The changing face of UK Fashion retailing market

The changing face of UK Fashion selling martThe habiliment retail constancy has been and is undergoing significant changes resulting from processes of globalisation, changes in consumer hold as hale as changing corporate activities in damage of strategic marting decisions. The UK clothing retail industry has experienced significant yield which has focused attention on studies in the field with this sphere of influence being considered as the one of the most competitive markets in Europe. This is primarily as a result of the concentrated power of larger retailers such as attach Spencer. One prime issue as a result of globalisation is that in that respect ar more and more retailers sourcing globally aiming to provide competitive expenditures and part products in the market. Marks Spencer as such then is challenged by this trend oddly from rival discount and supermarket competitors.Research MethodThe basis of the primary research conducted in this brief was delivering a questionnaire based survey delivered at four-spot retail outlets two of which were Asda and two of which were Marks and Spencer. Opportunistic sampling was used in that customers were approached in the store as they entered and left the premises and asked would they participate. A target of blow questionnaires to be completed at all(prenominal) store was decided on to achieve a healthy sample size yielding useable results for the analysis. The questionnaire had four sections. The first of these sought general demographic information such as age and sex, the second section sought information related to the frequency of shop at the stores as well as frequency of shopping elsewhere. The third section sought altitudinal information related to reasons for purchase in the respective(prenominal) stores while the fourth section and the fourth section sought information on preferences in call of shopping specifically related to the variables of quality, price and the retail milieu. D ata was entered into SPSS and analysed according to the objectives of the instruction.Permission to conduct the questionnaires were sought be local managers in the first instance though for two of the stores further permission had to be sought be regional managers. All respondents were advised of the anonymity of participating in the research and the results of the research were excessively offered to the managers involved in order to development the chances of successfully gaining permission to conduct the research. Surveying was conducted during a weekday and at a weekend time in order to enhance the representativeness of the sample in hurt of people working and varying their shopping times.Comparison of marketing mix in George at Asda and Marks SpencerOverall 412 questionnaires were completed but 12 of these were get rid of due to incomplete or incorrect completed parts. Of the 400 68% were effeminate and 32% male. The age breakdown of the sample showed that some 38% of th e jibe was between the ages of 26-32 or over although in the issue of Marks and Spencer shopper the proportion of shoppers in this age group was higher being 49%. Also Asda had a higher proportion of shoppers between the ages of 18-21 than Marks and Spencer the variants being 19% and 9% respectively. Over 90% of the total sample had shopped more than once in each of the stores at bottom the previous month with 45% shopping at least twice a week in either Asda or Marks and Spencer.Of worry was the result that 40% of Marks and Spencer customers indicated that they would shop there regularly (at least once a week) while the figure for Asda was 29%. This may be an indicant of punishinger strike off loyalty for Marks and Spencer in some respects but geniused(p) further results examined below may be under threat given attitudinal results related to price and quality.ProductThe UK clothing retail industry has grown in recent years and reached a judge of $38.7 gazillion in 2004 which delineate an increase of 3.7% over the previous year. Womens smash was one of the fastest growing areas in the sector (Datamonitor, 2005). However it is claimed that the growth in r nonethelessues within this industrial sector will slow down mainly due to the impact of discount and jimmy adding retailers offering clothing goods at lower prices forcing prices down overall within the industry. Clear indications of this trend can be seen in this case domain in that George at Asda and its range achieved significant growth and success compared to overall declining lucrativeness within Marks and Spencer. Since the introduction of clothing ranges by the supermarket in 1990 its product categories exhaust expanded to include womens resist, mens wear and infants-wear. Marks Spencer has operated in the marketplace for decades and offers akin(predicate) product ranges.While 49% respondents indicated a preference for shopping in Asda for womens clothes 51.2% of customers chose Mark s Spencers to purchase womens products. It is obvious that there is slight difference in the choice of product range yet the results in addition suggest that there a significant percentage (60%) of customers chose George at Asda primarily to buy childrens clothes and in particular to buy items such as school uniforms. One of the main reasons for this arguably can be explained by the lower price yet likely quality design of the Georges range. Especially for younger children where school uniforms would be discarded in a relatively short time due to the children growing the price of products offered by Asda can be said to be a significant attractive featuring influencing purchasing decisions.It has been reported that the childrens wear sector in the UK grew by 3% and reached a value of $4.7 billion in 2004. This phenomenon is perhaps attributable to the success of discount stores and supermarket operators who are able to provide cheaper childrens wear at reasonable quality levels (D atamonitor, 2005). From a macro perspective however the decline of birth rates in Britain has resulted in the expectation of a future decline in childrens wear gross sales. Hence arguably over the longer term it may be the case that with possible future declining sales that this sector will baffle even more competitive and quite feasibly the number of operators will be reduced in retail childrens wear.Evidence from this case study suggested that childrens wear product ranges delineated 27% of customers purchases in Asdas compared to 10% in MS. Additionally supermarket as generally a daily shopping preference for food provided a relatively accessible shopping environment for women and in particular working women to purchase childrens clothes.This was indicated by some 59% of respondents at the Asda stores stating they had or were intending to purchase items other than clothes as well. It is reasonable to say that as a result of changing roles for women in both social and economic contexts there is increase pressure such as reduced times available for shopping for women as discussed in literature review. These new consumer behavioural characteristics have resulted in changing retailing forms in the clothing industry to which new entrants such as supermarkets like Asda have capitalised on and responded to quickly as they emerge.In addition more men have become involved in clothing buying behaviour illustrated by the mens wear sector growing 5% in 2004 (Datamonitor, 2005). It was interesting to examine the results of this case study in the comparison of consumer preferences towards mens wear at Asda and MS. In this research 46% chose MS when purchasing mens wear as op pose to 33% in Asda. It is useful to look at this trend in understanding the changing features of the UK clothing retail market bearing in mind major impacts on consumer behaviour within the sector. Firstly Mark Spencer have exploited a branding strategy which established a reputation for high quality goods for a bulky period of time.As a result of price wars between supermarkets and value adding discount stores MS has aimed to focus on quality in order to sort it from rivals and position the store further in terms of exclusive designs as well as quality products. However its advertising campaign with the tagline exclusively for everyone which was launched five years ago has been demonstrated to have mostly failed with customers turning away from the retailer because of its high prices to lower cost offerings in other retailers (Gardner, 2004). The high figure though mentioned above for MS respondents relating to whether they would shop in the future in the stores perhaps indicates that MS still retains a sizable customer base from which it could attain on. However the validity of this assumption can be challenged given the size of the sample of this research and would need further investigation on a larger sample to confirm or deny.As such while MS seems to have fai led in maintaining competitive advantage through emphasising quality its supermarket rival Asda has also introduced designer ranges and positioned itself in terms of good design as well as lower price offerings. It is fair to argue then perhaps that MS will not improve its performance by challenging its supermarket rival on pricing and batch. Hence one response has seen MS switching to a branding strategy. Secondly as outlined in the literature review purchasing clothing products should not be seen as indicative of normal goodness buying behaviour because it is to a large extent it is linked with extrinsic factors such as culture and social status which in turn makes the value of brand names an essential element of clothing goods (Entwistle, 2000).Davies (1998) claims that the marketing of own brands is a feature of modern multiple retailing which can also be seen in this case study. Retailers such as Marks Spencer have created brand images by advertising their own products and i n the meantime transferred this brand equity into the physiological products in their stores. The costs of branding to the retailer are lower than that of marketing other manufacturers brands. This contributes to an understanding and explanation of attitudes towards mens wear purchasing behaviour which in this case saw the brand name of Marks Spencer as a quality clothing producer helping the retailer maintain a critical market parting in the mens wear sector. It perhaps also demonstrates that men are less sensitive about price in purchasing clothing goods than female consumers in that brand name and perceptions of quality influence their decision making processes.Jobber (2001) argues that price is often used as an important indicator by customers during the decision making process hence it is useful for devise retailers who exploit pricing overlyls to create impacts on customers at the perception and evaluation stages of the purchasing process. As Britains biggest clothing ret ailer Marks Spencer has established its brand image traditionally on the basis of providing quality clothing goods reflected in higher pricing reassert as being good value for money given the quality of the product. In contrast competition at the discount and value adding clothing ingredient of the market has generated significant threats to MS not only from discount retailers such as Primark but more importantly from new supermarket operators. In this case study George at Asda was chosen in order to provide a useful time period of view in understanding the changing environmental contexts of clothing retailing.With a turnover of 8301.5 Marks Spencers is one of the major clothing retailers occupying a commanding position in the middle market level (FAME, 2005). It is reported though that Marks Spencer has continuously lost market share due to intense competition in the UK clothing retail industry as well as from threats posed by new entrants such as George at Asda which has pro ven to be a highly successful entrant with the company reporting revenues of $26 billion by the end of January 2005 a significant increase of 19.8% compared to 2004 (Datamonitor, 2005). In contrast to George at Asda, Marks Spencer saw a decrease of 2.6% in revenues with operating simoleons falling to $1.3 billion in 2005 (Datamonitor, 2005). According to this research customers switched from Marks Spencer to cheaper retailers where quality levels were perceived as being relatively high with George at Asda being for 61% their first choice. The extremely low price of designer products helped Asda penetrate the clothing retail sector successfully and effectively. It is fair to say that international sourcing and effective allow chain management contributed to a significant degree to the competitive prices in its clothing sector in the same manner as its grocery section.It is also interesting to note that although more than 40% of customers believed that Marks Spencer maintained a better quality level for clothing product ranges based on its reputation and effective quality control programs only 31% respondents considered clothing products at MS as good value for money. As such then the price war between supermarkets and discount stores have driven down the market price for clothing products while improvement of quality in both retailing sectors has become essential in the overall value adding process. As a result as one of the main middle market players Marks Spencer has been be both at price and quality levels. A strong financial background enabled Asda to achieve economies of scale and benefits from its integrated supply chain. The power of Asda as a retailing giant helped it negotiate with global suppliers for lower costs which as a result lowered final prices for consumers.Particularly in recent strategies by employing designers the creation of brand name and image of George at Asda contributed to its competitive capabilities. This point of view corres ponded to earlier research discussed on consumer behaviour towards clothing buying which suggested that customers are particularly sensitive to price regardless of brand names yet in considering any extra value perceived in a brand name with the purchase customers became less sensitive to this element. This is able to help explain the strategic decision for Asda in building the brand name George at the sign stages of entering this very competitive market. Reflecting this it has been reported that MS had lost its place as the UKs biggest clothes retailer to its supermarket rival Asda. with MSs volume share of the clothing and footwear market remaining static at 9.1% while Asdas George label increased its share from 7.3% to 9.4% in 2004 (Barnes, 2004).As a result the supermarket has grown to be Britains biggest clothing retailer after figures produced by Taylor Nelson Sofres which pointed to the volume of the George range at Asda rising to 9.4% compared with MSs share which was stati c at 9.1%. However in terms of sales by value MS is still the market leader beating the Wal Mart-owned supermarket by 3 billion pound (Gardner, 2004). It is thus expected this represents a significant change in the retailing market particularly in consideration of the middle to value adding discount clothing market. This corresponds closely to arguments reviewed in the literature section which suggests that further casualties in the Mid-market and Value Clothing sector are expected driven by increasing competitive levels (Collins, 2005).Supply Chain Management franchising, merchandising and distributionSince the mid 1990s there has been an evolution in the UK clothing retail industry which has seen increases in both offshore sourcing and international expansion (Jones, 2002). In terms of local apparel manufacturers sales are focused on a some large buyers and Lustgarten (1975) has found that concentration ratios of major buyers have a significant impact on profit margins in the ind ustry. In the case of Marks Spencer its strong position in the supply chain gave them strong negotiation abilities in the sourcing process but the trends of offshore production and overseas sourcing by other retailers has created life-or-death threats and challenges. The fast fashion strategy introduced by George at Asda in 1990 depends on effective supply chain management especially in the management of sourcing afield to reduce production costs. Additionally the Wal-Mart owned supermarket enjoys economies of scale from its large number of suppliers globally and as a result good design and fast fashion goods could be transported to supermarkets rapidly as with its grocery products. However for Marks Spencer as one of the UKs leading retailers the franchising group acts in a revolutionary mental object in seeking to respond to these trends effectively (Whitehead, 1991).Marks Spencer has attempted to reduce stock hold by improving the efficiency of its logistics management in t erms of lead times through promotional sales for stock goods (Benady, 2005). However the results here were disappointing particularly in relation to womens wear. Market share reprehensible by 5% and UK retail sales fell by 1.7% (Benady, 2005). The problematic aspect of this can be found in the supply chain where too complex a design in the production process and inefficient management strategies resulted in the decrease. Results in this research shows that respondents believed merchandise in the basic sales floor in MS was characterised by a lack of a clear marketing image and that the product ranges were too complex. The retailer has sought to overturn down on its sub-brands and volume of stock held in order to introduce fashionable products at competitive prices in a shorter time. However it has been a point of concern that the management of its supply chain relied on management consultants rather than sales figures and marketing research on customer preferences. Consequently wh ile UK womens wear sales grew by 4.9% Marks Spencer suffered decreases in terms of market share and operating revenues leading to reduced profitability.Due to the changing nature of the UK clothing retail industry there are revolutionary changes occurring in the supply chain sector. The most important element here can be seen as the increasing amount of sourcing activities from cheaper overseas suppliers such as Eastern European countries as well as far Eastern regions. Additionally bearing in mind the key features of clothing products the principle of shortened response is an integral element of the sector. This is to say lead times in terms of design, production, transportation as well as merchandising have become shorter. In turn benefiting from significant declines in stock holding numbers as well as risks linked with mark down sales clothing retailers are able to provide new ranges products within several weeks with maintained profit margins. As Porter (1980) suggests industri al performance is largely influenced by levels of competition and this is the case for the UK clothing retail sector. The position of Marks Spencer is not only challenged by competitors within the same market level such as Next but also from rivals in the value adding discount marketplace including Primark, New Look. Entrants such as Asda into this industry have likewise created evolutionary changes in terms of marketing strategies as well as revolutionary supply chain management changes.The existing retail environment in which 72.5% clothiong sales went through larger retailers since 1998 is expected to continue however the battle for market share and sales among large retailers has become more intensive (Retail Intelligence, 1999). The tables below suggest that while the price of clothing is approximately the same in considering inflation prices of clothing have decreased. The speed element linked with purchasing has also decreased dramatically. This reflects both the new charact eristics of modern consumers who have less time for shopping but who are also more demanding in terms of price, quality and style and the strategic choice by retailers in introducing fast fashion and effective supply chain management in order to carry through this new demand.