COVENTRY UNIVERSITY
Project 1
Retail sector (fashion)
Saikou Bojang
11/14/2014
.
Project 1
Table of Contents
Page 1 (Saikou) contents ...................................................................................................................... 1
Page 2 (Saikou) introduction……………………………………………………………………….……………………………………4
Project management tools……………………………………………………………………..
Aim………………………………………………………………………….
Risk and mitigation ………………………………………………………………………….
Page 3, 4 (Saikou) Organizational structure ......................................................................................... 5
Beak down of the structure ............................................................................................................... 6
Hierarchy diagram........................................................................................................................... 7
Page 5, 6(Saikou) Market research…………………………………….………………………………………………………..……8
Page 7, 8(Saikou) Impact factors…………………………………………………………………………………………….…....9
PESTLE analysis ………………………………………………………..
Page 9 (Saikou) service management ………………………………………………………………………………………10
How companies use social media……………………………………………………………………………………..11
Page 10, 14 (Aristote & Amandeep) Advertisement………………………………………………………………….…12
Page 15, 16(Aristote) Financial data……………………………………………….………….………………………………..13
Page 17 (chervelle) Direct marketing………………………………………………………………………………………….14
Page 18, 22 (Amandeep & Aristote) current and emerging technology ……………….……..............15
Page 23, 24 (Aristote) SWOT analysis…………..……..…………………………………………….………………...16
Page 25, 27 (Amandeep) Economic trends…………………………………………………………………………….…18
Page 28, 30 (Amandeep) Consumer behavior…………………………………………………………………..…….19
Page 31 (Chervelle) competition………………………………………………………………………………………….20
Page 32, 37 references…………………………………………………………………………………………………………………21
Fashion retail
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Introduction
We are assign a project, the project was to act as a marketing intelligence group for a
chosen business sector of our choice. Our job is to come up with a business plan for
companies that are planning to set up a business within that sector by providing them with
information about the sector. The information should provide an in-depth analysis of
different areas of the sector such as for e.g. understanding of the businesses, competition,
organisational structure, service plan, impact factors, economic trends, current and
emerging technology, financial, market research etc.
We have chosen fashion retail sector and this document will contained information about
our finding.
Aim of the project
Our aim is to come up with a business plan for any organisation that is thinking about
setting up a business in fashion retail.
Risk and mitigation
During our projects risks will occur and we will need to find solutions to these problems. The
first risk that could occur is that that people in our group maybe absent or late. This can
delay our project as each individual are assigned a tasks. If they have not completed the
work, the entire group may be left waiting for that individual’s work in order to complete an
assignment or the project as a whole.
Project management tools
During the course of our project we have used three methods to monitor the process of our
project.
Munities of the meeting
At the beginning of each lesson we sat down as group a and feed each other with an
information about the work we are doing to ensure we are over lapping each other. Also it is
within this meeting that we record the absentees of each individual and also allocated each
member a task to do.
Gantt chart
We used a Gantt chart to monitor the process of each stage of our project. Also within the
Gantt chart we used mile stones to identify phases of the project.
Google docs
We used google docs to share our documents. That way each person within the group can
see what other within the group has done.
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Organisational structure
The organizational structure within this sector is determined by the size and type of the
business. Big high street fashion industries like River Island and Topshop will have a similar
organisational structure but may differ from the of smaller clothing company such as Select
and Peacocks. The hieratical diagram for this companies are the same in terms of structure
but the big brands has more complex diagram than the smaller, reason been that this big
brands such as River Island and Topshop are set globally whereas smaller shops like Select
and Topshop are just base in the country. Also big fashion brands require more
professionals as they are selling more products than the smaller fashion brands.
Shari Waters. (2014).
Break down of how the hieratical diagram is set up and what each branch’s job is to the
company
Founder: These people are at the very top of the hierarchy diagram as they owned the
company because they started it.
CEO: An acronym for chief executive officer and their job is to report to the board of
directors (founders) and also maximize the value of the company.
Store operator: The Store Operations department is handled by the store managers. The
major responsibility of this department is to update various retail operations by mixing the
business processes. This department helps the retail business in the following ways


It ensures the effective utilization of resources within the retail organization.
It gives priority to customer satisfaction by optimizing the business processes.
Marketing team: The Marketing department is handled by the marketing manager and their
job is to develop and implement various retail sales and motivate different programs, in
order to attain the organizational goals and increase their productivity.



Developing and monitoring various businesses and marketing plans.
Developing various projects in order to foster the retail growth.
Recommending sources for the growth of retail channels.
Merchandising: The Merchandising department is one of the important levels of the retail
business hierarchy. Their job is to increase the sale of the products to the end customers
and generate revenues for the retail store. Their responsibility includes;


Improving the visual standards of the products, as per the merchandising guidelines
of the retail business.
Developing various programs from time to time, for the impressive presentations of
the products.
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Human Relations
The Human Relations department also plays a vital role in the organisation hierarchy of a
retail business. Their job roles include;


Developing a healthy working culture and environment, in which the employees
genuinely focus on the customers.
Providing training in good business communication, to the employees.
Finance
The Finance department accounts for the following roles and responsibilities:
 Creating records of purchase and sales.
 Preparing balance sheets.
 Preparing profit and loss accounts.
 Calculating the salaries of the employees.
IT department
The IT department is another vital part of the retail business hierarchy. The job roles of the
department are as follows:
 Managing the electronic payment systems.
 Managing the online customer service systems.
 Attending to all the technology issues arising within the retail business.
http://www.hierarchystructure.com/retail-business-hierarchy/
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Market research
There are different ways to undergo a marketing research to ensure our business plan for
our chosen business can gain advantage over their competitors. I will research the market
share of this sector in the British economy and also I will be looking at the market leaders
and consumer behaviour.
Market share within the UK economy
In 2009, the UK fashion industry is estimated to have directly contributed £20.9 billion to
the UK economy, or 1.7% of total UK GDP. The majority of this is derived through retail
distribution, with estimates suggesting that almost 22.5% of all retail’s value added
contribution to GDP in the UK can be attributed to the fashion industry. This figure shows
how significant the fashion retailers are in the UK economy.




Excluding the retail sector, i.e. using a definition more comparable to that currently
used by the DCMS, we estimate that the fashion industry directly generated £6.6
billion of GVA or 0.5% of total UK GDP in 2009.
Significant contributions to this total were made by marketing (£241 million), the
fashion media (£205 million) and fashion education (£16 million).
Therefore, the UK fashion industry’s direct contribution to UK GDP is around twice
the size of the publishing (£9.9 billion), car manufacturing (£10.1 billion) and
chemical manufacturing industries (£10.6 billion), and only slightly smaller than both
telecommunications (£28.7 billion) and real estate (£26.4 billion).
Consumers purchasing fashion items (with some exceptions) pay Value Added Tax
(VAT) while companies manufacturing and retailing fashion items pay company tax
and all employees pay income tax and VAT. In 2009, these direct contributions to the
Exchequer amounted to £13.2 billion. British fashion council. (2012).
Market leader within the sector
Fashion retail is a really big sector you can tell base on the figures I have highlighted above
within it are different types of business of different sizes, types and reputation around the
world. Our main focus will be around the Coventry areas. Coventry city centre has stores of
some of the most high profile UK high-street fashion retailers such as River Island, Acadian
group, Next, New look, TK max, Primark and H&M. The market leaders for this sector is
Marks & Spencer with a market share of 16% in 2005 but that value has gone down
between 2006 to 2009, the second company that has the most marketing share in this
sector are Next with a total share of 14% in 2005 but their value also started to decrease
towards the beginning of 2007 and by 2008 when the recession started the market share for
most of this companies have gone down. From 2008 to 2009 as shown on the diagram you
can see that the Acadian group got the most market share of 8.4%. Anna Paszek. (2012
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Consumer behaviour towards shopping
Base on this chart below you can see that 77% of the consumers base on the bargain of the
product. List important thing to the consumers is buying clothes base on fashion rather than
the quality of it. Also you as shown below you can see that consumers value the quality of
the product and also brand loyalty is important to them.
In Coventry city centre you can see that most of the retail stores are located not far from
each which provide a very competitive market for setting the same business within that
area. The above statics shows what customers value most when shopping. To ensure
success within this sector this are the kind of things you need to target your audience.
Deniz Kurugollu. (2012
Below is a table of how the sector from 2009
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Impact factors
Impact factors are factors that may affect the businesses. Within the retail sector there are
some impacts that may affect the performances of the business; it may be good or bad
depending on the factor. Business world is dynamic and rapidly changing to analysis these
factors businesses PESTEL Analysis.
Political: The political factor determines the extent of government involvement within the
sector. Fashion industries are a vital part of the UK economy as they has a market share of
20.6 billion pounds within the UK economy therefore the government has a significant
involvement within the fashion retail sector. For example businesses may be affected with
inclusion of the new legislation such as the national minimum wage and setting tax rates
such as VAT or Corporation Tax.
Economic: The economical factor impacts companies and can have a long-term affect. A rise
in the increase rate of any economy would affect the way companies’ price their products
and services. Adding to that, it would affect the purchasing power of a consumer and
change demand/supply models for that economy. Economic factors include increase rate,
interest rates, foreign exchange rates, economic growth patterns etc. It can impact
companies in this sector in terms of unemployment, interest rates and exchange rates if
importing also some of the big fashion industries such as the Arcadian group and Zara and
River Island can be impacted with this factor as they export goods abroad as well.
Social: This impact the social environment of the business market. An example for this can
be buying trends for Western countries like the US where there is high demand during the
Holiday season. This impact-affected business especially fashion industries for example the
ageing population of the UK. This has seen the rise of what is called the 'grey pound' – an
increased number of wealthier older people with a disposable income.
Technological: This factor is the innovations in technology that may affect the operations of
the industry and the market it can be favourable or unfavourable to others. It consists of
rapid automation of factory and industrialised work, or the worldwide increase of retailing
online, e-commerce.
Environmental: This factor is the impact cause by the surrounding of the business. This
aspect of the PESTLE analysis is crucial for industries in this sector. Factors of a business
environmental analysis include but are not limited to climate, weather, geographical
location, global changes in climate, environmental offsets etc. you need o be aware of this
factor because its vital for when selecting a location of a business. Like for example in the
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Coventry city centre I where all the main retail stores are because it is healthy environment
for business. The competition is very high in that region as well.
Legal: This factor has two sides external and internal. The impact of this on the fashion
retailing companies is that legislations such as consumer laws and safety standards need to
be maintained as it may result in law suite if for example if a customer fall on your store
floor while it was wet and you do not have a hazard sign out may result in lawsuit, also
losing consumer detail or miss using it can also result in law suit. There are certain laws that
affect the business environment in a certain country while there are certain policies that
companies maintain for themselves. Legal analysis takes into account both of these angles
and then charts out the strategies in light of these legislations. BBC bitesize(2013)
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Service Management
Service management plan is a document that contains all the necessary details to run a
service. Our project was to act as a marketing intelligence group that provide services to
other business that plan build a business in the sector that we provide service on which is
the retail sector. To create a service plan we need to complete the following.
1.
2.
3.
4.
The Vision
The Service Strategy
The Service Package
The detailed Service Plan
Vision
Our vision is to create a service that will help companies gain more profit by giving them
information that will give them a competitive advantage over their competitors.
The service strategy
The service package

Allow people to
customize their own
product Online

Self-checkout

Give people the
opportunity to recycle
their old things for a
discount

Education so people
has a better
understanding when it
comes to decision
making.
Self service
Make
more
profit
Excusivity
More cashiers so
there is less
queeing
online
customerzation
Detailed service plan
Having a self-serving machines
would reduce the amount of
people you can employ
therefore saving you money
Excusivity
You can pay more money for a
product in return only you will
have that product within the
area.
Fashion retail
Self service
Make
more
profit
online
customerzation
More cashiers in a store would
save time and also you won’t
have people queuing to be
served
More cashiers
so there is less
queeing
People can customize their
clothes base on their colour
choice
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Advertising
What is a business sector?
Business sector is the subset of the economy not including the economic activities of the
general government, private households and also non-profit organizations serving people.
James Hirby. (). There are many different business sectors such as the transport sector, the
banking sector there are so many different sectors in the business industry but the main
sector that I will be discussing will be the retail sector. There are two sides to the retail
sector one side of retail is the supermarket sector and the second side to the retail sector is
the fashion which I will be focusing on in this report.
What is advertising?
Advertising is media content which is intended to convince audiences to take action on
services, products and ideas. The main idea of advertising is to drive consumer behaviour in
a specific way in regard to a service or product Anthony Curtis. (2013). There are many
different ways of advertising such as newspaper ads, radio advertising, T.V advertising but
the main way of advertising that I will be focusing on in this report will be the online
advertisement. I will be looking at the two different social network sites of my choice which
are YouTube & Twitter and I will also be looking at how retail stores are using the two sites
and if they are benefiting from the use of social network sites.
How it works?
The way advertising works is by informing customers about the business`s services &
products, by informing customers to products & services this will provide attention to the
products & services this will connect the benefits of your items which will encourage
customers to patronize the products & services . As a result customers will recognize and
understand the importance of products by advertising. startupbizhub. (2007-2014).
Social network sites for River Island, Topshop & two other companies
Social network sites are a strong advertising tool because it’s where people come across
products & new sellers. Social media is an effective way of growing sales online and in the
stores. Social media has the power to attract attention to websites and it could be used to
build up loyalty and long term relationships with customers. Robert Hutchins. (2014).
Beirut. (2010)
How are they using it?
Both River Island & Topshop are using social network sites effectively and to their advantage
as both YouTube & Twitter have been used to stay connected with customers by engaging
with customers online as customer’s feedback is important
Good ways they are using?
There are many effective ways that both River Island & Topshop are using Twitter such as
starting, joining & also leading conversations with customers. Twitter is a powerful social
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networking site because it has helped both companies attract new followers and launching
new clothing products & lines. Twitter is a perfect way of expanding the reach of online
presence which has obviously shown. Because Topshop have 937 K followers Topshop.
(2009) while River Island has 269 K followers River Island. (2009). which just shows the
presence that Topshop has online as statistics shows that Topshop are way ahead of River
Island when it comes to followers on twitter. Twitter has 140 characters called tweets which
River Island & Topshop use to post links, videos, photos which is an easy way to be closer to
customers. Twitter. (2014). Promoted accounts. There are many effective ways both River
Island & Topshop are using YouTube such as browsing videos by name, keywords and also
the type. There are also different channels with videos created by a user which can be
subscribed to. Viewers are able to leave comments under videos. Media Smarta business
school. (2008-2013).YouTube helps both companies in keeping updates with the way the
other rival company is doing, so companies can watch what other companies are doing.
Driving business online.
Is social networking benefiting River Island & Topshop?
Social networking is benefiting both River Island & Topshop because social networking has
the ability to reach out and also communicate on a personal level with their target audience.
Yasmin Bendror. (2014). Topshop has benefited from twitter & YouTube because social
networking sites is the fastest and the least expensive ways and is has also helped Topshop
find their audience and it has also helped Topshop grow in the retail business of today.
Statistics show that on Twitter Topshop have 992K followers following the company on the
Twitter platform.
On the other hand River Island compared to Topshop hasn’t done as well using Twitter as
Topshop have. River Island has a 269 K follower which shows the difference in numbers
compared to Topshop. Topshop has benefited the use of social networking as Twitter has
provided a platform for Topshop to build relationships with their customers. For YouTube
Topshop again are far ahead of their rivals River Island with 47,803 subscribers to their
YouTube channel compared to River Island who have an small amount of 7,532 . This again
shows the major difference in not just one social media site but now a second one this
should be worry for River Island once again because with both Twitter & YouTube two major
social network sites of today they are vastly behind their rivals which also shows that
Topshop are doing something completely different compared to River Island. Topshop
statistically look like they are benefiting vastly from the use of Twitter & YouTube while
River Island is behind Topshop when it comes to the use of both social network sites.
Compare stats to other companies? 2/3
Comparison of the use of Twitter & YouTube for River Island & Topshop
Statistically when it comes to the use of Twitter Topshop is leading because they have more
followers than River Island. Topshop has 992 K followers while River Island has a 269 K
follower which shows that Topshop are benefiting from the use of Twitter. 269 K followers
is still a decent amount of followers but River Island should be concerned with the large gap
between Topshop & them because clearly River Island need to come up with a different
strategy to match up and come toe to toe with Topshop because at the moment the gap of
followers when it comes to the use of Twitter is large. Once again statistically when it
comes to the use of YouTube River Island is once again behind their rivals Topshop by a
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massive amount. Topshop are blowing their rivals away with an impressive 47,803
subscribers on their channel while River Island are massively behind with a least impressive
amount of 7,532 subscribers on their channel. Once again River Island should be concerned
with the way they are behind Topshop in the social media area because You Tube & Twitter
are two major social media sites and it looks like River Island are not benefiting from the use
of Twitter YouTube clearly shown by how far they are behind Topshop.
Comparison of the use of Twitter for Primark & Select
Statistically when it comes to the use of Twitter Primark is leading because they have more
followers than Select. Primark has 69.K followers while Select fashion has a total of 4, 5888
K followers. Clearly the gap between Primark & Select Fashion is huge it obviously shows
that Primark is a much bigger store compared to Select Fashion. Statistically when it comes
to the use of YouTube Select Fashion are massively behind Primark and the gap is massive.
Primark have 4,755 subscribers on their channel while Select Fashion has a total of 52
subscribers which is a worrying figure because it shows that users and fans don’t really pay
attention to their channel.
Comparison of all Retail stores
Out of the 4 retail stores that I have used for examples Topshop is the leading retail store
when it comes to the use of Twitter. Topshop have thrived off using Twitter and this has
helped them with the way they communicate with their customers online. The amount of
followers that Topshop hold not only has blown away River Island but it also blown away the
smaller retail stores such as Select & Primark. The followers that both Topshop & River
Island compared to Select Fashion & Primark clearly shows the difference all retail stores
and it clearly shows which stores are the bigger stores and which stores are the smaller ones.
River Island & Topshop are the bigger stores while Select Fashion & Primark are the smaller
stores compared to the bigger stores. When it comes to the use of YouTube Topshop is the
leading retail store out of the 3 stores, they have a massive amount of subscribers
compared to the rest and this shows once again that Topshop are ahead when it comes to
the use of social network sites and it shows that they are doing the right things at the
moment while River Island is clearly behind in the social media department. Once again
YouTube shows that Primark are way ahead of Select Fashion when it comes to the use of
both Twitter & YouTube and statistically by numbers you can also once again tell the
difference between the larger retail stores & the smaller retail stores.
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Social media within the retail sector as a whole
Social networking media sites have become the most affordable marketing technique used
by businesses. The use of social media has developed rapidly over the last few years, with
technology becoming more advanced, the public have been accustom to social media via
their computer/hand-technology (iPads, Laptops, PC’s, tablets, smartphones and etc.),
however smartphones are the most used technology by users, according to research, 63% of
Twitter users will access social media sites comparing to the 34% social networkers as a
whole, this will instantly have a massive influence to the public, with businesses updating
their new products/systems to the media. New research has emerged declaring Twitter has
overpowered Facebook in terms of business marketing; statistics are showing 47% of user’s
who follow a specific brand/business on Twitter, are most likely to engage with the brand
and visit the company’s website.
Interestingly enough, 77% of top 100 companies are now released on Twitter. With over 77%
of businesses/brands available on Twitter, and 70% of these brands are also published onto
Facebook, the value of Fortune 500 corporate Twitter and Facebook accounts has rapidly
improved by 4% last year. Its declared, 8 of the top 10 Fortune 500 companies will now
preserve a Twitter attendance. Some of the world’s biggest companies are now dominating
the use of advertising/promotion through Twitter, well known brands such as; Chevrolet,
Starbucks, Ford, Dell have used their own techniques to expand their brands even further
with users on Twitter. River Island has recently conquered Twitter with the use of their
marketing strategy. Amy Gesenhues. (2013). Social Media Use Growing Among Fortune 500
List With 77% Tweeting & 70% On Facebook.
The official Twitter page for River Island has over 265,445 interactive Twitter followers,
however, Facebook has proved to be more dominating in terms of advertising and selling
with a staggering 2.1million users connecting with the official page of River Island. However
Topshop has now risen in the ranks in terms of global marketing, over-taking River Island
statistically, 532,974 Twitter users are interactive with Topshop online, with over 4million
users communicating effectively with Topshop on Facebook.
Instagram is also another useful method which is commonly used by large brands to help
enlarge and expand their fan base to the public, River Island have expressed their ideas and
philosophies via Instagram, with an astounding of 52,516 followers engaging with the
official page, River Island on Instagram. (2014).
Topshop has also expanded their phenomenal fan-base to Instagram, over-powering River
Island once again with a record of 597,606 interactive users following the Topshop brand.
Topshop on Instagram. (2014).
YouTube is another commonly used system which is used to deploy a brand/business,
YouTube however, isn’t only for entertainment purposes, and a variety of platforms are
established all over YouTube. Businesses/brands are now taking their marketing initiative to
the next level by utilising their ideas onto YouTube. River Island is a prime example of a
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worldwide business, which has taken their brand to video-recording in order to connect
with the public globally. Each month, River Island will upload a brand new video containing
the latest fashion trends, enabling the public to keep up to date with the current trends of
River Island. These fashion trends include; the newest women’s wear men’s wear, kids wear
and etc. Unfortunately, River Island’s YouTube platform hasn’t performed immensely in
terms of connecting with the public and the growth of their fan base, statistics shows, only
7,451 users have subscribed to River Island’s official YouTube channel. River Island . (2014).
River Island
Although, Topshop continue to control the influence of the public by using their creativity
to YouTube, expressing the new current trends, the latest catwalk shows, seasonal trends,
celebrity panels, award shows. The use of various fashion videos has enabled the public to
keep engaged and intrigued with current trends, figures show, Topshop has an incredible
46,615 users who have subscribed to the official channel. Topshop. (2014). Topshop .
Furthermore, blogging has become an exceptional platform in the current market for
business awareness and promotion, in terms of cost efficiency; it’s the most cost efficient
for business users and designers. Constructing a blog can come from a variety of free
software’s online; the most common blogging software, which is highly recommended by
inventors, is known as WordPress.com. WordPress.com has developed rapidly in the world
of blogging, research and statistics has shown; nearly every second, almost near 6 new posts
are being distributed on Wordpress.com, the breakdown of this extraordinary statistic
displays over 20,000 blogs published per day, with a massive outstanding total of 7.49
million annually. It’s also the second best in terms of the popularity list for free blogging
areas. Businesses/brands are now taking their marketing approach to a diverse level; River
Island is a prime example, recent fashion designers from River Island have now taken their
knowledge further by promoting the current and latest trends in fashion, and expressing
their visions and opinions on specific clothing items, products, latest trends, styles and
fashion. Personal writers are hired in order to create blogs to raise awareness and offer
efficient information to the public, the aim intention is to broaden the knowledge of fashion
and engage with the public even further. Tom Ewer . (2014). 14 Surprising Statistics About
WordPress Usage
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Financial data
In Coventry there is only one river Island store which is located in the city centre alongside
other rival stores such as Primark, Topshop, H&M, new look and next. Over the last few
years River Island hasn’t performed well and have taken a big setback financially because
despite River Island expanding, sales growth has been lacklustre since the year 2009 when
River Island made a turnover of £826.4 Million however sales did drop to £802.02 Million in
the year 2010 despite opening 13 UK stores between 2009 & 2013. River Island`s earnings
have also been hit because group pre-tax payments fell from £160.5 Million to £138.6
Million between 2008 & 2009 as river island invested in a new website. Group pre-taxes
continued to fall in 2011 as the retail company chose not to pass the rising cost of cotton on
to customers. However the latest figures of 2012 showed that River Island is back in growth
with the profit increasing from £86.9 Million to £97. 9 Million. Gross margins have also
come under pressure as the retail company has been forced to discount massively to keep
up with fashion rivals who just show the competition is becoming harder and other
companies are on the rise. In the 12 months to December 2011 gross margins fell to 16.9 %,
which for the first time in eight years they have dropped below 20% and below the peak
they have reached which was 27.3% in the year 2005. Tiffany Holland. (2013).
River Island`s main rival is Topshop which is an retailer that specializes in fashion, make up
and also accessories. It has 300 stores in the UK and more than 440 shops across 37
countries. Topshop is a part of a group called arcadia group which is controlled by Phillip
Green who owns other retail companies such as Dorothy Perkins and miss Selfridges . In
Coventry there is only one store which is located in the city centre alongside other rival
stores such as Primark, Topshop, H&M, New Look, Next and River Island. Compared to their
rival store River Island Topshop financially have been doing well as in the year 2009
Topshop`s profits went up 13% to £213.6 Million in 12 months to the month September.
Pre-tax profits were £481 Million for the year 2013 and this was because of the sale of
Topshop by 25%. Factors such as underlying profits were £167.8 Million which was just
slightly an improvement compared to £166.9 Million in the year 2012. (BBC News, 2012)
Matthew Chapman. (2012).
Primark
When it came to the financial side of the retail industry Primark had a magnificent year this
year with profits going up by 30%. The season didn’t seem to affect Primark as the sales
from September went up by 10%. Primark`s sales went 10% in the six weeks from midSeptember following the end of its financial year. Primark`s annual sales are close to £5bn
which rose by 17% in the year ending 17th of September as a result of the addition of 1.4 M
sq ft of the shopping space in the expansion aboard . Operating profits rose up to £662
Million which was a 30 % rise, without new stores sales were up by 4% on last year.
Primark`s instant expansion has boosted ABF, which is tackling with lower sugar prices
which have reduced profits in the core business. The earnings from sugar fell by 22% to
£2bn last year lowering profits by 54% to £189 Million. The strong pound also weighed on
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the ABF`S earnings and profits because the group`s reported revenues of £12.9 bn for its
financial in the year 2013 which went down by 3% although up by 1% based on the average
exchange rate. The basic earnings per share rose 30% to 96.5p and the pre-tax profits were
up by 18% to £1.02bn. Jennifer Rankin & Sarah Butler. (2014).
Select Fashion
Sales at the discount fashion retailer Select Fashion have climbed in the past 6 months.
Select Fashion has benefited from the disorder of other rival companies by delivering
products straight from its own factories. The London based firm which has 150 stores
including a store in Coventry. The sales increased by 8% in the six months in the year 2012
with the total sales rising up to 16% which compares with a rise of nearly 20% in 2012 while
most fashion retailers were struggling to increase sales at all. The owner and chief executive
Cafer Mahiroglu rescued the chain in 2008 and turned his first profit in the year 2011. Neil
Craven. (2012
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Direct Marketing
Direct Marketing is a straight forward marketing strategy on which allows businesses and
other organisations to communicate with their customers and prospective customers. The
advertising techniques often includes having contact with consumers whether face to face
or though current technologies, many of the techniques can include text messaging, emails,
having interactive websites that customers can use and take part in the business, use online
advertising networks and social networks to display ads, use database marketing to filter to
your customer and analyse their likes and dislike, fliers to help promote and establish a link
with customer, fliers are generally given with promotion codes and discounts to have the
customer feel as if they are being treated, catalogue are given or posted to customers, who
are generally subscribed to the company’s’ website electronically, or physically in store or at
the customers home.
Direct marketing is any strategy used to get to the customer, through television advertising,
radio advertising and social media (Facebook, twitter, Instagram etc.) direct marketing is not
limited to any specific age groups and race. The aim is to promote and advertise the
business in the best possible light and generate as much sales and revenues as they can for
that business.
Direct Marketing toward business comes with a different approach than the usual technique.
Business advertising or marketing to another business should have a more professional
approach to be taken seriously. Privacy is a major issue with direct marketing and any steps
taken towards marketing to customer and business should be done so within the up keeps
of the law.
Through interacting with customers, direct marketers are able to collect information about
their customers that enable them to analyse and come to a conclusion about what the likes
and dislike are of a specific person; which the business then structure and provide new
products and services from that information for specific persons. The information collected
allows them to target specific groups of people, race or just common interest between
customers. Direct marketing helps to increase the speed and efficiency of the business and
its day to day activities which allows sellers to customize sale offerings and keep an ongoing
relationship with their customers at the same time.
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Current Technologies & emerging technologies
Introduction
Technology has been a focus in the retail industries as a way accomplish both goals,
improvements have been made in areas such as supply chain management and customer
experience and loss prevention. Arubanetworks. (2012).
Current technologies
The first current technology is the price verification Kiosk system which has become very
popular with retailers because promotional sales, returned merchandise can make
determining an accurate price sometimes difficult for customers. If a Kiosk is nearby in the
store customers can then take the merchandise then scan the barcode and instantly
determine the actual price of the item, If a printer is connected customers can then print
their own barcode tag and also get the actual price of the item. This can be very helpful for
both customer and the staff in the store because the customer can confirm that the cash
register records the same price that the customer is expecting to be charged. Wi-Fi
technology plays a part in placing price verification kiosk system in place because this means
that there will be no need for wires and cables. Arubanetworks. (2012).
The second current technology is the self-help kiosk can be placed around a store giving
customers touch screen access to store directories and inventory information for nearby
stores in a chain with product information and current sales. Self-help kiosks helps both
customers and staff around the store because kiosks are often for customers to find their
own answers to questions they may have which also saves customers more time by having
to walk around the store looking for staff`s assistance when a staff member could be busy
with any other customer. Arubanetworks. (2012).
The third current technology is Marks & Spencer’s browse & order hubs which debuted in
2012 and has reached across more UK stores use and these hubs allow customers to
browse the catalogue and scan barcodes on items and also explore an item`s information .
Order & hub helps customers to order on the device and collect at a later date or have the
product delivered to the store or even the option of having the product delivered to your
house. Graham Carlton. (2014) &. Ben Davis. (2014).
CCTV technology is also another form technology, which is commonly used in business/retail
sectors, the usage of CCTV is to enable security safety for its customers and for the
company’s well-being, also to help reduce and tackle down theft crimes within a business.
Retail theft has been the biggest problem in the UK retailers, customer theft and theft by
employee’s has been the biggest challenge for companies and for retail businesses over the
last few years, the average figure states 33.1% overall. However statistics has shown,
shoplifting signified the leading setback to retailers across the United Kingdom, figures show
around 36% of the company’s losses and setbacks is due to shoplifting/theft in-stores.
Furthermore, theft driven by employees was an immense fear to the companies, figures
shows 33% of shoplifting comes from employees. Additionally, it was stated administrative,
non-crime losses and supplier fraud was predicted at 25% and 6% overall. Rebecca Smithers.
(2013). Shop thefts rise as economic downturn bites
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Till systems in retail stores has promptly advanced over the past generation, most intelligent
merchandisers supply a computerised till system which is applied to several retailers
through a variety of retailer sectors. Known for its ultra-time-efficiency and management,
instant messaging direct to a point of sale, and cash management. The most common type
of system that is utilised in retail sectors is known as PoS Till System, the most common type
of method is applied to many business sectors across the retail sector. The most significant
characteristic to any PoS System is to enable retail employee’s to use his or her own
initiative towards the system, nevertheless, IR (retail intelligence) till systems should be
accustom to any employee who has been familiar to previous cash-handling/managing in
the past, experience is very vital whilst operating the PoS System. Due to the design and
outline of the system, it’s very recognisable for employee’s to be familiarised with the
system, its led to believe, anyone with fundamental computer knowledge would be able to
function the system very easily without hesitation. Intelligent Retail (2014). PoS till system.
The purpose of PoS is to generate an easy form of solution to its retail employee’s; also the
system is set to be powerful in terms of usage for employers, with many functions being
accomplished simply by a click of a button on the system.
Many functions are implemented within the system, functions such as; managing all
deposits, checking the availability of stock in certain locations via choice, bar-coded receipts
to prevent the risks of theft and fraud. Even more so, the system is tremendously secure
and protected in terms of tackling fraud crimes, the system allows the employee to trust
their staff in order to deliver changes to customer’s, cash-handling, handling gift receipts,
this is due to each transaction being recorded and implemented into the system for security
reasons. Intelligent Retail . (2014). PoS till system.
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Emerging technologies
Virtual mannequins
Virtual mannequins can be used in different environments; virtual mannequins can deliver
messages that capture instant attention. Playing pre-programmed message virtual
mannequins is an ideal way to pass on a promotional message onto visitors and customers.
The mannequin can be programmed by heat, movement sensor and also with a continuous
loop with functions if needed. The virtual mannequin could be a staff member or an actor in
stores. Ima Kiosk. ().
Zapp Mobile app
Zapp is a mobile app which puts real time payments on people’s mobile phones through
their banking application allowing payments to happen between consumers & merchants.
The Zapp mobile app already has partners such as Nationwide bank, Santander and HSBC;
Zapp will become open to financial insulations and merchants from 2015. Zapp comes from
your card so details won’t need to be shared online; your information won’t be passed to
the businesses you want to pay. Zapp will also allow users to become in control check their
balance before they purchase anything so they are able to confident purchasing because
they will instantly see their balance. Zapp also helps the businesses because they will be
receiving payments instantly and this could lead to more sales because Zapp helps
customers go shopping to a successful payment in a few clicks with no bank card pins to
remember as there might be customers who forget their pins from time to time. www.zapp
/. (2014)
RFID Radio frequency identification
RFID is an ID identification which relies on a small chip which is implanted in a tag. The small
chip can record and store data such as an items serial number, price and records of
purchases. An electric scanner can use radio signals to track or read the ID tag of the
product. For example a warehouse worker may use an RFID reader to check the data , the
data on the barcodes may just be numbers for example but once scanned the numbers on
the barcode can be checked on the company`s database and then the company will have full
knowledge of what `s in hand . Industry Canada. (2009).
Risks that businesses need to consider with the use of social media
Introduction
Social media has become the leading advertising tool for businesses to implement their
marketing strategies. Social media offers opportunities for companies to reach customers
and also establishing brand awareness however using social media to their full potential is
not always a straight forward as it may seem and social media will always have set risks that
businesses would have to consider. Nicole Wiegand. (2014).
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Social media can be a good advertising tool but it does have its set of risks such as
customers who follow companies are free to make comments such as exposing you’re the
business to the negative publicity on these social media sites and these comments could
have an effect on other customers who read these comments. A response can help reduce
the damage from the negative comments but it won’t rub out the criticism on the page.
Nicole Wiegand. (2014).
Another disadvantage of using social media for larger businesses is the threat that hackers
pose. A hacker can gain control of a company’s page and then spread false information
which can instantly go viral because even large companies such as Sony have fallen victims
to hacking because they have been hacked more than once. Nicole Wiegand. (2014).
Another disadvantage of using social media is the use of skill which relates to the staff of the
company because setting up the profile may be easy but figuring out the best ways of
interacting with customers and use of social media to help the business achieve goals that
have been set out .
How to keep Core customers happy
It’s important that core customers are not forgotten as they want to feel included and
connected to the business/organisation. There are 3 main areas which I believe are
important in the retail industry which in essence will keep your core customers satisfied.
Smarta business school. (2008-2013)
The first aspect that will be discussed is how to keep your customers happy as I feel it’s
always important to ask your customers questions and also listen to what your customers
have to say. It may take some time for customers to open up about their opinions on the
product and maybe what they have purchased or maybe the customer service they have
received from staff but that’s the way you gain the customers attention and trust and this
will lead to customers being able to give feedback and maybe their thoughts on any
improvements the next time they come to shop or ideas the business could use for future
references. Smarta business school. (2008-2013).
The second aspect that I will bring up is making a customer feel special that you are paying
them attention which then could lead to special relationships with them. Sending discount
offers, loyalty cards for a way to encourage customers to return to the store. Loyalty cards
are a fantastic way of showing appreciation to customers and it also generates additional
business which works a good advertising tool as it spreads information about the store.
Using loyalty cards helps retail stores analyse and keep track of customers shopping habits
and giving customers loyalty offers that match their needs. David Gigg. (2012).
The third and final aspect that I will bring up is online surveys, online surveys is a perfect
advertising tool for retail as it enables you to conduct research on their customers and is a
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powerful way of getting to understand your regular customers . For example how many
customers there is in a local area? , if they find an item
Useful and a price they would feel that is suitable to pay for a product. The aim of online
surveys to give customers the chance to give you back information on how your business is
doing and also gives you a chance if you’re on target or missing out targets. Survey monkey.
(2014). The marketing donut. (2009-2014)
How to attract customers who don’t shop regularly
Introduction
It’s difficult to reach out to new customers than getting existing ones. Once you have an
established customer base sales will become easier, more predictable and easier to grow in
the future Smarta business school. (2008-2013). relying on existing customers could leave
you vulnerable even though it’s unlikely that you will lose all your existing customers and
finding new customers and also having your existing customers is the best way to keep your
business stable and growing.
One of the first aspects I will bring up is regularly updating your website because customers
search Topshop and River Island looking for what’s new. Search engines favour websites
that are fresh and that have added new content. Keeping your websites updated also shows
that you can regularly communicate with customers such as listening to new ideas,
understanding the issues that a customer may have with the shop. With updating the
website regularly will be an advantage to you as regularly communicating with customers
who don’t shop regularly make them feel happy and may even become more conformable
with the shop for example regularly shopping with the company Smarta business school.
(2008-2013).With social networks this allows opportunities to connect with customers
instantly. Creating profiles on a multiple amount of social network sites allows businesses to
talk to customers on regular basses; you can also talk about the new products coming in and
the sales that could be on at the moment. Chris Mikisen. (2014).
Keeping regular contact with customers is another way of attracting new customers, letting
customers knows about promotional events and promotions. This acts as a good way of
spreading the word and sees what types of products those customers who don’t shop
regularly suddenly becoming interested in the clothing lines the store sales. Sending
newsletters to customers and emailing website visitors can be useful in updating customers
about sales and new items in your store. Lea Winters. ().
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SWOT ANYALSIS
What is swot analysis?
Swot analysis helps businesses develop a strong business plan by making sure that you have
considered the business strengths and weaknesses and also the opportunities and threats to
consider while developing a business strategy. Tim Berry. (2014). Opportunities and
threats deal with the factors which are external to the business environmental factors. Swot
analysis for example is done as a planning process where financial and also operational
goals are set for the upcoming year and this is why strategies are important because a
strategy should be in place to achieve the goals set out. Brain Hill. (2014).
Why SWOT analysis is important?
The reason why SWOT analysis is important is because it’s a way to dealing with the risks
which may hinder the business strategy in place. Risks are less threatening to a business
when time has been taken to develop contingency plans to instantly implement should the
threats occur. SWOT analysis helps a business be better prepared for whatever could
happen in the external environment. Queensland Government. (2014).
Introduction
Retail companies use SWOT analysis (strengths, weaknesses, opportunities and threats to
evaluate their businesses. SWOT analysis for the retail sector is detailed look at the
retailer’s strengths & weaknesses, the opportunities and the threats vs the key competitors
in the retail market place. Strengths & weaknesses are measured as internal factors which a
retailer has more control. Opportunities & risks are external factors which are positive and
also negative situations where retailers continuously face. Rick Suttle. (2014).
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Strength
The strengths
One strength of the swot analysis could be
the financial backing which means that it has
plenty of capital and also access to bank
loans. Strength could be the retailer’s
cheaper wholesale prices so this means that
the retail company may offer exclusive
products compared to other retailers. For
example a retailer could sell high quality but
defective clothing at a reduced price. A
retailer should make a list of the strengths
and the key competitors. Rick Suttle.
Weakness
Weaknesses
When reporting weaknesses a retail store
should start with addressing the
weaknesses. For example through a market
research, the retailer may discover that it
has a weak brand image compared to the
key competitors. The retailer may be
missing, for example the store might sell
expensive & cheap brands. They could be
lacking in customer service especially if the
retail store has no advantage which sets the
retail store different from the other retailers.
(2014).
Rick Suttle. (2014).
Opportunities
Opportunities
An extra step in a retail SWOT analysis is
identifying the key opportunities in the
market. There are many opportunities a
retailer may discover through its sales and
the market research. Rick Suttle. (2014).
Threats
Threats
A retailer can recognize threats through
using SWOT analysis; threats can include a
decrease in the consumer demand,
rescission or even an increase in the retail
competition for competitors. Rick Suttle.
(2014).
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Economic trends
The overall economic trend pattern for River Island has vastly increased over the last year. It
was claimed in 2012 River Island had immensely improved as a company in terms of sales
revenue, this was due to the company allocating the production back to the UK, signs of
improvement had drastically erupted with the enhancement of sales throughout the year.
Throughout the 12 months, the company had improved the amount of items/products
manufactured at home with an estimated figure of 50%.
During 2013, River Island’s pre-tax profit had suddenly jumped 12.5% last year due to new
store investments across the UK and worldwide, furthermore, the company had verified a
record of £97.8million pre-tax during December 29th 2013, whereas revenue had
approached up to 0.4% to £802.3million. The chief executive of River Island, Ben Lewis had
stated, “I am pleased with our performance against a tough economic backdrop. It reflects
the investment we have made in the business and we can look forward to further expansion
at home and abroad as we build a world class multichannel fashion brand”. Jon Whiteaker.
(2012). River Island sees British manufacturing pay off. In the year of 2013, River Island
launched and unleashed 14 new stores across the UK and the rest overseas, the company
had also relocated certain stores across London and Liverpool flagships to a larger location
to expand and broaden the company even further with the use emerging technologies.
The Rihanna for River Island was officially unveiled and launched in 2013; the global
superstar had decided to take a break from her musical career in order to focus on the
fashion side of her career. Concentrating on the fashion side, Rihanna had launched her own
clothing platform with River Island, using her own initiative; she designed and selfconstructed her own creations within the clothing industry. The Chief executive of River
Island had stated the company had become more recognisable and “more famous” since
the release of Rihanna’s clothing brand, adding a sophisticated aspect towards River Island.
Mr Lewis adds further by stating the global pop star has had a “tremendous impact” within
the company, also raising the profile of the brand further. The growth of the company had
enlarged and increased, however, the Rihanna for River Island collection remained
distributed in the UK only, the singer had said to be complementing whether to take the
development of her clothing range to the US. Since the launch of 14 operating stores across
14 countries (UK and overseas), River Island has expressed their desires to expand the
development further by launching their very own brand in Australia, the plan had come into
action when River Island had uniquely built an exclusive website for the particular country.
A major uncertainty is still surrounding River Island, whether to take their brand to a new
level and propose an idea into the US, opening stores in the US to increase the company
internationally. However, River Island wouldn’t be the first company to expand the company
into the US, rivals Topshop had effectively opened its first store in New York back in 2009,
since the success of Topshop’s launch in New York, the store is now operating in many cities
across the US, such as; Chicago, Los Angeles and Las Vegas.
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Meanwhile, since the introduction from Rihanna’s clothing brand, the company’s sales had
enlarged to 0.4pc to £802million, whereas pre-tax profits had risen to 12.5pc to £97.8million.
Chief Executive Mr Lewis had stated it was a “good performance” from the company, seeing
as the customer location was “very fragile” at the time. Mr Lewis further adds, “It reflects
the investment we have made in the business, and we look forward to further expansion at
home and abroad as we build a world-class multi-channel fashion brand”. However, the
company didn’t establish sales or the operation of its online business, although the online
sales had successfully developed very strongly. Graham Ruddick. (2013). River Island plots
international expansion after Rihanna tie-up.
Established River Island stores across the UK has developed in a very positive approach, the
company now has stores across Russian, Holland, Poland, Belgium, the Middle East and now
in the Far East.
During the year 2012, River Island had launched seven brand new stores; two of the stores
were relocated into a larger unit, and one store was closed down. During June, River Island
revealed a new flagship store on Oxford Street, promises are being made by the company to
ensure new launches across the globe and within the UK, River Island are set to establish
and open 20 new stores Graham Ruddick. (2013). River Island plots international expansion
after Rihanna tie-up.
2014 was proven to be a successful year for the company; River Island launched its first
Stockholm store in Sweden, due to several years of continuous launches across the globe,
River Island have managed to secure overseas unveilings across Europe and the Middle East,
also River Island had struck a deal with Zalora to unite Asian fashion and beauty
internationally, across Hong Kong, Singapore and Malaysia. The clothing range has been
uniquely identified for Asian customers only. Graham Ruddick. (2014). Rihanna boosts River
Island sales
The economic trends pattern suggests River island accounts had declared profits from the
company had fallen from a huge £152.8million, down to a staggering £157million, sales and
revenue had enlarged from £670m to £727million. “The market is highly competitive.
Turnover in the first part of 2008 is in line with expectations, taking into the account the
more challenging environment," stated the directors in their report. Richard Fletcher. (2008).
River Island owners see profits slump.
The billionaire Lewis family had reduced their revenue’s from investment vehicles, forcing
the retail company to decrease values within the drive sales.
River Island declared their announcement to select Oracle Retail Planning and Optimisation
software in order to enhance planning performances through business models. The idea of
using Oracle Retail is to enable the growth of the business by developing planning across
various channels, with the use of tactical operational support from Oracle Retail. The idea is
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to create a business process improvement within the retail sector; stages will consist by
using, merchandise financial, Retail assortment and item planning modules from Oracle
Retail to accomplish current and future planning and lifecycle requirements. The three main
stages of planning modules are to enable the use of frequent consistency and a more
genuine planning process, whilst an improved understanding of merchandise routines
throughout the business to notify profitable inventory investment and to ensure customer
experience advancement. Additionally, the software can also be used for raising stock
availability, River Island’s chief information officer Doug Gardner released a statement
regarding the use of Oracle Retail, declaring “Global and omnichannel expansion is a key
strategic focus and to do this successful, Oracle will help us optimise our planning practices
to support this growth while continuing to provide our customers with their must-have
items, wherever and whenever they shop with us”. Oracle Retail had responded to Doug
Gardner’s statement insisting River Island will now be able to resolve stock/merchandise,
financial, product and assortment strategies to business aims. Retail Technology. (2013).
River Island plans to support growth strategy. River Island and the impact on society – other
impacts rather than fashion.
River Island is currently supporting leading epilepsy charities known as Epilepsy Society and
Young Epilepsy. The company has raised awareness through their online website by
advertising and promoting an understanding about epilepsy to the public, also, customers
who tend to shop online and place orders will be given a free “Everyone knows someone”
wristband to help support the campaign, and most importantly, the company will be giving
away a £100 worth of vouchers to any customer who engages with the epilepsy
questionnaire and successfully completes the process, the campaign has been designed to
run for a week only.
The high street fashion brand has also launched an international charity organisation by
unveiling a capsule t-shirt line. River Island has declared working with War Child, a
worldwide charity organisation that is recognised internationally, the project was inspired
and highly influenced by one of the world’s most iconic superstar named John Lennon.
During the generation of the 80’s, John Lennon was highly praised due to his charity work
with children who were affected by war crimes, victims of war and left as orphans.
Impressed with his immense charity work, River Island had suddenly developed an interest
to carry on Lennon’s legacy, by working on a project called War Child. The company had
confirmed its launch with the creation of ‘Come Together’, a classic iconic song that was
written and released by John Lennon; the design was originally worn on Lennon and his wife
Yoko Ono. War child has recently stated the t-shirts catchphrase is a representation of the
children who are suffering from war crimes across the world. Nad Badshah. (2014). River
Island x War Child: John Lennon-Inspired T-Shirt.
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Consumer behaviour
A consumer’s role is to determine whether they would like to purchase products from the
preferred brand, however, we need to distinguish the difference between the use of the
product away from social status use or whether wanting to purchase a product to satisfy the
consumers’ needs. Peer pressure has determined a massive part within the society, and has
proven to be highly influential towards the consumers. Psychological research has studied
the behaviour of consumers in regards to peer pressure, and the impact it has into buying
specific products. The sensation of wanting to have a certain product is due to the high
influence from the society, individuals may feel heavily pressurised into buying a specific
brand in an agreement with the group.
Applying this theory to River Island, this has proven peer pressure plays a vital role within
the company’s success and achievements, for example, The Rihanna for River Island
production scheme suddenly had enhanced and boosted the sales/revenue in a dramatic
manner. Consumers felt the need to go into stores and secure their very own Rihanna
fashion brand, why? Rihanna is a global superstar who is widely recognised internationally,
she’s an iconic celebrity in the public perception, and the dominance of her career has led
the consumers to automatically buy the clothing range, regardless if the brand is managed
in a poor manner, or if the materials are produced in an average approach. In some cases,
consumers may disregard all the risks presented within the specific brand, merely because
the name of the brand itself will inevitably change the consumer’s view towards the product.
Society and the use of the social status has advanced rapidly over the previous generation,
distributing the latest and current trends via social media sites, users will tend to base their
own opinion regarding a brand via social media, other users feedbacks will control the final
conclusion about the brand, and whether to purchase a certain product based on customer
feedback. Moreover, the influence from personalities has empowered the persuasion on
specific brands, forcing the consumer to purchase the product, without the worry of being
left behind with the current trends or being deprived from the latest trends in fashion. The
most current trend within the retail sector and River Island right now is leather and fur
materials, as most celebrities are promoting to enhance the clothing range; consumers will
automatically become inspired by celebrity trends, and will be easily persuaded to go out
there and acquire the up-to-date fashion, also, the need to ensure others they’re owning
the latest brands within fashion.
Another influential factor which plays a vital role towards the consumer is known as
‘cultural factors’. Cultural factors and societal environment is very essential in terms of
meeting the required actions from the customer, and the impact it has on the consumer
behaviour. As we grow up, as people we are either influenced or persuaded by positive
leaders throughout life, for example, positive role models such as; family members, friends,
our backgrounds, diverse environment or civilisation society which enables a communal
behaviour towards our own culture. To take cultural factors into consideration, it is
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necessary the brand/company recognises the requirements of the characteristics to
familiarise the precise product and the marketing approach into the right direction. This will
be essential in terms of exceeding the consumer’s needs within a specific brand. Cultures
can essentially determine the way we live, and how big the impact can lead to certain
purchases, an example of this can be from women who live in Beirut, Lebanon women are
often seen dressed in miniskirts or short trousers, however, a woman who lives in
Afghanistan and is caught wearing a miniskirt would result into disastrous consequences,
either facing bodily harm or even the death penalty. The culture in Afghanistan is very
diverse; women are usually dressed in burqas in order to keep themselves covered up,
similarly women in Saudi Arabia are required to wear an “abaya”, this is a black garment
which is highly recognised in the middle east. Becoming a latest fashion world-wide, retail
sectors are slowly starting to embrace this idea into their stores. 3.1 Factors That Influence
Consumers’ Buying Behaviour. (2012).
A situational influence within the atmosphere is also another technique which can
exceedingly influence the consumer’s behaviour towards purchasing a certain product.
Stock availability can most definitely determine the outcome of brand switching and most
importantly, switching to a different company, the environment of the store is vital in terms
of maintaining and satisfying the consumer’s needs, however, if certain demands are not
met by the brand, and stock availability is extremely low, the consumer will either; not make
any purchases at all, wait until the availability of the stock, or leave the current store and
visit another store to purchase the preferred product. Due to River Island being a
phenomenal success globally and recognised worldwide, the demand within the clothing
platform has risen to an intense manner by decreasing the stock availability in certain
environment locations. The high-street is a popular location where stock demand comes
into action, due to the busy shopping environment within the high-street area, stock
availability will become even more unattainable to purchase, leaving the customers
unsatisfied, and compelling customers to transfer their store location into a different store
area. Also, the consumer’s attitude can also take a negative approach towards the company,
if the consumer has been left disappointed with the service, a negative attitude will be
applied towards the company, and consumers will tend to speak critically about the
company/service, or may also change their attitude towards another substitute company in
a positive manner and will develop a outlook on the substitute product. Tim Friesner. (2014).
Situational Influences and Atmospherics.
Promotional transactions are also another persuasive method which can help to improve
the consumers behaviour, River Island are generally known for their online sales, discounts,
and occasional gift cards. Each Thursday’s, River Island will organise a student discounts
event for university students, the objective of these events is to develop the growth of the
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consumer base. With students being on a limited budget, the use of student discounts will
affect the behaviour towards the desired product, prompting students to purchase
discounted items, due to the decrease of sales. Most retail sectors have applied this market
intelligence within their company to enhance sales, and influence on consumers.
How does music improve the atmosphere within the retail sector? Due to customer
feedback, a study has indicated music can play an energetic role towards the consumer’s
performance into obtaining a precise product. A study has shown, the diversity in music can
affect the consumer’s mood in a tactical manner, for example, slow rhythm music has
proven to enhance the mood within the store, compelling the customers to discover
furthermore around the store for an extended time period. However, fast up tempo music is
usually assembled. The tempo of the music doesn’t necessarily depend on the speed, it’s
the distinctive type of music which will determine the representation of the company, for
example, a music theme will define the company overall. Tim Friesner. (2014). Situational
Influences and Atmospherics.
Physical features within River Island is another strategic method, which is highly
implemented within most retail sectors, the use of physical features is simply applied to
fabricate the mood and the emotion of the consumer. Features such as; lights decorations,
music enhancement, weather (bright and sunny), and design of the store, visible structure
of the stores shelves and the range, and the dress style of employee’s. All of these elements
can affect the consumer’s behaviour into purchasing an item or not, retail sectors that will
want to sell a preferred product will need to glamorise their stylish features in a physical
presence. Relating back to Rihanna For River Island clothing, the layout of the clothing range
was presented in a professional manner, employee’s from River Island were dressed in the
Rihanna’s clothing range, helping to promote the brand, and most importantly, capturing
the consumers attention into buying the brand, this is firmly down to the stylist’s, and how
they have represented themselves. If a stylist is dressed in a fashionable style, the consumer
will be intrigued and would want to have the anticipated look in order to retain the most
recent trends within fashion.
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Competitions
The retail world is very competitive and many of these big giant companies that generate
huge income tend to be more competitive towards each other than with the smaller retailer.
The incomes generated by these companies are what they use to market themselves and
their products. Large retailers like Topshop, Debenhams and River Island are much more
established than the smaller retailers like Peacock, Select and BHS.
As a part of the Arcadia group, Topshop has been around since 1964, the business has
excelled and has become one of the most successful businesses within the Arcadia Group
over the years. Topshop is as successful as River Island and the business are running in
competition with each other. These businesses have the same marketing strategy and
appeal to the same groups and crowds of people as River Island.
Each one of these businesses has different ways in which they market their businesses. The
smaller establishments like BHS, Peacock and Select does minimal amount of advertising
and promotions, the cost of engaging and keep in competition with the other big companies
like, Topshop, River Island and Debenhams is far too expensive. Peacock and Select have a
targeted audience of students and clothing prices for customers who are not able to shop in
River Island for instance. The quality and longevity of the clothing comes into question as
the material use in these shops is low quality that’s why the clothes are cheap. The material
that’s used in River Island compared to Select are better quality and that why the price of
their clothes are much higher than that of the smaller retailers.
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