). The company should analyse maintain the level of profitability by adopting various strategies and deal with the changing behaviour of the customers as well as country.
Economic Factors: A rise in the rate of inflation of economy would impact the manner Mark & Spencer’s price their goods and services. The company require to organize a complete analysis of economy. Challenges like employment level, inflation, rate of interest etc n require to have possess in the plan of marketing so that the techniques usage encounter every such issue and confirm sustainability of competitive position. However, GDP rate bounced back in Jan 2022 after falling in 2021 (Lea, 2021). The company requires to focus more in the arena of fashion as younger generation invest most of their disposable earning in attires.
Social factors: It is significant to understand that networking sites and social media is adding the changing taste and preference of customers. Celebs make various fashion statement that creates a buzz among the common mass (Priyankara et al., 2021). Moreover, consumers typically wearing designer attires at a reasonable cost. Therefore, it is significant for the company to understand these tastes and preferences so that it would be easier for the organisation to design the attires in a similar way.
Technological factors: Modern day companies are adopting and changing new technology. Major brand marketers frequently invest large amount on marketing and advertising to form to build loyalty and preference and create brand awareness (Ndlela and Chuchu, 2016). For the company to regularly integrate to customers they require to be profoundly into promoting, which they are. Moreover, the company should regularly up-to-date with the new Mark & Spencer brands.
Legal factors: Laws are always varying. The company carry out update and re-training every year, they check and follow news legislation and with problems respecting Safety and Health. The company also invite tax changes to the business, business changes to the business. However, it was found that the company was engaged in a tax fraud in 2013, thus it is significant for the company to avoid these practices as it can negatively impact on their loyal customers (Johnson and Sherwin, 2022).
Environmental factors: The company promotes themselves as a premium brand and because of this they are hugely concerned regard the effects of environment. They vow to be careful regard their product procedures and promote the concept of sustainable industry of retail. The company has also developed its own Green Policy, “Plan A” (Polman and Bhattacharya, 2016).
Porter’s five forces theory would be effective to recognise the drivers of the micro-environment that the fashion business requires to determine at the time of mentioning retail exercises.
It is moderate for the company. Retailing market has huge barriers of entry because of huge capital investment to achieve economies of scales and cost efficiencies and to enter the market (Wood eta al., 2019). However, Mark & Spencer fame and emphasize on quality would make hard for rivals to break the loyal customers of the company. Moreover, matching the efficiency of channels by the company would be tough for new competitors.
It is high for the company. Thus, the company needs regular innovation because the clothing trade is beset with substitutes. It can be said that it is very simple to get same design at much minimized price elsewhere and it is also simple to copy designs (Kapustina, 2018).
It is low but consumers have several alternatives available and has very low costs of switching. Therefore, the company requires to boost its loyalty and propose its consumers unmatched conveniences and value that are tough to match. Moreover, the Organisation also requires to be attentive and safeguard its turf.
It is low for the company as the company supplies were primarily British in late 20th Century. However, pressure of competitive forced the company to minimize its prices flagging the supplier’s power. Emphasize on private tag also provide company power over outer suppliers. Moreover, switching expenses for the company suppliers, specifically since the company relies on redistributed suppliers are very low.
It is high because the intense competition in the fashion-retail industry outlines a challenging environment for Mark & Spencer, where the organisation is fraught to distinguish from others like Zara, Gucci, H&M (Clegg et al., 2019). It shows the organisation requires exercising cost-leadership to reduce the danger of competitor.
With respect to the above study, it can be said that the fashion retail firm is mainly mentioned to be influenced by various factors like technologies, legal, social drivers. There are some strategies and tactics that can be adopted by Marks & Spencer to overcome the various obstacles mentioned above and to make a mark in the world of fashion industry. Internet and digital network of retailing would become a good platform to attract a large number of customers, thereby increasing profits (Verhoef et al., 2021). Technologies are changing the way individuals shop through social media, augmented retailers and retail store apps. Fashion retailers are embracing diversity to get their merchandise in front of their customers. Creating a different and innovative experience can set a retailer apart from the rest in the more catered globe of fashion. The increase in distribution and online practice would benefit the company in reaching out to a specific consumer base for greater profits.
As Marks & Spencer offers premium products with high price, so it can be said that the company should assess the importance of moderate pricing strategy as it allows them to price their goods in such a way that neither too little nor too much (Bianchi and Fredrilsson, 2016). In addition, the organization should also be aware of existing laws and policies enacted by the government to assist with discrepancies in the workplace and to prevent the company from paying implicit costs by the government for any violations.
Porter's Five Forces Theory
Also, Marks & Spencer has various competitors like H&M, Zara, etc. Therefore, the company should adopt a differentiate strategy to gain a competitive advantage. Marks & Spencer can achieve this strategy by offering better clothing at the same price (Kireru, Ombui and Omwenga, 2016). The efforts of many fashion retailers have helped firms recognize more sustainable practices of work throughout the product life cycle and many brands have set broad goals of sustainability and set principles and standards for the import and export of clothing and they take the initiative to promote innovation (Gazzola et al., 2020). Similarly, Marks & Spencer also needs to take the initiative to invest more in sustainable products so that they can leave their fingerprints in the market.
In order to face the high competition and to contain the changing demand of the user, the corporation should invest in various goods and services and also focus on the quality of the products to attract more and more customers.
It is recommended for the organization to recognize purchasing supplies globally to reduce costs so that consumer goods can be delivered at a lower cost. In addition, it is also recommended that the company may launch a market campaign on social media with an enduring goal such as asking social media users what type of clothing they usually prefer. Because of this campaign, the company can strive to maximize the production of clothing that is generally preferred by the majority of consumers (Silva, Hassani and Madsen, 2019).
The company should invest more in R&D to recognize the tastes and preferences of customers and also consider the existing technologies in the market which can be adopted for maximizing growth and profits.
The information outlined above in relation to Marks & Spencer's fashion retail business provided an accurate understanding of the company's operations. In addition, it helps to examine the ways and tricks where specific operations of the business can be directed. If the organization adopts and applies the appropriate technologies then they can definitely make their mark in the fashion retail sector. Furthermore, the main objective of the research was to select the most suitable strategy by Marks & Spencer to provide the best goods and services to the customers in the right manner according to their demands and preferences. In addition, research has also outlined some notable changes in the fashion retail section in the United Kingdom and the way they have affected their business. Recommendations have also been given at the end to maintain a profitable or gainful place in a competitive market for a long period of time.
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