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BP310 BACHELOR OF FASHION (MERCHANDISE MANAGEMENT)

MKTG1250 FASHION & TEXTILES MERCHANDISING MANAGEMENT

Assessment 1

RETAIL SURVIVAL AND GROWTH

STRATEGIES IN 2017

Assessment By Laura Leanza

S3559786

Word Count: 2,034

RMIT University
Semester 1
2017
RETAIL SURVIVAL AND GROWTH STRATEGIES IN 2017

Executive Summary

The following analysis report has been written to communicate a response to the assessment brief

part of the subject Fashion and Textiles Merchandising Management. The purpose of this report is

to present a detailed analysis, based on the findings through secondary research, on ways in

which international competitors have changed the Australian Fashion Retail industry.

Undertaking this report has involved identifying, researching and analysing emerging global issues

that are impacting the Australian industry. The brief required to support findings through evidential

and credited sources, as it benefited research with a valid outlook on the Australian market.

The report has been broken into five major sections based on the Australian Fashion Retail

industry. The following sections will include detailed information on the market, a discussion of

factors impacting the industry, a brief description of two global brands that have entered the market

and two local brands that have been disrupted from international retailers. Results are concluded

with a summary of three important factors that will affect the Australian industry in the next five

years. These factors are based on an opinion supported by findings in the previous sections.

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RETAIL SURVIVAL AND GROWTH STRATEGIES IN 2017

Table of Contents

1.0 Introduction...................................................................................................................4

2.0 Size, Market Characteristics and Main Players ........................................................5

3.0 Factors Currently Impacting The Industry................................................................7


3.1 Political ..................................................................................................................................................................................... 7
3.2 Economical ............................................................................................................................................................................ 7
3.3 Social ........................................................................................................................................................................................ 8
3.4 Technological ....................................................................................................................................................................... 8
3.5 Environmental ...................................................................................................................................................................... 8

4.0 Successful Global Brands Disrupting the Australian Market ................................9


4.1 Zara (Inditex) ........................................................................................................................................................................ 9
4.2 ASOS ........................................................................................................................................................................................ 9

5.0 Local Brands Affected by the Disruption of Global Brands Entering the
Australian Market ................................................................................................................. 10
5.1 Marcs And David Lawrence (M Webster Holdings Pty Ltd.) ................................................................ 10
5.2 The Iconic ............................................................................................................................................................................ 10

6.0 Drivers of Changes .................................................................................................... 11


6.1 Automation And Technological Advancement .............................................................................................. 11
6.2 Transparency In Sustainable And Ethical Practices ................................................................................. 11
6.3 Change In Education, Jobs And Skills .............................................................................................................. 12

7.0 Conclusion .................................................................................................................. 13

8.0 References .................................................................................................................. 14

9.0 Appendix ..................................................................................................................... 16

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RETAIL SURVIVAL AND GROWTH STRATEGIES IN 2017

1.0 Introduction

Presented in the following report is an analysis regarding the ways in which international retailers

have changed the competition in the Australian Fashion Retail industry. With an overview of the

Australian market, it gives a clearer insight of the industrys situation through detailed information

about the characteristics of the market. Additionally, figures have been provided to highlight

aspects of the industry, such as the growth rate and market shares of the top performing

companies.

Factors that are currently impacting the Australian industry have been briefly detailed through five

most important issues. This has been analysed through the PESTE elements, to gain a broad but

concise insight on impacts across the five spectrums. These factors have been selected through

findings of valid sources, and secondary research from experts with knowledge of the industry.

Through the discussion of these factors, it was recognised that some aspects correlate and

possibly affect each other.

Taking the factors into consideration, two global brands are discussed on how they have

successfully disrupted the Australian retail market. The fast fashion Spanish retailer Zara and the

UK online retailer ASOS, have been selected to understand their methods of success when they

entered the market. In relation to this, two local Australian businesses, Marcs and David Lawrence

and The Iconic, have been looked into on how they have had to adjust their business strategies

since the disruption caused by international businesses.

The report is concluded with a summary of the analysis, and focuses on three most important

aspects that will impact the Australia Fashion Retail industry in the next five years. This conclusion

has been derived from personal thoughts with no further research, simply based on previous

findings within the report.

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RETAIL SURVIVAL AND GROWTH STRATEGIES IN 2017

2.0 Size, Market Characteristics and Main Players

(WK1_RCO1, WK1_RCO2, WK1_RCO3, WK1_RCO5)

The Australian Fashion Retail industry is estimated at $19 billion, with a current growth of 4%

annually: the reason being of the fundamental expansions to online stores for brands to grow in a

competitive industry (IBIS World, 2017). Increasing development of new technology has lead to

accessible and convenient shopping for consumers through ecommerce. Despite the rising

competitive prices, most traditional brick-and-motor retailers have found beneficial factors of

developing an ecommerce site by making use of strategies that support the aim to be a multi-

channel retailer. The diverse segments in the retail market are crowded with choices,

predominantly covered by many small independent businesses. Competition factors, such as price,

style and quality, have greatly affected Australian companies facing the pressure of rivalry from

international brands entering the market. (IBIS World, 2017)

In relation to internal competition, there is an immense focus on competing for consumers on the

basis of price, quality, on-trend fashion, brand status and customer service. Consumers want

exclusivity and new fashion trends, in which retailers must adopt new styles fast to stay on target

with profitability and demand. Competition can vary between the high-end retailers and the

merchants who target low to middle income earners. Brands that have a premium status do not

compete on price instead they sell at higher prices with the finest quality. In contrast to retailers on

the low-end spectrum who largely compete on price. External competition in Australia is

fundamentally focused on department stores, such as Myer and David Jones, who can offer a

selection of exclusive local and overseas labels. They have the ability to source large quantities of

products from overseas at a discounted or wholesale price, affecting the competition with other

clothing retailers at a sharper level. More importantly, there is more pressure for traditional brick-

and-motor stores to capture consumers from new competition of online retailers (IBIS World,

2017).