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Fashion retailing - Past, present and future

Article  in  Textile Progress · July 2014

DOI: 10.1080/00405167.2014.973247

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McCormick, H., Cartwright, J., Perry, P., Barnes, L., Lynch, S. and Ball, G. (2014)
‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321

Fashion Retailing – Past, Present and Future.

To cite this article:

McCormick, H., Cartwright, J., Perry, P., Barnes, L.,
Lynch, S. and Ball, G. (2014) ‘Fashion retailing – past,
present and future’, Textile Progress, 46 (3), 227-321,
DOI: 10.1080/00405167.2014.973247

To link to this article:

http://dx.doi.org/10.1080/00405167.2014.973247

Helen McCormick (Corresponding Author)

The University of Manchester
email: [email protected]

Jo Cartwright
The University of Manchester
email: [email protected]

Patsy Perry
The University of Manchester
email: [email protected]

Liz Barnes
The University of Manchester
email: [email protected]

Samantha Lynch
The University of Manchester
email: [email protected]

Gemma Ball
The University of Manchester
email: [email protected]

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McCormick, H., Cartwright, J., Perry, P., Barnes, L., Lynch, S. and Ball, G. (2014)
‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321

1. Technology and Fashion Retailing

2 Introduction to Fashion Retailing
2.1 Retailing
2.1.1 The Wheel of retailing
2.1.2 The Retail Life Cycle
2.2 The History of Retailing
2.2.1 Recent history of Fashion Retailing
2.2.2 Fashion Retailing in the UK
2.2.3 Key Fashion Retailers in the UK
2.3 The Structure of Global Fashion Retail Markets
2.3.1 Globalisation
2.3.1.1 Global consumer markets
2.3.1.2 Global communication
2.3.1.3 Global business
2.3.1.4 Global logistics
2.3.1.5 Global customers
2.3.2 Internationalisation of Fashion Retail
2.3.3 Fashion Retail Market Formats and Structure
2.3.4 Fashion Retail Formats
2.3.4.1 Specialist apparel ‘own-brand’ retailers
2.3.4.2 Department Stores
2.3.4.3 Variety stores
2.3.4.4 Independents
2.3.4.5 Supermarkets
2.3.4.6 Discount stores
2.3.5 Fashion Retail Market Structures
2.3.5.1 Developed (Mature) Fashion Retail Markets
2.3.5.2 Emerging Economies
2.3.5.2.1 China
2.3.5.2.2 Brazil
2.3.5.2.3 India
2.3.5.2.4 Russia
2.3.5.3 Developing Economies
3 Introduction to The Retail and Marcomms Mix
3.1 Retail Marketing Mix
3.1.1 Place - Retail Location
3.1.2 Product (selection and buying)
3.1.3 Retailer branding
3.1.4 Retail own brands
3.1.5 Retail Pricing
3.1.6 Retail Service
3.1.7 The Selling Environment
3.1.8 Retail promotion
3.2 The Marcomms Mix
3.2.1 Media Clutter
3.2.2 Marketing Communications Objectives
3.2.3 Key Marketing Communications Tools of Fashion Retailers
3.2.3.1 Advertising
3.2.3.2 TV Advertising
3.2.3.3 Press advertising
3.2.3.4 Online advertising
3.2.3.5 Public Relations (PR)
3.2.3.6 Celebrity Endorsement and Sponsorship
3.2.3.7 Sales Promotion
3.2.3.8 Personal Selling
3.2.3.9 Direct Marketing
3.2.3.10 Visual Merchandising
4 PEST Analysis of Fashion Retailing
4.1 Political/Legal
4.2 Economic
4.3 Socio-cultural
4.3.1 Growing Consumer Confidence
4.3.2 Fashion Awareness and Celebrity Role Models
4.3.3 Changes in Shopping Habits
4.3.4 Acceptance of New Technology
4.3.5 Increasing Demand for Clothing Quality
4.3.6 Brand Loyalty
4.3.7 Ageing population
4.4 Technology – more
5 Porter’s Five Forces in the era of mobile communication technologies
5.1 The Threat of Entry of New Competitors
5.2 The Bargaining Power of Buyers
5.3 The Bargaining Power of Suppliers
5.4 The Intensity of Competitive Rivalry

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‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321
5.5 The Threat of Substitute Products or Services
6 Emergence of Omni-channel retailing
6.1 History and Growth of Online retailing
6.2 Development of Online Retailing
6.3 Omni-channel development
6.3.1 Pureplay
6.3.2 Bricks and Clicks
6.3.3 Multichannel
6.3.4 Omni-channel
6.4 Towards a Definition of Omni-Channel Retailing
6.4.1 Simultaneous Channel Usage
6.4.2 Connectedness
6.4.3 Single View of the Customer
6.4.4 Seamlessness
6.4.5 Consistency
7 Profiling the modern day Consumer behavior
7.1 Channel switching
7.2 Researching online
7.3 Browsing
7.4 Channel adoption
7.5 Composite Channel Usage
7.5.1 Offline: Physical store
7.5.2 Offline: Catalogue
7.5.3 Offline: TV shopping
7.5.4 Online: Smartphones
7.5.5 Online: Tablet
7.5.6 Online: Desktop/Laptop
8 Fashion Retailing initiatives
8.1 M-commerce and Fashion Retail
8.1.1 Location-based services and communications
8.1.1.1 GPS Applications (apps)
8.1.1.2 RFID and NFC technology
8.1.1.3 In store Wi-Fi
8.1.1.4 Mobile applications (apps)
8.1.1.5 QR codes
8.2 Digital visualisation of fashion
8.2.1 Digital Scrunch technology
8.2.2 Virtual fitting rooms
8.2.2.1 Online fitting rooms
8.2.2.2 Body scanning technology
8.2.2.3 Magic Mirrors
8.3 Omni-channel Initiatives
8.3.1 Self-service Technology
8.3.2 Click and Collect and Deliveries.
8.3.3 Social media
9 Conclusion

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McCormick, H., Cartwright, J., Perry, P., Barnes, L., Lynch, S. and Ball, G. (2014)
‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321

Abstract

This issue of Textile Progress reviews the way that fashion retailing has developed as
a result of the application of the World Wide Web and Information and
Communication Technologies (ICT) by fashion retail companies. The review
therefore first considers how fashion retailing has evolved, analysing retail formats,
global strategies, emerging and developing economies and the factors that are
threatening and driving growth in the fashion retail market. The second part of the
review considers the emergence of omni-channel retailing, analysing how retail has
progressed and developed since the adoption of the internet and how ICT initiatives
such as mobile commerce (M-commerce), digital visualisation online and in-store and
self-service technologies have been proven to support the progression and expansion
of fashion retailing. The paper concludes with recommendations on future research
opportunities for gaining a better understanding of the impacts of ICT and omni-
channel retailing through which it may be possible to increase and develop knowledge
and understanding of the way the sector is developing and provide fresh impetus to an
already innovative and competitive industry.

Keywords
Fashion, Retail, Technology, Omni-channel, Information and Communication
Technologies.

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‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321

1. Technology and Fashion Retailing

The fashion and clothing industry is extremely important for the textiles industry as it
plays a crucial role in the economy and social well-being in numerous regions of the
world, thus fashion retailing is a significant component of the broad study of textiles
[1] and therefore an important area to review. The current review responds to the
need for an exploration of the role of Information and Communication Technologies
in retailing, and in particular, consideration of the influence of the Internet in the
context of the fashion industry. Changes in retailing are happening in abundance and
they are impacting retailers from all angles whether in terms of store location, product
range or pricing and the internet has without doubt exerted the greatest single force in
recent years upon retailing both in the UK and abroad [2]. New business models such
as e-commerce (the buying and selling of goods and services by transferring data
electronically) and m-commerce (mobile commerce conducted via wireless hand-held
devices) have changed the fashion retail landscape; many recent changes have been
driven by consumers’ enthusiastic adoption of online retail which is now high across
all ages and social groups, as consumers have become more willing to shop online
and retailers continue to improve their online offering [3]. As a result, clothing has
become the fastest-growing online category of goods bought in the United Kingdom
[4]. In order to manage products, sales and customer relationships, retailers require
effective and innovative ICT systems, which include better Point of Sale (POS)
systems, secure payment systems and integration of distribution channels to provide a
clear process for retailers and a better service for customers.

Past trends have seen retailers hold large store portfolios and growth often came from
increases in store space. The rise of online shopping however, has had an impact on
the importance of store numbers and rather than simply adding yet another different
and separate channel for making a purchase to the existing channels in retailing,
which may include stores (multichannel retailing), it has stimulated a more
comprehensive change in retailing as a whole. There is now a move towards
omnichannel retailing, which aims to integrate the different ways of interacting with
the retailer, maintain a high level of customer satisfaction across channels and allow
the consumer to switch easily from one channel to another; store quality and size
become more critical in ensuring that consumers still want to shop on the high street
[5]. Technology affects every aspect of retailing from operating strategy to consumer
behaviour [2]. Information and Communications Technology (ICT) in retailing can be
used to support retailers in managing data about consumer behaviour by providing
information about products and trends, which enables retailers to develop more
effective retail and marketing strategies; from a consumer perspective, it enables the
provision of enriched information to support the consumer decision-making process
[6]. Fashion retailers must therefore consider the integrated development of all
channels to enable them to market holistically, taking advantage of all of their touch
points with the consumer, including mobile devices, social networks and interactive
in-store technologies. Competitive advantage is critical to fashion retailers; creating
differentiation and correct targeting of consumer groups in order to encourage loyalty
from consumers is one of the key strategies that can lead to strong competitive
advantage [7]. The current review will therefore investigate innovation in fashion
retail, focusing on technological developments that have accelerated retailers into

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‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321
becoming global fashion brands and considering factors such as retail formats,
process innovations, customer experience, new marketing media and order-fulfillment
technologies in the development of retail strategies.

2. Introduction to Fashion Retailing

This section will firstly define what retailing is, in order to set the context for
presenting theories of growth and development and detailing the UK fashion retail
market. A study of fashion retailing cannot, however, be undertaken without an
appreciation of the global aspects of the fashion retail industry; this section goes on
therefore to provide an overview of the global fashion retail industry, including
structures in developed, developing and emerging markets to enable readers to be
presented with the issues facing the modern fashion industry operating in a globalised
market and the global fashion industry as it is today.

2.1 Retailing
Retailing can be defined as ‘the set of activities that markets products or services to
consumers for their own or personal household use. It does this by organising their
availability on a fairly large scale and supplying them to consumers on a relatively
small scale’[8]. As an industry, retailing is paramount to the economy of most nations
and has a strong influence on consumers and their lives [9]. This section outlines two
retail theories, ‘The Wheel of Retailing’ [10] and ‘The Retail Lifecycle’ together with
a brief history of retailing.

2.1.1 The Wheel of retailing

Kent and Omar [11] examine the ‘Wheel of Retailing’ discussing its relevance to
current day business. The wheel was developed by McNair [10] with reference to
retailing in the USA. The theory purports that there is a pattern of entry and
development for retailers and each moves from being ‘low status, low margin’ to’
‘high cost/high price’ and the retail market then becomes open to new market entrants
who come in to occupy the low status position and threaten to take consumers away
from the original retailer [10]. Hollander [12] proposed reasons why this pattern
emerges from which it is evident that errors in management are made as the business
grows, either through a lack of attention to detail or a lack of perspective. When these
factors are aligned with consumers demanding more from the business, strategic
decisions can often be made for the wrong reasons, leading to business vulnerability
[9]. Today, where retailers occupy very distinctive niche areas of the market and often
start out as upmarket retailers rather than low cost, the ‘Wheel’ model is considered of
less use, although Kent and Omar [11] claim that it is still valuable when examining
the need for retailers to expand through new product ranges and store formats by
using more innovative ideas.

2.1.2 The Retail Life Cycle

The ‘Retail Life Cycle’ theory was developed by Davidson, Bates and Bass [13] with
the intention of challenging some of the limitations of the ‘Wheel of Retail’. It
critiques the Wheel’s focus on the downward movement of costs and margins, when
often, businesses enter markets at a more upmarket position than this model implies
[13]. The Retail Life cycle is based on the Product Life Cycle [14] and works on the
premise that the retailer and the format in which they trade also have a limited life
cycle. This approach has implications for location and property investment,
timescales for profitable trading, and changes to store formats. Studies of retailing in

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‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321
the USA showed, for example, that city centre department stores reached their peak
many years ago [13], whereas in the UK, the likes of Selfridges, Harvey Nichols and
House of Fraser have shown how to succeed through adapting to consumers changing
wants and needs by adjusting their retail business to become multichannel businesses.
The same retailers have also shown understanding of retail as leisure, including food
and beauty in their offerings.

2.2 The History of retailing

The history of retail dates back to simple markets where traders sold their wares to
local people; although these were basic operations they were deemed very important
to the economy and were regulated in England through a royal charter [11]. As the
popularity of market trading grew, the development of permanent residency close by,
for skilled craftsmen in the areas of footwear and clothing, also became common. The
general retail store was born in the 1800’s selling a broad range of merchandise [15],
and it is suggested by Howe [16] that these traders were unable to be successful and
therefore transformed their businesses into specialist stores. Moving into the 19th
century, such specialists evolved into department stores, which were clothing-based in
the first instance growing to offer more-varied merchandise as they developed [17].

The evolution of retailing over the last 50 years has been notable and rapid, with the
results of changes in the balance of power from manufacturers to retailers evident in
the current structure of the retail industry. The arrival of the ‘variety store’ in the early
20th century paved the way for some of the retail giants that still exist today, for
example Marks and Spencer and BHS (part of the Arcadia Group), although some
early champions of this format did not survive, Woolworths and Littlewoods being
perhaps most notable in the UK [9]. Where retailers were once simply places to buy
goods, they are now powerful businesses, having a greater control over their
marketing mix; indeed they view marketing as critical to success whereas once they
viewed it with scepticism. Retail has adjusted its business approach from that of the
1950s, when ‘Manufacturer was king’, through the 1960s when ‘Consumer was king’
to the current time where ‘Trade is king’, meaning that now there is a concentration of
larger, more powerful retailers in each sector and they are all heavily involved in the
marketing of their stores and the brands that they sell [18]. In current times, fashion
retailers face shorter product life-cycles, which mean that it is much more challenging
to see a return on investment [9].

2.2.1Fashion Retailing in the UK

Fashion retailing in the UK has been revolutionised in the past ten years by the advent
of value retailers such as Primark, Peacocks and the supermarkets, who have grown in
order to meet consumers’ desires to have more clothes at a lower price and have
consequently created and sustained deflation in the fashion industry up until 2010
[19]. Price has been a critical issue for many fashion retailers, certainly in the last five
years due to the recession, and this factor has also been combined with consumers
becoming less-loyal and less-willing to pay too much for fashion that has essentially
become throwaway [20]. In addition to difficulties concerning pricing, the fashion
retail market has also seen the arrival of many new overseas retailers onto British high
streets, with H&M, Mango and Zara now becoming popular household names for UK
fashion consumers. New market entrants have brought leading-edge fashion that is
delivered to consumers at high speed; the excitement and creativity of the fashion
industry combined with the hunger for new product from consumers has led to a

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‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321
period of several years of sustained growth, with womenswear one of the key
categories. The advent of fast fashion which started in 2002 has helped to drive this
growth as consumers have been driven to buy clothes to keep up with the latest trends
and celebrities [21].

The value of clothing and footwear in the UK is forecast to be worth £47,295m in

2014, showing year-on-year growth since the recent recession of 2.8%, which
although stronger than in some retail sectors, is a relatively-weak performance when
compared to pre-recession years. Prices have risen due to operating cost increases;
however, because demand for fashion has become weaker, so, ultimately, retailers
have had to resort to discounting, which has then lead back to pressure on margins.
Retailers require skill in assessing potential demand for products and to purchase
accordingly, as supply is key [22]. There has been a general upturn in the fashion
sector and consumers are becoming more confident again, meaning that clothing
consumption is slowly increasing, but despite consumer optimism it is clear that the
clothing market is sensitive to cost increases which ultimately affect retailer profits
[23]. Growth in the sector is evident and is expected to be sustained over the next five
years, favouring focused retailers who manage a multichannel strategy carefully, as
much activity is attributed to sales transferring to online retailers, both established and
new [24]. Fashion retailers are said to need to capitalise on new opportunities, as it is
expected that innovation will sustain the category including key players such as
Primark, ASOS and John Lewis, who continue to develop distinctive propositions for
their respective consumer groups [23].

Jackson and Shaw [25] note that the point of difference for UK fashion retailing is
that the structure of the industry is now dominated by fashion retailers such as
Topshop and Zara who have developed their own ranges to become competitive and
sought-after high street brands. The UK fashion market is dominated by large own-
brand multiple retailers and has been significantly altered by the arrival of new
market-entrants from across the world [26]. Figure 1. shows the UK fashion retail
market in 2011.

Figure 1. The Structure of the UK Fashion Market

Source: [19]

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‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321
It is evident from Figure 1 that the impact of international retailers such as Zara and
H&M has not only created further competition for consumer’s spending, but also
shaped a difficult environment for retailers in which to develop and maintain
competitive advantage and a point of difference in the mind of the consumer. Added
to this, competition on the high street from value retailers such as Primark and
Matalan has intensified and shows no sign of abating.

The fashion retail market in the UK demonstrates the breadth of choice that
consumers are offered, with fashion being sold through both specialist and non-
specialist outlets, and many retailers operating a multichannel approach that includes
e-commerce, ‘click and collect’ and mobile applications for smartphones; this is
discussed in more detail in Section 8. Where there were once exceptions, (Matalan
and Primark originally chose not to follow a multichannel approach), these businesses
are now following the trend and responding to changes in consumer behaviour.
Indeed,even some of the leading international fashion retailers such as Zara and H&M
were slow to respond, both waiting until 2010 to launch UK websites.

Womenswear as a retail sector is overcrowded, but this does offer a wide range of
choice to consumers [27]. Evidence shows that it is the stronger, more-focused
retailers that are succeeding; for example, Zara has a very clear unique selling point
(or USP), providing unique, frequently-updated designs at high-street prices.
Regularity of range-refreshment is becoming more important to female shoppers, as it
signals up-to-date and trend-led fashion to consumers; Marks and Spencer are said to
be suffering in this regard despite numerous efforts to change ranges and the quality
of communication, however other retailers in this sector are thriving, for example
John Lewis, who have attracted fashion-seekers without driving away their core
consumer [27].

2.3 The Structure of Global Fashion Retail Markets

A study of fashion retailing cannot be undertaken without an appreciation of the
global aspects of the fashion retail industry. This section provides an overview of the
global fashion retail industry, including the structures in developed, developing and
emerging markets to enable readers to be presented with the issues facing the modern
fashion industry operating in a globalised market and the global fashion industry as it
is today.

2.3.1 Globalisation
Fashion retailing is a global industry, and it is important to understand the context of
the global market in order to understand how the market is structured. The
internationalisation of the fashion industry, particularly in relation to sourcing side,
has taken place over many years and has occurred largely as a result of increasing
proportions of off-shore production, as companies chase low-cost labour in
developing economies. This has occurred against a backdrop of wider ‘globalisation’.
Theorists have long debated the definition of the term globalisation. Here are some
examples:

‘To economists globalisation is seen as the increasing internationalisation of

production, distribution and marketing of goods and services.’ [28]

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‘(Globalization is) the worldwide diffusion of practices, expansion of relations across
continents, organisation of social life on a global scale, and growth of a shared
global consciousness.’ [29]

‘(Globalization is) the process whereby the world’s people are becoming increasingly
interconnected in all facets of their lives.’ [30]

With these definitions of globalisation in mind, it can be argued that the

internationalisation of the fashion industry in terms of its overseas sourcing is only
one aspect of its globalisation. Globalisation is a result of the internationalisation of
many economic, technological, social, cultural and political activities including:
 Global consumer markets – these are emerging as a result of developing
economies and some degree of political liberalisation; for example, China and
India are now two of the fastest-growing consumer markets in the world
attracting many western brands; changes in political control have made it
easier for western companies to do business in these markets.
 Global communication – advances in technology have enabled communication
to take place across the globe instantly, enabling fashion buyers to
communicate with overseas suppliers, consumers to access information and
companies to communicate with consumers around the globe. An example of
this can be seen in regard to the sourcing of fashion garments; many
companies use online intranet technology such as Gerber Technology’s Web
Product Data Management PDM software to communicate with designers,
manufacturers and quality controllers, who may each be located in a different
corner of the globe, to provide product data and images tailored to meet the
needs of each recipient and help them to accomplish their part of the
production process.
 Global business – as competition increases, companies increasingly have a
global perspective in the way they do their business for example as business
needs become more global (in terms of competition, sourcing, expansion, sales
etc) they must develop strategies to manage the complexities of international
business. Companies are increasingly doing business overseas meaning global
competition is taking place in every corner of the world, so even small local
companies now have global competitors; for example, a small independent
fashion boutique in France may find itself in competition with an international
fashion retailer like Zara. As global trade increases, co-operation and alliances
between countries emerge to facilitate the overseas business activities, for
example the North American free Trade Agreement (NAFTA), which
facilitates free trade between the USA, Canada and Mexico.
 Global logistics – advances in supply-chain management technology enable
products to be transported efficiently and effectively around the world making
it increasingly easy to source product from countries where it is not
necessarily consumed.
 Global customers – shifts in social and cultural outlooks, coupled with
improved communication, have created a generation of ‘global’ consumers, as
consumers in virtually every country are exposed to fashion through music,
film and the internet and so in many countries, the perceived difference
between fashion consumers is minor. For example, a company like H&M
believes that a strong brand with a good fashion offering can be a success in

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‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321
virtually every country in the world as consumers of ‘fashion’ have become
the same worldwide.

2.3.2 Internationalisation of Fashion Retail

Taking into account the rise in globalisation over the last few decades, it is clear that
the fashion industry is a truly global industry. The textile and clothing industry is
probably one of the most widely-dispersed on the earth, given that it is present in both
highly-developed as well as emerging economies. Where once fashion garments were
produced and consumed in the same country, there are now manufacturers all over the
world making fabrics and garments for sale by retailers that are increasingly global in
their spread, to consumers who consider themselves to be world consumers.
Globalisation has provided the perfect conditions for fashion retailers not only to
source globally, but also to internationalise their consumer facing business. There are
a number of globalisation factors that come into play to facilitate internationalisation
of fashion.

Globalisation has played a part in the developing and emerging economies of the
world. For example as production has shifted to countries such as China, India and
Vietnam, this has contributed to the development of their economies, creating wealth
and therefore a growing class of wealthy consumers who, in a world where they are
exposed to global communication, wish to buy into a ‘rich western’ lifestyle, thereby
creating demand for fashion brands. A 2013 Bain survey of global consumers found
approximately 205 million luxury consumers in the established consumer markets of
North America, Western Europe and Japan compared with a combined total of 125
million in the ‘newer’ retail economies of Eastern Europe, Asia, Africa and Latin
America, with the fastest growing market for luxury goods being China.

In the more established consumer markets of developed nations such as Japan, Europe
and the USA (where the majority of today’s global fashion retailers are owned i.e.
have their headquarters), fashion retailers have grown organically over the last 30
years through expansion in their domestic markets to such an extent that many have
reached saturation point in terms of domestic expansion. Examples of fashion retailers
who have reached saturation in their domestic market include The Gap (USA) and
H&M (Sweden). Having reached saturation in their domestic market, fashion retailers
have looked to international expansion to grow their businesses, first with expansion
into geographically or culturally close markets; increasingly however, in the new
millennium, expansion and growth is being achieved by internationalisation into
emerging economies of the developing world. Many forward-thinking fashion
companies regard Asia and the Middle East as the key areas for growth in the fashion
market, as these are the regions with some of the fastest-growing consumer markets.
The various markets and their characteristics are discussed in further detail in
Sections 2.3.4.1 and 2.3.4.2.

International fashion retail includes brands which are internationalising their retail
operations as well as own-brand fashion retailers (both wholly-owned and part of
large retail conglomerates), thereby increasing their international expansion. Fashion
is considered to be one of the fastest growing sectors of international retailing and
these retailers have become global ‘super brands’ in their own right with retail
presence across all continents of the world. In analysing the world’s biggest global
retailers, the vast majority of the top 10 are supermarket groups such as Tesco (UK),

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Wal-Mart (USA) and Carrefour (France) but it is important to mention these as
supermarkets increasingly offering fashion as a core part of their business, making
them extremely powerful players in the global fashion market.

Ownership of the global fashion retailers is currently concentrated in the West and
Japan. The sheer size of these global fashion retailers means that they hold an
enormous amount of power over the global fashion supply-chain, which can cause
tension in terms of the pressure that the retailers put on manufacturers to produce the
goods. The global spread of international fashion retailers is varied, with some such as
Federated Department Stores operating in only three countries in a concentrated
geographic location, compared with Inditex, with stores in 63 countries in every
continent of the globe [31].

The process of internationalisation of retail has been modelled by Moore and Fernie
[32] based on work by Dawson [33] and Sparks [34] representing the
internationalisation of retail as a continuum of activities from invisible to visible
dimensions as depicted in Figure 2.

Figure 2: The Dimensions of Retail Internationalisation [32]

Stage 1 Stage 2 Stage 3 Stage 4
Launch couture/RTW Open couture/RTW Open diffusion brand Open diffusion
via wholesale in flagships in capital flagship stores in stores in key
capital city cities capital provincial cities
department stores

(Leading to…) (Leading to…)

Extend wholesale Maximum
availability of RTW availability of
to key stores in other diffusion brands via
major cities wholesale within
capital and
provincial cities

Source: [32]

The model in Figure 2 demonstrates how retailers internationalise, starting with

relatively low-risk internationalisation such as financial investment (e.g. buying
shares) or cross-border shopping (e.g. consumers from Canada shopping in the US) to
the transfer of know-how (e.g. business practices in a particular market) to the
relatively higher-risk activities of international sourcing (e.g. from low-cost labour
countries) then finally to the internationalisation of operations (e.g. the opening of
stores in overseas markets) [32]. In international fashion retailing, internationalisation
of sourcing has taken place for many years as a result of shifting production to low-
cost-labour countries, but it is clear that the internationalisation of retail operations is
now firmly part of the competitive retail landscape.

The biggest challenge facing fashion retailers operating in a global market is how to
market to consumers in a variety of international markets. A dimension of
globalisation is the internationalisation of consumers markets, their emergence and
the internationalisation of various social aspects of consumer life. It is argued that as a

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result of globalisation (or perhaps it is a cause of globalisation), consumers are
converging in their tastes and the way they behave. For example, it could be argued
that young fashion consumers aged 15-25 have similar wants and needs for fashion
products, whether they live in Shanghai, Seattle or Seville. However, this theory is
challenged and commentators in the field of globalisation and international retailing
argue that despite a phenomenal rise in the sale of goods internationally, consumers
remain divergent in their wants, needs and behaviours. This debate influences a firm’s
internationalisation strategy by determining the extent to which they take a discrete
incremental approach to overseas expansion, tailoring their retailing activities on a
case-by-case basis to each individual international opportunity, or to the other
extreme whereby there is a global strategy which directs a single approach to all of
the company’s retailing activity across the globe.

The international retailing strategy that is adopted will influence whether a firm
chooses to standardise or adapt their retail-mix activities (see section 3). The decision
whether to standardise or adapt retailing activities is a fundamental component of
international fashion retailing strategy. Even if it is established that fashion consumers
have similar needs the world over (about which there is ongoing debate), differences
in the retail environment of each market in which a company does business will affect
the retailing activities in that country, because these factors shape and drive consumer
needs and wants in that particular market. The retail-marketing environment consists
of political, economic, socio-cultural and technological factors (also referred to as
PEST factors) (see Section 4 for more information on PEST). Table 1 shows
examples of how characteristics of the macro environment of each market may differ
from that in the domestic market, thereby affect marketing activities for a fashion
company.

Table 1: Impact of the Macro Environment on International Fashion Retailing

Environmental Domestic Market International Impact on Retailing Activities
Factor Market
Political Free trade Heavily regulated/ Entry method into the international
controlled market may have to be with a local
partner e.g. a joint venture
Economic Mature market Emerging economy Retail marketing communications
in the international market may
have to focus on educating
consumers about the brand
proposition where they have not
been previously exposed to fashion
branding
Socio-cultural Main language English not widely Brand names or advertising
English spoken or understood campaigns may have to be re-done
in local languages
Technological Reliable Disparate internet Communication & transportation
communication & access subject to control or disruption;
transportation Marketing communication through
infrastructure the internet may not be effective;
Supply chain efficiency may be
lost due to poor communication
with overseas supply chain
partners or disruption to
transportation

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Table 1 demonstrates the impact the macro environment may have when managing
business in two markets (one domestic and one overseas), but for many fashion
retailers, their business activities down the supply chain and also consumer facing,
take place in a wide range of different countries. Therefore it is clear that international
fashion retailing becomes increasingly complex the greater the extent of
internationalisation (i.e. the more countries which are involved in the business) the
company is involved in.

Despite the diversity of macro-environments which may impact the retail mix, the
decision whether to standardise or adapt the retail mix is a complex one. Since retail
marketing is about satisfying consumer demand which is shaped by the macro-
environment, it may seem obvious that retail activities should be adapted to suit the
local environment, since it means that retailing activities can be better suited to satisfy
local needs. However, there are also significant disadvantages associated with
adaptation, not least the significant cost involved in the adaptation of retail activities
for every international market. Similarly, by following a strategy of adaptation of the
fashion-retailing mix, some of the attraction of doing business internationally (e.g.
benefits of scope; advantages offered by low cost countries etc.) as well as the appeal
of the global brand may be lost.

The strategic alternative to adaptation is standardisation, whereby all aspects of the

retail-marketing mix remain the same in every country in which the business operates.
There are several significant advantages to this strategy, particularly in terms of
economies of scale (to be gained in areas such as production, R&D and marketing).
As globalisation increases further, more weight is given to the argument that
consumers are becoming increasingly similar, thereby making standardisation a more
realistic option. In reality, although two strategic alternatives are presented, the vast
majority of fashion companies take a dichotomous approach, by standardising the
retail-marketing mix where possible and imposing adaptation where necessary to suit
local consumer demand.

2.3.3 Fashion Retail Market Formats and Structure

This section aims to provide an overview of the types of retail formats, evaluate
competitive positioning and trends in various formats and consider the characteristics
and structure of different fashion-retail markets.

2.3.3.1 Fashion Retail Formats

Fashion retailers can vary significantly. There is no single definition of fashion retail
formats [9]. In fact, in his seminal textbook ‘Retail Marketing’, McGoldrick [9]
suggests that the lines defining retail formats have become so blurred they should be
considered against a series of characteristics each with their own continuum (see
Figure 3) and then if we consider fashion retail in the broadest terms, apparel can be
sold in specialist apparel stores, grocery stores, department stores, independent stores
as well as luxury stores and sports stores (if we consider sports/leisurewear as
‘fashion’).

Traditionally these formats have dominated fashion retailing, and examples include
H&M, Zara and The Gap. Typically they sell only their own products, specialising
specifically in apparel (although they may also offer small associated ranges in
accessories, footwear and other lifestyle products), under the retailer’s brand

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associating the products’ brand name and brand image with the brand store image
[35]. This branding strategy is also referred as a monolithic or mono-brand strategy
[36], private label branding, store branding or the establishment of own-brands [37].
In this context, the retail-branded product would be available exclusively in the
retailers own stores, and the products would typically be manufactured by a third
party (contracted manufacturer) under license [38]. These fashion retailers are usually
‘multiples’ or ‘corporate chains’ with many outlets, thereby achieving significant
economies of scale and buying power [9]; they have dominated the sector and the
supply chain, usually wielding significant power over their suppliers and driving
down prices. These particular fashion-retail formats have tended to proliferate in the
value, middle and premium markets, but it is a highly-saturated format and
competition is fierce. The successful value players, for example New Look in the UK
have increasingly driven down prices whilst the premium fashion retailers such as
Abercrombie & Fitch have focused on product quality, lifestyle and brand equity.
This has left some of the more poorly-defined, middle-market players with difficulties
in their strategic positioning; for example Kookai in the UK had poor brand equity
and no price advantage. One of the most significant trends in the specialist retail
formats has been the growth in the number of companies who were previously brand
manufacturers who have moved into retailing. For example, the foundation of the
Ralph Lauren business was in the manufacture of branded apparel, which would
typically be retailed via department stores or independent stores. However,
increasingly these so-called ‘manufacturer brands’ are moving into the retail business
and opening their own retail outlets in an attempt to garner more control over their
channels to market. This trend tends to work best at the premium and luxury end of
the market where there is sufficient brand equity to extend the brand proposition into
the store environment which becomes an extension of the branded product. This
strategy has given rise to the exciting development of innovative flagship stores,
which merits study in its own right. The key issue in considering this new
development in specialist retail is that it considerably blurs the lines between what we
now understand by a ‘retail’ business and a ‘fashion’ or ‘branded’ business: is Louis
Vuitton a brand or a retailer?

Figure 3. McGoldrick’s Retail Format Dimensions

Single store Groups of stores

In town Out of town
Proximity Destination
Small Large
Mature Innovative
Mainly food Non-food
Specialised Generalised
Niche Commodity
High added value Discounter
Experiential Functional
Store based Home based

Source: [9]

Department Stores
Department stores are thought to be the oldest example of large format retailing; they
are large stores typically arranged over several floors, selling a wide range of goods

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including apparel, homewares, toys, electricals and other household goods [9]. These
formats can operate at all levels of the market from value to premium with some at
the luxury end, for example Harrods, Selfridges and Bergdorf Goodman. Fashion
apparel is typically the key offering of a department store and in many ways defines
its market position and brand proposition (although there are some exceptions; for
example John Lewis in the UK is more well-known for their household goods rather
than their fashion offering). Traditionally department stores sold branded goods
sourced from other companies, for example Harvey Nichols currently stocks brands
such as Jil Sander, Givenchy and Issa, however increasingly department stores are
leveraging the brand equity of the retail brand itself and extending into the ‘own-
brand’ sector. This strategy tends to lend itself to the middle-market department stores
and has been a successful approach for Macy’s in the USA and Debenhams in the
UK.

Variety stores
Variety store formats are something of a cross between multiples and department
stores. They tend to sell only their own-label products but have the same breadth of
product as a department store. One of the best known examples of a variety store in
the UK is Marks and Spencer.

Independents
These are small-scale stores (in terms of both store footprint and number of outlets),
stocking branded fashion merchandise. Although these stores remain significant in
fashion retail formats, particularly in certain markets such as France and Italy, they
have been squeezed by the other formats because they simply do not offer the same
buying power and therefore cannot compete on price at any level of the market.

Supermarkets
These store formats dominate the top world retailers and include Tesco, Walmart and
Carrefour. In fashion-retail terms they are very interesting since the increasingly-large
footprints of these stores are being taken up by non-foods, of which fashion/apparel is
a key offering. This is because the profit per square foot for non-food is much larger
than for grocery, where profit margins are squeezed.

Discount stores
Discount stores sell products at a lower price compared with the original or
recommended retail price; for example they may sell out-of-season product, seconds,
product sourced from a ‘grey’ market or in some cases, specially-produced
merchandise which does not fit with a brand’s core offering. It should be noted that
this format is distinct from a ‘value’ player whose low prices are a strategic
proposition i.e. the price starts low rather than the high- (usually offered by another
format) then discounted-price strategy offered by the discounters. Discounters have
seen significant growth over the last few years and the TJX group, trading under TJ
Maxx in the USA and TK Maxx in the UK, is now one of the biggest global retailers
[31].

Having established that fashion retail is a global business, and discussed the
challenges faced by fashion retailers operating in this context, it is important to
understand the nature and diversity of the various fashion retail markets.

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2.3.4 Developed (Mature) Fashion Retail Markets
Typically the markets of the industrialised nations of North America, Western Europe
and Japan are considered to be ‘developed’ or ‘mature’ retail markets. These are the
retail markets where retail ownership is most heavily concentrated as a result of the
exponential growth in retailing during the post-war growth years of mass
consumerism in the 1960s and 70s, as can be seen in the map below (Figure 4) in the
regions with the darkest coloration.

It is interesting to note that in every case of the developed nations, at some time or
another they have used the production of textiles and/or apparel as a basis on which to
build their economic growth [39]. Although in the majority of cases, as a result of
globalisation (as discussed in Section 1.2.2), the production side of fashion retail has
shifted to countries which have lower labour costs, these nations continue to have
highly-sophisticated, well-evolved and well-established fashion retail markets, with
concentration of ownership in the retail sector. A 2010 analysis of the world’s top
250 retailers by Deloitte [31] found that 86% were retailers with ownership in one of
these developed nations and around 90% of the total value of revenue derived from
these nations.

Figure 4. Global Economic Map

[40] Source: www.countrylicious.com (2013)

Developed nations share certain characteristics, for example, highly sophisticated

consumers with little brand loyalty and high levels of price-sensitivity [41]. Another
key feature of all developed nations in the context of fashion retailing is that they are
largely saturated markets. Thus fashion retailers are having to constantly innovate in
order to maintain and/or grow their market share in these highly-saturated markets,
for example through the use of changed sourcing strategies, retail format/concept
innovations [42], retail theatre, in-store experience and omnichannel retailing, all of
which are discussed later. As well as looking at innovative approaches in the domestic
markets, fashion retailers have increasingly looked at growth via expansion into
international markets, and the Deloitte study found that the top global retailers were

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also the most diversified in terms of the countries in which they have retail outlets
[31].

Table 2: Top Global Specialist Apparel1 Retailers (of the Top 250 Retailers)
Retail Name of Company Country of Origin 2011 2011 No.
Revenue Retail Group Countries
Rank Revenue Revenue of
(US$m) (US$m) Operation
42 The TJX Companies, U.S.A 23,191 23,191 7
Inc.
47 Inditex, S.A. Spain 19,157 19,157 87
55 Sweden 16,974 16,974 43
H&M Hennes &
Mauritz AB
68 The Gap, Inc. U.S.A. 14,549 14,549 41
96 Limited Brands, Inc. U.S.A. 10,364 10,364 50
100 Fast Retailing Co. Ltd. Japan 10,028 10,057 20
121 C7A Europe Belgium/Germany 8,762 9,421 20
123 Ross Stores, Inc. U.S.A. 8,608 8,608 1
159 Shimamura Co., Ltd. Japan 5,914 5,914 2
170 Next plc U.K. 5,378 5,513 68
187 Associated British U.K. 4,889 17,777 7
Foods plc (Primark)
198 Landmark Group UAE 4,518 4,700 11
201 Group Vivarte France 4,491 4,491 55
208 Arcadia Group Ltd. U.K. 4,304 4,304 41
222 Abercrombie & Fitch U.S.A. 4,158 4,158 17
Co.
238 Esprit Holdings Ltd. Hong Kong SAR 3,881 3,881 72
Source: adapted from [31]

The key issue in the fashion retail sector in the developed nations is the stagnation of
growth as a result of the global recession and saturation of the domestic markets. In
retail terms, these markets offer well established infrastructure and fashion retailers
are constantly looking for innovation either in products or services as a way of
achieving competitive advantage or growth [43], for example ASOS in the UK now
offers same day delivery of their online orders. Academic literature on the latest
thinking around fashion retail (much of which is covered in this paper) tends to relate
to the established markets.

2.3.4.1 Emerging Economies

Emerging markets are those that have developing economies where growth in income
per capita and GDP show a trend for significant growth [45]. Emerging markets are
predicted to be the greatest opportunity for growth for global businesses [44] and
represent approximately 80% of the world’s population making them extremely
attractive propositions for fashion retailers as consumerism grows. Furthermore, in
terms of fashion retail, the consumers in these markets are hungry for ‘western’ style
products and brands which they feel represent wealth and consumerism. As a result of
the challenges of growth stagnation in domestic markets, fashion retailers have looked

1 ‘Specialist Apparel’ excludes luxury retailers, department stores, standalone footwear and variety
stores

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to the emerging markets for expansion and many have had significant successes in
these countries.

It is difficult to define exactly which countries are considered ‘emerging’ economies

at any given time since inevitably global economics are transient, however the key
nations typically considered part of this sector are the so called BRIC nations of
Brazil, Russia, India and China. The BRIC nations have consistently outperformed
many developed European markets as well as the US market [45]. Other key
emerging fashion retail markets of note include Turkey, Thailand and Mexico. It is
predicted that by around 2025 emerging markets will account for 50% of the world’s
total consumption, up from 30% in 2013 [46], so these are the fashion retail markets
of the future and many western fashion retailers have interests in international
expansion into these countries. Those retailers which have expanded into emerging
markets have seen revenue growth rates 2.5 times faster than in their domestic
markets [46]. However, despite the positive commercial indicators, expansion into
these retail markets can be challenging. Whilst operating in a domestic market,
retailers generally have a good understanding of their market environment and thus
what shapes consumer behaviour, but when moving into any new market, the market
environment can be very diverse, for example in terms of geographic spread, cultural
diversity, language, technological innovation, infrastructure, political stability and
cultural factors (particularly when related to fashion) (macro environmental analysis
is discussed in Section 3). Despite the rapid expansion of fashion retail in each of
these markets, academic research on the subject is sparse.

China
China is one of the world’s fastest growing and biggest economies and currently has a
GDP of just over $9 trillion, second only to the USA [47]. It is not only the growth
and size of its GDP which makes China an attractive retail market, but also the size of
its population which stands at approximately 1.3 billion people [48], although it
should be noted that whilst the growth in consumerism of this market has resulted in a
rapidly-growing middle class of wealthy consumers, much of the population still lives
in poverty. The rapid economic growth is also vastly different from region to region
and city to city, and despite the relaxation of regulation, there remain many hurdles in
bureaucracy and business practices which can make doing business in this market
risky. However, China remains the world’s single most promising market for growth
in fashion and luxury retailing, and is set to be the main engine for growth in the
worldwide fashion market according to McKinsey [49], and therefore many retailers
see entry to this market as a risk worth taking.

Retail expansion of foreign fashion retailers into China had been slow during the early
stages of the ‘Open Door’ policy announced by Den Xiaoping in late 1978, despite
the rapid growth of the economy. This was largely due to the heavily regulated
business ownership laws which were, however, relaxed in the 1990s allowing for
direct foreign ownership and paving the way for a flurry of retail expansion into the
Chinese market [45]. Foreign fashion brands are particularly attractive to wealthy
Chinese consumers keen to display their new-found wealth by wearing foreign brands
which tend to be associated with the ‘wealthy west’ [50]. China is one of the world’s
biggest markets for luxury goods and even during the global recession, demand for
luxury products in China continued to grow very significantly [45] [51].

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Retail formats in China are similar to those in most western markets with a mix of
department stores, specialist, variety, discount and online stores in high street or mall
locations [45]. Western retailers used a strategy of market entry via high end hotels in
the early days, for example via outlets in the foyers of the best hotels in the biggest
tier 1 cities. However as expansion of foreign retailers has gathered pace and new
modern shopping malls have opened, there has been significant growth in stand-alone
stores. The exciting pace of retail expansion is reflected in the scale of the stores
being opened and some of the world’s most-innovative, expensive and high-tech
stores can be found in China, and in particular, flagship stores have been used as a
key market entry method via the top-tier cities [51].

Brazil
Brazil is an emerging economy that has grown rapidly in the last 15 years and has
featured considerable stabilisation in political and economic terms, as well as a
narrowing gap between rich and poor. Overall wealth levels across the population
have improved and unemployment is steadily decreasing [48]. It is now the 7th biggest
economy in the world [47] with a large population of 202 million [48]. There are
growing numbers of wealthy young consumers fuelling a significant demand for
fashion retail and it is worth noting that the per capita spend on fashion is six times
higher than that of the per capita spend of Chinese consumers [45].

Despite interest from foreign retailers, small independent stores continue to dominate
Brazil’s retail landscape, particularly in the middle market, although as foreign
expansion increases, modern retail formats are becoming more common ([45].
Foreign apparel retailers such as Zara and Timberland tend to have a higher market
position in the Brazilian retail market and are perceived as ‘upmarket’ and only
accessible by the wealthiest consumers [45]. At present the modern types of retail
format are few and far between. Department stores are virtually non-existent in
Brazil, which is based largely on traditional retail formats such as street markets and
small middle market independent stores, which are typically small-scale, and often
family-owned entities, although there is growing consolidation in this sector [52].
However there are growing numbers of modern shopping malls and the fashion-retail
sector is ripe for consolidation of specialist multiples [45]. The Gap, Zara, TopShop
and Forever 21 have all entered the Brazilian retail market.

Whilst Brazil remains an attractive fashion-retail market, there are issues with
regulation, particularly protectionist regulations, high levels of consumer debt and
significantly diverse cultures across the country. It is also worth noting that being in
the southern hemisphere, the fashion seasons are the opposite of most of the other
large global fashion markets, which poses logistical and planning challenges for
fashion retailers [49]. There is however, a growing interest in fashion in Brazil and a
number of local designers and fashion brands have emerged in the market as well as
key events such as Sao Paulo Fashion Week [52].

India
India is considered a highly-lucrative retail market and has the largest number of retail
outlets in the world (15 million outlets) [45]. Its GDP is the tenth largest in the world
[47] and it has a very large, young population (average age 25) who enjoy shopping
[45]. Of course, there are a large number of retail outlets, but much of the retail sector
is fragmented and unstructured; only about 6% of retail in India was able to be

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described as ‘organised’ retail in the mid-2000s according to Basu, Kalyan and
Kalyan [53]. Even so, the entrance of foreign retailers has meant the organised retail
sector is enjoying significant growth; in particular, the mall sector is very popular in
India [45] and although to date, organised retail structure has only firmly established
in the top-tier cities [53], organised retail is forecast to grow to around 20% of the
total market by 2020 [54]. Foreign retailers with presence in India include Next, Zara,
Levis and there are also a number of strong domestic retail multiples such as
Pantaloon and Fab India [53]. The sector remains heavily regulated by the Indian
government and there are strong protectionist measures, although deregulation is
taking place slowly [55]. Department stores and variety store formats tend to be
dominated by domestic retailers in India with foreign fashion retailers tending
towards the specialist stand-alone multiples, many of which are located in the modern
shopping malls [56]. Indeed, modern retailing in India is characterised by the
development of huge, sprawling malls and shopping complexes incorporating
entertainment and social spaces [54].

There is significant growth in the richer classes and a shrinking of the proportion of
poor in the Indian population [56]. In line with other emerging markets, Indian
consumers view fashion consumption as a way of conveying their status and thus
fashion retailing is predicted to continue with strong growth in India [57], however
one of the key challenges for fashion retail in India is how to present product ranges
which satisfy the desire for western styles within the constraints of what is considered
culturally acceptable [58]; [56]. The shift in demand towards western styles has been
a recent phenomenon and in 2005 only around 20% of total apparel sales were from
ready-made clothing [55], although this is growing at a rate of nearly 50% per year
[54].

Infrastructure in the Indian retail market remains poor and the country has huge
diversity in terms of wealth, culture, religion and language [56]; [55]. There is
however, growth in the numbers of affluent consumers driven by increasing numbers
of professional jobs, mainly in the first-tier cities, and increasing numbers of women
in the workplace, fuelling demand for modern work wardrobes.

Russia
Russia is another emerging economy which has seen significant growth in
consumerism following political and economic reform in the early 1990s which paved
the way for the development of a market economy. Russia has a large population of
nearly 141 million and with the 8th biggest GDP [47] is Europe’s largest consumer
market, but one of the weakest in Europe when measured in terms of Purchasing
Power Parity [47]. Retail in the Russian market is highly fragmented [59] and the
market is characterised by issues with corruption, infrastructure problems, high taxes
and red tape [45]. There are a number of strong domestic apparel chains mainly
serving the middle market. As with other emerging markets, the biggest proportion of
apparel sales currently comes from traditional retail formats such as street vendors
and local independent stores, however there is significant growth in modern retail
formats of all types such as department, stores, specialty stores and online offering
[45]. The retail structure in the large cities such as Moscow and St Petersburg are
highly evolved and similar to any established retail market, whereas the smaller cities
are in the earlier stages of retail development [59].

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Growth in apparel retailing had been growing rapidly in Russia because of increasing
customer demand from increasingly-wealthy consumers and the entrance of foreign
retailers [45] but the 2008 recession hit the Russian market hard and a number of
luxury retailers exited the market. However, as confidence has grown again more
recently, many foreign retailers who had exited are now looking to re-enter, and those
who stayed are looking to expand. Even so, current forecasts for growth in the
Russian market are modest as inflation and taxation hits consumers [31], and the most
recent turbulence of 2014 looks set to destabilize the region and possibly impact
fashion retailing in the region.

Following the years of communism where consumerism did not really exist in this
market, Russians are now eager to consume, with foreign brands being especially
desirable since, in the minds of these consumers, they represent everything about the
move away from communism. Fashion tastes in Russia vary enormously with
consumers in western Russia typically preferring a Scandinavian style of dress
compared with consumers in the East of the country preferring bright colours and
accessories [45].

2.3.4.2 Developing Economies

A developing market economy is defined as one which has a low-to-middle per capita
income [45] but demonstrates growth factors significant enough to suggest that it will
quickly become an emerging market. AT Kearney [197] describe developing
economies as those with growing consumerism and middle classes with a desire to
move from fragmented and traditional retail formats to a more organised approach,
supported by their governments’ relaxation of regulation and a desire from consumers
to buy foreign brands. According to their definition, the top ten developing economies
in terms of growth and market attractiveness include Chile, Uruguay, the United Arab
Emirates, Armenia, Georgia, Kuwait, Malaysia and Kazakhstan [60].

The analyses presented in this section demonstrate a clear link between the
development of a market economy creating demand for foreign brands and the
entrance of foreign fashion retailers into these new markets, initiating a shift from
fragmented and informal retailing formats to the more organised retail structure which
is the norm in the established fashion retail markets.

3. Introduction to The Retail Marketing and Marcomms Mix

The next section details the elements of the retail marketing mix which are the various
elements and methods required to formulate and execute a retail marketing strategy.
As evident from the previous section, fashion retailing has become a global industry
and competition has increased dramatically, therefore details of the key methods
adopted by retailers in order to differentiate them from their competitors merit further
discussion.
Following analysis of the retail marketing mix, attention in this section turns to
marketing communication (or Marcomms) and in particular to the Marcomms mix;
according to Keller [61] the pace of change in the marketing communications
environment has been so rapid that it has been difficult for marketers to keep pace;
technology has offered new opportunities for them to manage their brands and to
continue to reach the consumer in a relevant, appropriate and cost-effective way. The
key marketing methods utilised by fashion retailers are then discussed.

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3.1 Retail Marketing Mix
The retail marketing mix can be defined as, ‘The total package of goods and services
that a store offers for sale to the public. The retail mix, then, is the composite of all
effort which was programmed by management and which embodies the adjustment of
the retail store to its market environment,’ [62]

The general aim of a retailer is to create an offering that is relevant to a defined target
market and is attractive to customers based on the variables of price and performance
[11]. Retail marketing strategy is closely related to more general marketing strategy
and works from a similar base [9], however certain elements of the retail industry
dictate that the standard ‘4 Ps’ marketing framework (product, price place and
promotion) is not sufficient as it concerns itself with product; for the retail industry
the focus needs to be on market orientation which requires a more detailed
framework, and therefore an adaptation of the 4 Ps model which goes beyond the
product orientation of the 4 Ps [63]. There are a number of specific elements to the
retail mix that have been detailed by academics [64], and these will be discussed in
this section.

Compared to fifty years ago, changes in the retail mix are evident in for example,
product design, where retailers have much greater influence over what is stocked and
at what price it is sold [11]. Another change is that brand image has become more
important, as retailers have become powerful brand owners and influencers in their
own rights [35]. Additionally the increase in the acquisition of consumer data from a
variety of sources including product purchasing and behavioural data has enabled
retailers to focus on the customer relationship and how this can be built and
developed to increase profit and loyalty [65]. The 4 P’s model can be extended to
include people, process and physical evidence [25] and it is noted that in retailing,
people are critical in the execution of strategy as they are the brand representatives
who meet consumers. Gilbert and Time [66] define three basic tenets of the marketing
mix: it must be executed to meet the needs of consumers, there must be an effort to
create a uniform message or ‘synergy’ through promotions and other elements and the
marketing mix must be created in such a way that it allows the retailer to adapt and
respond to the competitive market place.

3.1.1 Place - Retail Location

“You can be the best retailer in the world, but if you set up your shop in the wrong
place, you’ll never do much business. If you operate from the wrong properties, you
start with your hands tied behind your back.”
[67]

Possibly the most critical element of the retail mix is place or location which has
become ever more vital as the retail sector has grown [68]; however McGoldrick [9]
states that on its own, a good location will not suffice and certainly does not make up
for other areas of the retail mix that are weak. Additionally Bell and Lattin [69] found
that given the change in consumer’s lives and the development of out of town style
shopping, there appears to be preparedness for consumers to travel, perhaps making
place less important than a truly compelling retail offer. Interestingly in a time when
many consumers are focused on price, it could well be this factor that influences
where consumers shop. Some of the value retailers, in particular Primark and Matalan
highlight this fact; their stores not always being situated in prime locations, but still

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being successful in attracting visitors despite their store design, atmospherics and
overall shopping experience. Reynolds and Wood [68] have researched place and
location as strategic tools; being in the right place with other similar retailers impacts
store traffic and customer types and therefore similar retailers have benefitted by
being located near to each other [70]. The opportunity to share surroundings and co-
operation between retailers can enhance each retailer’s performance [71]; however the
requirement is that each retailer has to be able to compete with the others on their own
merits, or otherwise risk losing out to the competition. Store rationalisation is likely
for a number of retailers as the move towards multichannel continues apace [72],
meaning that location for the key remaining store is ever more important. Making
location decisions is critical to retailer success and growth and an extensive list of
factors is considered before stores are finally built. The use of GIS data is frequently
used in this area, enabling decisions to be made on social and economic status of the
chosen location. Other techniques for selecting store location include instinct of the
retailer and sales data from other stores in similar areas. Evidently retailers do not
have free rein in their choice of location as planning restrictions are rife in order to
protect the environment and other key local issues [11].

3.1.2 Product (selection and buying)

Fashion retail is a dynamic and competitive market and product competition has never
been greater; selling the right product at the right price is critical, and has become
more challenging due to retailers speed to market and own brand developments from
international retailers entering the UK market. In addition the retailers have to
anticipate and translate trends for their customers; a challenge that is ever present and
critical to profitable trading [73]. The difficulty for retailers in anticipating and
translating trends for their customers is challenging [73] and as many retailers now
offer an element of fast fashion, homogeneity has reappeared in the market and
retailers need to seek new ideas in order to attract customers to their stores. Overall
this has led to consumers having an over-supply of choice with insufficient
differentiation and distinction between retailers [9]. Added to customer demands,
seasonality is a key factor in changing fashion ranges quickly [74] leading to ever
shorter opportunities for retailers to actually sell the products they have in store.
Furthermore a key issue for fashion retailers is the area of product quantity where
ordering the correct stock is critical [75]. In addition to the requirement of product
assortment within ranges, different colourways and sizes are also required and from a
logistics perspective the variety of sourcing opportunities and complications of
dealing with distant suppliers [11] make it difficult to achieve the goal of the right
product at the right time; a way of overcoming this is through the use of radio-
frequency identification (RFID) to allows a product to be tracked which is discussed
in Section 4.4. In terms of product development, retailers are now heavily involved in
specifying product requirements as they have to protect their brand reputation,
especially if the brand positioning is linked to a specific level of quality or design
input. It has been demonstrated that those retailers with a ‘positive design input’ have
a higher valuation [76]. Product is critically linked to brand perception, the quality of
a product also ties to its price and is therefore key in ensuring sales and profit are
maintained [11]. Keller [77] discusses the importance of brand image for the
consumer, which links closely with product design and quality and the brands that a
retailer sells. Successful fashion companies that have embraced technology and
challenged outdated ways of work thrive in this competitive marketplace; indeed Zara
exemplify how to meet the needs of the consumer through improved supply-chain and

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stock management [78].

3.1.3 Retailer branding

Retail branding is an under-researched area [20] and differs in many ways to
traditional product branding; however as Keller [79] states, retailers can attach
‘unique association’ to their service quality, the products they offer and a variety of
other retail variables such as price, merchandise and physical stores in the same way
that they can be attached to products. A retail brand identifies the goods and services
of a retailer and differentiates them from those of competitors [80] and ‘brand equity’
is created when marketing and promotional activity attracts a more favourable
response from consumers than occurs with the marketing activity of other retail
brands. This leads to the creation of retailer image in the consumer’s minds and hence
leads to increased brand equity. According to Ailawadi and Keller [35] retail brand
image is also affected by the manufacturer brands that are sold in store, and the equity
attached to those brands. It is clear that the use of manufacturer brands in retail stores
can encourage, “consumer interest, patronage, and loyalty in a store” [35], as the
brands stocked help to add to and enhance retailer image and build credibility,
contributing to image and retailer brand positioning in the marketplace. This relates
directly to the fashion retailers being considered in this research as each of them sell
to varying degrees either manufacturer brands or, in the case of Marks and Spencer,
very strong own brands which have equivalent authority. Notably, as retailers strive to
retain customer loyalty and seek new customers, Wallace, Giese and Johnson [81]
stated that a multiple-channel strategy is one way of building customer loyalty to a
retailer’s brand. It is also of note that consumers are becoming brand-aware at a
younger age than ever; research has shown that this frequently happens between the
ages of 15 and 25 [82] and it is recognised that young consumers have the ability to
influence brand choice, particularly in clothing, whether that is through direct choice
or influence of parents [83]. Retailers therefore in many cases seek to attract younger
customers to their stores with the intention of building a life-long relationship with
them.

3.1.4 Retail own brands

In the past 20 years, fashion retailing in the UK has changed beyond recognition and
has become more responsive and exciting in response to consumer demands. In
fashion retailing, the own brand has triumphed in the high street with successful
retailers such as Topshop and Zara selling garments under their own names having
created a strong and desirable retail brand image [84]. Alongside these larger retailers
newer, more-niche own labels have evolved and the lifestyle sector of this market has
grown substantially with retailers such as White Stuff, Fatface and Joules
demonstrating outstanding brand development in higher price fashion merchandise.
These own brands have become recognised for their market position and demonstrate
how own brands transform businesses and become an integral part of business success
and value [20]. The implication of strong own brands and their effect on the corporate
brand-image [35] cannot be underestimated as this development has led to a number
of critical aspects for retailers to control; namely store design [85], product quality,
price and uniqueness [20].

3.1.5 Retail Pricing

In the ever-more competitive fashion retail environment price has come to the fore; its
importance to consumers grows stronger as recessions deepen and fashion retailers

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seek to attract customers to their store rather than lose them to another retailer [86].
Where homogeneity is commonplace price often becomes the deciding factor in a
purchase [87]. However for fashion retailers there is a delicate balance for price; low
enough for consumers to see value and high enough to ensure that a degree of quality
relevant to the retailer is maintained; not too high however that customers seek a
similar garment elsewhere [9]. Related to this concept, it is the task of retailers to
assess the impact of price and price changes on a number of areas including brand
image and ultimately the financial performance of the business; the aim is to protect
profits and market share [88]. It is clear that price has become critical for consumers
in the wake of the recession, and although consumers still want to buy fashion they
are not prepared to pay the prices that they have done previously [24]. Retailers have
also faced a number of changes that have affected their ability to sell garments at low
prices; the rise of fuel prices, cotton and labour had a great impact upon purchasing
power and cost prices rose [87]. There has been little change in this trend of
consumers wanting to pay less; as the number of promotional campaigns, price
reductions, sales and discount days are prominent in the fashion sector [89]. Retailers
need to examine the impact of promotional activity across the year and especially
during the critical trading period, as margins are eroded when mark downs are used in
an attempt to lure customers into store and encourage spending; the aim being to
achieve volume of sales, rather than profit. This is vital in terms of protecting market
share as fashion is easily replicated and a similar item can often be bought elsewhere
at a lower price. The future depends upon building strategies that will move fashion
retailers out of cheap prices and reduced prices into a more sustainable pricing
strategy as the UK comes out of recession [24]. An attempt to reverse the pressure on
margins by holding prices firm instead of offering numerous discounts is critical if
brand values are to be maintained, as it will become vital for retailers to promote
brands in an effort to encourage consumers to spend more.

3.1.6 Retail service

Retail service is a vital part of the retail mix and it is clear that the shopping
experience becomes more enjoyable for the customer and more profitable for the
retailer when staff members are well-trained and understand the consumer [9]. It has
been proven that staff interaction with customers, alongside the physical appearance
of store personnel can enhance the shopping experience and this, combined with store
policy, creates the strongest impact on consumers [90]. Sum and Hui [91] agree
regarding the importance of the sales person stating that it is the empathy of the sales
person that is critical. Patterson and Baron [92] found that with specific reference to
department stores, customers, and in particular younger customers, had poor opinions
of retail staff. Academic research has demonstrated that sales personnel are critical to
the store experience and indeed these factors also help customers to decide whether
they will return to the store. Jackson and Shaw [25] agreed with the notion that the
shopping experience can therefore create competitive advantage for the retailer. Mary
Portas [93] discovered that although it is recognised that service is critical to retailer
success, this is not always followed through in practice by retailers. She concluded
that the service industry has become “a faceless couldn’t-give-a-monkey’s business”.
It is apparent that poor customer service is rife, perhaps due to retailers’ budget
constraints for staff training and perhaps due to a lack of understanding about what
most customers expect from a retail store. Retailers must be aware that poor sales
staff often equate to poor product perception in the minds of the consumer [94]. It is
likely that retailers in Great Britain will need to focus closely on service as the UK

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comes out of a recession, as this is clearly linked to product perception and ultimately
affects the price a customer is willing to pay.

3.1.7 The Selling Environment

Fashion retail behaviour is often hard to anticipate because consumers frequently shop
in an uncontrolled manner, with impulse purchasing being a strong behavioural
characteristic [95]. The selling environment is therefore critical to get right as
although location is important in its own right it has to be supported by the right
selling environment. This means an environment that brings the brand to life, one that
draws consumers into the store; this is the main opportunity that consumers have to
experience the brand, so it is vital that it is well executed and meets consumer
expectations [96]. The importance of store environment is evident in the literature, [9]
[64] and there are a number of elements which create the environment specific to each
retailer [9] . Kerfoot, Davies and Ward [97] discuss the communication aspects of the
environment that are created by the physical nature of the store; the way in which
products are displayed for example is done with the aim of ensuring the selling space
is maximised and customer interest is converted into sales across as many products as
possible [98]. Certainly, in fashion, this presentation is critical [25], this is supported
by Lea-Greenwood [99] who note that fashion retailers have made significant
investment in both visual merchandising and overall store design to enhance the
shopping experience and ultimately encourage customers to spend time in store and
purchase at the end of their visit. It is vital for retailers to create an environment to
achieve this. Emotional response to the retail environment has been measured through
the dimensions of ‘pleasantness, arousal and dominance’ by Mehrabian and Russell
[100] whose S-O-R (Stimulus – Organism – Response) model examined consumers’
emotional reactions to the store environment. This is important as the positive impact
of store environment is often extended visit times and increased purchase levels
[101]; [102]. Current economic trends have perhaps lead to a decrease in the
importance of the store environment for some consumers as they perceive price to be
the most important deciding factor and are less influenced by the selling environment;
indeed Becerra and Korgaonkar [103] state that alongside price it is brand or product
and retailer that have the strongest impact upon actual purchase. UK fashion retailers
have become adept at acquiring information about their consumers and match
consumer’s needs to the design of the store. However, conversely it is the nature of
retailers to sell and often consumers are over-stimulated by too much merchandise to
be able to clearly see the offer. This placement of product is done in conjunction with
store layout design to attempt to manoeuvre the consumer through the store [102].
Due to economic constraints most retailers will adhere to a standard style of store
layout where the individuality for the store comes from branding schemes and visual
merchandising. It is the combination of layout and offer, matched to the target
customer that facilitates brand buy in, getting this combination right is key as it this is
discussed further in section.

3.1.8 Retail promotion

The use of the term “promotions mix” has been common since the 1970’s and has
since been adapted by academics and practitioners to include a vast range of varying
advertising and promotional tools. The term is interchangeable with ‘The Marketing
Communications Mix,’ (Marcomms mix) which describes more-clearly the role of
promotion [104] and is the term used in the Section 3.2. In recent years, the
components of the Marcomms Mix have increased further due to changes in

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technology and the opportunity that the internet in particular has opened up for
consumers and businesses [105].

3.2 The Marcomms Mix

Solomon. Marshall and Stuart [106] defines the Marcomms mix as advertising, sales
promotion, direct marketing, public relations and word of mouth, however a more
recent grouping of the Marcomms tools has presented them in a clear way with a
distinction between traditional media channels and new channels such as E-active
Marketing or Digital Media and Alternative Marketing; alongside other disciplines
such as advertising, public relations, sales promotion, direct response, word of mouth
and personal selling [105]; [107]. The availability of new media channels, in
particular the internet has allowed fashion businesses to develop their Marcomms
strategies and become global players very rapidly. In addition fashion retailers have
specific tools which are critical to the fashion Marcomms mix [25] and these are
discussed below.

3.2.1 Media Clutter

Looking at the large number of communication tools it is easy to understand why,
with so many ways of reaching the consumer, the media environment has become
cluttered. Many consumers feel that the increase in the number of messages targeted
at them across every type of medium is overpowering and this can lead to active
avoidance of messages [108]; obviously this indicates that money spend on promotion
could be wasted. This “cluttering” of media channels is defined by Ha [109] as
‘amount of advertising space in a medium’. Further research suggested that the effect
of clutter is to lower consumers’ attention levels, impede recall of the advertisement
and have a negative impact upon a consumer’s cognitive response [110].

3.2.2 Marketing Communications Objectives

Marketing communications objectives must be clearly defined: McGoldrick [9] states
that for a fashion retailer they should be to “Increase expenditure from existing
customers, increase store traffic, increase product sales and develop store image”.
Additionally for a fashion brand; “Building brand equity, creating favourable
attitudes towards the brand and maintaining the strength of unique brand
association” [111]. Indeed Keller [79] acknowledges that retail brands can become
strong brands in the minds of the consumer when ‘unique associations’ become
attached to the retail brand. Baack and Clow [105] summarised the objectives as;
developing brand-awareness, changing customer attitudes; driving sales through
changing purchase behaviour and increased footfall, objectives achieveable by using a
mix of Marcomms tools, the aim being to ensure that the tool chosen can deliver the
required objective in the correct combination. The following section covers the key
Marcomms tools that are used in fashion retail.

3.2.3 Key Marketing Communications Tools of Fashion Retailers

Whilst the main Marcomms groupings are acknowledged above there are key tools
used within the fashion industry that have equal importance [96]. A brief examination
of each will follow:

3.2.3.1 Advertising
Advertising is defined as “any paid form of non personal presentation and promotion
of ideas, good or services by an identified sponsor” [111] and for many categories has

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been the dominant communication channel and many brands still rely on it. However
advertising in fashion is low in relation to other product categories, reflecting lower
spend on fashion than leisure or food [96]. Large fashion retailers such as Marks and
Spencer (M&S) have used advertising rather sparingly in the past, however in recent
years M&S have become the largest spender in the sector [19]. In the era of new
technological advancement in communication and the changing environment,
advertising can still play a strong role but there will usually be a number of other tools
used to create a campaign that can develop brand equity [61]. Advertising is
associated with mass media such as television, press, cinema, posters and radio and is
still deemed to be an important contributor to building brand image in terms of
“selling the establishment, attracting customers to the premises, [and] selling goods”
[112]. Table 3 shows fashion retail spend on advertising in the UK in 2012. This
shows M&S as the clear leader in terms of spend and also indicates where retailers are
increasing spend including large international retailers such as H&M and smaller UK
businesses such as Shop Direct. Conversely, Next and New Look have reduced
advertising spend; perhaps some of this spend has been redirected to online activity or
invested elsewhere in the business, which often happens in times of difficult trading.
Many companies see advertising as a ‘moveable feast’ or budget heading that can be
cut or reallocated in difficult economic times [113]. Furthermore, where some
international retailers such as H&M spend millions on global advertising, others
spend very little; Zara, for example, holds a policy of almost no advertising budget.
Both companies are extremely-profitable and growing businesses which may be taken
to demonstrate that there is not one retail strategy that works across the globe; each
retailer needs to use different methods to promote and develop their own brand.

Table 3. Retail advertising and promotion

Clothing Retailing - UK - October 2013 - Retail Advertising and Promotion

2009 2010 2011 2012 %
change
£ £ £ £ 2011-12
Marks and Spencer 5,173,168 21,576,00 26,004,073 23,936,232 -8
4
Asda Stores Ltd 7,095,211 7,607,885 7,970,176 8,973,406 12.6
Tesco Plc 5,373,454 5,393,779 7,218,784 8,435,966 16.9
H&M Hennes Fashions 4,696,392 6,046,466 6,712,501 8,169,787 21.7
Next Plc 6,536,537 5,083,879 7,608,691 7,363,222 -3.2
Shop Direct Home 858,919 2,405,483 1,843,698 6,881,210 273.2
Shopping Ltd
Debenhams Plc 91,586 843,405 6,714,453 6,218,237 -7.4
TK Maxx 1,705,495 2,287,300 6,678,148 4,428,147 -33.7
New Look Fashion 2,933,470 5,069,622 6,834,490 4,112,025 -39.8
Stores
Clarks International Ltd 1,962,048 5,416,281 5,578,475 3,191,813 -42.8
River Island Clothing Co 64,244 31,031 678,606 2,781,507 309.9
Ltd
Redcats UK 337,940 642,387 665,185 2,512,792 277.8
Burberry Ltd 1,477,795 1,267,351 1,278,115 2,510,664 96.4
Sainsbury’s 1,652,597 2,228,235 4,135,972 2,150,240 -48
Supermarkets Ltd
Matalan Ltd 2,760,346 2,324,689 3,367,665 1,996,525 -40.7

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JD Williams and Co Ltd 215,349 940,233 707,271 1,856,655 162.5
Levi Strauss UK Ltd 425,446 674,306 1,454,350 1,476,345 1.5
Gap Europe Ltd 291,658 493,811 195,003 1,469,740 653.7
Esprit Unisex Fashions 40,549 31,262 632,257 1,402,022 121.7
Uniqlo 1,673,534 1,546,438 1,026,226 1,334,812 30.1
Bonmarche 518,774 22,452 23,630 1,332,598 5,539.40
Mango Retail 419,808 606,940 1,120,793 1,297,890 15.8
Hugo Boss Fashions 677,000 1,001,549 1,310,187 1,205,657 -8
Rohan Designs Ltd 340,693 897,923 1,478,293 1,191,783 -19.4
John Lewis Partnership 1,849,235 1,474,719 1,518,843 1,155,810 -23.9
Tommy Hilfiger 421,020 1,544,017 1,047,624 809,543 -22.7
Bhs British Home Stores 162,561 214,545 110,277 808,779 633.4
Dorothy Perkins 1,146,081 1,151,067 1,136,718 807,231 -29
House Of Fraser Plc 1,532,065 1,255,455 1,103,151 778,015 -29.5
French Connection 587,907 1,641,385 1,421,587 714,809 -49.7
Group
Total of the above 53,020,88 81,719,89 107,575,24 111,303,46 3.5
2 9 2 2
Source - [114]

Table 4 shows in some detail how retailers spend their marketing communications
budgets across media types. For most fashion retailers the press is a key media
vehicle. The table also demonstrates the heavy use of TV advertising by John Lewis
and Marks and Spencer in particular.

Table 4. Main Media Advertising Spend, by Leading Clothing Retailers, 2007-10

Retailer Direct Internet Outdoor Press Radi TV Tota
mail o l
% % % % % % %
M&S 2 2.1 12.1 38.3 2.2 43.2 100
JLP 3 4.4 0.6 49.2 2.2 40.1 100
Debenhams 24.3 1.2 0.2 45.8 12.3 15.3 100
Matalan Ltd 41.9 1 15.6 18.9 9.4 13.1 100
Next 9.4 0.1 0.1 47.8 0 39.2 100
H of F 45.9 1.2 0.9 38.2 6.6 7.1 100
TJ Hughes 0 0 0 97.9 1 0.2 100
BHS 41.2 0 0.1 9.8 3 45.9 100
H&M 0 3.5 61.4 33 0.4 1.7 100
TK Maxx 0 2.6 5.4 60.4 4.5 27 100
Source – [19]

3.2.3.2 TV Advertising
It is understandable that large general fashion retailers such as Matalan, T K Maxx,
Marks and Spencer and John Lewis use television advertising as part of their
communications strategy as not only does it reach a large volume of people, it also
has the power to create conversation in the media and the general public about the
advertisement, especially if the advertisement is very strong or particularly poor.
Despite changes in consumer behaviour and in technology, TV advertising continues

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to be powerful with regard to brand building [115]. Indeed the combination of TV
advertising and social media can create additional coverage for example views online,
an example being consumers viewing youtube for the John Lewis advertisement
totalled 4 million over the TV campaign period, which is a outstanding result and one
that broadened the reach of the TV campaign considerably.

3.2.3.3 Press advertising

Press advertising in magazines is still a key channel for fashion retailers to use to
promote their ranges and offers. Although press also incorporates newspapers and
brochures, it is the glossy magazines from Vogue and Harper’s Bazaar to Grazia that
are tried and tested publications in fashion. Magazine advertising reaches consumers
in subtly different states of mind, often consumers choose to read and engage with
their magazine for relaxation and research shows that a strong and loyal bond to a
particular titles can be formed [107]. Magazine advertising media rates are calculated
by the size of the advertisement and its position in the magazine; more importantly
the magazine circulation and readership are critical in both cost and advertisement
performance. A clearly-defined target audience helps media buyers to select the
relevant magazine titles and this ensure that the message is received by the right
people [25].

3.2.3.4 Online advertising

The area of online marketing and advertising has grown dramatically in the last 10
years and is now an integral part of the marcomms mix for most fashion retailers from
Burberry, who exemplify use of this medium, to Topshop. The purpose of online
marketing communications is to remind consumers about brands when they visit
websites, deliver information in the form of online advertisements, and offer
enticements to other websites using banners and buttons. All of these are used to drive
traffic to websites [107]. More fundamental however are the areas of internet search
and consumer generated content. Internet search most notably through Google allows
consumers to find products, brands, services and information. In addition consumers
can also find product reviews. User-generated content allows users to get closer to
brands in the online space and have more personal contact between the two parties,
engendering trust and repeat purchase [116], this will be discussed further in section
8.3.3 when reviewing social media.

3.2.3.5 Public Relations (PR)

“Public relations is a strategic communication process that builds mutually beneficial
relationships between organizations and their publics” [117]. This definition includes
the word strategic, meaning that PR is planned and executed in a structured and
considered way [118]. PR is a key tool for fashion retailers and entails ‘managing the
corporate identity’ of a business which requires a number of tasks to be carried from
ensuring press coverage of product to defending the business against any negative
publicity that may occur [96]. Although control over some PR activities cannot
always be guaranteed, mainly due to the editorial control of magazine journalists, PR
can generate excellent media coverage at low cost. Other aspects of PR relate to
exhibitions, event management, launch parties, fashion shows, and sponsorship tie
ups, all of which require enormous amount of effort which often goes un-recognised,
but which can in a stealthy and subtle way, build brands and support advertising [25].
The use of social media within the PR mix has enhanced opportunities for fashion
businesses to communicate with their publics even more cheaply through the use of

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Facebook, Twitter, bloggers and other tools to spread positive word of mouth about
their brands; indeed this approach aims to embed the brand firmly in the consumer’s
life [119], see Section 8.3.3.

3.2.3.6 Celebrity Endorsement and Sponsorship

Celebrity endorsement is defined as “Any individual who enjoys public recognition
and who uses this recognition on behalf of a consumer good by appearing with it in
an advert" [120]. Twenty percent of advertisements in the UK use celebrities as their
focal point, and this number is similar around the world [121]. Celebrities are used in
a wide variety of advertising from TV to press and posters and their usage is
successful in attracting attention and engendering deep brand-attachment from
consumers. Indeed the use of celebrities is done in order to use the power of the
endorser to enhance the brand advertised thus leading to increased brand equity [122].
This is achieved because all the attributes of the endorser are subsequently attached to
the brand and powerful emotional feelings can be transferred [111]. Many marketing
managers seek to find celebrities to promote their brands as it is evident that the
correct celebrity will attract attention from both consumer and media and create better
brand-recall and brand prestige [122]. As brand homogeneity has increased and
consumers sometimes find it hard to discern between brands, this area of promotion
has grown significantly in the last 10 years, and is recognised as a powerful element
of the Marcomms mix as it can help advertising to stand out in a cluttered
environment. The use of celebrities is likely to lead to the generation of PR coverage
for the brands involved and can be used to reposition and launch new brands [123]
which is why it has become a key strategy for marketers to use. However the use of
celebrities has positives and negatives mainly due to lack of control on behalf of the
brand. Erdogan [123] summarises these. The advantages being that celebrities attract
attention over and above standard promotion and therefore can enhance brand image
resulting in brand enhancement and possible repositioning. The negative aspects of
celebrity endorsement however can have a detrimental impact on the brand; indeed
the behaviour of celebrities can overshadow the brand, create negative PR and can be
a costly waste of investment. The issues linked to the incorrect choice of celebrity can
impact upon the brand and Silvera and Austad [124] confirm that it is critical to select
the right celebrity for the product/brand and to make this relationship credible in the
eyes of the consumer. Clearly as this type of promotion is expensive, choosing
celebrities whose fame is evidently transient is inadvisable [125]. Some fashion
retailers have found this to their cost, for example New Look’s collaboration with
Lilly Allen in 2011 was unsuccessful as at that point Lilly Allen was not sufficiently
well-known.

3.2.3.7 Sales Promotion

The key objectives of sales promotion are to stimulate consumer trial, to improve
purchase or repurchase rate and to cement long-term customer relationships [66].
Sales promotion tools vary from discounted prices, multibuy options and BOGOFs
(Buy One Get One Free offers) to more specialist promotions that add value for
consumers, such as loyalty schemes and gift coupons [126]. In fashion, sales
promotion is done in a variety of ways with the intention of attracting consumers in
store and clearing stock. Activity is often executed through use of a coupon or
voucher either promoted in press or online. It is a useful tool as it can be used short
term to stimulate sales and retailers see immediate results when coupons are
redeemed. It is used heavily over the key sales period of summer and Christmas,

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alongside mid season sales and stock mark downs, across a wide range of retailers
from Gap to H&M. Driving store traffic and creating trial are two of the key
advantages of sales promotion but too many offers can affect brand perception and
ultimately change consumer behaviour; leading to customers who will not buy until
there is an offer [89].

3.2.3.8 Personal Selling

In fashion, the role of the sales person depends upon the nature of the store; the higher
the price of merchandise the more sales involvement is usually expected. Involvement
requirements also increase with the age of the consumer [96]. Many high street
retailers have introduced personal shoppers into their stores to act as a guide and
stylist for customers, the aim being that customers’ spend increases and although
Topshop was the first to take this approach on the high street many other retailers
have followed.

3.2.3.9 Direct Marketing

Certainly in fashion as an image-based industry, direct marketing has been seen as
lacking status as a medium. It is however used by fashion businesses that recognise its
power as a tool to support advertising. Certainly direct marketing has the ability to
create a personal relationship between brand and consumer [127] and can recruit new
customers and retain current customers. Many fashion retailers have become users of
direct marketing through store-card programmes and more recently the use of the
internet to communicate with consumers, and this change in use has improved the
image of direct marketing. Changes in the external environment have led to both an
increase in direct marketing activity and a change in its image whereby many newer
fashion brands use the medium across multiple channels. What often starts as web- or
store-based contact with consumers, develops further through direct mail, sending
catalogues to entice customers to buy. Certainly fashion brands such as Boden, White
Stuff and Joules have adopted this approach to create a personal approach to
communication and their approach uses technological advancements in consumer
insight showing an understanding of time constraints and changing buyer
expectations. Many fashion retailers use direct marketing to excellent commercial
effect, creating a strong brand dialogue with consumers [96]. The concept of lifetime
value lies at the core of successful direct marketing and the key components of
continuity, interaction, targeting and control all relate to this notion [128].

3.2.3.10 Visual Merchandising

Visual stimulation and communication have long been considered important aspects
of retailing by practitioners and academics alike [9]. Visual Merchandising is defined
as “the activity which co-ordinates effective merchandise selection with effective
merchandise display” [129], however Easey [96] takes this further to incorporate the
whole store experience with merchandise a part in that. Visual merchandising in
fashion is a powerful tool and alongside store design, layout plays a large part in
actually getting customers into store and in bringing the fashion experience and brand
to life [97] this is further discussed in section 7.4.1.

4. PEST Analysis of Fashion Retailing

All fashion retailers operate in a macro-environment i.e. they are affected by forces
outside their control. In this section the wide and varied environmental factors
affecting the fashion retail industry are discussed in more detail. The fact that these

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elements are often unpredictable makes it difficult for retailers to anticipate change,
[130][73], however it is vital for retailers to monitor the external environment on a
regular basis; even more so in the current economic situation. It is important to
differentiate between macro- and micro- forces affecting the industry, macro being
the wider issues which are economic and socio-cultural; micro being the forces which
impact marketing strategy, such as customers and competitors. The macro-
environment is generally considered to be made up of political/legal, environmental,
socio-cultural and technological factors and is often referred to using the acronym
PEST.

Figure 5. PEST Framework and Impact on the Retail Marketing Mix

Source: Adapted from Mooradian et al 2011

The above framework (Figure 5, adapted for fashion retail, illustrates the wider
external issues that retailers need to manage and understand, and demonstrates their
impact upon the marketing mix. Some external factors are common to the whole of
the market sector, such as political and economic; however other factors are related
closely to the various consumer groups who exhibit different behaviour and
consequently require varying levels of attention. For example the impact of
technology varies across demographics and therefore the incorporation of technology

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into the marketing mix has to be considered in different ways to meet differing
consumer needs and expectations.

4.1 Political/Legal
The fashion retail industry has become a global industry with the majority of retailers
operating on a worldwide basis as discussed in section 1.2. The impact of political
and legal frameworks within which retailers have to operate in other countries is
complex. All retailers have to adhere to the laws of the country in which they operate
in terms of business legislation which protects both businesses and consumers but can
often appear to be a barrier to success [131].

Political issues can relate to a whole variety of issues which can impact fashion retail,
for example terrorism, war, revolution, strikes, extortion, confiscation, controls,
currency restrictions, embargos, taxation etc. Legal issues can also have all kinds of
influence over fashion retailing for example opening hours, waste laws, emissions etc.
and of course the impact of both political and legal frameworks will vary significantly
from country to country. In both cases, political and legal stability in a particular
market can impact retail operations, consumer demand and exit costs [132]. Of course
political and legal issues can impact retailers indirectly via any aspect of their supply
chain [133]. For example the removal of the multi-fibre agreement as a result of
global political agreements in 2005 had a major impact in terms of the increased
amount of product that retailers could source from China and ultimately played a
great part in shifting world economics. Political and legal issues are often considered
to be interchangeable, since it is typically a government which controls regulatory
frameworks [134]. Lea-Greenwood [134] explains the effect of this in the context of
fashion-marketing communications which can be ‘self’ regulated as is typical in
developed economies, or very tightly controlled in other political and legal
environments, such as China.

In the UK the government has an enormous influence on both the economy and the
consumer, and the current austerity measures that have been implemented in an effort
to reduce UK debt have led to increasingly difficult operating conditions for many
fashion retailers. Indeed the current situation within the UK has been one of the
driving factors for many UK retailers such as John Lewis and Marks and Spencer to
seek growth overseas. Legal restrictions in the UK can impact retail strategies such as
flagship store development, which may be hindered in the UK by its strict planning
legislation.

Internationally, political stability is regarded as one of the key factors in consideration

of expansion for fashion retailers. Political instability is perceived as a risk factor for
fashion retailers and has inhibited growth in some markets [135][43],for example
some of the African nations. However, political dynamics can have the effect of
making markets more attractive for fashion retailers, for example the changing
dynamics of politics in Russia, whereby the stringent communist political control was
relaxed in the early 1990s and enabled the Russian economy to grow and
consumerism to increase (as discussed in section 1.2).

Government regulation is often cited as a key factor influencing retailer entry

methods to a market [135]. For example government restrictions in many developing
and emerging markets have impacted the potential for fashion retailer expansion. In

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the case of China and India, protectionist measures imposed by their governments and
rules about foreign direct investment restricted the expansion of some retailers into
those markets [45] [43].

A number of legal/regulatory issues that are current to fashion retailers in terms of

how they communicate with their market were identified by Lea-Greenwood [134]
and they include:
 The use of post-production digital enhancement of marketing images
 The sexualisation of children in fashion advertising and product assortment
offering
 The use of size zero models in marketing activities and size ranges
 Misleading environmental claims and actions
 The use of violent imagery
A key legal issue in the fashion retail sector has been the issue of copyright of designs
and counterfeit goods [25]. The lack of regulation in China over these issues for many
years resulted in a multi-billion dollar counterfeit industry that has been difficult for
brand owners to manage. However, over the last few years China has introduced new
legislation to help combat this problem and it has improved the situation somewhat,
although this continues to be a global problem for fashion retailers.

4.2 Economic
The economic issues in the macro-environment play a key part in influencing fashion
retailing, and the obvious examples of this were detailed extensively in Section 1.2 in
its analysis of fashion retail structures in developed, developing and emerging
economies. With this in mind it could be argued that economic factors have
significantly shaped the whole global fashion retailing structure, however economic
issues affecting fashion retail may also include:
 Size of economy
 GDP per capita
 Disposable income
 Classification of economy i.e. developed, semi developed, early developing,
less developed
 Population
 Income
 Consumption patterns
 Inflation
 Consumer Debt
 International groupings e.g. EU, NAFTA

Economic factors have a strong influence on the marketing mix as retailers are forced
to optimise the 4 Ps to ensure that they remain competitive through difficult trading
periods. In the situation where consumers have less money to spend it is still vital that
retailers attract customers to their stores rather than them going to a competitor’s.

In the fashion-retail sector, economic issues in any given market will determine the
size and scope of the fashion market. For example, as discussed in Section 1.2,
economic factors determine the structure of the retail market e.g. in terms of

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traditional vs. organised retail formats. Crucially, economic factors determine the
purchasing power of consumers in that market and in turn this is likely to influence
the type of fashion product consumers will be motivated to buy, for example
commodity products vs. luxury fashion. For fashion retailers this is an important
consideration and average purchasing power per person is often a better benchmark of
market potential not GDP of the market. For example, China has the world’s biggest
GDP but the huge gap in prosperity in this country means that their purchasing power
per person is relatively low.

4.3 Socio-cultural
Fashion retailers need to have a clear understanding of the impacts of social and
cultural changes on their consumers, as these are elements that are critical to success.
Retailers may be required to adapt their ranges to attract a variety of different
consumers and their changing needs [136] [11], and it vital to search for niches and
meet the requirements of those identified consumer groups [137]. However this is an
area that is complex and difficult to manage and it is crucial that improving consumer
understanding is a constant activity as the consumer is changing every day [106]. The
following factors are currently important in influencing consumer behaviour in
fashion retail.

4.3.1 Growing Consumer Confidence

A lack of consumer confidence had an impact on fashion retail since the onset of the
recession and certainly led to a decline in fashion shoppers in the UK, particularly in
the 25-54 age group [24]. A cut in the disposable income of many households due to
limited wage-growth, unemployment and the rise in the price of everyday items such
as food and petrol meant that consumers looked to reduce their spending on fashion
[24]. However Mintel [27] reports that as the UK economy continues its recovery and
consumers regain confidence they still expect good value for money in their clothing
purchases and this often means waiting for sales and promotions before purchasing.
Indeed, UK consumers have become and are likely to remain bargain hunters.

4.3.2 Fashion Awareness and Celebrity Role Models

In recent years consumers have become far more aware of fashion trends [21] forcing
retailers to rise to meet customer needs more-rapidly and cost-effectively in order to
capitalise on the opportunity to sell higher volume of garments to customers on a
more-frequent basis [138]. It would appear that some of this can be attributed to
increased celebrity-obsession as the plethora of media stories about celebrities has
grown unabated [139]. The subsequent impact of this has led to the demand for
increasingly-faster supply chains [74] and has ultimately put more power into the
hands of consumers. This change to supply-chain and lead-times has become the
ultimate aim for many retailers [138]; indeed some such as Zara are renowned for
using this approach and therefore are able to differentiate themselves from other high
street retailers through their speed-to-market of fashion items. Previously, slow,
cumbersome supply chains with difficult relationships between retailers and
manufacturers, led to retailers having small ranges of product and a supply chain
which was driven by the manufacturer [96]. A great deal of effort to improve supply-
chain relationships, with some retailers owning their own supply chain has led to a
better performance and enabled retailers to use this as competitive advantage. Many
fashion retailers have invested in enhanced supply chain technology (see Section 4.4),
and although this shift in ability to change supply time has required enormous

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investment it has justified the expenditure [137]. Growing fashion awareness and
demands for cheaper clothes that are accessible to all created opportunities for the
value fashion sector to develop rapidly. Additionally, value retailers have impacted
consumer behaviour and encouraged consumers to buy more fashion. However the
idea that this type of retailer is purely selling ‘cheap clothes’ is disputed by Ross and
Harradine [140] who state that the main purpose of this category is about ‘cheap
fashion’ and therefore fashion that is appealing to the mass market because of its style
and price. It could be argued that in the current economic situation, consumers are
shopping with value retailers because they need the clothes rather than that they want
cheap fashion.

4.3.3 Changes in Shopping Habits

Consumers are changing the way they shop and their behaviour is influenced by a
number of factors. In recent times UK consumers have been labelled as being cash-
rich, time-poor, and this was one of the key drivers of convenience shopping. This has
changed, however, since the economic downturn in 2008, with consumers now
deemed to be “Cash-poor, time-poor” [87]. One of the impacts on fashion retail has
been the shift towards supermarket fashion, whereby clothes can be purchased
alongside food, for example Florence and Fred at Tesco, which has a turnover over
£1bn on clothing [87]. Part of this success is due to the fact that supermarket shopping
offers fashion to consumers both conveniently and cheaply, thus consumers have time
to be fashionable. Convenience is also a factor in the growth of out-of-town shopping
which has occurred in the last 10 years and has contributed in part to the demise of the
traditional high street store [141]. However research demonstrates that the movement
of consumers away from the High Street towards out-of-town shopping [142], is
justified as out-of-town retail offers a better atmosphere, more convenience and free
parking [143], illustrating that out of town shopping is an ideal place to execute
retailing as a leisure activity. Comparison shopping has remained a constant reason
for consumers to visit specific retail sites that offer the choice of stores, however,
online fashion retailing has opened a new avenue for comparison shopping which has
been made easier than ever for the consumer [72] as discussed in Sections 6.4 and 7.

4.3.4 Acceptance of New Technology

Consumers have readily and rapidly accepted new forms of technology and many are
now accustomed to using websites and mobile commerce as part of their shopping
repertoires, thereby putting pressure on retailers to provide this additional channel and
service to consumers [144]. According to Mintel [27] 41% of all internet users had
used a smartphone and 35% a tablet to purchase goods online in the last year. This has
led to demand for retailer websites that are enabled for smartphone and Apple® iPads,
and additionally for the creation of retailer applications. Many consumers now want
to shop how and when they choose and retailers cannot always react as quickly as
consumers would like. Indeed [5] research shows that many fashion retailers are
concerned about the rapidity of developments in technology and are unsure how to
react strategically to meet customer demands.

4.3.5 Increasing Demand for Clothing Quality

Mintel [27] states that 31% of women are willing to spend more on well-made clothes
that will last longer. Interestingly, almost half of young women aged 16-24 are happy
to spend more in return for quality. This attribute however is associated with the most
affluent consumers, with highest household and annual incomes, perhaps implying

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that trusted retail brands who can demonstrate value are attracting consumers who are
interested more in longevity than fast fashion. However two fifths of the 16-24 age
group see cheap prices as priority when they are shopping and are less driven by
quality [114]; this trend will be likely to remain until the UK is out of the recession.

4.3.6 Brand Loyalty

Mintel [19] states that almost 30% of consumers shop at five outlets or more for their
clothes, indicating a lack of loyalty. This is most prevalent in younger consumers.
However age is not an issue when the data for shoppers who frequent one to three
stores is examined. Across all age groups this level of loyalty is strong and can be
improved by fashion retailers who offer the right products, good stock availability and
excellent customer service.

4.3.7 Ageing population

In 2014 Mintel [27] reported that the UK fashion market for women aged 55+ was
buoyant, showing strong purchasing levels of 94% buying clothes in the last 12
months. One of the key challenges for retailers is the changing age profile of
consumers and the increase in the numbers of those aged 65 plus. By 2030 this group
will reach 15.5m in the UK [145]. Catering for this consumer in fashion retail will be
challenging as there will still be a demand for fashionable clothing; it is possible that
those fashion retailers catering purely for the 15-24 year old market will begin to lose
sales as demographic trends shift in favour of more mature consumers. Catering for
Generation X, who tend to be well educated, IT literate and confident, may well be a
challenge for fashion retailers [146].
4.4 Technological
A dynamic, challenging global industry, the high street fashion industry is one of few
sectors under simultaneous pressure for short lead times and low costs. Shorter
product life cycles (PLCs) and rapidly-changing consumer demand require a focus on
agility to reduce lead times and satisfy consumer demand at its peak. In addition, the
ever-increasing globalisation of production and retailing results in a complex
environment characterised by the increasing complexity of the global apparel
environment which includes ‘globalisation of markets, increasing distance between
industrial partners, proliferation of information, reduced time to market and
emergence of code signing practices involving suppliers’ [147]. Advances in supply-
chain management technology provide retailers with improved capability to manage
these environmental challenges.
To achieve competitive advantage by agility and responsiveness, supply chain
initiatives based on collaboration, such as integrated systems and supplier
development may be employed [148]. In the UK fashion industry, the move towards
close collaborative working relationships was evidenced during the 1980s through the
development of QR (Quick Response) techniques which enabled domestic
manufacturers to compete with the off-shore sourcing of garments from lower labour
cost countries [149]. QR performance relied upon a network of close alliances with
supply chain partners, since such collaborative relationships are a precursor to
responsiveness [137]. While QR was unable to prevent the large scale global shift of
production to lower labour-cost countries, it laid the foundations for companies to
adopt a ‘fast fashion’ strategy; retailers such as Zara, Primark and ASOS replicate
catwalk trends at high speeds providing budget versions for their customers. These
companies used supply-chain technologies to facilitate responsive collaborative

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working with a globally-dispersed network of suppliers. In recent years, advances in
technology have resulted in more sophisticated solutions for fashion retailers to
shorten lead times in global sourcing networks and satisfy consumer demand at its
peak. For example, Product Lifecycle Management (PLM) is a major evolution in the
practice of innovative design and has led to the development and diffusion of
numerous IT software solutions [147].

Product Lifecycle Management refers to a company strategy as well as a specialised

information system [147]. Here the focus is on PLM as database-driven software
solutions that enable retailers and brands to manage their stock, reduce product
development costs and shorten lead times from design concept to production. The
technology enables scale efficiencies, innovation and consumer-centricity and thus
plays a crucial role in helping retailers to create fresh and innovative products and
deliver them to market in a timely and profitable manner [150]. As fashion consumers
become increasingly demanding for instant trend-gratification and production
networks become more complex and geographically dispersed, the efficient
management of product design and development is crucial for business success. PLM
emerged in the 1990s, evolving from its predecessor PDM (Product Data
Management) systems and coinciding with the large-scale shift to outsourcing. For
large fashion retailers with huge networks of suppliers around the globe, PLM
solutions provide ‘a single version of the truth’ [151]. A common repository for data
that can be shared with suppliers globally across the design, merchandising and
sampling stages reduces the potential for time-lags that might otherwise result from
the errors that arise from multiple versions of documents. PLM systems offer better
functionality, in terms of accuracy and consistency, than spreadsheets. The
improvements in communication enabled by PLM shorten time to consumer and
increase speed of replenishment [151][150]. Furthermore, PLM systems support truly-
collaborative ways of working for geographically-dispersed teams, so that tasks can
be performed in parallel rather than sequentially, which helps to shorten the time for
product to reach the consumer. Parallel working also has benefits for improved
product quality [147]. PLM technology delivers clear benefits to fashion retailers, but
also enables suppliers to access their retail buyers’ data more easily, thereby enabling
suppliers to service their retail buyers more effectively. However, since there are a
number of competing PLM systems available in the marketplace [152][147], suppliers
that service a number of retailers may have to work across multiple PLM systems,
which could increase complexity.
One example, Infor’s Fashion PLM, supports fashion designers, technical product
developers, brand managers and merchandisers to collaboratively plan, create,
develop and source fashion collections [151]. As well as supporting external
collaboration with supply-chain partners, it also supports internal collaboration
between design, technical and commercial teams within the organisation. The
software is highly-configurable and can be accessed via the web or as a mobile app as
well as through a desktop device, allowing users to work anytime and anywhere. Its
interface is specifically designed to appeal to creative as well as technical designers.
For creative designers, drag-and-drop features provide user-friendly functionality
while mass create-and-edit capabilities reduce the amount of repetitive data-entry
tasks and give users more time to focus on being creative and innovative. Greater
user-friendliness in software design helps to speed up the process of adoption

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throughout the firm, increases employee motivation and reduces training requirements
(Infor, 2014a).
PLM can also contribute to more sustainable ways of working. Harrop [153] provides
a number of examples including 3D virtual sampling as a way of reducing the amount
of physical samples that need to be air-freighted from the supplier’s product
development facilities to the retailer’s headquarters. The 3D virtual-sampling
technology offers high definition, detailed photo realistic images, enabling the
suppliers to fully appreciate the concise detailed requirements of the finished
products. These complex simulation tools are built upon algorithms from the field of
mechanical simulation, animation and rendering [147]. The collaborative nature of the
3D virtual sampling software allows the supplier to query the requirements online, via
collaborative white boards and screen sharing, to ensure that they have all the details
to deliver the correct finished article, thus reducing the need for multiple sample
iterations [153]. The retailer is then able to carry out mechanical simulations in order
to verify that the design matches the specifications supplied [147]. Although such
technology is commonly used in the automotive sector, the fashion industry presents
challenges due to the complex and soft textures of materials as well as the sheer
volume of styles and colourways which are produced each season. Even so, its
advantages have been made clear by the example of the German sportswear retailer
Adidas, which has successfully used this form of technology to remove more than one
million physical samples from its supply chain over a three-year period [154],
contributing to the sustainability agenda by reducing material waste and carbon
emissions.
Since more retailers are operating multiple channels, the challenge of managing
supply and demand has become more challenging as inventory problems can occur at
any level of the supply chain, causing a knock-on affect for supplier partners [155].
Supply-chain efficiencies have been fuelled by technology, progressive forms of
management and the movement towards a collaborative process which is designed to
be customer centric in order to ensure the delivery of products to meet demand and
return profit. Advanced technologies have improved supply chains with the main
development being in radio frequency identification (RFID) which consists of tags
and readers. The tag is a microchip that contains information such as where it was
produced, manufacturer details or a unique ID number; this information is then
transmitted to the reader, a wireless detector, which can translate the tag information
in order to update the back-end database [156]. Vlachos [157] conducted research into
the effects of radio frequency identification (RFID) practices on supply chain
performance finding that this technology significantly helps improve the performance
of managing inventory, fulfilment planning, forecasting and replenishment
concluding improvement of stock availability by 45.6%. Rushton, Croucher and
Baker [158] outline some of advantages to utilising RFID technology in logistics:
 Tracking raw materials and work-in progress through manufacturing;
 Tracking finished goods and unit loads in distribution centres: this can reduce
labour time and costs through automated check-in, order shipment-verification
and stock checking;
 Tracking finished good and unit loads to shops or customers: this can enhance
service provision through more accurate and timely information on order
status;

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 Tracking reusable assets such as pallets and roll cages: this can provide
significant increased in asset utilisation by reducing asset cycle time and
enabling better asset management.

It is evident from the advantages outlined by Rushton et al., [158] that tags provide
more detailed information than the barcodes which had been previously used to
manage the supply chain; tags last longer and enable automatic identification through
radio frequency, and they do not require line-of-sight contact in order to read
information like barcodes, therefore increasing their accuracy. The real-time data that
RFID can provide is vast and RFID could be a solution for retailers who operate via
multiple channels, to combine the insight about consumer behaviours and real-time
information flow about fashion products [159] allowing a retailer to innovate and
replenish stock in response to consumer demand.
Supply-chain technology innovations also facilitate the management of ethics in
fashion production. SEDEX is the world’s largest collaborative platform for
managing ethical supply chain data and enables suppliers to share the audit results
with multiple retail customers. It reduces the costs of compliance for suppliers who
may be subject to multiple audits each year for the various customers that they
service. This helps to increase efficiency in the audit process so that retailers and
suppliers can spend more time driving ethical improvements.
Online shopping for fashion has grown significantly over recent years. However,
further growth of online shopping is partly predicated upon the increased
sophistication of e-fulfilment models for home delivery [160]. In the early years of
rapid e-commerce growth, customers were often disappointed by poor delivery
service, and as consumers become increasingly demanding, a key challenge remains
on how to reliably and cost-effectively fulfill customers’ orders. The typical e-
commerce consumer of the late 1990s was an affluent and technologically-proficient
male, with low expectations of the online purchase experience. However, as the
market expanded, the typical profile of the e-commerce consumer changed to become
female mainstream shoppers from lower-income brackets with higher expectations of
the online purchase experience [161] [160]. The ‘last mile’ problem refers to the issue
of delivery of items from the delivery vehicle to the consumer in the most efficient
way. If the consumer is not at home when the delivery driver calls, then the item must
be taken back to the distribution hub and another delivery must be organised, which
increases the cost to the retailer. As noted by Fernie. Fernie and McKinnon [160] ‘in
making the final delivery to the home, companies must strike an acceptable and
profitable balance between customer convenience, distribution cost and security’.
While consumers would prefer urgent deliveries to arrive at a precise time with 100%
reliability in order to minimise the inconvenience of having to wait at home for the
delivery, few consumers would be willing to pay the cost associated with such a high
service level. For the retailer, a 24-hour slot would provide the most cost-effective
delivery solution, however few consumers would be willing to accept the
inconvenience of having to wait at home for such a length of time.
The managing director of one of the UK’s leading premium express-delivery
companies explained in an interview in 2012 how the complexity in Business-to
Customer (B2C) deliveries results in higher costs compared to Business-to-Business
(B2B): ‘there are a whole load of add-ons that B2C customers really want – re-
delivery tends to be much higher, the challenge around returns is much greater, the
Christmas peak is much higher and they tend to be a lot more choosy in terms of what
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I call in-flight re-delivery requests – ‘I’m not in tomorrow, can I change the delivery
please’. All of those things tend to mean a more complex and costly delivery’ [162].
Notwithstanding these higher service-expectations, the value that the consumer
perceives to be in the delivery is low and consumers are generally unwilling to pay
high delivery costs. Retailers have had to innovate with solutions to the ‘last mile’ in
e-commerce and the problem of non-attended delivery (when the consumer is not at
home when the delivery arrives). New developments in improving delivery fulfilment
include better communications (e.g. order-tracking, text message updates etc), better
choice of delivery slots (albeit costlier than a 24 hour slot) and rise of click-and-
collect services.
Many retailers use third party logistics providers (3PL) such as DHL, DPD, and City
Link in the UK. The growth in e-commerce has led to new technology-enabled third-
party couriers entering the market, such as Shutl and Yodel. Many of these companies
have innovated in communication technology to provide consumers with a more-
accurate delivery time frame to reduce the likelihood of non-attended delivery. For
example, DPD recently launched two ‘last mile’ innovations for the B2C market. Its
predict service in 2010 was the first service to use GPS technology to notify parcel
recipients by email or SMS of an accurate one-hour delivery window [163]. A
personal touch is added by notifying recipients of the first name of their driver. In
2013, DPD launched its ‘Follow My Parcel’ service in conjunction with fashion pure
player ASOS, which allows recipients to live-track the progress of their parcel using a
GPS mapping interface designed for smartphones, tablets and PCs, all the way down
to the recipient’s front door [163]. In the event that recipients cannot be at home to
accept their parcel, flexibility of options maximises convenience. DPD offers a range
of options for re-delivery such as selecting an alternative delivery date, opting for
delivery to a nominated neighbour, opting to have the parcel left in a specified safe
place, collecting the parcel from a local DPD depot, or upgrading delivery to a new
time slot such as before 10:00am, before 12 noon, in the afternoon or on a Saturday.

Changes in the technological environment have been rapid and relate closely to
changes in consumer behaviour in terms of how consumers prefer to shop,
communicate and receive their deliveries. Consumers have quickly adopted new
technology from the internet to mobile communications and as this has quickly
become part of everyday life, consumers now require retailers to communicate with
them using this technology. The evolution of new websites, social media and
applications for smartphones has facilitated improved connectivity between retailer
and consumer [72] as discussed in Section 8.

5. Porter’s Five Forces in the era of mobile communication

The high street fashion market is a challenging, dynamic industry sector,
characterised by short PLCs, high product variety, high volatility, low predictability,
relatively low margins and high levels of impulse purchasing [164]. According to
Porter [165], the attractiveness of an industry sector and thus the average long-term
profitability of firms operating therein, depends on five forces. The combination of
the five forces determines how economic value is shared between major actors in the
industry, namely competitors, customers, suppliers and producers of substitutes. Each
force can have a positive or negative impact on profitability. Applying this model to
fashion retail facilitates analysis of the competitive environment in an industry where
competition is high and profitability is becoming harder to achieve. However, even in

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unattractive industries it is possible for firms to earn above-average profits by
deploying strategies that differentiate them from their competitors.
5.1 The Threat of Entry of New Competitors
The fashion industry, according to Knutsen [166], is ‘a technologically mature
industry with low barriers to entry, and a relatively flat and price-sensitive market’.
This suggests it is difficult for retailers to achieve profit as the threat of new entrants
is high. Certainly the arrival of new and successful international fast fashion retailers
over the years, such as Zara, H&M, Gap and more recently Forever 21, has increased
the level of competition for incumbent UK retailers. The internet and growth of e-
commerce has further opened up the market and increased competition. Porter [167]
stated that e-commerce can weaken industry profitability by reducing barriers to entry
for new entrants and by reducing switching costs for consumers. E-commerce
represents a low-risk means of entry for overseas retailers and allows them to keep
costs low until a secure trading base is established. E-commerce also levels the
playing field between small independents and large retailers, enabling consumers to
access a wider variety of fashion retailers than previously. Established fashion
retailers face competition from smaller players who now have better access to the
marketplace and higher visibility than possible with only a bricks-and-mortar store.
For example, designer childrens’wear retailer Childsplay Clothing trades from only
two stores in the UK but ships worldwide and has a global customer base that values
its selection of “the world’s finest designer brands for children newborn to 16 years”.
Competition has also increased with the emergence of ‘fashion pure’ players (firms
that only sell online), such as ASOS and Net-a-Porter. These businesses have grown
successfully and disproved the notion that high-involvement goods such as clothing
are not suited to online retailing. For cash-rich and time-poor consumers, online retail
offers a convenient means of browsing and shopping for fashion while on the move or
outside of traditional store opening hours. Furthermore, advances in web technologies
allow consumers to play around with outfit building and provide editorial content to
promote the latest trends to encourage shoppers to buy the complete look, without
having to wander the high street or pore through fashion magazines for inspiration
[27]. Consumers are increasingly happy to purchase high-involvement fashion
products online, which is partly supported by the development in technologies
designed to make websites more interactive and provide customers with the ability to
evaluate items online, as well as a more-engaging online shopping experience. Thus,
European online clothing and footwear sales totalled around €33.2 billion in 2012,
equating to approximately 20% of all online retail sales in Europe [114]. The three
leading ‘fashion pure’ players in the European online fashion market are ASOS,
Zalando and Amazon Europe, although their market share remains relatively low,
suggesting opportunities for substantial market-share growth [114]. In 2013, ASOS’
share of the European online fashion market was 1.6% (up from 1.4% in 2012),
Zalando’s was 6.1% (up from 4.0% in 2012) while Amazon Europe commanded a
market share of 6.4% (up from 5.5% in 2012). ‘Pure players’ represent a growing
threat to store-based retailers, not only from their online operations, but also from the
emerging trend for online retailers such as Simply Be in the UK and Bonobos in the
US. Others such as Net-a-porter and eBay are entering the physical space by way of
pop-up shops or virtual shopping walls. Furthermore, as the majority of multiple
retailers in developed markets now also sell their products online through their own
websites or via virtual shopping malls, an additional challenge of cannibalisation
emerges between online and physical distribution channels [168]. Now that

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consumers can shop from multiple retailers online, it is inevitable that online retail
will displace some physical store sales, and therefore a large store portfolio in mature
markets is becoming less necessary. Many retailers are rationalising their store
portfolio, as e-commerce effectively becomes the largest store in the portfolio and
capable of serving the whole country. Prior to e-commerce, maturity for a UK fashion
retailer was in the region of 250-300 stores nationwide, but with the advent of online
retail, a mature portfolio would require only 100-150 stores plus a transactional
website [169]. Physical retailers respond to the threat of e-commerce players by
creating more engaging and experiential stores where shoppers can be amazed and
amused.
The e-commerce channel also enables consumers to move further down the long tail
than previously possible and cultivate tastes for niche products and services.
Anderson [170] defined the long tail as ‘the consequences of the abundance boom
created by technology’ and argued that success could be achieved by selling less
popular items, rather than bestsellers. Whereas success in physical retailing rests upon
selling more popular items, success in online retailing could lie is selling less popular
products for which greater demand levels can be aggregated over a larger
geographical area. Most importantly, the tail has the potential to extend to great
length, see Figure6.

Figure 6: The Long Tail

[see attached file]
Adapted from Anderson [170]

While it may not be profitable for a physical retailer to stock niche items, due to the
stocking cost and insufficient local demand, online retailers can aggregate demand on
a national or even global scale and the cost of stocking such products is far lower than
for a physical retailer. For example, Brynjolfsson, Hu and Simester
[171] calculated that around 30-40% of Amazon book sales are niche titles that would
not normally be found in a bricks-and-mortar store. Before the advent of online
shopping, consumers were limited to mainstream products which would sell in large
volumes. However, the development of e-commerce allows retailers to extend their
range of products further and further, so consumers are able to move further down the
long tail and are no longer limited to selecting from the most popular products only.
The evolution of web technology has not only led to increased competition from small
independents and overseas fashion retailers, but also the emergence of new retail
business models, such as aggregators, flash sales, subscription websites and rentals.
This leads to increasing numbers of retailers competing for the same consumers.
Online aggregators act as virtual shopping malls or portals for consumers to discover
fashion and accessories from far and wide, without the spatial and temporal
limitations characteristic of physical retailing. They also provide a shop window to
the world for small fashion brands and retailers. Aggregators do not hold stock but
pull content from a variety of other sellers’ websites, and as such they are highly
capital efficient and attractive to investors. For example, Farfetch.com provides a
window to some of the world’s best independent fashion boutiques, which the
consumer can shop without leaving their home, and pay for in a single checkout

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procedure. Orders are shipped direct from the boutique itself. While some aggregators
specialise in particular product categories, as seen in Table 5 below, Lyst.com
partners with retailers, designers and fashion bloggers so that consumers can create a
personalised fashion marketplace with a customised feed of products.

Table 5: Examples of online fashion aggregators

Aggregator Product category Website Description

Farfetch.com Fashion and accessories “An online marketplace for

independent fashion boutiques
globally”

Boticca.com Jewellery and accessories “The world’s luxury bazaar of

fashion accessories”

Littleblackdress.co.uk Dresses and accessories “The world’s largest collection

of little black dresses, party
dresses and accessories to
complete your going out look”

Notjustalabel.com Fashion and accessories “The world’s leading designer

platform for showcasing and
nurturing today’s pioneers in
contemporary fashion”

Shoptiques.com Fashion and accessories “A one-of-a-kind online

destination for discovering and
exploring local boutiques across
the world”

Lyst.com Fashion and accessories “The world’s biggest fashion

selection bringing stores,
designers and fashion influencers
together to create a store made
just for you”

Flash sales are membership-only websites which offer heavily discounted past-season
products to consumers for a short period only. The high level of discount and the
short time window in which items are available encourages a sense of urgency in
consumers. The members-only aspect creates a sense of exclusivity, and while many
sites allow customers to sign up on their own, some initially required an invite from
an existing member. Products on flash-sales sites are shielded from search engines, so
they do not pop up in response to online searches for the brand names. Brands and
designers therefore benefit by being able to get rid of old stock quickly and discreetly,
without the potential disgrace of having heavily discounted products lingering on the
shelves of discount retailers in full public view, which could devalue brand equity in
the consumers’ eyes. Examples of flash-sales websites include vente-privee.com,
brandalley.co.uk, secretsales.com, gilt.com, hautelook.com and ruelala.com. The
success of this business model has led some firms to expand into other product
categories such as wine, homewares, travel and property, such as Gilt with its
subsidiary Jetsetter.com which offers heavily discounted luxury holidays and
accommodation. Similarly to online aggregators, flash-sales sites do not necessarily
hold stock. Many sites, like Gilt, one of the most popular and successful private sale
sites, operate on the ‘Block, Sell and Ship’ model. In this model, brands send samples

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of their clothes to Gilt, where merchandise buyers hand-pick items for the site. The
buyers then place their orders for the amount of merchandise they’d like the brands to
set aside for the sale, based on available stock. After members have paid for their
goods and the sale ends, Gilt then places the confirmed purchase order with the brand
for what it has sold online. Merchandise is then shipped to Gilt, where everything is
packaged in Gilt-branded boxes and shipped out to customers. This is a low-risk
model. The most important concern for Gilt really is the time it takes for the brand to
send its purchase order, and then send it out to customers. Another risk in this model
has to do with inventory. If the count is not accurate, a number of customers may
need to receive refunds and apologies that their order could not be filled. The risk
then is that the customer becomes discouraged and will look to other sites.
Another common way that sites operate is to purchase and fulfill orders directly. With
this model, the sites take more of a risk but have the potential to offer customers the
best discounts. In this business model, the firm contacts brands to assess the amount
of inventory available, and the brands will send inventory reports and samples. In
contrast to the ‘block, sell, ship’ model, the more inventory the site buys, the better
the wholesale price, and the better price it can offer to its members. The risk here is
that if a site overestimates demand and orders too much of a brand’s inventory which
then goes unsold, profitability is reduced. However, some sites have a permanent
outlet section, where orders are fulfilled immediately and which could be used to shift
purchased stock which is left unsold at the end of a sale. Many fashion retail brands
have low levels of brand loyalty, making it likely that new entrants could take custom
away from established brands. However, Hergeth [172] disagrees saying that whilst
new businesses can quickly establish the name of their brand, consistent and sustained
brand support and development are required for brands to truly thrive.

5.2 The Bargaining Power of Buyers

The power of buyers is high in industries where buyers can easily switch from one
brand to another, as is the case in fashion retail. This has been demonstrated by
success of value retailers such as Primark who entered the market recently but has
already displaced incumbents in terms of market share. Its low-priced fast fashion
offering forced other retailers to reduce their prices, thus reducing the likelihood of
other fashion retailers making profit as price competition leads to lower margins and
profits, jeopardising long-term business sustainability. In addition to value retailers,
overseas fashion retailers such as H&M, Gap and Zara have such wide reaching and
large scale businesses that they too can force prices down and deliver compelling
offers to attract consumers. Recent consumer research reveals that 71% of UK
consumers’ fashion purchasing decisions are driven by price [173].
This is clearly seen in Table 6 below, which shows changing market share of leading
UK fashion retailers between 2005 and 2012 and during which time value retailer
Primark more than doubled its market share and became the UK’s fourth largest
fashion retailer.

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Table 6. Market share of top 10 UK fashion retailers 2005 and 2012
Rank Retailer 2005 market share Retailer 2012 market share
% %

1 Marks & Spencer 10.8 Marks & Spencer 7.6

2 Next Group 7.6 Next Group 7.2

3 Arcadia Group 5.3 Arcadia Group 5.6

4 Asda 4.0 Primark 4.8

5 Debenhams 3.5 Sports Direct 3.5

6 Tesco 2.9 Asda 3.4

7 Matalan 2.9 TK Maxx 3.0

8 John Lewis 2.3 Debenhams 2.6

9 TK Maxx 2.3 JD Sports 2.6

10 Primark 2.2 Matalan 2.3

Source - Mintel, 2005, [114]

Consumers encounter lower search costs through web search, browsing and
recommendations, as technology makes it easier for buyers to find lower-cost sellers.
This transparency increases the level of price competition in the market.
Customisation of viewing can be based on a set of preferences specified directly by
the consumer, or more subtly, the features of the customised product might be
deduced automatically through cookies on a website. Technology thus allows the
identification and tracking of individual consumers, both within a specific online store
and across different websites. Profiling technologies allow the creation and sharing of
consumer profiles, and the matching of consumer identities with relevant
demographic information. Such techniques can be used to discover or estimate the
preferences of specific consumers. Product offerings can be customised and
recommendations can be made based on a consumer's attitudes, past behaviour and
demographic characteristics, or through ‘collaborative filtering’ systems that offer
recommendations based on the feedback and experiences of consumers with a profile
of likes and dislikes similar to the targeted consumer.
Markets with increased product variety, and increased information about these niche
products, allow consumers to discover and purchase products that otherwise would be
unavailable. This can lead consumers further down the ‘Long Tail’, allowing them to
cultivate deeper tastes for these niche products.

5.3 The Bargaining Power of Suppliers

Suppliers have power when they are few in number and where it would be difficult
for a buyer to switch to another supplier. In the fashion industry, supplier power is
low. Fashion supply chains are characterised by a strong power imbalance in favour
of the retailers [174]. This is due to the exceptionally high degree of buyer
concentration, a very low degree of supplier concentration and the industry’s

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historical tendency towards adversarial trading relationships, which means that
garment manufacturers possess a very low degree of market power compared to
retailers. UK fashion retail in particular is highly-concentrated within a small group of
large retail companies, with 28% of consumer expenditure on apparel accounted for
by fashion multiples TNS, 2008, cited in Jackson and Shaw [25]. In 2007, the top
five retailers accounted for 35% of UK clothing sales [175]. While there is more
emphasis on independent fashion retailers selling branded merchandise in European
countries, the UK high street fashion sector is dominated by multiples selling own-
label product.
High street brands and retail groups such as Arcadia, Aurora, Next and Marks and
Spencer do not own production facilities. Instead, they take advantage of the cost-
efficiency and flexibility offered by operating supply chain networks and
subcontracting garment manufacture to lower labour-cost countries. The size and
buying power of these large retail groups gives them a distinct advantage over
garment manufacturers. These powerful retail buyers organise highly-competitive and
globally-dispersed production networks [176]. Their success is dependent on ‘their
ability to shape mass consumption via strong brand names and their reliance on
global sourcing strategies’ [177]. The bargaining power of garment suppliers in
general is limited due to the global abundance of garment manufacturing capacity;
however, large-scale suppliers that produce for volume retail buyers such as Gap and
Nike may acquire a greater proportion of supply chain power, since alternative
suppliers that are able to produce such volumes are scarcer [172].

5.4 The Intensity of Competitive Rivalry

Rivalry in the fashion industry is increasingly intense as there are high numbers of
businesses of similar size competing for the same customers. The degree of rivalry is
the strongest of the Five Forces, and this high level of competition can lead to market
exits, particularly when economic circumstance are difficult and competition
intensifies further [178]. The demise of Peacocks, La Senza and other fashion and
footwear retailers in the UK marketplace demonstrates the power of this force. Added
to this, existing companies are each seeking shares of a market that is not growing
significantly and there are signs that consumers are becoming less brand-loyal as they
seek value from products and are easily able to get similar products from a range of
companies, due to the homogeneity of the fashion market [19]. This level of rivalry
can lead to significant benefits for fashion consumers, as price reductions become
commonplace. Technological innovations increase price-transparency for consumers.
For example, the UK start-up company, Grabble, is a social fashion discovery-and-
commerce platform that enables users to create personalised fashion wish-lists from
multiple retailers. Users also receive alerts when any of the items in their wish-list are
reduced in price.
Subscription sites cover fashion, beauty and accessory categories, extend across
menswear as well as womenswear, and offer consumers the opportunity to keep up to
the minute with new trends recommended for their particular tastes by a team of
stylists. Leveraging the elements of a curated selection, personalisation and the
celebrity influence from stylists, consumers can benefit from saving time and money
whilst maintaining a fashionable look. Most subscription services require users to fill
out a short style and preference questionnaire and then use algorithms to provide
recommendations for the user. Users can choose to purchase or skip an item each

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month. Examples include UK-based Stylistpick and US-based BeachMint (covering
sub-brands JewelMint, ShoeMint StyleMint, IntiMint). Rentals or dress hire are well-
established business models, but the internet has increased access to them for
consumers. Examples include WishWantWear, GirlMeetsDress and RentTheRunway.
Another technology-enabled fashion business model that represents a source of
competition to incumbent fashion retailers is peer-to-peer commerce, which takes the
form of sales or rental websites and mobile apps such as eBay, ASOS Marketplace,
Schpock and Depop where consumers can purchase from each other.

5.5 The Threat of Substitute Products or Services

The fashion market has grown more homogenous as value- and fast-fashion retailers
have driven changes in the market leading to a proliferation of designer copies
available at low prices. There is little brand loyalty and consumers are easily able to
switch between retailers; indeed consumers can buy similar designs from Zara or
Primark depending on their budget and preference [20]. Consumer wardrobes in the
UK are saturated, as evidenced by recent findings from consumer research. According
to Retail Week [173], 70% of UK women agree that their wardrobes and drawers are
‘full-to-bursting’, while 50% agree they have several items that have never been
worn. This suggests that consumers may be less-willing to purchase more clothing
than they did previously, and perhaps more willing to spend disposable income in
other sectors, such as consumer electronics or leisure activities. Technological
advances in consumer electronics lead to intensifying competition for share of
wallets, as consumers treat themselves to the latest tablet, smartphone or e-reader
instead of a fashion garment. Increasing availability and social acceptance of beauty
treatments and personal adornment such as manicures and spray-tans, piercings and
tattoos provide another source of competition for fashion retailers’ share of consumer
wallets. The trend towards healthier living means that fashion is competing with gym
or fitness club memberships. Furthermore, socio-cultural shifts away from purely
materialistic pleasures towards experiential fulfillment means that fashion is now
competing with eating out, leisure activities, holidays and travel.

6. Emergence of Omni-channel retailing

The term omnichannel as applied to retailing is still relatively new within academic
research. In Omni-channel retailing, a retailer views all of their channels as a singular
seamless operation [5]. As previous sections in the review have outlined, it is factors
such as technological development, changes in the economy, amplified market
competition and increasing globalisation that has spurred the growth of omnichannel
retailing and brought about mainstream awareness. The retailing sector has been
forced to pursue innovation driven by the most recent technical solutions because
consumers have adopted the new technologies and become omnichannel consumers.
There is now an expectation by consumers that information should be freely available
to everyone at all times [179]; this puts an immense pressure on retailers to develop
the traditional store into a model that is accessible for twenty four hours every day.
However this can be equally described as beneficial as Shanka et al., [180] denote
‘the rise of powerful search engines, advanced mobile devices and interfaces, peer-to-
peer communication vehicles, and online social networks have enhanced […] ability
to reach shoppers through new touch points’. There is increased pressure for all
retailers to satisfy the new ‘retail-savvy’ customer who uses multiple devices and
channels to shop, which has led many retailers to rethink their retail strategy and
adopt an omnichannel approach. However the need for consistency across multiple

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channels is acknowledged as a key driver in multichannel retailing and marketing
literature [181] [182], however there are not many retailers that have yet achieved this
[180]. Drapers [5] highlights that even within the UK retail industry there is no
specific industry body or benchmark retailer considered as a market leader of
successful multichannel/ omnichannel concept. Therefore trial and error is the current
method by which retailers are attempting to move towards an omnichannel operation
[5]. It is this fundamental lack of existing research on the area omnichannel retail that
dictates the need for further research in order to fully understand the omnichannel
shopper and journey. Technology is used throughout the retailing process in order to
improve the shopping experience for the consumer and improve efficiency and points
of sale for retailers. To understand how technology is being used by fashion retailers,
it is important to understand the history and development of online retail and how that
has changed the fashion retail market.

6.1 History and Growth of Online retailing

Initial users of the Internet were largely a technical audience of government agencies,
academic researchers and scientists in the 1970s and 1980s. E-commerce applications
expanded rapidly due to the developments of technical innovations [183]. During the
mid-nineties, the commercial use of the Internet triggered high expectations in both
executives and investors [184]. After initial excitement and many entrepreneurs
investing in dot-com business, retail sales were lower than anticipated. Due to the
collapse of many start-up companies, many academics theorised about the reasons for
the downturn, many believing that basic business methods such as developing a
business strategy, brand, intellectual capital and business processes were not followed
leading to the crash. Another factor was that traditional bricks and mortar retailers
were reluctant to embrace Internet technologies due to a fear of cannibalising their
own sales [185]. It was over 10 years ago that Burt and Sparks [186] suggested that
businesses were beginning to harness the Internet to enhance business efficiency,
which would lead to the emergence of new formats within retailing. If we fast-
forward 11 years we now have consumers who are digitally-connected, who utilise
multiple shopping channels to get the product they want, when they want and at the
price they want to pay. From a business perspective it is now considered that for a
B2C company, an online presence and marketing capability is essential [187]. A brief
overview of the UK economy and online fashion market now follows, before an
analysis of the current context of online retailing and the development to
Multichannel and Omnichannel retailing.

6.2 Development of Online Retailing

It is important to understand the stages of development of online retailing since the
internet became a transactional channel to see how retailers and consumers have
utilised it. The first stage of online retailing has been defined by Ellis-Chadwick,
Doherty and Hart [188] as the communication platform, presenting information
regarding products and store location. Scott, Golden and Hughes [189] defined that it
is at this stage that interactive features were offered, such as joining a mailing list or
catalogue ordering, in order to prompt the consumer to make a purchase and raise
brand awareness. The transactional E-retail store is the second stage where retailers
developed an online shop where they could sell their products and services online,
and the final stage is that of a portal, retailers moving beyond a sole e-store, instead
developing or participating in portals, in order to create an online shopping mall
[190][189].

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‘Fashion retailing – past, present and future’, Textile Progress, 46 (3), 227-321
Figure 7. Stages of Online Development
Figure 13. Stages of online development
E-retail Stage 1. Boost Initial Retailer Brand Awareness

Company Customer
Push
Product and
Service
E-retail Interactive
Information
Communication Features –
Business Mailing List
Platform
Information

E-retail Stage 2. Transactional

Company Customer
Push/ Pull

Present Product
Niche Market
Online
Transactional
E-Retail Store
Additional
Transactional
Shopping
Medium

E-retail Stage 3. Online Shopping Providing Added Value

Company Customer
Pull
Information
Links to other e- Portals – Online Rich/ Price
One Stop Shop
Transparency
retailers Shopping Malls

The model (Figure 7) hypothesises the development of online retail, translating how
the antecedent variables result in changes of the outcome variables, included in the

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model is the push and pull of information between the retailer and the consumer.
Primark is still at stage one whereby they only use their website to communicate
information about the products and business. However in June 2013 Primark trailed
selling clothing through the ‘pure play’ fashion retailer ASOS, it was a limited trial in
order to give the company an insight into online retailing. ASOS is a fashion retailer
that is as Scott et al., [189] identified as a portal, it is a global online fashion retailer
selling over 65,000 branded and own-label products, shipping for free to 234
countries. ASOS's websites attract 29.5 million unique visitors a month and as at 31
December 2013 had 14.8 million registered users and 7.9 million active customers
[191] which make it a one-stop-shop for customers and a positive platform to retail
from a business perspective due to its global reach. Most fashion retailers are either at
stage two, having their own transactional website, and many are also adopting stage 3,
linking with other fashion retail websites, such as ASOS, Amazon, Ebay and more
recently the development of dedicated fashion search engines such as shopstyle.co.uk
and OSOYOU.com which provide style inspiration and present the latest fashions and
then redirect customer to the retailers website in order to buy the product.

Much of the early literature regarding online retailing focused on acceptance and
motivations to use the Internet. A users attitude to the adoption of online shopping can
be attributed to the classic consumer behaviour models, namely the technology
acceptance model (TAM). The technology acceptance model designed by Davis,
Bagozzi and Warsaw [192] considered factors contributing to that acceptance of
internet technology and online service providers, in its purest form outlining that a
user’s perceived usefulness and ease of use of any one given technology determines
their attributes and hence their ability to adopt the technology as a way of life [193].
The model has been continually re-developed and new factors have been added since
more consumers have adopted the web and online retailers have evolved and factors
such as trust, enjoyment, intrinsic and extrinsic motivation and human and social
change process variables have been applied [194] [195].

Today E-commerce represents a huge market for retailers in Europe with retail sales
predicted to reach £111.2 billion in 2014 [196]. According to Verdict [3] the UK
online retail market will grow from £30.1bn in 2012 to £50.2bn in 2018, representing
14.6% of all retail expenditure by 2018 therefore deducing that online shopping is
now a widely accepted medium in the UK. A.T. Kearney [197] ranked the most
attractive countries for online retail in both developed and developing markets, China
is ranked number one as it is forecast to rapidly grow in five years to $271 billion.
China has the world’s largest population, 1.36 billion, and the most internet and
online shoppers, and with increased internet access to rural regions, improvements in
infrastructure and rising wealth, China has a lot of potential for online growth.
Globally, the US is still the leader in online retailing compared to Europe, however
Asia is set to overtake North America in terms of total online sales. Internet use and
confidence is growing in more of the developing countries such as Brazil, Russia,
Saudi Arabia and South Africa, with more economies adopting online due to
improved online practices increasing consumer confidence, better internet
accessibility, financial systems and logistical infrastructure [197]. There is still a lot
of potential for other European countries such as France, Sweden and Italy to grow
online market share. Online sales in clothing and footwear across Europe represent
around 9.9% of all Europe’s clothing and footwear spending in 2013, and around 20%
of total online retail sales in Europe [114]. According to Neilson [198] internet users

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account for one-third of the world population and one billion persons are expected to
make a purchase online in 2013. Apparel and accessories, books and travel
reservations are the leading product categories for online purchases globally [198].

The value of the online global B2C retail market is estimated at 825 billion Euros in
2012, with the UK online retail market totaling 78 billion pounds [199]. This is
predicted to see an ongoing increase in sales, rising from 12.7% of the UK online
retail market in 2012, up to 21.5% before the end of this decade [200]. The UK
consumer are now found to spend more than £1000 per person shopping online per
annum, the highest amount out of every nation compared in the latest Ofcom report
[201].

Within the expanding online market, existing retailers are found to be experiencing
increased global competition [202]. From a business perspective it is now considered
that for a B2C company an online presence and marketing capability is no longer an
option, and is viewed as an essential tool [187]. It is evident that online shopping is
still experiencing organic growth and internet usage has not yet reached saturation
point in many countries, therefore there is a pronounced potential for fashion retailers
that develop an online or operate multiple channels to grow their business.

6.3 Omni-channel development

Figure 8 traces the development of omnichannel retailing in the UK. E-commerce
which is at the heart of omnichannel retailing has progressed over the past decade
from pure play online retailing to bricks and clicks partnerships, then retailers
integrated channels to become multi-channel, and the most recent, omnichannel
strategy; it is important to analyse the different methods to market.
Figure 8 – Omni-channel development

Bricks and
Pure Play Multichannel Omnichannel
Clicks

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6.3.1 Pureplay
A pure-play retailer can be defined as ‘a retail organisation which uses electronic
data transmission as a sole means to sell directly to a consumer’ [203]. There are
several pure play online retailers that have established themselves as global successes
and serve as an important part of the infrastructure for supporting the wide uses of the
internet. Companies such as Ebay and Amazon were among a few of the companies
that received much media coverage at the beginning of commercial use of e-
commerce [204], but their success no-one could have predicted. Both companies are
vastly successful with many brands selling via the Amazon and ebay platform.
According to Borghini, Diamond, Kozinets, McGrath, Muniz and Sherry [89] pure
play retailers have 15% of the online fashion market share with online fashion
retailers Net a Porter, My wardrobe and ASOS leading the way in the UK.

In the early days of e-commerce, early 2000, most studies focused on understanding
factors such as risk due to security concerns, delivery costs and shipping problems
and lack of confidence in product evaluation [205]. Garbarino and Strahilevitz [206]
found that women perceived higher risks online and tended to perceive greater
severity to both the consequences and likelihood of failure regarding credit card
misuse, fraudulent sites and loss of privacy. It is evident that during the early stages of
online adoption that trust was a major deterrent of online shopping, so therefore it
became a widely researched area regarding online shopping [207] [208] [209].
Technological advances online have improved security levels, with many retailers
adding features that would increase customer confidence such as the tangible and
intangible security features below indicted in table 7 by Halaweh and Fidler [210].
Almost half of the features noted were intangible stressing the importance for retailers
to build a reputation and brand.

Table 7 . Security features in e-commerce website

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Source: [210]

Similar findings to Halaweh and Fidler [210] study confirm to build trust online a
secure internet environment is essential and that privacy assurance, usability and a
well designed website has a positive impact on user online trust [211]. Bart et al.,
[212] state that online trust ‘includes consumer perceptions of how the site would
deliver on expectations, how believable the sites information is, and how much
confidence the site commands’. For multichannel retailers, the physical presence of
the retailer may enhance online trust. However it can be argued that ‘pure play’
retailers can build trust by establishing a strong brand image and marketing campaign
as this can reduce uncertainly and increase purchase intent, with ASOS and Net-a-
porter substantiating this [213]. A further challenge to traditional bricks and mortar
retailers is the move by pure players such as eBay, Etsy, Piperlime and Bonobos into
opening physical stores. Born online, these retailers are better-placed to integrate
digital innovations into the physical environment and provide a stimulating and
effective shopping environment for consumers.

6.3.2 Bricks and Clicks

Bricks and clicks was an expression introduced by academics, to introduce the hybrid
approach of bricks and mortar and click businesses [214]. After the dot.com downturn
in 2000, valuable lessons were learned, such as that having an established brand
provides significant advantages in online retail, playing a part in customer loyalty and
increasing profits [215]. Many academics have argued that the clicks and bricks
approach is more successful than ‘pure play’ [216]. Turban and King [217] describe a

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bricks and click retailer as an organisation that conducts some e-commerce activities;
a bricks and mortar retailer with an added-on transactional website.

Traditional UK bricks and mortar retailers had been reluctant to embrace internet
technologies [185], so bricks and clicks partnerships were established, for example
Marks and Spencer and Amazon. Marks and Spencer's in-house team designed a new
website which was launched in 2007 in conjunction with Amazon, using some of
Amazons website's ideas, such as showing recently viewed items and recommending
items based on your previous browsing. The website developed with Amazon had the
widest selection of clothing in the UK. Online sales grew by more than 60% in
2006/07 with over 55 million visits and profits reached over £100 million [218] so
Marks and Spencer wanted to continue to grow the business but felt it needed support
from an experienced e-commerce business. Under the terms of the agreement,
Amazon Services Europe hosted and provided the technology behind the Marks and
Spencer branded website and its in-store, telephone-ordering and customer services
systems, whilst Marks and Spencer remained responsible for the management of its
website, customer service operations, warehousing and distribution. However in
February 2014, Marks and Spencer launched its £150m website, terminating its
seven-year contract with Amazon. Marks and Spencer executive director of
multichannel e-commerce Laura Wade-Gery said "We've been renting the car rather
than owning it. Amazon fundamentally sells everything as if it is a book and Amazon
is pure-play only, meaning [the M&S e-commerce site] has tortured the system”
[219]. In a ‘clicks and mortar’ arrangement, it is vital that both the online and offline
partner share a cohesive understanding of what the partnership’s value is to the user
[22]. She believed that Amazon is designed from a ‘pure play’ perspective and their
new website is aimed to help their international expansion and multichannel business.
This move from Marks and Spencer highlights the change in online fashion retailing,
that it is no longer just seen as an additional selling channel but as an integral part of a
retailer’s growth strategy.

6.3.3 Multi-channel Retailing

The definition of multichannel retailing varies throughout academic literature, with
the very basic understanding being the availability to purchase both online (the
internet) and offline (the physical store) [221] [222] [223] [224]. Certain studies
expand on this and triangulate the mix with a third channel such as the telephone
[225], catalogue [179] or both [226].
There have been a number of academic reports on the significance of multichannel
strategies, especially since the option of the online channel emerged over a decade
ago [227][186][228]. Multi-channel strategies are important from a business and
consumer perspective [229]. Customers are more sophisticated in their use of
different channels and expect a transactional website. Multi-channel integration
provides the platform to create a greater customer experience that is consistent across
channels [230]. However the retailer’s task of co-ordinating and integrating channels
provides many challenging issues. Rosenbloom [227] lists several challenges multi-
channel retailers need to overcome, such as creating synergies across channels,
building strategic alliances, finding an optimal channel mix, creating sustainable
competitive advantages, dealing with conflict and providing the leadership necessary
to attain well integrated multiple channels. Noble, Griffith and Weinberger [231] note

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that synchronizing multiple channels greatly increases market strategy complexity,
raising issues such as multichannel pricing, branding and consumer behaviour.

To increase market share and expand across consumer segments many retailers are
adopting a multi-channel strategy, leveraging their presence across multiple channels
[216]. Consumer purchasing patterns have changed significantly with many
consumers using the internet to look for ideas and inspiration, to compare prices and
to find new retailers and brands. The internet has allowed consumers to shop from a
global market. The fashion retail market is no longer monopolised by a few big
players, it is an international market made up of multiple retailers, value, luxury and
independent brands. The accessibility to be able to shop whenever a consumer desires
will contribute to the rising sales of many multichannel retailers. The challenge for
retailers is join up offline and online channels, to increase sales across channels,
improve the customer shopping experience and increase expose of their brand. The
boundaries between physical store retailing and online retailing are blurring, with
more fashion retailers looking at digital initiatives to attract more people into their
stores. Recognising changing shopping patterns, the majority of retailers have been
looking to make significant investment into their multichannel propositions. This has
predominantly involved a refresh of online propositions, but has also extended to
integrating new technology and extending fulfilment options.

Theoretically the successful integration of a multichannel retail business should allow

for the searching of product information in one channel, product purchase though a
second channel and subsequent delivery or pick-up of the product through a third
channel. Yet despite multichannel retail championing the proliferation of channels,
the current level of retail channel integration between channels is still very low [232].
Oh et al., [232] constructs six retail channel integration dimensions to measure the
capabilities of a multichannel offer, including:

 Promotion - advertising and publicity.

 Transaction information management - availability of online and offline
transaction information across channels.
 Product and pricing information management - consistent information across
channels.
 Information access - cross-channel information access.
 Order fulfillment - ability for the customer to define
delivery/collection/payment channel.
 Customer service - access to support whatever the consumers chosen channel.

The successful categorisation of a multichannel retailer is dependent on the

fulfillment of one or more of the dimensions.

The lack of inclusion of emerging channels and subsequent investigation into their
effect on the multichannel retailing have been argued as irrelevant, citing low
adoption in comparison to the major channels [233]. However the need for further
research into these emerging channels and their inclusion within the multichannel
marketing mix – such as M-commerce and TV selling – is highlighted as fundamental
for a more-robust understanding of multichannel shopping [234][222].

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6.3.4 Omni-channel retailing
As a result of the changes to modern retailing the evolution has also given rise to a
new retailing strategy termed ‘omni-channel’ [235]. Omni-channel retailing may be
regarded as an advancement of the integrated multichannel concept. Presently, an
omni-channel approach is also one of the most significant drivers of retail growth,
with consumers demanding an integrated experience, regardless of the channel mix
they choose to select [236]. Omni-channel retailing can act as a future competitive
advantage for a retailer [237]. According to Bodhani [238] research indicates that
omni-consumers will spend 20 percent more than their multi-channel counterparts.
Therefore it is useful to understand what the key drivers behind omni-channel
retailing are.

What is clear from examination of the scholarly literature to date is that there is a
paucity of research and insight available on omni-channel as a construct. Empirical
literature on retail mediums has continued to focus investigation upon the study of
retail channels in isolation of one another for example [239] Hsieh et al., 2012) rather
than offering a more-cohesive and customer-centric view. Whilst the phenomenon has
received fervent attention from retailers, academia has yet to acknowledge the term
“omni-channel”. Thus a debate has emerged as to whether omni-channel is simply an
industry myth or a legitimate concept that signifies an important evolution in
academic research.

An interest in omni-channel has been triggered by the fact that marketers and retailers
have the potential and in effect an obligation to encourage consumers to explore new
retail channels. This may be achieved through the development of omni-channel
marketing messages that interlink with the consumers’ motivations to use a particular
channel for a specific purpose and any the interrelationships that consumers believe to
exist between channels

Firms should no longer focus on managing channels in isolation of one this is due to
the fact that consumers have a single perception of a company and do not view a
firm’s divisions as separate operating units [240] and today’s business models are
reflecting this [241]. In future retail directors will be expected manage the transition
away from single channels to a combined multichannel operations [235]. The extent
of this will not simply cover traditional channels such as online website but will hold
a far wider remit to support the on-going introduction of new channels so that the
complete customer journey can be owned by omni-channel directors [235].
Increasingly, senior management appointments to UK retailers are demanding leaders
with experience in multichannel management. This demonstrates that there is growth
towards cross-channel management [242], which somewhat responds to call that firms
were lacking in coordinated management of cross channels.

The ability for organisations to integrate their information technologies, systems and
resources will enhance the customer relationship [232]. Furthermore, the consequence
of not adopting such an approach presents too great a risk for retailers. Piercy [240)
states that consumers can and will take a negative experience from an online channel
and translate this as a perception in an offline division, further adding that the
negative extent of translating cross channel perceptions is still worryingly unknown.

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6.4 Towards a Definition of Omni-Channel Retailing
Retail channels no longer work independently of one another but consist of multiple
channel interactions within a single customer journey. Indeed a consumer will
experience on average approximately 56 interactions with a series of retail channels
and touch points between first interest and eventual purchase transaction [243][244].
Based upon the literature examined omni-channel retailing may be defined as an
advanced and integrated cross channel customer experience [235]. Moreover, omni-
channel retailing denotes a ubiquitous shopping experience for consumers whereby
multiple channels and devices will be used [237].

The development of this new mode of retailing in fact stemmed from fashion retailers
and so provides added context to this paper. UK retail owner Aurora Fashions was
one of the primary retail organisations to use the term “omni-channel” to identify a
single customer journey across multiple channel interactions [245]. Some of the most
successful British retailers have begun to invest and implement an omni strategy with
promising results [246] thus stimulating a need for timely investigation. Despite this,
research by Kurt Salmon [247] indicates that whilst a number of high performing UK
fashion retailers are adopting an omni-channel approach, not one of the organisations
surveyed demonstrated best practice across all consumer touch-points.

Academic literature has not yet offered a specific definition for omni-channel retailing
therefore some themes of omni-channel are explored in place of a formal definition
below:

6.4.1 Simultaneous Channel Usage

Mobiles are an example of one technology being integrated into the physical store
experience [248]. Research results by industry analysts A.T. Kearney [249] identify
that it is increasingly the norm for the majority of consumers to regularly engage in
simultaneous use of retail shopping channels and this presents new and unique
opportunities. This is supported by academic findings from Schramm-Klein, Wagner,
Steinmann and Morschett [250] who identify that it is common for retailers to use
channels simultaneously to interact with consumers. The use of multiple channels in
conjunction with one another is even more evident with younger consumers who
more frequently engage in this activity [249].

6.4.2 Connectedness
Connected consumers are part of an evolved omni-retail ecosystem [251] thus
bolstering the argument of this investigation that a multichannel and an omni-channel
approach possess different features. The connected consumer describes a highly
customer-centric and agile retail environment [252][181][253] and also describes
consumers who are willing to exploit a number of retail channels via digital means
[251][252].

Stereotypically a connected consumer maybe described as demonstrating a number of

other characteristics as identified in Table 8.

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Table 8. Connected Consumer Characteristics
Characteristics Citation
Actively participating in social media Berman and Kesterson-Townes [181]
Deloitte [253] Forrester [252]
Empowered Berman and Kesterson-Townes [181]
Deloitte [253]
Informed Deloitte [253]
Interacting with user generated sites and Berman and Kesterson-Townes [181]
content e.g. review sites
Promiscuous, lacking loyalty Deloitte [253]
Receptive to digital channels Aubrey and Judge, 2012 [251]
Seeking personalised experiences from retail Berman and Kesterson-Townes [181]
interactions
Time poor Deloitte [253]
Viewing a variety of types of media content Berman and Kesterson-Townes [181]

Not only are connected consumers accessing multiple channels to shop they are also
described as intelligent and empowered, choosing to take control of their customer
journey through using a variety of shopping mediums [251][254][253]. This notion is
exemplified by the fact that shoppers are now more judicious in their purchasing
behaviour by conducting research prior to purchase and considering a wider range of
information, examining user reviews and seeking advice [251]. Shoppers are also
more efficient with their shopping tasks by browsing in store then ordering at in-store
web kiosk [251]. Some 50% of global mainstream consumers have embraced digital
consumption behaviour [181], with as much as 83% of UK consumers regularly
access the Internet and are likely to own multiple devices (64% laptop, 52%
smartphone and 12% tablet) [252]. Indeed consumers now expect to enjoy only the
very latest of technology in any digital retail offering [253].

6.4.3 Single View of the Customer

Businesses operating across channels should be customer-centric [241]. A single view
of the customer is achieved through the means of data integration across channels and
ultimately contributes to satisfaction [255]. Usefully the integrated data, which offers
a single customer view, provides commercial benefits for retailers through developing
across channel insights, generating more accurate customer profiles and targeting
[253]. However developing a single customer view incurs cost to the retailer [256]. It
is argued that a single customer view is better placed within the omni-channel
retailing context rather than multi-channel. A single view of the customer takes
account of the complete customer journey and insights rather than simply combining
insights from multiple channels.

6.4.4 Seamlessness
A retail experience should be seamless and consistent throughout a users shopping
experience [251][181][257][258]. Seamless integration of multiple retail channels
recognises a progression within modern retailing and one that is beyond a standard
multi-channel approach. This is because omni-channel strategy is concerned with
looking at consumers combined channel experiences rather than examining channels
in parallel with one another. The importance of seamlessness has even been cited as
an important factor when discussing nuanced themes of omni-channel retailing. For
example cross channel behaviour requires integration to create a seamless offering

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[259]. The benefits of a seamless experience is that it is one which induces loyalty
amongst shoppers and thus encourages increased consumer spend [237].

6.4.5 Consistency
Consumers are increasingly aware of their shopping options, often comparing and
contrasting a retailer’s channels. Inconsistencies between channels produce a negative
impression of a retailer [260], with consumers more likely to frequent a channel when
they consider it to be higher quality [261]. Previous studies demonstrate that the
consumer is unafraid to switch to a different brand or retailer entirely when
encountering what they consider to be an inadequate channel experience [262]. Also
there is an under-researched suggestion that situational variables are a major influence
in the channel selection process [239]. From an omni-channel perspective there needs
to be a level of consistency throughout each channel so that consumers can move
flexibly between the channels and have a positive perception of the retailer
throughout the experience. Importantly, should retailers not offer a level of
consistency across their channels shoppers would actively avoid them [257]. Retailers
must therefore aim to reduce the number of challenges associated with moving
channels to satisfy consumers and information consistency and integration [271].

There is still a need for physical retail locations, but since the majority of high street
retailers have moved online, a transactional retail website is vital to keep up with
competition. The key for fashion retailers is to ensure that synergies with online
retailing are exploited to drive footfall to stores. It is essential that consumers are
given choice by establishing strong links between the in-store and online offer. Online
retailing cannot just emulate the physical shopping experience; retailers need to
design the online shopping experience to create a consistent message, looking at
design features that create a likeness and perform a similar function to the physical
shopping environment. A well-integrated omni-channel format is important for
retailers as it could result in increased customer base, higher market share and added
revenue. However the task of coordinating and managing both channels efficiently
and effectively is a challenge for retailers. Previously retailers opted for partnerships
and ran and managed channels separately. Retailers need to integrate their channels
and make them consistent, giving online shoppers incentives to stay with the same
retailer when they switch channels. Omni-channel retailing is a business approach, a
strategic process to retain a strong brand from channel to channel in a highly
competitive market. To achieve integration a holistic approach is necessary, designing
and marketing the channels as a whole and having one overall business strategy rather
than individual channels as separate entities.

This section has evaluated the evolution of online retailing and how it has been
integrated into a retail strategy. The analysis demonstrates that it has been a process
that has developed from adding a channel on to a business in reaction to consumer
demand, to now being integrated to create an omni-channel channel offering. The
next section will attempt to evaluate the multi-channel consumer to gain a better
understanding about shopping behaviours, what channels consumers are using and
why.

7. Profiling the modern day multichannel consumer

The multi-channel consumer is defined as one who regularly use and purchase from
multiple retail channels [263]. With both the mean revenue and customer value of a

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multi-channel consumer increasing incrementally in relation to the number of
channels adopted [226]. Interaction with a retailer via multiple channels is found to
form stronger relationships, increased trust and lower consumer perception of risk
[226], furthermore, Venkatesan, Kumar and Ravishanker [264] and Gensler,
Dekimpe, and Skiera [265] found that the consumers with higher purchase frequency
and spending levels (heavy users) have a greater preference for multiple channels.

Despite embracing online shopping, the multichannel consumer is found to be fairly

mainstream in their technical capabilities, demonstrating an even bias across channel
preference and less technical ability than consumers who prefer to shop solely online
[266]. However the use of multiple channels within the pathway to purchase is
actually found to positively enhance feelings of intelligence in shoppers [222].
McGoldrick and Collins [266] more recent studies have demonstrated that
multichannel shoppers who favour online channels have a tendency to be highly
experienced, educated and younger demographic, demonstrating an increased
transaction volume [225]. For a successful omni-channel approach to be achieved
there is an increasing need for a better understanding of shoppers [257] and not just
the operational impact of the approach itself. Konus, Verhoef and Neslin [233] states
that it is important for marketers to identify and understand segments. There is an
abundance of multi-channel segmentation literature available
[233][179][267][266][268] yet there is no existing research to acknowledge any
segmentation in relation to omni-channel shopping.

Customers found to purchase via multiple categories of a retailer are more likely to be
open to new channels and migration between channels [226]. These multichannel
enthusiasts are notably disloyal to retailers [233], especially for a customer with a
preference for a retailers online channel, as upon receiving dissatisfactory service they
are more likely to switch to a competitors online channel than choose another channel
within their initial brand [225]. As within the channel adoption process multichannel
consumers are often found to compare and contrast the consistency and excellence of
service between organisations (e.g. competitor retailers and brands) and across the
various channels within a single organisation [260], however, “increasingly it is
necessary to think in terms of channels within retailers, rather than retailers within
channels” [266]. Internet shopping is commonly thought of for functional repeat
purchases only, whereas shopping in store is primarily a social experience [239].

Many academic studies have focused on the multi-channel consumer by

characterising the consumer group [233][269][266], understanding channel choice
[270][271][224][240] and analysing the impact and effect of the multichannel
environment [272][234][273][267]. Nicholson, Clarke, and Blakemore [239]
specifically examined the positive and negative influences on a multi-channel
consumers’ purchase channel choice through the measurement of the following five
Belkian dimensions: physical setting, social setting, temporal perspective, task
definition and antecedent states. However, despite focusing primarily on a
comparison between the three channels (store, online, offline catalogue), the study
acknowledges the increasing use of multiple channels within the purchase channel
decision e.g. shopping in a catalogue, and then using the website to make the final
purchase; yet the research struggles to fully capture the reasoning behind this
behaviour. Several behaviours unique to a consumer shopping within a multichannel
environment have been found, the following four are most relevant due to their

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potential application in the use of multiple channels within a single shopping
experience (e.g. within omni-channel retailing), the existing findings follow.

7.1 Channel switching

Channel switching is a proactive consumer-led decision whereby a consumer changes
from using one retail channel to a different retail channel [274]. Pookulangara,
Hawley and Xiao [274] found switching to be heavily influenced by utilitarian gains,
often dictated by price, energy and time-saving factors. Cross channel behaviour
principally describes purchasing across multiple retail mediums and how retailers are
at risk to cross channel retaliation by consumers [240]. Cross channel retaliation
occurs when a consumer, who has an experience in one channel, then, projects this
positive or negative experience or perception onto another channel [240]. Consumers
who stereotypically exhibit positive cross channel behaviour include the following
consumers; females, highly involved, highly loyal or experienced with retailer brand
[240].

Since retail shoppers are now ‘channel agnostic’ [275][258] it is likewise a goal for
retailers to be ‘channel agnostic’ in their delivery of a retail offering [276][277]. A
‘channel-agnostic’ approach is a way of describing a consumer’s omni-channel
customer experience [257]. Retailing is now about the complete customer experience
and takes into account the multiple interactions with the retail organisation rather than
consumers experiences of individual channels [278]. Moreover it is now an
expectation of consumers that retailers have an understanding of every retailer-
consumer interaction, regardless of channel source [278]. To implement an agnostic
strategy business process architecture must operate across all channels and be
unspecific to any one retail medium [279]. For customers, the outcome is that they
should be able to select a channel or combination of retail mediums to best suit their
needs [277] and do so during whichever transaction phases that they wish [276].
Young consumers are particularly labelled as ‘channel-agnostic’ as they are digital
natives [251]. Aubrey and Judge [251] state that young consumers are particularly
indifferent as to where they buy from. At present issues being examined within the
theme of cross channel behaviour include how the offline channel induces consumer
trust in another channel and channel cannibalization [240]. Cross channel behaviour
fits with omni-channel more closely than multi-channel retailing due to it taking
account not only of multiple channel interactions but also the relationships and
transferable perceptions between channels which hints at studying the overall
customer journey.

7.2 Researching online

Research shopping is the behavior of researching a purchase in one channel and
purchasing through a separate channel. This can be caused by the consumer’s
perception of one channel providing a better solution for certain tasks e.g. the belief
that the online channel is more effective searching [179]. The greatest tendency for
research shopping is found in multi-channel shoppers [233]. And new technologies
play an active role within the formation of this consumer behaviour, specifically the
female Generation Y consumer. It has been found that social networking sites are now
considered to be part of the research shopping journey, often functioning in the same
way a consumer might consult a shopping website or catalogue [280]. The act of
‘shopping around’ in itself is primarily viewed as aggressive by nature, often allowing
consumers to find their desired product for a more competitive purchase offer through

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a rival retailer. However, consumers that establish loyalty to a singular brand or
retailer also exhibit research shopping tendencies by researching multiple channels of
a single retailer [267], thus demonstrating the complexity of the behaviour.

7.3 Browsing
The act of browsing primarily fulfils a hedonic need, increasing pleasure and fun
[262]. The research body eMarketer [281] estimates that in 2013 over half of digitally
enabled shoppers, now favour browsing when using smartphones and although not
equal the popularity of browsing using a tablet is an area of growth also. The
behaviour of browsing has previously been viewed as a negative trait that retailers
should aim to override [282] owing to the ability for a customer to abandon their
search and potential purchase. Countering this, Wang [283] discovered that despite
the act of browsing impacting the experience of male and female consumers
differently, for both genders browsing did positively influence patronage intentions.
Therefore there is an understandable questioning of whether the traditional success
metrics – such as traffic conversion and sales – are comprehensive in the context of
multi-channel retailing [180]. Analysis of the increasingly complex usage and the
relationships formed within the adoption of multiple shopping channels are needed to
understand the true value of success within the omni-channel retail journey.

7.4 Multi-device ownership

Multi-device ownership and use has grown with the increasing affordability and
accessibility of personal technology; illustrated by the fact that 35% offline sales can
be influenced by online research [284], for example: through the use of a smartphone
whilst shopping in-store. Now over three quarters of consumers have reported the use
of multiple devices within the shopping process [285], with a trend for the
simultaneous usage of devices [286] such as the use of a smartphone and tablet device
at the same time. The smartphone is found to be the most frequently used device with
which to begin a path to purchase that is then continued on a another device [285].

A recent industry study by Microsoft [287] segmented multi-device behaviour into

four distinct activities:
 Content Grazing - multi-tasking simultaneous usage with undefined purpose.
 Investigative Spider-Webbing - multi-tasking simultaneous usage with a
defined goal.
 Social Spider-Webbing – simultaneous usage, for the purpose of sharing
content and connecting with other users.
 Quantum – sequential and intent-based usage

Interestingly, shopping is found to be a dominant activity for the users displaying

either Quantum or Social Spider-Webbing multi-device traits. However from an
academic perspective this area is found to have a large deficit in the literature on the
simultaneous and sequential usage of channels and a subsequent lack of
understanding in the variable interrelationships, due in part to the need for a
framework tailored to analyse these factors [239].

7.4 Channel adoption

The early development of multi-channel strategy was driven by the online domain
[288] where websites were seen merely as a solo channel and not as a physical
extension of the store experience [289]. There was also a debate as to whether the

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digital channel would supersede and catalyse the demise of the traditional store
channel [290]. However today the ideal is for retail channels to work in symphony as
a means of “future-proofing” a retail business [266][253][239]. As a result the retailer
agenda should now be concerned with optimising the consumers shopping experience
by organising complementary functions across multiple channels. It is therefore
suggested that it is critical to understand how each channel is important to the
consumer and how individuals use and shop across multiple channels.

The significance of consumers combining channels is that rather than bolstering the
demise of traditional channels it is in fact helping to redefine the purpose of the retail
store experience; whereas the store was previously threatened by the rise of the digital
era, now new in-store technology is enhancing the traditional store shopping
experience [239]. Oppenwal, Tojib and Louvieris [261] state that understanding how
consumers mix channels, how channels work together or compete in different
contexts allows more knowledge to be gained about these particular consumers. Yet
regardless of the combination used particularly when moving from offline to online
multichannel retailers need to provide a consistent experience, regardless of purchase
stage i.e. a transaction or simply browsing for a product [291]. However retailing has
progressed and the need for combining a range of channels has largely been triggered
by changing consumer lifestyles [239]. Today’s consumer will now move back and
forth between an array of channels before making a purchase [285]. Current literature
studies have shifted from looking at single-channel preferences to now looking to
how consumers mix channels e.g. Gensler, Verhoef and Böhm [292]. In line with
omni-channel Gensler, Verhoef and Böhm [292] argue that an integrative examination
of channel usage is important as channel attributes, channel experience and shopping
channel spill-over effects (the influence of using a channel at one stage and its effect
on influencing same channel usage in the next stage of purchase) can affect consumer
channel choice throughout a shopping experience.

Observations record that contexts such as the time and location may affect the channel
choice of a consumer [285][239]. However it must be highlighted that most
multichannel consumers only adopt cross channel usage with a select number of
retailers and that only 5% of multichannel customers shop with more than 5 retailers
through multiple channels often chosen through prior consumer preference e.g.
multichannel shoppers choose to do so only with their favoured retailers [293] thus
correlating with literature that associates the usage of multiple channels with the
formation of deeper relationships and increased trust in their capabilities [226]. This is
crucial for retailers as the major consumer characteristics influencing the adoption of
a channel are formed upon the individuals’ aversion to, or acceptance of the risks
involved [294]. As internet enabled devices become more ubiquitous their role
becomes habitual, leading to increased usage for relaxation and time-killing, activities
that are strongly linked to increased escapism and pleasurable motives [287].
Furthermore the Nicholson’s et al., [239] findings are now over a decade old,
discounting recent technological advancements such as social commerce. The ability
to use ‘Web 2.0 social media technologies and infrastructure to support online
interactions and user contributions to assist in the acquisition of products and
services’ [295], leveraging online interactivity within the online shopping arena and
increasing the potential for hedonic shopping experiences online.

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Currently research is calling for a heightened understanding of how consumers make
choices in relation to the ever-increasing variety of retail channels that are currently
available to them [296]. Importantly there are few studies, which look at how
consumers use channels in combination with one another [261]. Poloian [155]
emphasises that retailers must understand how each of the channels are used by
customers, as retailing is more than a mechanical transaction of goods or services in
exchange for money, it is a means of providing value. Recent studies show that the
modern consumer online time is now spread between four primary media devices; PC
and/or laptop, TV, tablet computer and smartphones [297][298][285][293], however
despite the emergence of these digitally focused channels this has yet to take away
from the prominence of the physical store which is still makes up the majority of the
UK fashion retail market sales. Currently 6% percent of UK instore sales are currently
influenced by mobile channel with expectations set to increase in value to £36 billion
pounds by 2016 [253]. Further, offline channels such as catalogues and television
shopping channels, still contribute but are more targeted to specific consumer
segments, each channel will be discussed, divided by the clarification of the channels
as either ‘online’ or ‘offline’, as this became the most frequently observed
overarching categorisation in the literature relating to the understanding of multiple
channel usage within retail [221] [222] [223] [224].

7.4.1 Offline: Physical store

The emphasis of the store as a destination, enhancing the experiential physical nature
is crucial when competing with online retailers [299]. The changing role of the high
street has previously been discussed. However, in the UK, shopping centres are also
progressing towards a more lifestyle-orientated experience in the current climate.
Retail design has been researched by academics for decades, with research finding the
importance of design elements such as the layout, colours and music but more
recently a store-as-a-brand strategy, particularly in fashion, becoming more prevalent
[300][301]. Retailers such as Ambercrobmie and Fitch, Hollister, Victoria’s Secret,
Zara and Topshop are among those that are branding their stores using atmospheric
stimuli, employees and merchandise to create distinctive store images. It is evident
that the store environment influences consumer behavior by creating experiences in
store that influence emotions, cognitions and responses [302][303][304]. Some of the
more traditional understandings of experience do not include social aspects in their
definition, however more recent conceptualisations such as Verhoef, Lemon,
Parasuraman and Roggeveen [305] and Gentile, Spiller and Noci [306] do. Social
interactions can be interactions with staff and other consumers in-store. Hu and Jasper
[307] believe that retail stores should be planned appropriately as places for
socialising and leisure as well as for purchasing. Brand community and dialogue are
an important part of the social experience in store that lead to developing a greater
relationship between retailer and customer. As clothing is an experiential product,
being able to create a strong interactive and hedonic atmosphere for consumers is
important to enabling purchase intention [308]. Krishna [309] when researching
marketing in a broader sense defines sensorial marketing as ‘marketing that engages
the consumers’ senses and affects their perception, judgement and behaviour’.
Developing theory from both psychology and from marketing, Krishna [309]
considers how the five senses affect consumers perceptions, finding that by
stimulating senses companies can create competitive advantage, improve brand

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identity, create memorable experience, increase time spent in the store and create
stronger relationship with consumers [309].

It is also important to note the issue of sensory overload and conflict, however there is
currently little research in this area. Abercrombie and Fitch and Hollister are two US
brands that have adopted the store-as-a-brand strategy. The Hollister store for
example has a porch outside the shop entrance, with a pitched, tiled roof and wooden
fencing, which represents a surf hut to reinforce the Hollister brand image. Inside the
stores have a theatrical setting, with low lighting and a perfumed scent throughout.
The stores are very distinctive and even without large signage on the outside, the
exterior, scent and lighting entice customers into the store and once inside the
majority of the clothing is branded with the Hollister logo. This movement towards a
branded fashion store is influenced by the fashion market now being globally
competitive and the high street becoming more polarised, with many retailers selling
similar products, targeting the same customers, therefore the retail store can be used
as a way to differentiate from competitors offering a unique and distinctive shopping
environment [300].

7.4.2 Offline: Catalogue

Despite being the oldest form of distance selling in the UK, with origins traced back
to the 19th century, UK catalogue shopping has been in decline for almost a decade
[310][19]. Home shopping decreased by 7% in value sales in 2012 [168]. Many solely
catalogue based retailers are now repositioning with e-commerce model, such as
fashion retailer Simply Be. The premise of catalogue retailing is often viewed as
obsolete, where the main consumers of home hopping continue to be older
consumers, for example; housewives [168]. However, the platform retains value as a
branding device and an effective tool with which to drive existing custom online
[273] rather than a key channel within the omni-channel retail mix.

7.4.3 Offline: TV shopping

Television shopping is a mass-media channel [311] that is therefore broadly targeted
and provides a rich experience [312]. It is still the single most popular past time, with
95% of the UK regularly watching on a weekly basis. TV shopping is seeing signs of
growth [168] however this may be due to the advent of broadband enabled ‘smart TV’
that allows access to the internet. Concurrently the TV viewing habits of the UK are
migrating online with almost a quarter choosing to fulfill their TV viewing habits
online [201].

TV shopping retailers are taking heed of this trend, pre-empting potential future
struggles in the increasingly digital market by moving into online commerce. Despite
being a predominantly offline retail model, the customer still requires a technical skill
and inherent understanding in order to complete a TV shopping purchase [313].

Television has evolved into a catalyst [287] inducing consumers to visit a web
address, stream live online [255] or, the increasingly observed consumer initiated
behaviour of multi-device usage – for example the use of a laptop to search for further
information on a topic triggered by simultaneously watching TV [286][285][286].
Therefore, despite small signs of channel growth, the priority of TV shopping for
retailers must be questioned when TV is the least actively consulted channel within
the shopping process [311] and the consumers of TV shopping can be more

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effectively reached online [273]. Especially when the convergence of internet access
and television via ‘smart TV’ [201] brings into question which channel a consumer
would actually be purchasing from.

7.4.4 Online: Smartphones

Within the UK the majority of consumers have yet made a purchase using their
smartphone, however the adoption rate has doubled within the last 12 months [314],
with half of UK smartphone owners shopping (e.g. browsing) via their device, and a
third continuing to purchase [199]. Recent market research shows a skew towards
male smartphone shoppers in the UK with over half of those males being younger
than 34 [315], the report demonstrates that UK users are committed to using the
smartphone as a tool for pre-purchase research with 65% of multi-device shoppers
beginning their investigations on a smartphone [285]. Early signs demonstrate that
this form of technology has the potential to fulfill a function beyond a purely
logistical role, becoming an integral tool in the complexity of the everyday life of the
user [316], M-commerce is discussed in more depth in section 8.

7.4.5 Online: Tablet

Despite being a relatively new product on the market, tablet devices already account
for more web traffic than smartphones on the global scale [317]. The relative
affordability of the tablet has fuelled its purchase, a displacement of the longstanding
desktop PC for use as a primary online consumption method within Western markets
[150]. Two thirds of tablet owners have made a purchase from a tablet [199] with
commerce related queries ranking highly on the device’s usage [318]. When
considering that the smartphone as a device is more widely adopted this may seem
surprising. However the similarities in design features between a desktop and a tablet
e.g. larger screen, and similar desktop orientation, correlate with findings that
consumers are prone to adopt mobile technologies that strongly resemble services
they have previously used [319]. Despite the mobility of the tablet device, they are
usually used at home [285][318] the current primary usage being for personal
entertainment [285]. Within academia there is a trend for research into the tablet to be
placed in tandem with the smartphone under the broader definition of ‘mobile’
[320][319][269]. However recent observations conclude that tablet usage is uniquely
characterised, with owners demonstrating user behavior and intent exclusive to the
device [318]. Similarly within the industry the Internet Advertising Bureau is warning
retailers who were quick to adopt mobile optimised websites that they now risk
alienating tablet consumers by not doing the same, as currently only 8% of the top 50
UK retailers have tablet-friendly websites [321]. With tablet commerce set to triple in
sales this year on global scale [281] it is clear that as a channel, tablets will form an
important piece of the omni-channel puzzle for retailers. Investigation into how
tablets are similarly augmenting the store would be a beneficial avenue of future
research, especially when retailers such as Apple and Urban Outfitters are now
replacing the traditional point-of-sale, with sales persons operated tablet devices in
their UK stores.

7.4.6 Online: Desktop/Laptop

There is already a vast body of research relating to the fixed (e.g. non-mobile) web
and its various applications within the online shopping field. With Internet users now
found to form an opinion (either positive or negative) on a website within one 20th of
a second of viewing the initial webpage [322] this demonstrates the online

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environments’ huge impact on the consumers decision making process. Within the
UK almost forty five million users frequently browse the web via a personal computer
[298]. Yet there has been an 11% decrease in worldwide PC shipments during second
quarter of 2013 [150] which brings into question the current dominance of the web
via the mobile web using smartphones and tablets.

A review of the existing literature has confirmed the incremental evolution and
increasing relevance of omni-channel within the current multichannel retail market.
There is a demand for seamless and cohesive cross channel retail experiences from a
consumer satisfaction perspective. In the long term this requires a comprehensive
understanding of the consumers’ behaviours across all channels [255]. Moreover, it
will also benefit a retailer’s ability to gain maximum insight into a consumer’s
lifetime value and the most beneficial channel synergies. The key finding is the ever
increasing blurring of the boundaries between channels [5] [180] where channels were
previously viewed as individual silos. Now technology infiltrates the physical store
and sociability is incorporated into the online retail space. The literature has revealed
several gaps in the analysis of the multichannel retail experience, including a deficit
in the analysis of emerging channels as part of the multiple channel shopping
experience [222][318][179]. Based upon the existing research the key channels for
ongoing growth and the area where future research should be conducted in order to
understand the relationship between the channels are the retail store, desktop/laptop,
smartphone and tablet device.

8. Fashion Retailing Initiatives

As discussed previously multi-channel retail has changed the fashion landscape, as

retailers continue to add touch points to reach out to current and new customers to
expand their business. It is evident that the Internet, which has enabled e-commerce,
has been the main driver of change over the past 15 years. Retailers are now moving
towards an omni-channel strategy, which means rather than using each channel
separately or individually as in multichannel retail, rather simultaneous use of
shopping channels. Berman and Evans [323] state “Technology is beneficial to
retailing relationships if it facilitates a better communication flow between retailers
and their customers, as well as between retailers and their suppliers”, more fashion
retailers are adopting technology-based innovations in store and online to
communicate with customers throughout their shopping journey, in the next section of
the paper current technological trends will be discussed.

Technology is crucial in creating an omni-channel strategy to create a seamless

unified experience for customers, merging online content and offline sensory
experiences providing the “best of the two worlds” to enhance the shopper experience
and provide the retailer with invaluable information about the consumer shopping
process [324]. A new era of retailing has developed through greater convergence
[253][325]. Now the role of managing the retailer’s brand through the convergence of
channels is of paramount importance [305][325]. The next section reviews some
channels and technology solutions that can help fashion retailers develop their retail
strategy, widen their reach and improve the customer experience. Many of the
technologies discussed are currently very niche and at experimental stage and
academic research needs to be conducted to gain a better understanding of the impact
on retail strategy.

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8. 1 M-commerce and Fashion Retail

Consumers using multiple retail channels within their path to purchase are inherently
more valuable [326] and therefore warrant retailer investment in order to gain their
patronage. Hedonic products such as fashion, are found to be a significant predictor
for the choice of bricks-and-mortar stores due to experiential enjoyment of the
channel [274]. This ties with the recent market research that 77 per cent of UK
shoppers have ‘showroomed’ at least once in the last six months [327] and Google’s
[285] findings that 65% of shopping journeys using multiple channels begin on a
smartphone device. Therefore it would be beneficial to encourage customers to use
their smartphone when shopping on the high street and in the physical store,
integrating m-commerce and physical retailing.

8.1.1 Location-based services and communications

The geographic boundary that was once an issue for fashion retailers has been broken
down as consumer have access to retailers all over the word, however due to GPS
technology it is now easier than ever for retailers to pin point a consumers exact
location via their mobile device. Proximity- and Location-based services (LBS) are
applications that are available when a mobile is close by and utilise tools such as the
Global Positioning System (GPS), Radio Frequency Identification (RFID), Near-field
Communication (NFC), short-range wireless network-linking technology (Bluetooth),
wireless local area networking technology (Wi-Fi), Mobile internet Applications
software (Mobile Apps) and Quick Response two-dimensional bar codes (QR codes).
GPS is commonly used to provide information about outdoor locations such as
specific place locations, traffic statuses and directions to destinations, whereas RFID
(Radio Frequency Identification) is used for location tracking for indoor smart
applications [328]; both will be discussed with regards to their value for fashion
retailers.

8.1.1.1 GPS Applications (apps)

Mobile phones are no longer regarded as a luxury item; Mobile phones are now “as
ubiquitous as landlines” with a reported 9 out of 10 UK consumers currently owning
a mobile phone [114]. The majority of smartphones have a GPS system within the
handset, therefore there is a lot of potential for location-based services (LBS) as
retailers have the potential to deliver content based on the spatial proximity of the
user, providing marketing content that is geographically relevant, therefore more
targeted [329]. Foursquare [330] is a LBS application (app) that has over 50 million
users and nearly 2 million business contacts [330]. Foursquare allows users to access,
create and share information about geographic locations. Content and information are
shared by both the retail businesses and customers therefore working on a push and
pull basis; customers can upload images or post about a new shop that they have
discovered and retailers can post information about up and coming events and send
discounts direct to the consumers phone. The value of this type of mobile app is that it
creates conversation between consumers and businesses, and the consumer has chosen
to engage and make that connection. Farrelly [329] found that users sought
engagement with places, using foursquare to connect, explore, and learn about the
history of places and what other people’s views and feelings were when they were
there previously. Fashion retailers can learn from this type of LBS app that customers
want to connect and engage with places including retail stores, and that the value of

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consumer content and retailer content whilst in a close geographic proximity can
encourage browsing, social sharing and buying activities in the physical store.

8.1.1.2 RFID and NFC technology

RFID technology has received a lot of interest in academic papers especially within
the logistics and supply chain area, as it supports in-store operations such as tracking
inventories, monitoring merchandise sales, stock management and aiding the store
management, providing retailers with better inventory management and order
accuracy [331] (See section 4.4 ). As well as for logistics and supply chain
management RFID can also be used to improve the customer experience. The ability
to be able to identify a customer and provide more useful information, save time, as
well as customise the consumers’ in-store shopping experience is achievable due to
technology such as RFID which can be integrated into mirrors, shopping trolleys,
labels and scanners [332]. However research on RFID tracking for marketing
purposes and consumer-oriented research is scarce [333]. Boeck, Roy, Durif and
Gregoire [333] conducted research to evaluate how consumers perceive RFID loyalty
programmes and assessed perceived intrusion as a resistance to adopt this technology;
as previously consumers were concerned about privacy issues [334], which could be
due to a lack of understanding of how the retailers can access your location and that
being and invasion of privacy. Boeck et al., [333] found that consumers were infact
happy to be identified from a distance from the store and also to have their
movements and behaviours tracked instore but they felt intrusion when sales staff
identified them when entering the store, which stipulates that consumers are open to
RFID tags that identify them at a distance and more discreetly within the store. This
type of loyalty scheme using RFID technology, could enhance customer service, as
retailers will be able to target consumers and offer personalised real-time
communications, the area of Near-field Communications is still in the early stages of
development and adoption for marketing purposes but in the future it could allow
communication to customers via their NFC-enabled smart phone. A German company
called match2blue have developed Bluetooth Low Energy (BLE) beacons to help
retailers attract customers’ into retail stores. A new shopping precinct in Marseille,
Les Terrasses du Port, have over 250 Bluloc beacons, enabling retailers such as H&M
and Zara to deliver promotional offers directly to the customers smart phones (See
figure 17), if a consumer has downloaded the mobile application. The high precision
beacons can sense the individual applications within a range of 100 metres and
consumers can select the retailers and types of offers that they want to receive,
therefore personalising the offers that they are sent.

Figure 1 – Image of promotion and Bluloc beacon.

Images: (www.bluloc.com) [335]

As well as technology being used as a push form of communication by retailers to

market products to consumers, RFID tag can be used in the same way as a bar code,
as they can provide a unique identifier for an object which can be attached to a
product or label. The key difference is unlike a bar code, you can scan an RFID tag
from up to 20 feet away. Burberry has integrated RFID systems in their stores since
September 2012 in order to enhance their customer’s shopping experience. Burberry
utilise RFID technology which links to a ‘magic mirror’ (See section 8.2.2.3) which
turn into large digital screens displaying information about how products were

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created, runway shows and styling information [336]. Wong, Leung, Guo, Zeng and
Mok [337] further note that there is currently little research related to how this type of
technology improves retail sales and how it is perceived by customers, therefore this
would be an interesting area of future research.

8.1.1.3 In store Wi-Fi

As well as communicating with customers via GPS and RFID, more fashion retailers
are beginning to offer free Wi-Fi in store that can be accessed via mobile phone. This
may at first seem counterintuitive, especially for those retailers that stock other brands
which may be priced cheaper elsewhere, however major retailers such as Debenhams,
House of Fraser, John Lewis and Tesco are rolling out this service. There are pros and
cons to offering such a service, but it is evident that increasing customers are using
their mobiles to look for reviews, find out more detailed product information and
compare prices in particular this trend is popular with 15–34 year olds [3]. Fashion
retailers need to see this ability to connect with consumers as an opportunity to
provide additional information via an app or a website so that customers can research
and make informed decisions when in their store. For fashion retailers, there is a
potential to encourage up selling and cross selling of products, by offering outfit
inspiration online; some retailers already have complete the look or suggestions which
encourage multiple purchases [338]. Having more product information via apps or on
a website when customers are in store, may inspire consumer to look for additional
products [339]. If customers have to login in order to receive Wi-Fi, retailers will be
able to capture customers’ details, with the consumers consent, and provide a more
precise tool to target customers. Mobiles have the ability to enhance the in store
experience by allowing retailers to personalise offers whilst customers are at the retail
location. The challenge for retailers is to ensure that it is easy to log in to the Wi-Fi.
Location-based promotions via mobiles such as special offers or discounts may also
encourage customers to spend more time in the store and it would also be a good way
for fashion retailers to promote new collections or brands. The cons are of course if
consumers can compare prices they may choose to buy the products from another
retailer if they find it online cheaper. Verdict [3] found that 38% of online shoppers
research goods in store before completing the transaction online. This trend is known
as ‘showrooming’, with consumers looking at products in the physical store, then
going online to compare prices and purchasing it elsewhere. For retailers such as John
Lewis, whose mission statement since 1925 has been founded on a price promise
“never knowingly undersold”, many would believe that the internet would be seen as
a threat, as customers could compare products whilst in store. John Lewis however
have embraced multichannel retailing and e-commerce and extended this strategy
online which had a potential risk as it increases visibility of price differences from the
high street, however sales figures significantly increased and John Lewis has won
many retail awards over the past few years. By allowing customers to access free Wi-
Fi in store, John Lewis are able to try to influence customers to purchase by
encouraging them to access product information, view ratings and reviews as well as
comparing prices; reinforcing their price matching promise, making customers feel
confident shopping in the knowledge that they cannot find a similar product with
same price, service and quality on the high street.

8.1.1.4 Mobile applications (apps)

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Retailers’ apps should be developed to enrich the customers’ in store shopping
experience, rather than being developed as an isolated channel. There are thousands
of apps available that can scan barcodes, offer customer reviews and compare prices
which customers can download to their mobile phones, many of which are free; these
types of apps could have a major impact on many fashion retailers. Retailers therefore
need to be innovative and develop apps that offer additional benefits, providing
valuable information that is user-centred, encouraging purchasing intentions and
increasing brand recognition. Amazon, for example, have an app called ‘Amazon
Flow’ which is an augmented-reality app that has the ability to identify tens of
millions of products as it can decode barcodes, QR codes and web addresses using
text and image recognition. Once a photograph has been taken of the product,
Amazon then price-matches the item, displaying the cost of items on Amazon and
providing rich information such as trailers or sound bites from music albums.

8.1.1.5 QR codes
QR codes are another method that retailers can use to integrate offline and online
communications using mobile phones. QR codes are similar to barcodes in that they
are a machine-readable optical label that provides information about what it is
attached to; whether that is a service or business, a product or an advertisement. To
read a QR code, users must have a QR decoder downloaded to their mobile phone
which they scan the code with, which then links to content presented on their mobile.
QR codes should only be used when the information or service that they provide
cannot be provided in a faster and more convenient way providing a unique service
and providing consumers with a reason to scan it, such as interesting, money saving,
useful information. Some fashion retailers have found more innovative ways to
integrate QR codes into marketing campaigns, Vera Modo for example created a pop
up shop in Aarhaus, Denmark which presented their latest collection as a photo on the
wall or on a computer screen. QR codes were used to provide more details about the
products and allowed the customer to order them immediately (see Figure 18)

Image 2 -– Vero Moda, Aarhaus Denmark

Source: VERO MODA

John Lewis trailed a similar initiative adding QR codes to their Christmas windows in
Waitrose stores. Customers could scan the code and then purchase online and opt to
click and collect in store the following day.

It is evident from reviewing academic literature and the retail examples that it is
beneficial for retailers to encourage customers to use their smartphone when shopping
on the high street and in the physical store, integrating m-commerce and physical
retailing. As mentioned previously in section 8.1.1.4, many consumers are using
mobile apps to compare prices [3]. Bar code scanning apps or using QR codes enable
mobile product-centric services for consumers to compare prices of products offline
and online and also to provide additional information about products, read customer
reviews and provide social interaction B2C and C2C. Retailers need to holistically

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think about the different channels and marketing tools to create an omni-channel
shopping experience as the boundaries between each channel are now blurred and
consumers are seeking more relevant information, retailers need to provide more
pertinent online material to engage, convert and encourage cross channel consumer
spend.

8.2 Digital visualisation of fashion

With increasing consumer take up of online fashion shopping, as well as growth in
smartphone and tablet ownership, there are a number of technological advances
around digital representation of fashion items as well as the use of mobile and tablet
devices in store. Although most online shopping is done on a desktop or laptop
computer, the usage of tablets and smartphones is rising. Touch-screen devices differ
in presentation, processing and interaction modalities from desktop computers [340],
allowing a different form of digital interaction with products than is possible on
desktop or laptop computers. Touch-screen devices allow users to directly manipulate
objects on the screen so the fashion browsing experience becomes richer and more
intuitive than on a desktop. New multi-touch user interfaces support additional
interaction techniques beyond pointing and tapping, and allow users to interact using
single- and multi-finger gestures such as flicking, swiping, rotating and pinching
[341][342][343]. New advances in technology for e-commerce and mobile commerce
exploit the touch-screen functionality of mobile devices as a means of reducing the
physical-digital divide between the store and website fashion shopping experience.
Clothing has been classified as a high-involvement product category that needs to be
seen, tried on and touched to be evaluated [344] and the lack of tactile input online
presents a challenge for retailers. Presenting an object using single static images
allows users to get a good understanding of the object's essence; however, since
consumers acquire most information about products through vision and touch [345],
then the lack of touch and feel which characterises online shopping may lead to
increased perception of risk. According to Padilla et al, 2013, certain characteristics of
objects are difficult to convey from the physical to the digital domain, for example:
• Flow (weight, thickness, drape)
• Movement (stretchiness, comfort)
• Motion disparity (gloss, speckle)
• Personality (charm, attitude)
McCabe and Nowlis [346] found that in the case of products with material properties,
such as clothing, consumers’ preferences in online environments increase when the
product features are described in terms of their touch properties more than their visual
properties.

The development of various forms of image interactivity technology (IIT) makes

online fashion shopping more accessible and tangible to consumers [347]. The
theoretical underpinning for the study of IIT lies within the broader domain of
atmospherics. This refers to the application of environmental psychology to marketing
and can be defined as “the conscious designing of space to create certain effects in
buyers” [302]. Just as the physical environment influences various psychological and
behavioural shopping outcomes in a bricks and mortar store [348][303], certain
atmospheric qualities of retailer websites are likely to affect the use (intentions and
actual) and results (e.g. satisfaction, re-patronage, amount purchased, and dwell time)
of the online store [349]. IIT can reduce perceived product risk and increase hedonic
value of the online shopping process [350]. Close-up pictures, zoom facility, 2D or

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3D rotation, mix-and-match function which simulates how items would look together,
virtual try-on facility using personalised or non-personalised models in virtual
dressing rooms, and augmented reality apps provide online shoppers with an
enhanced ability to evaluate the properties of the item online in order to overcome the
relative sensory impoverishment when compared to shopping in a physical store.
Zoom and 3D virtual try-on reduce perceived risks and create positive attitudes
toward the retailer [351]. Rotation (360 degree spin) positively influences cognitive
(perceived information), affective (mood), and conative (attitude and behavioural
intention) outcomes [352]. Mix-and-match technology results in greater purchase
intentions, revisit intentions, time spent on website and attitude towards website
[353]. Personalised 3D virtual try-on positively influences utilitarian value and
purchase intention [354]. Interactivity increases consumers’ perceived hedonic value
[355]. Presence of aspects of IIT on e-tail websites therefore leads to positive
consumer responses such as purchase intention, revisit intention, duration of time
spent on website and overall perception of the website
[354][351][352][350][356][353][357]. Furthermore, virtual product experiences, 2-D
and 3-D virtual product experiences that provide visual, tactile, functional, and/or
behavioural simulations of product attributes during product inspection, helped
consumers perceive less product performance risk [352]. Some visualisation
technologies, such as zoom and 360 degree rotation, are relatively commonplace and
well established, whilst others, such as digital scrunching and virtual fitting rooms,
are still at an experimental stage.

8.2.1 Digital Scrunch technology

Animation and video enables retailers to further engage with e-shoppers by providing
enhanced product evaluation possibilities beyond those possible from a static 2D
image. However, these tend to be difficult and costly to produce and therefore out of
reach for smaller retailers or individuals with limited resources. Furthermore, videos
of animations may be difficult to stop, rewind or zoom. Shoogleit.com is a digital tool
developed in academia to produce user-controlled interactive object visualisations
which could digitally communicate sensation and which would be more engaging
than static images, but easier and cheaper to produce than a high quality video.
Furthermore, as web users become anxious when unable to actively control
interactive elements [358], user-controlled interactivity was incorporated in order to
increase cognitive and affective responses [352]. Interactivity controlled by users
allows for a synaesthetic response between the subject and the media [359]. Figure 19
below shows the user digitally scrunching fabric on a touch-screen device, using the
same well-known real life gestures as would be used in a physical store to evaluate
and engage with the object in a more natural and authentic way than possible with a
keyboard and mouse [341].

Image 3 - Shoogleit multi-gesture interface on touchscreen device [341]

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8.2.2 Virtual fitting rooms

According to Fogg [360], use of an Augmented Reality Interface for Tele-operation
(ARITI), a software framework, produces a persuasive effect by creating experiential
value through presence as well as through product simulations, media richness
through environment simulations, and the narrative experience through cause and
effect simulations. An increasing strength of mental imagery raises the buying
intentions of consumers. The augmented reality shopping experience enables
consumers to interact smoothly with virtual items online [350]. Thus, as is expected,
ARITI has persuasive effects on increasing the buying intentions and behaviour of
consumers by stimulating mental imagery. Consumers’ perceived risks associated
with online shopping are greater than those associated with other shopping modes
[361], due to inconsistency among fashion retailers in terms of size and fit therefore
virtual fitting rooms have been developed that can help overcome any concerns
helping shoppers choose the right size.

8.2.2.1 Online fitting rooms

There are a number of types of virtual try-on technologies, the first being the
technology that uses parametric avatars which allow consumers to provide their
measurements such as height, waist, hips for women, and neck and chest for a man;
an avatar with the consumer’s exact measurement is then produced to allow them to
choose the size and fit they want. Fits.me offers a virtual fitting room for online
retailers that suggests and shows the garment size that is the closest match to the
shopper’s measurements, and enables the shopper to ‘scroll’ up and down sizes until
he or she identifies the size that fits them correctly or the way they prefer to wear the
particular garment, see Figure 20.

Image 4 – Fits.me online fitting room

Source: Fits.me Virtual Fitting Room www.fits.me

In a trial involving Henri Lloyd, the return rate for garments was 4.5 per cent for a
group of customers who used the software, compared with 15.3 per cent for a group
that did not [362]. Fits.me has developed virtual fitting rooms for a number of fashion
retailers including Austin Reed, Baukjen, CC Fashion, Henri Lloyd, Hugo Boss and
Thomas Pink. This is one of many companies that have developed this type of online
fitting room; however there is a need to research consumers’ perceptions of this
technology in academia, as it is constantly developing.

8.2.2.2 Body Scanning Technology

Another method is 3D body scanning technology [363][364][365]. Studies have
proven that various body shapes, even within specific size categories exist [366]
therefore by using body scanning technology consumers would be able to have an
accurate understanding of their body measurements, size and body categorisation.
Whilst more are possible, 3D body scanners take between 160-200 body
measurements in order to replicate the exact body dimensions of the customer.
Companies such as Bodymetrics [364] have developed scanners that, once the body
dimensions have been calculated, can provide information about the most-suitable
brands within a particular retail environment for a customer, by matching garments to
the consumer’s body shape.

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Figure 5. Body scanning technology

Source: Bodymetrics [364]

This information can then be downloaded onto a Bodymetrics App so that the
customer can reuse the information again when they are away from the store. This
type of technology blurs the boundaries of offline and online shopping and has the
potential to offer a personalised shopping experience to the customer; therefore this is
an area of interest for future research in fashion retail.

8.2.2.3 Virtual Mirrors

A more recent development regarding virtual fit is a multi-functional mirror,
sometimes called a smart or magic mirror. Retailers such as Simply Be, White Stuff
and Adidas have invested in such technologies. The interactive mirror implements the
Augmented Reality concept, which is defined by Olsson Lagerstam, Kärkkäinen, and
Väänänen-Vainio-Mattila [367] as a technique “to combine real and computer-
generated digital information into the user’s view of the physical world in such a way
they appear as one environment”. The magicmirror.me technology looks like an
ordinary mirror on the outside, so customers can see their own reflection; however it
is multifunctional and can also be used for digital signage, to play videos and
catwalks for example. It can also integrate RFID technology which can detect the
garment being tried on and when a customer views themselves in the mirror, it could
display product information or provide additional products related to the particular
garment brought in by the customer [368]. Burberry stores have incorporated RFID
technology to enhance their customers’ experience, by weaving RFID technology into
selected apparel and accessories, triggering bespoke multimedia content relevant to
the products when near a magic mirror which would showcase runway footage or
exclusive videos [336].

Customers are encouraged to interact with the mirror for example to take a photo of
themselves in an outfit or to interact with virtual items online using a specially
designed augmented reality application that fits the garments to the body shape,
allowing customers to try on garments without having to get changed (see figure 22).

Image 6. Magic mirror augmented reality and image capture

Source: Magic Mirror [369]

Poncin and Mimoun [370] have recently conducted some research regarding magic
mirror technology with augmented reality and found that it offered strong positive
benefits in terms of overall shopping satisfaction and patronage intentions. Huang and
Hsu [371] had similar finding proving that augmented reality technology can increase
buying intention by stimulating mental imagery. The magic mirror is blurring the
lines between online retailing and physical retailing, as it enables customers to
interact with garments using the mirror rather than getting changed in a fitting room
[350]. The benefits of this for a retailer is that customers will be able to view and try
on more garments as it is not as time consuming and furthermore retailers can use it
as an opportunity to up-sell offering matching accessories as in the image above
(Figure. 22) from New Look in China. Customers can also take an image of
themselves in the changing room and then interact with the photo in a number of
ways, adding backgrounds, magazine style logos, comparing two looks and finally

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allowing them to share the image with their friends or social networking sites.
Research suggests that this is currently more popular with the younger generation
[372], however further research needs to be conducted to see what features different
consumer segments like and if more widely adopted by retailers the effect that would
have on user perceptions, the use of social media and social shopping is discussed
further in section 8.3.3.

8.3 Omni-channel Initiatives

The rise of multi-channel retailing has led to the integration of typical web-based
technologies in store as a means of engaging consumers and increasing customer
service levels, commonly on large touch-screens, tablets or i-Kiosks (see section
8.3.1). As well as initiatives to encourage consumers to buy online in the physical
store, there are also click and collect initiatives to encourage offline customers to
enter the physical store. This is helping to overcome the most cited barrier concerning
online retail which is fulfillment and returns; therefore current delivery and returns
initiatives are discussed in section 8.3.2. The final omni-channel initiative to be
discussed is looking at how fashion retailers are utilising social media to connect with
the omni-consumer. Online shopping communities are being created where
consumers can share ideas and recommendations, obtain advice and review products
[373]. Online consumers are increasing seeking advise and the opinions of others
using social networking sites before they purchase a garment or to showcase a product
after purchase in order to get assistance with decision making [372].

8.3.1 Self-service technology

Increasingly, information technology interfaces are being integrated into brick and
mortar stores, such as self-service checkouts [374], express-order terminals and multi-
media kiosks [375]. Conversely Kallweit, Spreer, Toporowski [376] outline that there
are two types of self-service technologies, those that are transaction-focused, allowing
customers to scan, pay or place an order [377] and more recently customer-service or
information-related technologies [375]. These self-service information technologies
allow customers to access additional information without the help of an employee via
a touch screen display kiosk and provide a more personal customised experience led
by the consumer [378]. Wang [375] considered the benefits of self-service technology
in store for customers finding that perceived usefulness and perceived enjoyment
influence consumer satisfaction and continued behavioural intention. Moreover,
perceived enjoyment is found to enhance consumer satisfaction, whereas usefulness is
not, implying that when developing self-service technologies retailers need to
consider entertaining elements to satisfy the consumer [375]. In Kallweit et al., [376]
study, they did not find hedonic aspects of self-service information technology
relevant to consumer usage; it could be argued that was due to the product category
that was used for the research, which was drilling machines. Fashion retailers have
embraced digital kiosks and touch screens not only for utilitarian purposes but also
hedonic to create an experiential retail experience in store such as smart mirrors
discussed earlier.

Other research regarding consumer perception of using and overall satisfaction with
regards to self-service technology include convenience, trust, speed of transaction and
perceived waiting time [379][380][381]. Fashion retailers have adopted both types of
self-service technologies for example John Lewis has rolled out customer self-service
kiosks across all of their brick and mortar stores, and in addition to that their

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employees know as partners, have all been trained to aid the customers journey via a
kiosk if required, known as PACT- Partner Assisted Customer Transactions. The idea
behind this is that the partners close the sale when on the shop floor rather than
customers leaving the store and looking elsewhere. Research by Di Pietro, Pantano
and Virgilio [382] evaluated how employees perceived self-service technologies as
they could be perceived as a threat, as the customer can lead the transaction,
effectively serving themselves, therefore substituting humans, however many
employees considered it as a tool that could enhance their job rather than replace it.
Marks and Spencer offer a similar service equipping their staff with iPads, in order to
allow them to walk around the store and take product orders for home delivery or
delivery to the store. Further Marks and Spencer have implemented more self-service
information-related technologies such as the virtual makeup counter, which uses
facial recognition technology to enable customers to upload a photo and experiment
with the latest beauty trends, this new digital technology has attracted more than
200,000 visitors to date [383]. The design of the Marks and Spencer in store kiosks
replicates the iphone/ iPod shape as they wanted it to look inviting and user friendly
(see Image 7). The kiosks are not only there to allow people to order online, and
arrange products to be delivered to their desired location, but to provide inspiration
through the Style Edit which provides advice through editorial features and videos.

Image 7 – Marks and Spencers iKiosks

Source: Polytouch kiosk by Pyramid Computer GmbH [384]

In Kallweit et al., [376] study they found that content quality of self-service
information technology was perceived more important than perceived ease of use and
attitude towards usage. They found that customers wanted information that was
relevant to the products that they required rather than a large variety of information;
therefore they advised that kiosks are designed to target specific audiences, with easy
to apply filters to help narrow the search process. The kiosks allow retailers to offer
an extended range of products, reduce queuing times, and also to provide inspiration
and choice to their customers, also such IT systems can cut costs and raise
productivity as the customer is essentially providing the service to themselves [374].
There are additional benefits to such a system as it can allow the retailer to capture
consumer details, provide confidence to customers that may not have previously
purchased online showcasing the retailer’s website and also providing in store
entertainment and style advice to customers in the store [6]. In an interview with
Internet Retailing, Laura Wade-Gery, Executive Director, Multi-channel E-
Commerce at Marks and Spencer said “Multichannel customers spend more, and as
M&S adds channels, that spend continues to rise” [383] similarly in sales figures
published by John Lewis Partnerships, 7th September 2013 “21 per cent growth in
PACT transactions underlines the importance to our customers of omnichannel
shopping options” stating the importance of kiosks in store.

8.3.2 Click and Collect and deliveries.

The main barriers to consumers’ adoption of online retailing are to do with the
fulfillment and delivery of products. Over the past 5-10 years different online and
multichannel initiates have been developed in order to try to offer consumers, better
delivery and returns options. Click and Collect is an initiative that has been adopted
by many multichannel retailers including House of Fraser, Marks and Spencer,

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Debenhams and John Lewis. John Lewis launched click and collect in 2009, allowing
customers to order online or by phone by 7pm in order to collect their order the next
day from a chosen John Lewis store. In 2011 Click and Collect accounted for 22% of
all online orders, indicating that a lot of customers value this service. There are
multiple reasons for this initiates success; convenience, immediate returns, quicker
process and no delivery costs. Cost of delivery, inconvenience of and cost of returns
and convenience of delivery times are cited as the largest barriers to purchasing online
according to Hsiao [385]. Obviously with a textile product there is a higher risk of the
product being incorrect due to fit issues, therefore initiatives to make delivery more
convenient to the consumer are imperative. Another initiate that is currently being
adopted in the UK are delivery lockers such as My Hermes and Amazon Lockers,
these are designed to expand delivery options offering products to be placed in
lockers at a convenient location for the customer, often in car parks or at train stations
for example. Collect + is a returns intuitive where by retailers are associated to local
business and collect returns from customers, which are then collected and distributed
back to the retailers. This is a free service to customers and as 87.1% of people stated
that free delivery and returns are important when online shopping it is likely this will
grow in popularity. Shutl is a UK based technology start-up that enables the delivery
of goods purchased online either within minutes of them being purchased or inside a
one hour window selected by the consumer. This is achieved by its web platform that
connects retailers to local same-day courier companies. These are currently the main
initiatives in the UK concerning delivery and returns which have advantages for both
the retailers and consumers, reducing costs and saving time for both.

8.3.3 Social media

The traditional fashion media landscape has undergone an immense transformation
with the advent of social media, which enables marketers to move from a one-way
communication model to a two-way dialogue which promotes interaction with
consumers. The rise of the social web represents a paradigm shift in marketing
communications [386]. The exponential growth in consumer adoption of online social
networking and technological advances in functionality on social media platforms
present tremendous opportunities for fashion retailers to get closer to customers.
Social media are increasingly used as a tool for disseminating marketing messages
and building deeper relationships with current or potential customers. Figure 9. below
shows the traditional one-way mass communications model, in which the brand’s
message is broadcast to a mass market audience, with no opportunity for feedback or
dialogue.
Customer

Firm Content Medium Customer

Customer

Figure 9: Traditional marketing communications model based on Hoffman and Novak

[387]

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Figure 10 below shows the current Web 2.0 era communications model, where
channels of communication permit feedback and dialogue between the consumer and
the brand, as well as between consumers themselves, for example through virtual user
communities or fashion blogs.

Customer

Firm Content Medium Customer

Customer

Figure 10: Web 2.0 marketing communications model based on Hoffman and Novak,
[387]

Social media refers to online content created by people using highly accessible and
scalable publishing technologies, resulting in a “diversity of new sources of online
information that are created, initiated, circulated and used by consumers intent on
educating each other about products, brands, services, personalities, and issues”
Blackshaw and Nazzaro [388]. Social media represents a wealth of information,
opinions and influence of those experienced with a product, which are readily
available and widely accessible online 24/7. A fundamental element of Web 2.0 is
user-generated content (UGC), so that besides extracting value, users also add value
to applications and processes by generating, reviewing, editing and disseminating
content [389]. Although consumers initially used social media to connect with
personal connections rather than businesses, recent evidence points to an increasing
trend for engaging with brands on social media, with the average consumer now
linked to 29 brands on premier social networking site Facebook [390]. Additionally,
the growth in penetration of smartphones and the use of mobiles rather than desktop
computers to access the internet ‘has placed retailers, symbolically perhaps, in the
palms of consumers’ hands, removing many former borders and expanding the
contexts and times that engagement can happen’ Spooner [391]. Direct customer
involvement and UGC lead to powerful network effects and the creation of user
communities [392]. Fashion retailers have amassed some of the largest user
communities on a number of social media to continuously communicate and deliver
branded content to their core brand advocates. Table 9 below shows the top retailers
on social network Facebook in terms of fan base, the vast majority of which are
fashion retailers.

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Table 9: Top 25 online retailers by Facebook fans, Q1 2014

Beginning End of Retailer January March Q1 Growth Q1

of Q4 rank Q4 rank Like Count Like Count # Growth %
1 1 Walmart 34,432,004 34,513,209 81,205 0%
2 2 Victoria’s 23,717,995 24,534,854 816,859 3%
Secret
4 3 Amazon.com 22,613,537 23,520,214 906,677 4%
5 4 adidas 22,387,836 23,053,063 665,227 3%
Originals
3 5 Target 22,699,626 22,721,330 21,704 0%
6 6 Levi’s 20,972,284 21,255,411 283,127 1%
9 7 WWE 14,813,897 17,462,335 2,648,438 18%
8 8 Nike 16,139,195 17,071,674 932,479 6%
7 9 Burberry 16,822,466 17,025,676 203,210 1%
10 10 Macy’s 13,804,457 14,119,567 315,110 2%
11 11 Victoria’s 13,780,658 14,004,522 223,864 2%
Secret Pink
12 12 Lacoste 12,393,540 12,996,437 602,897 5%
74 13 Pampers 1,884,967 12,872,088 10,987,121 583%
13 14 Gucci 12,014,425 12,558,302 543,877 5%
14 15 Hollister Co. 11,237,564 11,580,696 343,132 3%
15 16 Kohl’s 10,833,515 10,920,462 86,947 1%
16 17 Apple Inc. 10,122,147 10,802,278 680,131 7%
17 18 Aeropostale 9,753,232 10,141,166 387,934 4%
19 19 NFL 8,861,268 9,877,771 1,016,503 11%
18 20 American 9,468,911 9,569,289 100,378 1%
Eagle
Outfitters
20 21 Forever 21 8,744,187 9,066,913 322,726 4%
21 22 Abercrombie 8,259,448 8,539,147 279,699 3%
& Fitch
24 23 Dolce & 7,710,401 8,405,974 695,573 9%
Gabbana
23 24 Tommy 7,843,652 8,325,616 481,964 6%
Hilfiger
22 25 Old Navy 8,054,400 8,153,584 99,184 1%

Source: ChannelAdvisor, 2014

Social media channels facilitate immediate, interactive and low-cost communications

[393] and offer the opportunity for viral marketing, many-to-many conversations, and
real-time dialogue with consumers. Firm-generated content on social media aims to
create positive word of mouth (WOM) for the brand [394] and strengthen
relationships with consumers. Kaplan and Haenlein [395] highlight the key benefits of
social media that ‘allow firms to engage in timely and direct end-consumer contact at
relatively low cost and higher levels of efficiency than can be achieved with more
traditional communication tools’. As such, social media supports the democratisation
of fashion retail and levels the playing field in fashion marketing communications, as
its low cost nature means it can equally be used by small independent fashion retailers
as by large multinational fashion brands [1].

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Brands may also derive value from social media by real-time feedback on existing
products or potential new launches [389]. For example, online private sales site
BrandAlley used the opinions of its 8 million member community to inform the
selection of an emerging designer's launch collection [396]. Members could vote on
one of three possible selections and the one with the most votes would be put into
production. Similarly, online retailer ModCloth’s ‘Be the Buyer’ programme allows
users to vote items from emerging designers into production. Thus, consumers
effectively co-create the product and by gleaning customer feedback on product
samples, the retailer may reduce some of the risk inherent in predicting consumer
preferences before committing to a production order [397]. This illustrates how brand
community members play an active part in the brand’s life cycle [398].

However, the characteristics of social media also bring potential risks for fashion
retailers. Web 2.0 has led to a shift in locus of value production from the firm to the
consumer, and a shift in the locus of power away from the firm to the consumer [399].
Literature suggests that it is the consumer, rather than the companies, that now
controls how brands are created, developed, rejected and destroyed [400][386]. The
shift in power and authority enabled by the UGC element of social media gives a
voice to huge and diverse consumer groups, many of whom had no status of authority
or persuasion under the established hierarchical fashion system with its “high barriers
to entry and exclusionary practices” Crewe [401]. Evidence of this power shift can be
seen within the activities of online brand communities where members have a
‘transformative role towards business practices’ Cova, Kozinets and Shankar [402],
either as critics, provocateurs or agents of positive change. No longer are consumers’
complaints confined to the relative privacy of the store environment, but instead may
be played out in the public glare of the social media landscape. Therefore, successful
community engagement on social media ‘requires mastery of the nuanced principles,
styles, and mechanism governing the new cultural environment’ Fournier and Avery
[400].

Brand communities that act against the interests of a brand represent a force of
destruction. For example, in 2010, GAP ditched their new logo after only one week
following a virulent social media backlash. Although the new logo was a more
contemporary, modern expression designed to reflect the current direction of the
company, the overwhelmingly negative reaction suggests that brand custodianship in
the age of social media no longer rests solely with the retailer. With the shift to co-
creation of value and a renewed focus on relationships [403], the concept of customer
as co-producer of meaning removes some of the control from the brand and the brand
identity is thus co-constructed by consumers and marketers. The GAP case
demonstrates the risks and complexity associated with successful brand community
engagement and growth.

Luxury fashion brands have traditionally shied away from involvement in social
media in order to preserve their exclusivity, and because the characteristics of Web
2.0 technology did not fit with the firms’ desire for strong control of their brands
[404]. However, in more recent times, many luxury fashion brands have invested in
social media marketing in order to build and strengthen relationships with their
consumers and create purchase intentions for the longer term [404]. Kim and Ko
[404] note that many designer houses are active on social media in a number of ways:
for example, Louis Vuitton’s live broadcasting of catwalk shows on Facebook, or

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Ralph Lauren, Chanel, Donna Karen, and Gucci’s development of mobile apps. The
UK luxury brand Burberry is equally known for its digital prowess as it is for its
trenchcoats, thanks to social media innovations such as live-streaming of catwalk
shows on Facebook and the creation of its own social media community called The
Art of the Trench. For luxury retailers, although the social media fan base is not
always representative of the brand’s actual customer base, the brand can use the
medium of social media to build a relationship with aspirational consumers of the
future.

In addition to marketing communications and customer-relationship management,

another use of social media which may prove to be more valuable in the long-term is
its potential for listening to the voice of the customer. Social media channels provide
cheap and easy access to a wealth of quantitative and qualitative consumer data that
retailers can use to aid decision-making. User-generated content (UGC) on social
media is becoming a rapidly growing source of brand conversations and consumer
insights [386]. Data mining of this mass wealth of data on consumer behaviour,
consumer perceptions of retailers and their marketing activities, could help to inform
the retailer’s future marketing strategy. Advances in technology provide retailers with
sophisticated means of monitoring UGC on different social media platforms to gather
useful information to guide future brand strategies.

A key issue for marketers is the quantification of return on investment generated by

investment in social media marketing [405]. Traditional success measures such as
direct sales, conversions, cost reductions or market share are difficult to apply to
social media marketing, and it is commonly advised that long-term returns should be
prioritised over short-term payoffs [405]. Although social media marketing is still an
emerging discipline, Divol, Edelman and Sarrazin [406] point out that it is becoming
increasingly acceptable in the marcomms mix as the ‘perceived lack of metrics, the
fear, and the limited sense of what's possible are eroding’. Next will be a brief
introduction to the main social media platforms that are utilised by fashion retailers.

Facebook was founded in 2004 and has evolved into the world’s largest social
network with over one billion active users in 2014. It is therefore a key social media
channel for fashion retailers. Facebook’s continual technological innovation has led to
better functionality for business users and fashion retailers have recently set up shops,
competitions and virtual fitting rooms within their fan pages, as well as live-
broadcasting catwalk shows. Supermarket retailer Tesco used augmented reality
technology to build a virtual fitting room on its Facebook page, while British luxury
brand Burberry chose to launch its new Body fragrance on Facebook in 2011, by
sending a sample to all those ‘liked’ its fan page. In 2009, Louis Vuitton became the
first fashion brand to post a live catwalk show on Facebook. More recently, ASOS
previewed their summer sale through a Facebook application to drum up interest and
excitement amongst consumers. The application allowed its Facebook fans to play a
series of games and players with the most points went to the front of the virtual queue
and could access the sale first. When fans interact with a brand on Facebook, for
instance by ‘liking’ or commenting on a post, that interaction is automatically posted
to the fan’s news feed, for all their friends to see. This increases the viral effect of the
brand’s social media activity, which could be seen by a potentially unlimited number
of people. Facebook also provides access to a greater amount of consumer
demographics than either Twitter or Google Analytics, and thus enables retailers to

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more precisely target their marketing communications and advertisements. For
example, a fashion retailer could choose to target an advertisement to females of a
given age range in a particular geographic area who also have also ‘liked’ a given
competitor brand. Retailers can also access qualitative data in the form of posts and
comments about their brand, which can be used as a general indicator of brand feeling
at any given time. Facebook launched social plug-ins in 2010, which allow a user to
log into numerous other websites using their Facebook log-in details. The advantage
of this for retailer websites is that a user that logs in with their Facebook details
automatically shares their Facebook demographics, which provides a valuable source
of consumer data for the retailer.

Twitter is the world’s largest micro-blogging platform and enables consumers to keep
up to date with the latest news and gossip from their favourite fashion retailers. Its
limit on 140 characters per tweet makes it more concise than a blog post, while
hashtags (#) provide a searchable means of grouping topic threads. The retweet
function allows users to share another user’s tweet with their own network, thus
increasing the potential for viral marketing. Its speed and conciseness make it a real-
time information network and also allows the gathering of real-time consumer
intelligence and sentiments. However, these characteristics also represent a challenge
for retailers, as Twitter is increasingly being used as a public forum for consumer
complaints and consumers are demanding swift responses to Twitter complaints.
Some fashion retailers have set up separate customer care accounts on Twitter which
promise 24/7 support, such as Nike (@NikeSupport), All Saints (@AskAllSaints) and
Boohoo (@boohoo_cshelp).

Instagram is a photo-sharing app founded in 2010 which boasts the fastest adoption
rate of all social media and a higher level of engagement than Facebook [409]. With
its highly visual focus, it is very well suited to fashion retail [407]. Retailers and
brands can edit photos online by using Instagram’s filters and then share product
photos, blogger or street-style shots, celebrity endorsements or exclusive behind-the-
scenes content to drive interest and engagement in their followers. Hashtags (#) are
used for searchable grouping of content and to facilitate sharing content to other
platforms such as Twitter and Facebook.

Pinterest is an image-based online social pinboard, and one of the fastest growing
social media platforms. Since its user base is predominantly higher earning females
aged 25-44 [408][409] it is a particularly attractive platform for fashion retailers. It
also drives high levels of traffic to retailer websites and boasts higher conversion rates
than either Facebook or Twitter. In 2013, US fashion retailers Badgley Mischka and
Bergdorf Goodman previewed their resort collections exclusively on Pinterest. The
visual nature of Pinterest makes it a perfect destination for shopping inspiration and
product discovery. Users may create themed pinboards using their own images or
images collected from the internet. For example, fashion retailer Urban Outfitters has
a number of product-themed boards including interiors, accessories, shoes and gifts,
as well as behind-the-scenes, blogger street-style and festival fashion inspiration.

YouTube is a video-sharing platform with over 1 million unique users per month. It is
also the world’s second largest search engine after Google. Fashion retailers can set
up their own YouTube channel to broadcast fashion shows, fashion films,
advertisements and behind the scenes content. The YouTube widget allows users to

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embed YouTube videos on their blog. With dwindling audience figures for television
advertising, and the increasing fragmentation of television channels, YouTube
represents an effective means of reaching target demographic groups and sharing
video content. This explains why YouTube is such a popular social media platform
for the fashion retailers, with 90% of fashion brands currently maintaining a YouTube
channel and investing in digital video to drive engagement and Traffic, according to
L2Thinktank [409]. Although it is not possible to click through to a retailer’s website
from a YouTube video, it is possible to create shoppable videos. For example, eBay
created shoppable videos to celebrate London Fashion Week in September 2013.
Luxury retailers such as Chanel and Louis Vuitton use YouTube to tell the history and
story behind the brand, with very subtle product showcasing. High street retailer
French Connection ‘s YouTube channel broadcasts the latest fashion trends and tips,
TV commercials and provides links to its website and other social media platforms.

Google+ is the world’s second largest social network site after Facebook. It is a
visually communicative platform and highly optimised for photo and video content.
Although it remains an emerging platform for fashion retailers, its value lies in its
integration with Google’s search engine and the potential for increased SEO, since
postings are indexed in Google’s search engine. Early adopters of Google+ when it
launched 2011 were predominantly male, which made this platform arguably of less
interest for fashion retailers than Pinterest, for example. However, increasing numbers
of fashion retailers are establishing a presence on this platform such as H&M,
Burberry and ASOS. Circles enable users to organise contacts into groups for sharing
content, while Hangouts are used to facilitate video chat sessions, with a maximum of
10 people, but which can be simultaneously live-streamed with the public, even if
they aren’t involved with the Hangout. For example, Marc Jacobs incorporated
Hangouts On Air into the live-stream of its New York Fashion Week show in
February 2013, during which fans and influencers shared their first reactions. The use
of hashtags (#) enables users to search for related content and broaden their chance to
discover new brands.

In practice, fashion retailers coordinate activity across a number of social media

channels, with content strategy adapted to suit the particular nuances of each
platform’s functionality and audience. Table 10 below shows an integrated social
media strategy for premium fashion retailer Michael Kors across a number of key
platforms [410].

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Table 10: Michael Kors’ social media matrix

Platform Number of Content type

fans/followers
Facebook 13 million+ Product visuals and campaign images, branded street style shots,
videos, fashion week coverage, brand events, behind-the-scenes
insights, charity fundraisers and contests
Twitter 1.97 million+ Product and behind-the-scenes features, brand news, some
relevant external content and brand ambassador mentions.
Promoted tweets of seasonal campaigns and videos
Pinterest 137,000+ Original product and campaign images, mood and colour
inspiration and reposted lifestyle images on themed and
consistent boards
Instagram 2.1 million+ Product images, full looks, collaborator images, consistent
hashtags, videos including campaigns and catwalk, street style,
behind-the-scenes
YouTube 11,200+ Runway, destination videos, MK commentary and interviews,
seasonal campaigns, special events, travel, behind-the-scenes
and collaborations
Google+ 506,000+ Runway videos, Kors Collaborator photoshoots and videos,
consistent hashtags, product images, runway images,
Destination videos, behind-the-scenes shots
Vine 51,600+ Animated product features, campaign-related videos and runway
coverage
Blog n/a The Destination Kors blog comes in three languages: English,
Chinese and Japanese. Acts as the source for a lot of other social
media content, featuring news, editorial, celebrity style
coverage, apparel and beauty campaigns, travel diary, mood
videos and images, runway videos and the #WatchHungerStop
charity page
Source - adapted from [410]

Shopping and social networking activities are merging and new research is being
conducted with regards to online social shopping [375][411].

9. Conclusion
There are a number of different facets of retailing strategy that have contributed to the
globalisation of the fashion retail market; new innovative retail formats, for example
mobile applications and kiosks, new marketing methods particularly social media, and
the progression of omni-channel retailing to provide a consistent retail experience
across multiple channels. New technologies are being used to improve the fashion
retail process, from product development, through the supply chain to the delivery to
the customer. The future of retail will mean that channels will be viewed not as
individual silos but how they work holistically together; stores for example will use
technology to offer virtual shopping benefits in a physical environment and online
websites or mobile app will encourage consumers into the store [412]. Hence
convergence of channels is simply not the melding of technologies but it is about
exploiting the new and unique opportunities that arise as a result of these
combinations [413]. A key challenge is now looking at how new technologies will be
combined seamlessly and how consumers interact with these media [413]. With the
emergence of omni-channel retailing, and given the attractiveness of this strategy for
both the retailer and the consumer, there are many research opportunities for example:
• development and implementation of omni-channel retail strategies;
• understanding the omni-channel consumer and the customer journey;

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• understanding of ICT communications to improve retail strategies;
• development of a deeper understanding of omnichannel initiatives to improve the
customer experience.

Channel convergence is more greatly aligned to omni-channel retailing. This is

because the theme encapsulates a highly advanced seamless customer experience
across channels as aforementioned by Wind and Mahajan [413]. Omni-channel is also
more open to the addition of new technologies as they will form part of a single
customer experience, rather channels being managed in isolation or being individually
defined. For example multi-channel affords no scope to examine the simultaneous use
of mobile technology in a store for example as these are considered as two parallel
channels rather viewed than a single customer journey. This is supported by Deloitte
[253] who report that channels and their distinctions are becoming increasingly
blurred between both the physical and virtual space.

Through in-store digital technology, retailers are able to bring the social and
entertainment benefits and limitless shopping options of the web into the store,
whether on retailer's own screen or on consumer devices [414]. The benefit of
smartphones and tablet devices is their facilitation of greater interactivity between
consumers and websites, due to their touchscreen technology and multi-modal
(vision, touch, sound, vibration) capabilities. Retailers provide the customer with the
ability to choose from the entire product range via in store kiosks or mobile apps,
even if there is a lack of space to range it in store. Such technology permits the online
and store environments to reinforce each other in innovative ways. For example, UK
department store retailer House of Fraser trialed small format click-and-collect stores
in Aberdeen and Liverpool, which do not stock inventory but provide consumers with
the ability to browse and order from the retailer's entire product range on its website
in sophisticated surroundings with a high level of customer service [72]. This
development questions the function of a physical store as a place to stock inventory;
however it is dependent on high levels of digital prowess to be successful.

There is good reason to focus on the ways that digital and mobile technologies are
affecting retailing, however, the strategy adopted by ‘manufacturer brands’ as they
have moved into the retail business and opened their own retail outlets in an attempt
to garner more control over their channels to market, has resulted in the exciting
development of innovative flagship stores, which also merits further study.

This issue of Textile progress reviews research outputs and academic and industry
publications that have addressed the subject of fashion retailing in the past to the
present date and considers some developing possibilities for the future. It provides an
overview of the growth and development and key drivers of change of the fashion
retail industry, emphasising the adoption of online retail being the current driving
force for change. The development of ICT technology has also played a key role in
the development of the modern fashion industry, for example by enabling
communication to take place across the globe instantaneously, allowing buyers to
maintain the necessary contact with their overseas suppliers, retailers to manage
inventory and fulfillment and to provide information technology relevant to consumer
usage to improve their in-store experience. There is a strong focus on multi-channel
and the future likelihood of the emergence of the omni-channel consumer, identifying
some of the current research themes about cross-channel consumer behaviour and

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finally summarising some of the current retail initiatives taking place across the
different channels. As consumers have access to multiple distribution channels such
as ‘brick and mortar’ retail, e-commerce, mobile commerce, and more recently, social
media commerce, there is a growing academic literature regarding their adoption and
use and the factors that influence purchase decisions [385][415]. However the final
point to consider concerning omni-channel retailing is that whilst it is seamless and
integrated, it is able to provide a ubiquitous experience, as channels can be accessed
anywhere and at any time, using a variety of devices; future research should therefore,
not only consider the distribution channels, but also analyse ‘What’, ‘Where’ and
‘Why’ consumer interactions are taking place.

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