Retail Management Quiz

Business Context

• Topshop is a fashion retailer.

The Retail Environment

• Understanding the retail environment is important when making buying decisions.
• Online retail has transformed the retail environment and impacts decisions made by buyers.
• Mobile and social media strategies benefit retail buyers.
• Different retailers use multichannel and omnichannel strategies.
• Current retail and buying trends need to be identified.

Retail Buying

• Forecasting consumer wants and needs is crucial.
• Planning merchandise to meet consumer needs is important.
• Selecting appropriate vendors is necessary.
• Negotiating contracts with vendors is a key process.
• Pricing merchandise is essential.
• Maintaining accurate sales and inventory records is a necessity.
• Reordering merchandise is a crucial part of the process.

Retail Environments

• Fashion retailers operate in various formats.
• Fashion retailers target specific demographics.
• The fashion industry has a long history with successful brands like Gucci and Marks and Spencer.
• Retailers like ASOS and Net-a-Porter are prominent e-retailers with unique positions.

Different Retail Formats

• Luxury brands like Chanel have a wide product offering and distribution.
• Department store brands offer a broad range.
• Multiple chains and independents/boutiques exist.
• Supermarkets and discount retailers are common.
• Specialist retailers offer specific categories, like accessories.
• Niche brands focus on narrow markets.
• Catalogue retailers use catalogues for selling.
• Pure online retailers rely solely on online platforms.

National Brand v Private Label

• Retailers stock products developed for their own business as a private label.
• Alternatively, they can buy existing brands from manufacturers.
• Department stores and small independents often combine both.

Branded Buying v Private Label Buying

• Branded buying requires buyers to choose elements matching customer profiles.
• Private label buying needs a more creative approach through designer collaborations.
• Private label typically lets retailers source directly for higher profits.

The Brand is the Label

• In many cases, the retail brand is used as the company name.
• Examples include Gap, H&M, and Pink.

E-commerce and Online Retailing

• Retail e-commerce sales grew from 2016 to 2022 (data provided in chart).
• Online retail continues to grow globally, shifting from in-store shopping.

UK Retail E-commerce Sales

• UK e-commerce sales rose steadily from 2012 to 2018 (chart data provided).
• Smartphone sales account for a significant portion of e-commerce sales.

Evolution of Clicks-and-Mortar Approach

• An image of a laptop with a shopping cart depicts the evolution of the approach.

Benefits of Online Retailing for Customers

• Convenience is a key benefit.
• Online shopping allows for best price comparisons easily.
• Online retail offers a wider range of products.

Benefits of Online Retailing for Retailers

• No need for expensive storefronts.
• Warehouses can be less expensive.
• Advertising and promotion costs are lower.
• Communication with consumers is easier.
• Online adjustments can be done flexibly.

Challenges of Online Retailing

• Navigating the internet can be frustrating and time-consuming.
• Security and privacy concerns exist.
• Inability to physically see or try products.
• In-store returns are often easier than online.
• Delivery speed can add to the cost of online shopping.
• In-store shoppers often buy more through impulse purchases.
• Shopping can sometimes be a social activity, lost in online retail.

Online Shopper Expectations

• Providing experiential services (live chat, social media integration, VR videos) is important.
• Clearer and better quality content (images, product info).
• Fast service and optimized pages for different devices.
• Easy and quick checkout processes.

The Future of Retailing

• Despite the popularity of online shopping, a significant number of customers still prefer physical stores.
• Blurring of lines between in-store and online shopping.
• Customers appreciate interactions with sales associates in physical stores.
• Showrooming and webrooming demonstrate blending of in-store and online approaches.
• Omnichannel retail is the new approach in retail strategy.

Omnichannel v Multichannel

• Omnichannel integrates online and offline channels.
• Multichannel approach involves independent channels.

Omnichannel Retailing

• Retailers use multiple touchpoints for customer interactions.
• Integrating stores, phones, laptops, and social media seamlessly.
• The approach demands a unified message across all channels.
• Omnichannel replaced traditional methods of shopping.

Challenges of Omnichannel Retailing

• Same-day delivery and pick-up require visibility in inventory and efficient forecasting.
• Online orders can affect in-store stock levels.
• Customers expect consistent experiences across channels.
• Returns policies vary and cause issues for retailers.

Future of Retailing Expectations

• Customers expect fast delivery.
• Quick responses to shopping trends.
• Instant gratification and quality expectations.
• More personalized shopping experiences.
• Faster and more efficient shopping processes like curbside pickup.

Future of Retailing – Trends

• Online shopping exceeded in-store shopping in Black Friday weekend in 2016.
• Data analysis of customer behavior and social media trends will become crucial.
• In-store facilities like pick-up and returns are expected to remain.

Fututre Retailing - Trends cont

• Gather data from various customer touchpoints.
• Streamline and improve engagement with customers.
• Employ predictive analytics for smarter business strategies.

Globalization

• Economies of scale and purchasing power get stronger.
• Transparency in sourcing becomes important to customers.
• Production shifts from industrial centers to emerging markets.
• Companies adapt to low-cost regions based on demand trends.
• Globalization speeds up the fashion product life cycle.

Globalization Cont.

• Buyers have a global selection of suppliers.
• East Asia (Southeast Asia) is a significant global textile supplier.
• Wages and costs in producing regions vary.
• Global market shifts occur rapidly, impacting pricing.

Factors for Buyers in Global Markets

• Exchange rates fluctuation impacts pricing, especially with USD.
• Fluctuations in oil prices cause effects on clothing.
• Banking issues and recessions can impact retail.
• Significant events like royal weddings or heat waves cause trends.

Democratization of Fashion

• More people have greater access to more fashion and brands can reach wider audiences.
• Modern fashion is available to all, not just certain individuals.

Other Impacting Issues

• Fast fashion's (FF) influence on the retail environment.
• Changes in consumer behavior in stores that retailers are noticing.
• Fast fashion is increasing sales of items often sold at discounts, or markdowns.
• Fast fashion's growth is raising ethical and environmental concerns.

LUxury Sector

• Rapid sector growth due to demand from emerging economies.
• Design houses internationalize, opening flagship stores.
• Design houses access capital.
• UK department stores face challenges in the luxury sector.

Fast Fashion

• Biannual fashion seasons are becoming less relevant.
• Fast fashion trends move to more frequent releases (52 times in a year.)
• Traditional brands respond by expanding seasonal cycles.
• Cheap alternatives to high-fashion items remain popular.

Fast Fashion Problems

• Fast fashion is environmentally damaging.
• Large volumes of production generate pollution.
• Water usage is high.
• Toxic chemicals are released.
• Global supply chains contribute to pollution and ethical issues.

Summary of Findings

• Retail is rapidly evolving; buyers need to adjust.
• Shopping online is growing quickly and the lines between online and in-store shopping are blending.
• Retailers adapt with omnichannel retailers, merging stores, online platforms, and mobile apps.
• Online and mobile shopping transformed retail quickly.
• Better merchandising will require technologies that not only improve efficiency but also recognize that technology can improve customer service.