Next Cloth

Marketing Report
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Institutional Affiliation

Marketing Report paper
This article is based on a report on the clothes retail industry in the United Kingdom (UK). It is a report divided into four sections. The first part gives an overview of the sector and highlights major products and brands. It also discusses the financial performance of the various brands. The second part is a detailed analysis of the main trends affecting the market. Also addressed in this part are the threats and opportunities for companies operating in the industry. The third section identifies the main competitors in the apparel industry and highlights their significant weaknesses and strengths. In the last part, the report discusses the strategic marketing and positioning of Next Plc, a leading brand in the UK apparel industry.
Question 1 Response
The clothes retail industry is one of the largest and most diversified sectors of the United Kingdom’s economy. Currently, there are about half a million establishments involved in the retail sale of fashion clothing, footwear, accessories and related products and services such as body care and beauty. Next Plc is the largest apparel brand in the UK based on market capitalization, branch network, and annual sales volumes. Next operates more than 700 retail stores in the UK and a few other countries in Europe, Asia, and the Americas. In 2015, Next made 635 million pounds in profit, a significant increase from the previous years. As of December 2015, Next’s market value stood at 8.

5 billion pounds. It controls a big market share especially in the category of women and children’s clothing and footwear. About 95% of Next’s sales revenue comes from the UK market (PwC, 2016). Another major apparel brand is Marks & Spencer, which is currently valued at $ 7.2 billion pounds. Marks & Spencer operates more than 850 stores in the UK market, and a smaller number in selected foreign market such as India, Hungary, Greece, France and Poland. In 2015, its net profit was 481 million pounds. For several years, Marks &Spencer was the largest and most popular apparel brand in the UK until it was overtaken by Next a few years ago. The two brands are great direct competitors not only in the UK but also in their foreign markets.
Another major apparel brand in the UK is the Acardia Group. With a market value of 6 billion pounds, the Acardia maintains a significant market share in the apparel industry. Arcadia’s two primary subsidiaries, Topman and Topshop are aggressively expanding into the international market, a move that may see the brand’s market share grow tremendously. As of 2015, Arcadia’s annual sales stood at 5.7 billion pounds. The fourth largest brand is Burberry. Its market value and annual sales are 5.5 and 2.5 billion pounds respectively. Burberry has positioned itself as a low-cost retailer of quality apparel products. New Look rounds up off the top five largest and most popular clothing brands in the UK. The company is valued at 4.5 billion pounds, and its annual sales reached 1.6 billion pounds in 2015. Other notable brands in the UK market include ASOS, House of Frase and Sports Direct. These brands have developed strong competitive advantages in their respective target markets (PwC, 2016).
Question 2
The main trend affecting the apparel retail industry across the world is the growing acceptance of e-commerce as a convenient platform for marketing and shopping. Most apparel consumers prefer shopping for their products via online technologies as opposed to visiting the brick-and-mortar stores. It can be noted that the use of social media as a marketing medium has grown tremendously in the apparel retail industry (Inside Retail, 2015). Accordingly, clothes retailers are developing capabilities to take advantage of the opportunities presented by this emerging trend. Another significant trend is the increasing emphasis on sustainable business practices to avoid adverse environmental impacts. Consumers, environmental lobby groups and the government expect companies to implement sustainable business systems to reduce energy use and prevent environmental degradation. The last major trend is that European and American apparel retailers are expanding to new markets in the developing countries. It has made markets in Africa and Asia very competitive.
PEST analysis of the apparel industry shows that no major political issues are affecting the industry other the looming British exit from the European Union. It has been speculated that if Britain leaves the EU zone, British exports (including apparel clothes) to the EU countries will be expensive and thus less competitive (UK Trade and Investment, 2013). Economically, Britain has a strong economy than most countries in Europe and the world as a whole. Its economy is highly diversified and has a high GDP. Compared to other countries, most people in the UK have high disposable incomes. It means that they can afford fashion products like clothes, footwear, body care products and accessories. The primary social factor is the rapid aging of the country’s population. Apparel products are mostly targeted at the young and middle-aged population. The presence of a large aged population is a negative factor for the growth of the garment industry. As a highly developed economy, the United Kingdom has good access to various technologies. The garment industry employs different techniques in the design, procurement, marketing and distribution of products. Technological advancements have stimulated stiff internal competition among players in the retail business.
Frequent shifts in fashion trends are the main threat facing the clothes industry in many parts of the world including the UK. Changes in fashion quickly affect consumer tastes and preferences which render products obsolete (UK Trade and Investment, 2013). As a way to survive in such an industry, companies have to innovate their products and marketing strategies continuously. Competition from foreign companies is another important threat for UK clothes retailers. Leading American companies have opened stores and control a substantial market share in the UK, making the competition a major concern for local retailers. Also, fluctuations in the global economy also present a threat to the industry
Despite the above threats, many opportunities can benefit fashion retailers. Most importantly, the clothes industry is fast growing, especially the style category. Retailers can take this opportunity by expanding capital capacity so as to benefit from economies of scale. Overall, the apparel industry in the United Kingdom seems to be growth oriented (McRobbie, 2003). Despite the numerous setbacks that the sector has faced in recent years due to the slowdown in the economy, there are indications that it will continue growing in the next five years. As the industry grows, new companies will enter the market making it more competitive. It means that clothes retailers will have to adopt a broad range of strategies to survive competitive pressures.
References
Inside Retail (2015). The UK Fashion Market Opportunity. Available athttp://www.purelondon.com/files/pure_market_report_2016.pdfMcRobbie, A. (2003). British Fashion Design: Rag Trade or Image Industry? London: Routledge.
PwC (2016). The UK premium lifestyle, clothing, footwear and accessories market. Available at https://www.pwc.co.uk/assets/pdf/uk-premium-lifestyle-market.pdfUK Trade and Investment (2013). UK Retail Industry: International Action Plan. Available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/329878/UKTI_Retail_action_plan_June_2014_spreads.pdf