Market Trends Leading to the Macro Environmental Analysis - Clothing Industry in the Uk

I. INTRODUCTION

The women’s apparel market has been and continues to be one of the most competitive and challenging sectors in the UK retail scenario.

This report aims at analyzing Debenhams Plc. with respect to its women’s apparel section and key players such as House of Fraser, John Lewis and Marks and Spencers posing as strong competitors.

The analysis report includes an overview of market trends leading to the macro environmental analysis. The main competitors are identified and frameworks such as SWOT and Ansoff’s Growth Matrix are used to extract a profitable strategy for which an Integrated Marketing Communication plan is devised.

II. INDUSTRY ANALYSIS

MARKET OVERVIEW

Clothing industry in the UK has been proving to be highly lucrative to retailers as consumers spend the maximum expenditure on clothing at an estimated of £52.9 bn at 4.5% as of 2014 as compared to others like the car industry though it saw a slump in consumer expenditure with respect to 4.9% in 2013 due to consumer focus divulging in homeware and leisure industry. The clothing industry is estimated by Mintel to grow to £63,735 bn by 2019 as shown in the Figure 1.

Figure 1: Forecast on consumer spending on clothing (Mintel 2014)

Further into the clothing category, women’s fashion makes up for an estimated 49% of the total consumer expenditure in the clothing sector, taking away the highest share in the clothing category as illustrated in Figure 2.

Figure 2: Estimated distribution of spending on clothing, by sub-category, 2014 (Mintel)

MARKET OPPORTUNITIESS AND THREATS

OPPORTUNITIES

• As consumer confidence in the UK rises, the amount of income consumers are willing to spend on apparels increase making it more likely for retailers to expect an increase in sales and thus, profit

• Innovations make it more likely for retailers to embrace the channel shift towards e-commerce with facilities like virtual fitting rooms

• Menswear is performing well, providing retailers with the prospects of increasing sales and profit

THREATS

• Specialist retailers and non-specialist retailers like department stores are competing with respect to availability of choice and own brands at lower rates

• Retailers suffer in sales as market depends on heavy discounting which does result in increased sales volume but not at par with profit growth

• Factors like season and whether pose a great challenge for the apparel