Marketing Research Report for Primark
Introduction
The aim this report is to select a clothing retailer and conduct a marketing research for providing the store an opportunity to improve their sales through improving their strategies. For the achievement of the objective, the organization that has been selected as a target fashion retailing business is Primark.
Fashion retail industry overview
Industry analysis is important for organizations; it allows organizations to understand their weaknesses and strengths and provide the chance to realize the gap and capitalize on those gaps. The retailing section of the United Kingdom is an indispensable part of the economy of the UK and fashion is amongst the key drivers of consumer spending in the industry (UKFT, 2010). Fashion retail industry of the United Kingdom is growing and according to research, in 2015, the industry accounted for £ 39 billion of the United Kingdom economy with 1.3 percent growth rate that was up as compared to 2013 24.8 billion sales (I2I Event, 2013). In 2012, the UK online retail sale of fashion clothes was 29 billion and predictions were to grow until 2017 with 10 percent rate on an annual basis (I2I Event, 2013). The estimated value of the online sale of fashion clothes will increase 7.5 billion by the year of 2017 (Retail Week Report, 2015). According to the reports of analysts, the chances of the continuous growth of the fashion retail industry are brighter in future as well, and it is expected that the growth of the industry will arrive at £46 billion until the year of 2017 (Retail Week Report, 2015). If the industry growth is divided into male and female segments, then the male segment outerwear growth is expected up to 30.3 percent and the female segment growth is expected to reach at 21.3 to 22.6 until the year of 2017 (IBIS World, 2016; Brook-Carter, 2014; The Statistic Portal, 2016a). According to the IBIS (2016) report, London is contributing more in fashion retail sector’s establishment with 17.8 percent rate (IBIS World, 2016). The biggest challenge that the fashion retailing industry is facing is the rapid change in fashion (Barries, 2016). It has been determined that there is a lack of association between scientific discipline and designers. The retail sector organizations have brighter chances to grow their business through expanding their operations in multiple emerging countries (Remy et al., 2010; UK Trade and Investments, 2014). The online sale is also growing that poses an opportunity for fashion retailers to enhance their digital presence for improving their profitability (UKFT, 2010).
Brand overview with relevant statistical data
Primark is a multinational organization operates in fashion apparel retailing sector. The brand is a subsidiary of “Associated British Food Group”, and headquartered in Dublin, Ireland. The brand was found as Penny’s in1969. The company gained repaid success in the very short time period; the remarkable progress is evident by its expansion of operation in diverse locations. For example, in 2000 the company has 100 stores that increased up to 238 until 2012 and in 2013, the numbers of stores increased up to 257 in the United Kingdom. The brand is recognized for it's unassailable and valuable offerings (Primark, n.d; The Statistics Portal, 2016b). The business does not manufacture clothes itself; it outsources manufacturing operations (Ad Brand, 2016). The revenue of the brand with its increased expansion is enhancing such as in 2012; the brand generated 3.5 billion GBP in revenue that increased up to 4.95 million and reached at 5.3 billion in 2015 (The statistics portal, 2016b). The operating profit of the company in 2014 was 0.662 billion. The company with the expansion of its stores in Netherlands, Belgium, and Germany increased its retail sale space by 9 percent (Associated British Food Group, 2015). Even the company during the crisis proved itself as a winning brand just because of its strong fashion identification (Mintel, 2013).
Review of possible points for improvement for Primark
During a survey, it was realized that approximately 71 percent people who shop for fashion clothes their shopping decision is based on the price of clothes (Retail Week Report, 2015). Therefore, the company is recommended to lean its operation and reduce its operating cost so it can offer clothes to customers on low price that will be beneficial for the company and serve as low price competitive advantage. It has been realized that the company outsources manufacturing services. Outsourcing has multiple advantages but brings some disadvantages as well. For example, due to outsourcing the company is not able to learn the ability to transform its activities into differentiated competencies. Manufacturing process is central of the fashion retail business’s competitive advantage. Owning manufacturing operations will allow the company to reduce the inconsistencies and through making the operations lean to improve the quality and reduce cost as well (Hill & Jones, 2011; David, 2007). The one other problem of outsourcing the manufacturing operations is the inconsistency in the quality of clothes, which is visible at Primark nowadays (Net Mums, 2016). Customer in store experience is an important factor for driving the sale; people avoid to shop at places where they have to wait long. It has been observed that people at Primark have to wait for long for making payments. Adaption of lean operations in manufacturing process is not enough; the business should focus on improving the payment process as well (Collins, 2015). Availability of required items is necessary for maintaining and retaining customers, but most of the time the problem of the shortage of items is observed at the store that can affect the sales of the store (Trust Pilot, 2016). It is recommended to the store that it should use forecasting method for improving the availability of all size of clothes. It will allow the store to do not let the people leave the store without buying their desired clothes.
List of References:
Ad Brand. (2016). Primark (UK). Available from http://www.adbrands.net/uk/primark_uk.htm [Accessed 18 April 2016]
Associated British Food Group. (2015). 2015 Annual Report And Accounting. Available from http://www.abf.co.uk/documents/pdfs/2015/abf-annual-report%202015.pdf [Accessed 18 April 2016]
Barries, L. (2016). Outlook 2016: apparel industry challenges and opportunities. Just Style. Available from http://www.just-style.com/management-briefing/outlook-2016-apparel-industry-challenges-and-opportunities_id126918.aspx [Accessed 18 April 2016]
Brook-Carter, C. (2014). Fashion retail 2014: The future of fashion retailing in a digital age. Land Securities Retail. Available from http://www.landsecuritiesretail.com/media/18900/fashion-insight-report-final.pdf [Accessed 18 April 2016]
Collins, J. (2015). 13 things everyone needs to know before shopping at Primark. Available from http://www.savethestudent.org/shopping/fashion/top-tips-for-shopping-at-primark.html [Accessed 18 April 2016]
David, F. (2007). Strategic Management: Concepts and cases. Upper Saddle River, NJ: Prentice Hall
Hill, C.W.L., & Jones, G. R. (2011). Essentials of Strategic Management. Canada: Cengage Learning.
I2I Event. (2013). The UK Fashion Market Opportunity. Available from http://www.i2ieventsgroup.com/sites/www.i2ieventsgroup.com/files/reports/UK%20Fashion%20Market%20Report.pdf [Accessed 18 April 2016]
IBIS World (2016). Clothing Retailing in the UK: Market Research Report. Available from http://www.ibisworld.co.uk/market-research/clothing-retailing.html [Accessed 18 April 2016]
Mintel. (2013). Clothing Retailing - UK - October 2013. Available from http://store.mintel.com/clothing-retailing-uk-october-2013 [Accessed 18 April 2016]
Net Mums. (2016). Primark a good thing or bad think. Available from http://www.netmums.com/coffeehouse/general-coffeehouse-chat-514/coffee-lounge-18/572645-primark-good-thing-bad-thing.html [Accessed 18 April 2016]
Primark. (n.d). Beyond Corporate Social, Responsibility. The Times. Available from https://www.primark.com/~/media/ourethics/unpacked/primark-edition-18-full.ashx [Accessed 18 April 2016]
Remy, N., Schmidt, J., Werner, C., & Lu, M. (2010). Unleashing fashion Growth city by city. Mckinsey & Company Available from http://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Marketing%20and%20Sales/PDFs/Unleashing_Fashion_Growth.ashx [Accessed 18 April 2016]
Retail Week Report. (2015). Fashion retail 2014. Available from http://www.landsecuritiesretail.com/media/18900/fashion-insight-report-final.pdf [Accessed 18 April 2016]
The Statistic Portal. (2016a). Value of the clothing and accessories market in the United Kingdom (UK) in 2013 and 2017, by category (in billion GBP). Available from http://www.statista.com/statistics/317394/clothing-and-accessories-market-value-in-the-united-kingdom-uk-by-category/ [Accessed 18 April 2016]
The Statistics Portal. (2016b). Revenue of Primark worldwide from financial year 2007 to 2015 (in million GBP). Available from http://www.statista.com/statistics/383785/primark-revenue-europe/ [Accessed 18 April 2016]
Trust Pilot. (2016). Primark reviews. Available from https://uk.trustpilot.com/review/www.primark.co.uk [Accessed 18 April 2016]
UK Trade and Investments. (2014). Great Expectations: Doing Business In Emerging Markets. The Economist. Available from http://www.ifm.eng.cam.ac.uk/uploads/Resources/Other_Reports/UK_textiles.pdf [Accessed 18 April 2016]
UKFT. (2010). The value of the UK fashion industry. British Fashion Council. Available from http://www.ukft.org/documents/industryinformation/The%20Value%20of%20Fashion.pdf [Accessed 18 April 2016]
