New Business Concept: Marketing and Communication Strategy

appendix 5 PESTLE Political There are a wide range of political factors that are affecting the current retail/fashion market and it’s trading, however, the most recent factor is the results of the EU referendum. Leaving the EU will undoubtedly have a significant effect on UK businesses and businesses wanting to trade in the EU. Established retailers and new brands wanting to enter the market should be prepared for a decline in the sterling, rising cost of credit, possible disruptions in trade credit insurance (especially for midmarket retailers) and they should expect weaker consumer and business confidence (retaileconomics. co.uk, 2017). This also means that goods purchased overseas will be more expensive, for retailers it could mean that have to start looking at purchasing materials and other items closer to home.

Economical “2017 brought the return of inflation to the retail sector as cost pressures from a weakened pound worked their way into rising shop prices. At the same time, wage growth started to stall, provoking fresh fears about the spending power of the British consumer.” (Armstrong, 2018) Economical uncertainty is shaking up the high street; this along with the shift to ecommerce has had a huge effect on brick and mortar stores. While this increase in online sales is keeping the retail industry afloat, it has had negative effects on the high street with stores closing or companies decreasing the amount of stores they have. The number of shops across the UK is expected to fall by 22pc from 281,930 to 220,000 in 2018, according to forecasts by the Centre for Retail Research. It also predicts that a further 164 major or medium-sized companies will fall into administration, involving the loss of 22,600 stores and 140,000 jobs. Last year 42 retailers failed. (Armstrong, 2018) For fashion retailers it has been especially tough for them, with spending online accelerating, ecommerce brands such as Missguided, ASOS and Boohoo have hovered up shoppers with what they offer. eMarketer (2017) estimates UK retail mobile commerce sales will rise by 14.2% between 2017 and 2021, when purchases made online via mobile devices will make up well over one-tenth (13.4%) of total retail sales.

The way in which consumers are spending their money is changing and brands that don’t take this into consideration will ultimately fall into the pile of companies that fail due to not adapting to the changing market.

Social There is a growing concern amongst UK consumers around sustainability, especially regarding fast fashion brands. Facilitated by social media, consumers have become more vocal regarding sustainable issues, making it imperative for retailers to offer visibility over their material procurement and apparel production practices. The growth in sustainable fashion has seen high-street retailers launch dedicated sustainable collections, such as H&M’s conscious collection. Retailers must be transparent with their ethics, especially in regards to their sustainability.

The rise of social media influencers is creating a new age of digital marketing. “Seventy percent of consumers trust brand recommendations from friends, but only ten percent trust advertising” (influence. co Perspective, 2017). This means if a consumer was to see your ad they probably still wouldn’t trust it.

Influencers online have built loyal followings, some even have millions that want to know what they’re buying and trust what they say. From a brand perspective, Social Influencers can have a wide-ranging impact on awareness, appeal, and dedication coming from their audience. With traditional sales tactics dying, social media influencers are becoming increasingly important in a brands marketing strategy.

Technological Advances in technology means that consumers are now able to shop via their phone easier than ever.

“Smartphones have overtaken tablets to become the most popular mobile device for online fashion purchases, with almost half (48%) of Millennial’s having bought fashion from their smartphone.”

(Academic.Mintel.com, 2017) This means that retailers must continually invest in their mobile sites to give consumers an excellent customer experience and the latest technological advances to keep up with competitors.

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