Fashion Industry Trends and Challenges

1. Introduction

The fashion industry is growing at a rapid rate over the period of time where the fashion brands and the fashion trend of the customers are also changing towards more creative fashionable outfits. The organisations explore new innovative clothing and accessories for attracting the customer and create new fashion trend (Chen and Davis-Ngatai, 2017). The aim of the study is to conduct PESTLE analysis, for understanding the market for the fashionable clothing and accessories where the PESTLE factors have crucial impacts on the fashion industry. The organisation New Look is considered in this regard to analyse the political, economic and social factors as well as the technological, legal and environmental factors affecting the marketing and operations of the organisation New Look. New Look is the high street fashion brand, originated in the UK and it is serving with high quality fashionable clothing and accessories since 1969. The organisation is also efficient to expand their business over the international markets including Belgium, France, the Netherlands, Germany, Russia, the Republic of Ireland, Singapore, China, Romania, South Korea, and Poland, where strong employee base over 30000 employees are serving the customers innovatively. Due to depressed customers and marketing condition, the sales volume and revenue of the fashionable outfits is deteriorating over the period of time and it has adverse impacts on the brand New Look where the profitability of the firm is also affected for such market condition (New Look, 2018).

The PESTLE analysis is hereby necessary to be conducted for analysing the market condition as well as it gives the chance to acknowledge the market condition and strategise the organisation innovatively. The target customers if the brand New Look are young generation, the consumers who love creative fashionable outfits and the middle and high economic class, who can afford the fashionable clothing and accessories. These are the major target customers of New Look for expanding the business strategically across the international markets (New Look, 2020). The organisation low profitability and sales volume in Belgium, France and Ireland and at the mean time, the sales volume in Poland and China is increasing due to market trend and high demand of the customers. The PESTLE analysis of China will be conducted in order to analyse the market condition and the external forces that are effective to restructure the organisation New Look and enhance the brand performance for achieving the high competitive advantage over other firms, where the offline and online marketing and sales management are effective to manage customers relationship and strengthen their customer base for long run (Fashion Network, 2015).

2. PESTLE Analysis

PESTLE analysis is effective to demonstrate the political, economic, social, technological, legal and environmental factors which have crucial impacts on the brand expansion strategy. The PESTLE analysis for the New Look is effective to understand the China’s market situation and political condition to strategise New Look for better performance and expansion of the brand in future.

2.1 Political

The political situation has important impacts on the organisation and in this regard it is mandatory to have political stability and cooperation with the government for better management of the business and operational management. Though due to political instability and Crimean Crisis, there is problem for New Look to expand their business in Russia and the UK, the brand is trying to expand their business in China, as Chinese market is a good customer base where the brand can attract more fashionable customers in the market. The political situation is good and controllable where the government encourages the international trade and cooperate with the organisations for better performance in the Chinese market. China is a socialist state where it is controllable by political administrative power. Centralized democratic system as well as restriction in internet and press may adversely affect the business firms to run their operations efficiently (Thompson and McLarney, 2017). Moreover, there is corruption in the stages of international trade which also has negative impacts on the business.

2.2 Economic

The economic factor is also one of the major factor affecting the business growth and activities. The Chinese economy is growing but the growth rate is moderate. The growth rate in 2018 was 6.7%, however it was 6.2% in 2019 and it is expected to reduce to 5% in this year of 2020 (Trading economics, 2020a). Due to slow down of the growth as well as the pandemic era of COVD 19, the growth rate is deteriorating and it has adverse impacts on the organisational operational activities of New Look. The purchasing power parity of the customers is also deteriorating due to job loss and reduction of nominal income which also adversely affects the activities of the business. It is hereby risky for the firm New Look to expand their business in China and ensure high revenue and sales growth in the recent years (Vergassola, 2019). Though there is slow down of growth and economic factors, there is moderate growth in the e-commerce business and online activities, the brand New Look still has the scope to expand their business through internet and other online platform and to retain the customers and make the business successful.

2.3 Social

The social factors is also effective to strategise the business activities more efficiently and in this regard, population, literacy rate cultural beliefs and customer purchasing trend matter to develop planning for the brand. The population of china is increasing over the period of time and the literacy rate of the country is 96.8% which is good for the society (Trading economics, 2020b). The people are used to utilise internet platform and other online activities to grab new opportunities and be updated with latest information. Hence, it provides a scope to New Look to attract the local buyers in Chinese market through increasing marketing promotional activities through online websites.

As per the cultural beliefs and perspectives, the Chinese people love to wear red and quality clothing and accessories which are fashionable too. The organisation is able to attract the customers by developing fashionable outfit with creative design and good quality raw materials which may attract the target customers and strengthen their customer’s base for better organisational performance and successful establishment of the brand in the Chinese market.

2.4 Technological

The technological factors have crucial impacts on the activities of New Look, where the organisation can be efficient to expand their business sustainably. New Look has third party e-commerce business including ASOS as well as the online activities such as selling, customer relationship management as well as buying the products are the major activities which improves brand image in the market. The production process and the IT infrastructure of the brand are also fruitful for the business to be sustainable in the market (Zhu, 2020). Additionally, the organisation is also able to gain high competitive advantage through increasing online activities and technological advancement, the organisation is efficient to improve mobile application and engage all the customers through online Smartphone devices where the sales representatives can connect all the customers and engage with them 24*7. This further improves the service efficiency of New Look and it has positive impacts to grow the organisational operations over the period of time. The technological innovation in the ecommerce activities, IT infrastructure, managing the organisational human resource, ERP management for stock handle as well as the customer’s relation management are beneficial for New Look to gain high market share by establishing the company efficiently in the fashion retail market of China.

2.5 Legal

Chinese employment contract is strict, where proper terms and condition are mandatory to be mentioned. The information about the salary, work site and hours, labour protection and safety social insurance and job description must be there and other is clear agreement with the employees by including all the terms. The employment wage system and the 13 months bonus system are also effective to recruit the employees and manage them with proper monetary incentives and non-monetary incentives. The organisations in China follow all the rules and safety measures to handle the employee base and it also provides a scope to New Look to review the legislative structure to recruit the local people in China. Legal responsibility and supplementary provisions are effective in China, where the government provide clear instruction for successful recruitment and human resource management (New Look, 2020).

2.6 Environmental

The environmental factors are also effective to restructure the business activities more efficiently. New Look has signed up the Sustainable Clothing Action Plan (SCAP) 2020 Commitment to reduce environmental impacts and improve green environmental footprint for saving the natural resources of the earth. The organisations in China are also efficient to manage environmental sustainability through developing green supply chain, by using electric cars for reduction of the greenhouse gas emission, as well as using solar panel to reduce the energy resources (Hernandez and Haddud, 2018). The organisations also utilise paper packaging system for reducing plastic packaging. The waste management activities and recycling process would be fruitful for New Look to be sustainable in the market and provide positive brand image through taking environmental sustainable actions.

Hence, as per the PESTEL analysis of China, the Chinese culture and the customer’s trend are good for the organisation New Look to operate in Chinese market and influence the purchase decision making behaviour of the consumers. The organisation would be able to be sustainable by operating efficiently, legally and sustainably in the market.

Conclusion and recommendations

As per the analysis, the market condition of China is good where the brand can restructure their operational activities for successful establishment of the brand and in this regard, the new e-commerce site, flagship store as well as streamline targeting strategy would be fruitful for New Look to secure future sustainable development. The third party websites are good platform for New Look to boost their sales volume as in the third party website, the sales for the fashionable clothing and accessories is increasing by 15.7%. The company spends by £2 million in the past years for marketing strategic planning and it is fruitful for international marketing. New Look also invests in social campaigning for promoting their products and services across the Chinese market and also other international market. Celebrity advertising and influencing posts are effective top attract young generation for shopping. New Look is a high street shop which can expand their operations internationally through marketing activities. There is strong growth in the e-commerce industry and it is effective for the brand to utilise the e-commerce platform and boosts their sales volume by attracting the customers with high street fashionable outfits and efficient services. There is bigger emphasis on the internet and mobile application software where the customers love to spend hours for searching new fashionable outfits and make their purchase decision. Hence, it is fruitful for the organisation to develop a mobile application of New Look to attract the customers and convince them to make effective purchase decision through the application. The company must focus on easy payment method through the mobile application which is secure and improves customer satisfaction. The website of New Look also must be designed with creativity and innovation to represent the available products of the company to attract the target customers in future. It is evidenced that the spend amount for the fashionable products is decreasing over the period of time and thus the organisation must focus on promoting the creative products, innovative design and customer preferable materials to retain them in long run and in this regard the organisational also needs to set the price of the products which can represent the product efficiently. Setting the competitive price and following the premium pricing method are beneficial for New Look to retain the customer and strengthen their consumer base for long run. These are the major strategic planning for New Look through which the brand and enhance their sales volume and maximise profitability through successful marketing planning.

Reference List

Chen, C. and Davis-Ngatai, P.S., 2017. How to gain competitive advantage through crossborder e-commerce between New Zealand and China?.

Hernandez, D.F. and Haddud, A., 2018. Value creation via supply chain risk management in global fashion organizations outsourcing production to China. Journal of Global Operations and Strategic Sourcing.

Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by next Plc have on themselves and their competition in the UK Clothing Retail Market?. Journal of Commerce and Management Thought, 8(2), pp.234-264.

Vergassola, I., 2019. Prerequisites and outcomes of glocalization of marketing strategies by international retailers: the case study of IKEA and home depot in China.

Zhu, X., 2020. Marketing Plan For Kesko To Enter The Chinese Market.