The future of high street fashion retail stores in the digital era by Nanji Issaree

THE FUTURE OF HIGH STREET FASHION RETAIL STORES IN THE DIGITAL ERA a dissertation of issaree chulakasem

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THE FUTURE OF HIGH STREET FASHION RETAIL STORES IN THE DIGITAL ERA word count:9,507

table of contents

abstract

introduction

aims&outcomes

methodological framework

literature review

discussion

conclusion

list of illustrations

list of bibliography 75

appendix

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abstract The dissertation is focusing on how will high street fashion retail stores sustain and evolve in the digital age. As in the past few years, the fashion retail industry has faced some significant changes from the innovation of technology. Online and mobile channels have completely transformed the shopping experience in brick and mortar stores. Therefore, the study will investigate the impact on the customer shopping behaviour and critically evaluate the adaptation strategies of the middle-market fashion retailers, within the UK and outside, to provide recommendations on how will the retail stores evolve in the future where it could be beneficial to both retailers and their target customers.

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introduction The society in the 21st century is becoming a highly digital-led due to the changing of technology that affects every part of people lives, including the fashion retail sector, so it is inevitable that retailers will have to adapt to this changing. As in every other retail category, the internet posed a challenge to traditional retailers, catching many of them off guard. Asos and other e-tailers led innovation online, winning market share before many traditional retailers had realised the platform’s potential – sales at Asos rose from £42.6m in 2007 to £481m in 2012. The effect certainly made retailers take note. Verdict analyst Honor Westnedge says: “It made retailers that just had physical stores realise that online is a vital channel.” (Retailweek, 2012). Customer behaviour and attitude towards fast fashion have created the need of speed in every process (PESTEL analysis, Appendix 1), therefore many retailers have developed their supply chain, selling channels, marketing communications and distribution systems however, in the meantime, not many of them have invested in enhancing their brick and mortar stores. It is essential to study and discuss on how will the fashion retailers can revolutionise their physical stores to sustain and become one of the brand’s media (BOF, 2015), including its opportunities and pros and cons of the strategy. Doug Stephens of BOF (2015) has mentioned that practically, the physical stores are the most powerful form of media due to their innately live, sensorial and experiential quality that cannot be replicated online. The study is aimed at high street retail brands and to propose recommendations that will benefit them in the way they could adapt to a digital-led society, in order to response to their target customers. These circumstances are of great significance for the researcher as a student of international fashion business and as a part of the young generation that has been affected significantly by these changes, the researcher would like to study and produce a strong view in the current and future of the situation that could provide me the advantage in my future career when I work in the real fashion industry.

aims Aim1: To develop my research, analytical, evaluative and creative skills through a study of a complex industry problem as it is one of the Module learning outcomes for term 2 and 3

Aim4: To explore on how retailers adapt into the digital-led age and to forecast the future of a fashion retail industry in the highly technology-led era

Aim2: To investigate how digital media Aim5: To understand how retail stores changes customer shopping behaviour can be sustainable in the future and mindset towards high street fashion brands Aim3: To understand how a technology affects the organisational behaviour of fashion retailers

outcomes Outcome1: To produce a dissertation Outcome4: To make predictions and at Masters level which provides inno- recommendations for future growth vative and credible recommendations strategies. for the fashion industry Outcome2: To devise a retail marketing strategy for high street fashion brands incorporating digital media in response to fashion consumer behaviour. Outcome3: To determine perceived changes attitude of consumers towards fashion retailers and develop understanding for consumer needs to enhance their experiences

Outcome5: To produce comprehensive recommendations and evaluation for the retail stores sustainability in the future

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Research Philosophy : Interpretivism The study has been designed to find out how will high street fashion retail stores sustain in the digital age and how will it evolve in the future therefore, it has adopt an Interpretivism philosophy, as interpretivist involves researcher to interpret elements of the study, thus interpretivism integrates human interest into a study. Accordingly, “interpretive researchers assume that access to reality (given or socially constructed) is only through social constructions such as language, consciousness, shared meanings, and instruments” (Myers, 2008, p.38). Development of interpretivist philosophy is based on the critique of positivism in social sciences. Interpretivism is “associated with the philosophical position of idealism, and is used to group together diverse approaches, including social constructionism, phenomenology and hermeneutics; approaches that reject the objectivist view that meaning resides within the world independently of consciousness” (Collins, 2010, p.38).

methodological framework Research Approach : Inductive Inductive approach has been adopted by making a range of specific observations from secondary and primary sources and exploring via general observations and a range of theories. According to the focus of this dissertation, the researcher starts with gathering information from secondary sources including academic literatures, news and articles that related to store merchandising, multi-channel marketing and future forecasting of the fashion retail stores, simultaneously with searching through the studies of innovation of technology including its connection between societies, in order to produce an overall picture of the fashion retail industry that enables the researcher to identify the problems that brick and mortar stores are facing. 18

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Research strategy The study has interpreted a main strategy which is Diffusion of innovations theory that seeks to explain how innovations are taken up in a population, which in this case is how digital innovation has shifted the entire shopping behaviour. According to Les Robinson (2009), the main idea of this theory is to offer three valuable insights into the process of social change: 1.What qualities make an innovation spread. 2.The importance of peer-peer conversations and peer networks. (Fashion organisationsâ&#x20AC;&#x2122; strategies) 3.Understanding the needs of different user segments. (The target customers)

Trend study has been employed as it is the most appropriate method of investigation to map change over a period of time (Kumar, 2011). It has enabled to find out what fashion retailers and their customers have done in the past and what are they doing and thinking now. It has enabled to examine the change of the customer shopping behaviour that has been impacted by the innovation of technology. Trend of customer shopping behaviour has been observed at different points in time over past-present-future to make certain assumptions for the future of the physical retail stores. Participant observation has been used to gathering information about the customersâ&#x20AC;&#x2122; behaviour by observing the customers of a number of examples high street fashion brands within the UK. The information has been collected through several methods including : Interview and Surveys.

Research Methods Literature Reviews A literature review has been thoroughly carried out, for it is essential to understand the whole picture of the key topics. Different views of opinions about the issue has been carefully evaluated to provide a better understanding. The literature review has been divided into 4 sections; Digital shift, Digital influence in retail, Omni-channel and Physical store. Within each section, an indepth discussion has been executed to identify gaps in the current body of knowledge for target audience. Case study Researcher has selected case study as a research method as it allows to retain the holistic and meaningful characteristics of real-life events- such as individual life cycles, group behaviour, organisational processes and maturation of industries (Yin, 2009). Within this dissertation, couple of case studies has been investigated to study 2 different fashion retailers that has been operating an interesting strategies and to be able to critically compare and evaluate their effectiveness of the plans. Interview Interview several customers of high street retailers that has been selected for the cast study about their shopping experiences and their perspectives about the store. Questionnaire mainly focused on the consumersâ&#x20AC;&#x2122; perspective. As the study aims to give recommendations to high street retailers, therefore, the questionnaire will be conducted with customers of high street brands, mainly in the UK. The questionnaire analysis has been analysed by age group. One is customers aged under 25, customers aged between 25 to 35 and another group is customer aged above 35, in order to identify the differences between three perspectives that might be vary according to age. The results has been analysed and combined with the secondary research to produce recommendations.

Tools and Techniques Several strategic analysis tools has been used to analyse the external and internal factors including PESTLE analysis. A number of theories will be employed in order to produce a comprehensive evaluation. Research Limitations

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In consequence of the limit of time frame and budget, the researcher will do the observation at a range of street fashion brands including UK and international brands that can be accessed in the time limit. The questionnaire will also transmit online, through social media sites including Facebook, Whatsapp, Line application and E-mail. It is proposed to select two groups of customers as participants to answer the questionnaire, however the age gap between the researcher and the second group of participants might cause a limitation in finding the target group to participate. The key topics of this study are mainly associated with future and digital innovation, therefore, it is difficult to research from just academic books, which mostly contain old contents, the researcher has been conducted the secondary research mostly from internet websites and blogs.

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literature review Digital Shift The fashion retail industry has experienced some important changes in the past few years. Unlike many other industry, online and mobile channels have transformed shopping experience in brick and mortar stores forever (KDM, 2014). High-street fashion market in the UK has since become one of the world’s most internationalised and competitive retail sectors during the past 20 years (Rebecca Thomson, 2012). In the early 1990s a few big players, including Next and Marks & Spencer offered a straightforward fashion retail choice and the market has become more crowded. Arcadia and Primark jostle for market share with foreign rivals like Inditex (Zara) and Forever 21, while online retailers such as ASOS carry on to make steps into new territories (Retailweek, 2012). According to Verdict (2012), the retail sales in the clothing sector in

UK market reached £37.9bn in 2011. Since 2007, the value of online fashion sales has grown more than 200%. Sales online reached £5.6bn in 2014 and was predicted to rise to £7.5bn in 2017 (Conlumino, 2014). As ASOS founder Nick Robertson (2012) says: “It’s phenomenal what the last few years have done. If you loved fashion 10 years ago and you didn’t have easy access to Oxford Street you were presented with a local high street with two to three clothing stores. The same girl living in the same town can now effectively purchase from any brand in any country. It has opened up a whole new world.” ASOS and other e-tailers, winning market share before many traditional retailers had realised the platform’s potential- as ASOS sales rose from £42.6m in 2007 to £481.7m in 2014 (internetretailing, 2014).

Consumer shopping behaviour has changed by the empowerment of mobile devices in terms of how they listen, watch and compare things (Deloitte, 2014). Their attitude required the need of speed and seamless experience during shopping. As shown in Appendix1, customer behaviour is changing in several key ways; 1. Customers no longer compare companies only with competitors, but also with companies in different industries 2. Customers are less tolerant 3. Customers are led by the opinions of their friends. 4. Customers are more informed (Paconsulting, 2015). Therefore, according to Healey Cypher, Head of Retail innovation for eBay(2015), “Stores aren’t going to go away, but they are going to change, consumers have changed. Their expectation is accelerating incredibly fast.”, “Today customers want immediacy and they want

their shopping experience to be enjoyable and beautiful, both in the store and online”. The impact of the growth of online pureplays definitely made other retailers pay attention. Verdict analyst, Honor Westnedge (2013) noted: “It made retailers that just had physical stores realise that online is a vital channel.” Digital has become fundamental to the entire shopping experience, in and out of the store (Lobaugh, 2014).

Digital influence in retail

Even though integrating online shopping has various advantages, Edward (2012), has argued that when people buy products online they can’t try things on or feel the quality of item which results in loosing margin. “…This might mean that you lose out on a sale on an item that, if someone had been able to try it on or feel it in their hand, they would have actually paid good money for. Equally, when people buy online there is more chance it won’t fit properly or they don’t like the quality when it arrives at their door. This means that you will have to deal with a lot more returns which can be costly as well as time-consuming.” Returns rates were around 25% in 2012 and represent a significant cost to the business (Retail Week, 2012). Intangibility is the principle cause of risk in online shopping (Yu et al, 2012), until they develop a sensory device that we can touch or feel through it in the future.

lion of in-store retail sales. This shows that the industry has reached a point where digital channels should not be considered as a separate business.

However, in other way, online is a sector that suits multichannel retailing well. “A high street presence is still relevant in fashion,” says Westnedge (2013). “Multichannel shopping is very important.” Research from ContactLab and hybris (2015) has shown that a majority of in-store shoppers have practically searched online to get information in advance, including pricing, product options and in-store availability before trying things on in a physical store. The idea was supported by a Chief Operating Officer of a luxury fashion chain who gave an interview to Retailweek Report (2014) that “we have noticed that the stronger the online offering is, the more people come into the stores”. A research result of Deloitte (2014) has shown that in 2014, digital technologies had influenced 36 percent or almost £1 tril-

Thus, the findings suggest that consumers are often relying more on their own devices for in-store shopping activities than the store associate (Deloitte, 2014). Google (2013) also found that one in three smartphone shoppers would rather use their smartphone than consult a store employee which from the researcher’s point of view, this means retailers need to provide an easiest way for their customers to get information about the products themselves by optimize their site to display helpful product details in a mobile-friendly environment (Retailer eCommerce Study, 2013).

From the research (2014), 84% of store visitors report using digital devices before or during their trip to the store and the consumers who use a device during their shopping convert at a 40% higher rate which means the more the digital experience and information match the shopper’s needs at a given moment, the more likely they are to buy products. A director at an online retailer agreed on this issue; “Customers are no longer just inspired by walking into a shop, they are using advice from friends, family and social. But we know they are seeking advice from our own websites. So our editorial and expertise has become importance.”(RetailWeek Report, 2014).

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â&#x20AC;&#x2DC;Digital influence factorâ&#x20AC;&#x2122;, is not only influencing how customers shop and make decisions in store, however it is creating new digital expectations of retailers in terms of how they provide help to their customers to gather appropriate information to make shopping decisions and purchases (Deloitte,2014). Online visibility has become a more affordable way to draw new customers for new and small businesses. A strong existence on search engines has become increasingly vital according to Gaillard (2015). Brands are investing more heavily in the SEO (Search Engine optimisation) content and infrastructure of their websites including product descriptions that suitable for SEO and further content like category and brand social network pages (TextMaster, 2014). While the content needs to be adjusted for search engines, it also needs to be appeal to shoppers which means that it must be well written, attention-grabbing and persuasive (Gaillard,2015). However, Gregorio argued that the most noticeable drawback in using SEO is a long time taking to generate substantial outcomes, also no guarantee for any results at all for landing on the first page is really what matters in search results, as 75% of search users will most likely never scroll past the first page and disregard the rest (Gregorio, 2015). Therefore, this may not be favourable for small businesses that need substantial revenues in the short term. This example has shown that digital marketing tool alone canâ&#x20AC;&#x2122;t be the driver of a whole retail business.

Omnichannel Multi-channel retailing is now moving towards omni-channel – considering the customer as the heart of the strategy with each of the channel touch points operating in unison to deliver customers with the ability to buy product they want, when they want it (fourthsource, 2013). According to Apparel (2014), foreign growth will be a core part of many UK retailer’s strategies, they need to keep on top of accelerated technological developments, especially in mobile. Newton-Jones (2014) commented that the investment in the medium is crucial; “mobile is going to be bigger than anything we’ve seen so far to date... there’s a whole generation who are skipping the need to use a PC and go straight to tablet and smartphones.” While mobile has been a key driver that has helped to remove the barriers between online and offline. In 2011, high street retailers including Ted Baker and New Look launch ‘Click and Collect’ services (Thomson, 2012) which provide shoppers to purchase a product online and pick-up by themselves instore. The service has become a vital part of Omni-channel marketing. According to a research by consumer group Which (2014), found that 60% of people shopping online last year had problems with delivery. Therefore, Click and Collect is gaining popularity from costumers due to the fact that they can pick and choose collection times that best suit them. Moreover, it gives customers a guarantee that their product will certainly be there in-store (Struttandparker, 2014). 39% of shoppers in the UK have used click and collect in 2013 (Econsultancy, 2014) and nearly 76% are expected to utilise clickand-collect by 2017 (Planet Retail, 2014). The service is helping to bring the online and offline worlds together. This merging of the physical and digital is encouraging consumers to spend more in bricks and mortar stores as well (Struttandparker, 2014).

However, the disadvantage of this system becomes apparent. The area required to store orders started to become disproportionate. According to Internet-retailing (2015), “customer service had to start placing extra resources into frequently contacting customers to collect their orders, some wanted to add to their orders, change of mind or to make matters worse engage in idle chatter and conversation with the office staff or to see products before they bought them, all situations that add unnecessary and unplanned overheads to the business.”

up-market retailer, with a strong service proposition, including personal shopping facilities. Whilst House of Fraser was the best executioner of cross channel and order fulfilment, other retailers were not doing very well with their operating across multiple channels. They have been quick to embrace ‘Click and Collet’ but the offer was not consistent. As Siobhan Gehin (2014), Kurt Salmon partner, explains that “Retailers just do not have the ‘glue’ they need to link all the channels together, so they are disappointing customers and losing sales,”

Interestingly, some significant online pure-plays like ASOS also provide Click and Collect service as well, in order to avoid all the frustrating situations or disappointment with delivery and returning. According to Anna Richardson Taylor (2012), ASOS started to use this system in 2012 by partnering with a third party supplier Collect+, which allows customers to choose next-day delivery to local convenience stores. Customers can select from thousands of shops, with convenience strongly underlined on its website. However, with the increasing sophistication and flexibility of delivery, making the most of collect-in-store is also a challenge (retail-week, 2012). According to results of a survey by Kurt Salmon (2014), Topshop was the best omni-channel fashion brand among 25 UK fashion retailers they had been surveyed. The brand stood out from the competitors for its highly engaging content online, a clean and functional mobile site with social well integrated. And its store-experience matches that of a more

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physical store Although digital media and multichannel are vital for all fashion retailers these days, there is an important point that most of retailers have missed out which is to invest in developing their own physical stores. “…But there’s one form factor you may forget, and that’s your store. The store is the touch-point on the path to purchase…When you’re in a store, there’s nothing that’s more immersive than that experience.” said Healey Cypher in an interview at ‘Retail Tech: What Does the Future Have In-store?” 2015. According to The Parker Avery, brick and mortar retailers still dominate the retail landscape, representing about 92% of total retail sales (2013). Rather than being viewed as an underrated resource and even considered fading, physical stores should instead be considered as a significant source of competitive advantage (Oglesby et al., 2013). There is the same thought from BOF (Business of Fashion, 2015) that has encouraged brands to transform the store into one of their media channel, “This does not mean an end to physical retail stores but rather a repurposing… Given their innately live, sensorial and experiential quality, physical stores have the potential to become powerful media points from which retailers can articulate their brand story, excite consumers about products and then funnel their purchase. In fact,… physical store has the potential to be the most powerful and effective form of media available to a brand because it offers an experience, which if crafted properly, cannot be replicated online.” (Doug Stephens, 2015). Therefore, physical store in the future would probably not be just a space where people go to look for a product anymore, but rather be a living connected space. Beecham Research, (2014) has pointed out “Designing, selection, manufacturing and retailing are all in this space where customers mesh with the shop assistants… and together interact with a variety of technologies immersed in the surrounding spaces.”(Romeo, 2014). Recently, development in digital technologies and new user interfaces has gone some way towards translating the in-store experience to the online environment, through object interactivity or virtual try-on (Perry et al., 2013). A few retailers has started to engage technologies in their brick and mortar stores, such as wearable devices, cloud computing, sensor networks, virtual fitting rooms where you can “try on” fashions without undressing, visual signage social media tickers that tally “likes” of individual articles of clothing, and scannable QR codes. An outstanding example is Rebecca Minkoff, a US premium brand that focuses on using technology to build a new in-store experience. Uri Minkoff, the CEO said, “We hadn’t seen a lot of innovation in retail since the Apple stores.” In early 2014, they began a collaboration with eBay’s retail innovation group to create new interactive system in Rebecca Minkoff’s New York flagship store (Sacks, 2015). Customers are greeted by a huge

touch-screen, when they walk in the store, which lets them swipe through clothing styles and send to the dressing rooms to try on. Also, the dressing rooms are interactive with touch-screen mirrors that allow them to request different sizes (Sacks, 2015). According to Uri, the brand has treated its store as a software project. The eBay mirrors change the standard in which offline stores struggling to catch up by porting their physical presence online. “In this case, both eBay and Rebecca Minkoff— which started as an online brand—are venturing offline in recognition that the future of shopping will include elements of both” (Wohlsen, 2014). Steve Yankovich, eBay’s head of innovation and new ventures claims “People still want to use their five senses, not just the one sense you use when you’re doing e-commerce, So physical retail, a showroom, I think will never go away.” According to Shop Direct chief executive Mark Newton-Jones (2012), the problem for bricks-and-mortar retailers is that it is difficult to justify investing a large amount in new technologies if they only generate a fraction of sales now. He says: “The difficulty for them is that, while it’s still a very small part of their turnover, it is difficult to put enough investment into the technology to grow that part of the business.” However, the most innovative of store retailers will work on integrating the separate channels to provide services that e-tailers cannot, such as personalised offers on a mobile while a customer shops in store (Retailweek, 2014). Oglesby (2013) argues that one of the most challenging parts of physical retailing is finding associates who embrace customer service as a passion. “Even in low-touch service environments, where the customer does not expect significant interaction with the store staff, a single bad experience with sales associates who are not fully engaged

in supporting the retailer’s customer service value proposition can cause irreparable harm.” Through integration of customer data, driven and trained sales associates, and organisational structure that embraces personal customer experiences, the “Power of Feel” of physical store can be an effective asset (Parkeravery, 2013). Some retailers believe that “they must leverage information and behaviours from other channels to surprise, delight, and drive face-to-face customer loyalty in their brick and mortar environments” (Oglesby et al., 2013). But is it necessary for every high street retailers? In the Harvard Business Review article (2015), Matthew Dixon et al. states “stop trying to delight your customers.” While it appears to contradict the idea of providing outstanding customer experiences, a research by Dixon (2015) provides key figures. “A survey of more than 125,000 customers, 5,000+ agents and more than 100 companies teaches us that customer “delight” only happens 16 percent of the time. And chasing this rarely achieved “delight” increases operating costs by as much as 20 percent. Reducing customer effort is a more effective way to win the competitive battle for customer loyalty without washing away profit margins.” They noted that customers just need a “one-and-done” interaction with technical support or any other customer services. All this has led to question if omni-channel is the only way for every high street retailers to evolve in the future? Or the physical retail store can survive without integrating any digital technology? This area will be discussed further in the main discussion part of this dissertation.

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discussion

diffusion of innovations As mentioned in the literature review, the innovation of digital media has impacted all domains of society including communications (mobile gadgets), life styles and fashion retail industry. Customer behaviour also changed by the empowering of internet and new digital devices which have become fundamental to the entire shopping experience, in and out of the store (Lobaugh, 2014). In order to investigate and study about this phenomenon, the Diffusion of Innovations theory has been applied to explain how digital is taken up in a population. According to Rogers (2003), behaviour will change more rapidly if innovations are perceived as being better than previous options and consistent with the values, past experiences and needs of potential adopters. In the past few years, the use of digital media and social networks has extended to the majority level, see figure 16.

Figure 16 : Diffusion of innovations

E-tailers were the early adopters who saw the opportunity of using digital media to make profits. The value of online fashion sales has grew more than 200% since 2007 and reached £5.6bn in 2014 (Conlumino, 2014). Online pure plays have generated an enormous successful result according to Stephens (BOF, 2015), global e-commerce increased by 19% in 2014 and is forecasted to reach 30% by 2025. E-tailers such as ASOS and Amazon have won market share before many traditional retailers had realised the platform’s potential. They were propelled by the rise of Asian countries cheap manufacturing bases (PESTLE analysis, Appendix 2), which have ability to produce high quality products at an affordable price also with the high speed that completely revolutionised the whole industry. Therefore, a number of fashion retailers have integrated digital marketing strategies to take advantage from this change by using social media channels including Facebook, Twitter, Instagram or creating their own designed websites. However, Rogers argued that the impersonal marketing methods, as mentioned, may spread information to customers, but it is the conversations between peer to peer that spread adoption (Robinson, 2009). Consequently some of fashion retailers, aimed to recruit well-connected individuals to spread new ideas through their own social networks which is a part of Viral marketing method including creating connections with Bloggers who use ‘Popular Opinion Leader’ techniques. Bloggers were the early adopters. They were quick to make connections between innovations and personal needs also their natural desire to be seen as leaders and trend setters causes a powerful influencing to customers’ decisions.

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the change of customer behaviour As shown in PESTLE analysis, appendix 2, customer behaviour has changed in many key ways. They have become faster to complain, harder to satisfy as customer-to-customer dialogue has grown due to the rise of social media. In addition, the reputation of the brand is shaken or strengthened accordingly (Paconsulting, 2015). Customers also demand for what value for money, not overpricing or poor customer service. The most importantly, they are no longer accept branding and marketing from organisations due to a widespread of distrust of the mainstream advertising. According to the Bass Forecasting model, figure 18, people tend to adopt new innovations or products due to interpersonal communication with their trusted peers more than from mass media(Robinson, 2009). The model has illustrated how face to face communication becomes more influential over time. Customers in the digital age, that can reach to the information very easily, have become more informed by the product reviews on social networks and also be led by the opinions of their friends and their followers in the same time. The mindset of the consumer has shifted from one of careless consumption to one of considered consumption where they are more selective and careful about what they buy (Retailweek, 2014). The expectation is accelerating fast and the impact of the growth of online pure-plays made retailers, who had only physical stores, realise that online is a vital channel to enhance customer shopping experience.

Figure 18 : Bass Forecasting model

multichannel retailing “The internet hasn’t culled the high street” commented Dunkerton (2012). Online is a sector that suits multichannel retailing well. As discussed in the literature review, digital channels should not be considered as a separate business as in 2014, digital technologies had influenced 36% or almost £1 trillion of in store retail sales (Deloitte, 2014) therefore it’s obvious that digital devices can actually convert a higher rate for the in store sales. A figure 19 shows the result of investment priorities for fashion retailers, gathered by a Retail Week Fashion Leader survey (2014). Most of retailers believe that providing a quality multichannel service is currently the most important challenge as they need to respond to the speed of change in how consumers shop for fashion. A statistic from a study of Retailweek Reports has shown that the modern shopper is now using more than five channels to do shopping and almost half of consumers regularly use three or more channels to do shopping (Retailweek, 2014) therefore, many retailers believe that multichannel then can be the key to success for any brands who can give a good representation virtually, it is going to pull customers into the store. Store retailers can also work on integrating different channels to provide services that e-tailers cannot, which including personalised offers or special discounts on a mobile while a customer shop in store (Thomson, 2012). Figure 19

An investment in mobile features second in the list (figure 19). Mobile technology is growing at a faster pace than the initial growth of internet in the early days (Newton- Jones, 2012). It is considered as the most significant channel for shoppers to search for information in order to make purchases as modern shoppers tend to rely on their own devices than the store associates. The result from Shopatron Retailer Ecommerce study in 2013, shows

that 58% of customers use their mobile phones to compare prices, 38% use them to get product information and 22% use them to look at product reviews. The avoidance of sales associates relates to a recent study by the e-tailing group where the most important omni-channel feature for consumers is to check the availability of products before visiting the store (Brown, 2015).

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Figure 21 is showing relationships between searching and purchasing behaviour. â&#x20AC;&#x2122;Research Online, Purchase Offlineâ&#x20AC;&#x2122; or ROPO is possible due to consumers not wanting to waste a time to go to the store if a product is unavailable. Besides the noticeable purchase journeys of searching online and purchases offline, there is also a reverse ROPO effect (ROPO B), where shoppers begin their purchase journey offline, but place order online, for example when they want to see and touch the product in reality, but want to profit from cheaper offers online. This reverse effect is increasing in importance as well and is already seen as an important problem for brick and mortar retailers. It is very significant that customers have expectations on retailers to provide information they need in the most convenient way. Figure 21

While mobile has been a key driver to remove barriers between online and offline, Click and collect service has integrated them together. It made multi-channel retailing moved towards omni-channel where customers can get same experience from every touch points. Resulting other locations such as physical stores, drive-through pick-up spots or lockers to grow importance as locations for the collect or return products ordered online, and to being seen as a good way of allowing customers assess products prior to purchase. There is also the possible advantage of customers ending further in-store purchases when collecting their orders as several retailers have certainly intimated that between 60-75% of click & collect shoppers go on to purchase additional items while in store for order collection (Kantar Retail, 2015). With so many channels, customers are personalising their own experience with brands by exploring online content and in-store browsing, making it hard for retailers to deliver a consistent experience (Bruins, 2014). However, some retailers have grasped this concept, and their success on the high-street, together with remarkable online sales, demonstrates the significance of a good omni-channel strategy. According to a survey conducted by Kurt Salmon (2014), Topshop was voted the best fashion retailer that operate omni-channel due to its highly engaging content online that can bring customers back to store again and again and its social well integrated functional mobile site as well as its in-store experience with a strong service proposition. It also showed that

brand loyalty is directly associated with channel usage, as the more channel a retailer offers, the more channels a customer shops. And, the more channels a customer shop, the more loyal the customer (ATKearney, 2014). Conversely, in a recent study by SPS Commerce, more than 37% of fashion retailers feel as though they are still exploring their omni-channel and have not established a long term strategy yet. This percentage is up from only 29% last year and these numbers designate omni-channel commerce is moving at a pace that is becoming tough for some brands to keep up with (Brown, 2015). Moreover, in June 2015, Arcadia group which owns Topshop, the best high street brand operating omni-channel, has dropped operating profits (before exceptional items) from £204m last year to £172.3m and the group’s net debt fell by £100m to £193m and investment in the business rose to £107m from £93m in the previous financial year (Theguardian, 2015). This figure reflects a hard time for fashion retailers in which market conditions remain competitive and challenging with new entrants across all channels.

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Physical store In the era where high technology holds almost all the answers for fashion retailing, physical stores are still gradually developing through the integration of new innovations, competing to provide customers a true omni-channel retailer environment. Brick and mortar retailers are still dominate the retail industry, evidenced by representing 95% of total retail sales ( A.T.Kearney, 2014), even those who are reducing their stores are doing so in order to focus on bigger and better shop to improve customer experience (Retailweek, 2014). Moreover, even though smart phones and social media are significant for today business, retailers with a brick and mortar stores collectively sell more on their websites than online pure players (Brown et al., 2014). While both online and physical store are proofed to be valuable, the result from a questionnaire (Appendix), answered by 135 participants, finds that most people prefer engaging with physical stores. Regardless of age, 91% of participants usually make product purchases from in store and 64.7% prefer to shop from in-store to online, while 31.6% enjoy to shop from both channels. Interestingly, just 3.8% of participants prefer to shop online. Seniors participants obviously prefer physical stores to online, which is a predictable result, but surprisingly almost one-third of participant age under 25 year-old also prefer in-store shopping. This is a critical fact for fashion retailers to make a right move to engage these young generations in order to create a lifelong relationships. However, almost half of participants age 25-35, still like to use multi-channel for shopping. They tend to visit a physical store for trial, test, purchase and returns. The result has demonstrated that physical locations are fundamental to retailing future as consumers still prefer to be engaged with it. Nonetheless, to be sustainable, physical stores in the future would probably not be just a place where people go to buy product anymore, but rather be a living connected space by interacting with new technologies. (Romeo, 2014).

case studies According to the analysis in the literature reviews, a number of fashion retailers has already established new strategies in order to enhance their physical spaces. Hence, the researcher has selected two case studies of two fashion retailers who brought a new chapter to in-store experience.

Figure 25

Case study 1 : Rebecca Minkoff “Add some science to the art”, a memorable line which truly captures the essence of the label, said by Uri Minkoff (2015), Co-founder and CEO of Rebecca Minkoff. He commented that they had not seen a lot of innovation in retail since the Apple stores, so they started coming up with an idea to take the best from a mobile experience into the physical store. The brand has done a great job in integrating online and offline knowing that retail industry these days is all about multi-sensory. Rebecca Minkoff is truly a perfect case study for innovative marketing ideas and also collaborations. In 2014, they began collaborating with eBay to build a new kind of in-store experience (Sacks, 2015), by building ’the connected wall ’, a huge interactive screen in the flagship store, that lets customers swipe through product styles, in the same way they would do on their mobile devices, and send to a dressing room to try on. The dressing rooms are also interactive with a touch-screen mirrors, customers can easily request for new sizes or new styles from within the room. The brand not only implement digital devices in the store but also make the most of it by synchronising with online channels. Rebecca Minkoff mobile application can be used for self-checkout within the store or if customers decide not to buy at the time, they can save the exact items for later. Bringing mobile-shopping touches to traditional retail not only enhances shopping experience but also provides an exceptional customer data for the company. The data illustrates trend of what customers have chosen to try on, which the brand can immediately modify both in-store and online marketing to reflect those preferences (Sacks, 2015). Moreover, in the same way e-commerce track online shopping cart abandonment rates, Rebecca Minkoff also track the physical dressing room abandonment to offer a free trail for customers as well (Culp, 2015). What we could learn from the brand is how they collecting, leveraging and applying data from every channel to the centre of their operations, which provide them with the most impactful marketing strategy in terms of gaining customer insights and know what to offer them in return. On the other hand, the most challenging part of integrating new technologies into stores is that it’s require a large amount of money to invest. Rebecca Minkoff had invested about six-figure sum last year in the new technology tools (Minkoff, 2014). Therefore, even ’Web-rooming ’ is a good idea but most of retailers, especially for the small players, are not possibly be able to put enough investment into this area. Therefore, integrating advance technological devices may not be the answer for every high street retailer, but the ability to connect with their targets in the most efficient ways.

Figure 26

Case study 2 : Gentle Monster Our philosophy and keyword is “experiment”, Han Kook Kim, 2013

Figure 27

Figure 28

If Rebecca Minkoff’s spirit is to ’add some science to the art’, Gentle Monster’s would be to ’add more art to the art! ’. Gentle Monster is a designer brand that persistently progresses itself under a philosophy of “high-end experimentation.” (Gentlemonster, 2015). The eyewear company, established in 2011 by Han kook Kim, with its five main focuses including; product, styling, space, culture redesign and technology, creating new customer experience that has astonished the world. The brand has expanded internationally and become very well-known within Asian countries for the label that built on experimentation and innovative creativity, marrying with art and approachability (Schmidt, 2014). Gentle Monster presents its brand philosophy and value through experimental and differentiated product designs, together with numerous collaborations with many fashion brands, artists and designers in order to push the boundaries of the eyewear fashion industry. Allowing the brand to spontaneously explore different kind of materials and concepts within a limited fixed shape, the results are nothing short of revolutionary (Fashionbeans, 2013). Apart from an exceptional product design, Gentle Monster flagship stores located in Seoul, South Korea, can easily be described as one of the best examples for store of the future. The brand has created a store that hardly find a product but the place where an experimental art exhibitions take place. The showrooms are unique spaces that convey different interesting stories that drive visitors on an unforgettable journey, besides, the projects are redesigned every 25 days through collaborations with artists and brands to keep excite their customers every time they visit the stores. Every customer who gave an interview, shown in appendix 4, agreed that they first distinguished the brand from the unique store displays before even know what it was selling. “I noticed the brand by chance when I was walking on the Garosu-gil street with my friends. We were so curious about the store because it looked very outstanding, so we went in to take photos, and after that we realised it sells fashion sunglasses. ”, noted a 24 year-old customer. In addition, another customer got

Figure 29

to know the brand through social media when some of her friends shared pictures of the store on Facebook. “I thought it was a very beautiful place so I wanted to see it by myself. ”, noticeably, a great store visual merchandise can actually attract customers into the store. A customer has explained that the Gentle Monster store doesn’t look like a retail store, so she felt more comfortable to walk and look around, the fact was approved by another customer who said “It was a fun and relaxing shopping experience that I can enjoy taking pictures in the same time. ”. Yet, the interviewees have gave an important argument by noting that the real significant factor that influence their buying decisions was the product. “I think the decorations can appeal people to get in the store but what really influence my buying decision is the uniqueness of the sunglasses. ” This phenomenon has shown that in-store retail experience has gone beyond shopping for wearing products. Gentle Monster has successfully delivered an amazing and amusing experience through investing in store visual merchandise, along with quality products design to engage customers in the saturated market. On the other hand, people in the mass majority who are not very interested in artworks, may not get excited by the heavy visual merchandising. The result from the questionnaire, appendix 3, has shown that, when participants were ask to rank factors that influence their buying decisions the most when they shop in store, 48.9% says ’product design’, while ’product quality’ and ’sale promotions’ ranked second and third. In addition, ’Visual Merchandising’ and ’New experience’ were ranked sixth out of eight factors. It is very conspicuous that what customers really want is a product that answer their needs and suit their lifestyles more than just an instant experience. However, we can’t argue that the outstanding store design can certainly make the brand become well-known and also can draw new customers into the store.

future

Figure 30

Figure 31

Not only traditional retailers who see the opportunity from the use of multiple channels to enhancing shopping experience. Online pure-plays or internet retailers are also seeing value in expanding their physical stores to operate multi-channel strategy as well (Brown et al, 2014). In previous several years, Amazon, eBay and Google have invested on pop-up stores, which worked as a concept and showed visions of the companies, not just for selling products. Is it a signal telling online retailers can no longer rely merely on e-commerce to win and maintain a market share? Scott Galloway, professor of marketing at New York University, spoke about this issue in a conference in 2015 that, “…Pure-play e-commerce doesn’t work for anybody. The world looks like a multi-channel future; pure-play e-commerce is dead.” (Computerweekly, 2015). Physical stores can be a vital centre for product returning, which is the stage in the shopping that consumers demonstrate the highest preference for physical stores over online (Brown et al, 2014). This preference is reflected the desire for accessibility and time efficiency. Thus, for traditional retailers, a return is a potential new sale but for online pure-plays, a return can be a dead-net cost (ATKearney, 2014). Consequently, if all types of retailers cannot win the market share by operating on a single channel, the future of fashion retailers will probably nothing far from cross-channel. Even a lot of traditional retailers still not believe that digital industry is going to happen (Conlumino, 2014), they cannot deny that indirect relationship with driving sales needs to be taken into account (Retailweek, 2014).

Figure32 Presenting a research by Conlumino (2014), demonstrating the predicted true value of sales influenced by digital that can be increased £3.6bn higher than the direct sales value in 2017. While a physical store itself could generally generate around £38.5bn, but the result shows that it could increase £2.1bn by being a place of inspiration for people buying online and £1.1bn by being a point of collection for Click and Collect Service, also £400m more for being a place where online mobile transactions are made.

Figure 32

While the ongoing emerging of cross-channel retailing has opened new growth opportunities, it has undeniably increased complexity for customers and cost for retailers. With consumers using more and more channels to buy products, it is critical that they are offered a consistent experience throughout all channels, which is still the biggest challenge for most retailers in the present (Retailweek, 2014). According to the questionnaire analysis (Appendix 3), 97% of participants emphasis the important of using multi-channel by agree that ’brands in the future should use multi-channels for selling products’ whilst, 99.2% think that every retailer should focuses on the service. The result shows that good service is very significant. It is one of the most challenging parts of retailers as Oglesby (2013) has explained that “Even in low-tech service environments, where customer doesn’t expect interaction with the store staff, a single bad experience with sales associates... can cause irreparable harm.” Interestingly, when mentioning store of future, Brand story was ranked 3rd for the area that retailers should focus on, with 96.2% has agreed to the statement. Based on the research, for all the change we have seen, the basics of retailing remain the same. Product and service are still at the heart for every business operations whether it be online or offline. The future of retail store, as discussed above, will certainly continue to integrate physical with digital innovations, it will no longer be just a place for selling products but a space that share lifestyles or inspirations where people can interact with a variety of technologies or experimental arts. Successful retailing will continue to provide as many as possible options for customers and to establish the most value on the customers terms.

Figure 33

conclusion The value of stores for customers and retailers is far more than the sales that are captured within them. Whatever the strategy or channel, the future of retailing will be characterised by placing consumer at the core operations, in order to provide them with the ability to shop â&#x20AC;&#x153;anything, anytime, anywhereâ&#x20AC;? they want. Based on the research, multi-channels strategy has been proven to be valuable for todayâ&#x20AC;&#x2122;s business, any retailer who knows how to adapt to a constant state of change can be successful. In conclusion, fashion retailers need to evaluate every channel and use those channels in the most efficient way to offer the right seamless experience for consumers. Stores Currently most important for purchasing and becoming more significant for inspiration.

Mobile Currently most important for research but will still remain unsuitable for purchasing due to limited screen size.

Social media Online Currently most important for research Currently important for influencing buyand becoming more important for pur- ing decisions and still growing. chasing.

The research question which has set to discover the most accurate possibility of high street fashion stores in the future, should not be focusing on whether digital or physical. When, in fact it is all about digital with physical. In reality, online shopping will continue to grow, and physical stores will still remain fundamental for retailing. Therefore, there is no one precise way to operate a business in the era that any innovative approach can be possible, if the retailers have a right understanding of how each touch point can add value to maximise customer satisfaction and profitability.

Figure 34

list of illustrations Cover image : Google+, h. (2015). http:www.youtub/.com - Videos - Google+. [online] Plus.google.com. Available at: https://plus.google.com/109041569854441912453/videos [Accessed 25 Aug. 2015]. Figure 1 : NYLON, (2015). COS Spring Summer 2015 Look Book | NYLON. [online] Available at: http:// www.nylon.com/articles/cos-spring-summer-2015 [Accessed 25 Aug. 2015]. Figure 2 : Cereal, (2015). Cereal – Travel & Style Magazine. [online] Available at: http://readcereal.com/ [Accessed 25 Aug. 2015]. Figure 3 : Blog MyHome.pl - Nowoczesny design, wnętrza i ogrody., (2015). [online] Available at: https://myhome.pl/blog/wieszak-w-sypialni-alternatywa-dla-szafy/znaleziono-na-boltberendezo-blog-hu/ [Accessed 25 Aug. 2015]. Figure 4 : Interiii, (2015). Green OWEN Design by Tacklebox Architecture Decoration Ideas. [online] Available at: http://interiii.com/2013/04/owen-design-by-tacklebox-architecture/green-owen-design-by-tacklebox-architecture-decoration-ideas/ [Accessed 25 Aug. 2015]. Figure 5 : Cereal, (2015). Cereal – Travel & Style Magazine. [online] Available at: http://readcereal.com/ [Accessed 25 Aug. 2015]. Figure 6 : Radiovidmo.carbonmade.com, (2015). radiovidmo - some old stuff. [online] Available at: https://radiovidmo.carbonmade.com/projects/5264009 [Accessed 25 Aug. 2015]. Figure 7 : MONSTER, G. (2015). GENTLE MONSTER - QUANTUM PROJECT. [online] Gentlemonster.com. Available at: http://www.gentlemonster.com/project/quantum [Accessed 2 Jul. 2015]. Figure 8 : Gallery.readcereal.com, (2015). cereal. [online] Available at: http://gallery.readcereal.com/ page/3 [Accessed 25 Aug. 2015]. Figure 9 : Cereal, (2015). London - Cereal. [online] Available at: http://readcereal.com/city-guides/london/ [Accessed 25 Aug. 2015]. Figure 10 : judithvanmourik | interior achitecture, (2015). judithvanmourik | interior achitecture. [online] Available at: http://www.judithvanmourik.nl/ [Accessed 25 Aug. 2015]. Figure 11 : Google.co.uk, (2015). Redirect Notice. [online] Available at: https://www.google.co.uk/ url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAUQjhxqFQoTCLC9qY__w8cCFQcG2woda10MNQ&url=http%3A%2F%2Finspirationist.net%2Fworld-basics-2013by-schemata%2F&ei=Gz_cVfDDAoeM7AbrurGoAw&psig=AFQjCNEvLB_-ksoCfEadrbK-tiPLd0wmNw&ust=1440583833682853 [Accessed 25 Aug. 2015]. Figure 12 : Gauksdottir.com, (2015). Retail | Frida Gauksdottir. [online] Available at: http://gauksdottir. com/category/retail/ [Accessed 25 Aug. 2015]. Figure 13 : Pinterest.com, (2015). [online] Available at: https://www.pinterest.com/ pin/37436240629086470/ [Accessed 25 Aug. 2015]. 72

Figure 14 : Wtoutiao.com, (2015). PODOL YAN(wtoutiao.com). [online] Available at: http://www. wtoutiao.com/p/f48yaN.html [Accessed 25 Aug. 2015]. Figure 15 : Klaxon.pl, (2015). Klaxon - Biuro prasowe. [online] Available at: http://www.klaxon.pl/pl/ plebiscyt-polskie-wnetrze-2011-rozstrzygniety-of-84.html [Accessed 2 Jul. 2015]. Figure 16 : Diffusion of innovations. Figure 17 : Stories, &. (2015). & Other Stories | Online Store. [online] Stories.com. Available at: http:// www.stories.com/gb/ [Accessed 25 Aug. 2015]. Figure 18 : Bass Forecasting Model. Figure 19 : Investment priorities of fashion retailers [own diagram]. Figure 20 : iWant.ae, (2015). iwant.ae, Author at iWant.ae. [online] Available at: https://www.iwant. ae/author/admin/ [Accessed 25 Aug. 2015]. Figure 21 : Mobile Marketing Russia, (2014). Mobile strategy: ROPO effect â&#x20AC;&#x201C; 2MR Consulting. [online] Available at: http://mobile-marketing-russia.com/ropo-effect/ [Accessed 25 Aug. 2015]. Figure 22 : Pinterest.com, (2015). [online] Figure 23 : Archilovers, (2013). Supermarket Concept Store, Belgrade, 2008 - Remiks. [online] Available at: http://www.archilovers.com/projects/74303/supermarket-concept-store.html [Accessed 25 Aug. 2015]. Figure 24 : Cereal, (2015). London - Cereal. [online] Available at: http://readcereal.com/city-guides/ london/ [Accessed 25 Aug. 2015]. Figure 25 : Weekly Bobbins, (2015). An example of a new touch-screen in-store shopping experience. [online] Available at: http://bobbins.info/2015/02/example-new-touch-screen-store-shopping-experience/ [Accessed 25 Aug. 2015]. Figure 26 : MONSTER, G. (2015). GENTLE MONSTER - QUANTUM PROJECT. [online] Gentlemonster. com. Available at: http://www.gentlemonster.com/project/quantum [Accessed 2 Jul. 2015]. Figure 27 : MONSTER, G. (2015). GENTLE MONSTER - QUANTUM PROJECT. [online] Gentlemonster. com. Available at: http://www.gentlemonster.com/project/quantum [Accessed 2 Jul. 2015]. Figure 28 : MONSTER, G. (2015). GENTLE MONSTER - QUANTUM PROJECT. [online] Gentlemonster. com. Available at: http://www.gentlemonster.com/project/quantum [Accessed 2 Jul. 2015]. Figure 29 : MONSTER, G. (2015). GENTLE MONSTER - QUANTUM PROJECT. [online] Gentlemonster. com. Available at: http://www.gentlemonster.com/project/quantum [Accessed 2 Jul. 2015]. Figure 30 : Pinterest.com, (2015). [online] Figure 31 : Amsterdam, N. (2015). Rustik chateaux: Natural design store in Amsterdam. [online] Rustikchateaux.blogspot.co.uk. Available at: http://rustikchateaux.blogspot.co.uk/2012/10/design-store-decoracion-interior-tiendas-.html [Accessed 25 Aug. 2015]. 73

Figure 32 : Conlumino.com, (2015). Conlumino | Retail analysis, insight and solutions. [online] Available at: http://conlumino.com/ [Accessed 25 Aug. 2015]. Figure 33 : CCANDCS, (2014). Cos pop-up store. [online] Available at: https://ccandcs.wordpress. com/assignments/ [Accessed 2 Jul. 2015]. Figure 34 : MONSTER, G. (2015). GENTLE MONSTER - QUANTUM PROJECT. [online] Gentlemonster.com. Available at: http://www.gentlemonster.com/project/quantum [Accessed 2 Jul.2015]. Figure 35 : Obsessive Collectors Archive, (2015). Exposici贸n no 1, Making off. [online] Available at: http://obsessivecollectors.com/making-off-exposicion-y-baile [Accessed 25 Aug. 2015].

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Internetretailing, (2015). Internet Retailing | News, insight and analysis for Europeâ&#x20AC;&#x2122;s ecommerce and multichannel retail professionals. [online] Available at: http://internetretailing.net/ [Accessed 24 Aug. 2015]. Johnson, G., Scholes, K. and Whittington, R. (2008). Exploring corporate strategy. Harlow: Prentice Hall. KDM, (2015). The Future of Fashion Retail Store Environments. [online] Available at: http://www.kdmpop.com/2014/10/The-Future-of-Fashion-Retail-Store-Environments.cfm [Accessed 24 Aug. 2015]. Kumar, R. (2005). Research methodology. London: SAGE. Kurtsalmon, (2015). Kurt Salmon Management Consulting Firm. [online] Available at: http://www. kurtsalmon.com/en-gb/ [Accessed 24 Aug. 2015]. Lobaugh, K. (2015). The new digital divide | Deloitte US | Retail & Distribution. [online] Deloitte United States. Available at: http://www2.deloitte.com/us/en/pages/consumer-business/articles/the-new-digital-divide-retail-sales-influence.html [Accessed 24 Aug. 2015]. PA Consulting Group, (2015). Consulting, technology and innovation. [online] Available at: http://www. paconsulting.com/ [Accessed 24 Aug. 2015]. Parkeravery, (2015). Parker Avery: Retail Consulting, Retail Consultants, Retail Strategy, Retail Consulting Firm. [online] Available at: http://www.parkeravery.com/ [Accessed 24 Aug. 2015]. Perry, J. (2011). A future for fashion retail. [online] Retail-week.com. Available at: http://www.retail-week.com/technology/a-future-for-fashion-retail/5031669.article [Accessed 24 Aug. 2015]. Robinson, L. (2012). Changeology. Chicago: UIT Cambridge Ltd. Saunders, M., Lewis, P. and Thornhill, A. (2003). Research methods for business students. Harlow, England: Prentice Hall. Struttandparker.com, (2015). UK Estate Agents & Property Consultants | Strutt & Parker. [online] Available at: http://www.struttandparker.com/ [Accessed 24 Aug. 2015]. TextMaster, (2015). TextMaster | Translation Service | Web Content Writing. [online] Available at: https://uk.textmaster.com/ [Accessed 24 Aug. 2015]. The Business of Fashion, (2015). The Future of Retail is the End of Wholesale. [online] Available at: http://www.businessoffashion.com/articles/opinion/future-retail-end-wholesale [Accessed 24 Aug. 2015]. Thomson, R. (2012). The changing face of fashion retail. [online] Retail-week.com. Available at: http:// www.retail-week.com/the-changing-face-of-fashion-retail/5037465.article [Accessed 24 Aug. 2015]. Which, (2015). Reviews and expert advice from Which?. [online]

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Figure 35

appendix

appendix 1 ethical clearance form

appendix 2 pestle analysis

Political The UK government is planning to ease restrictions on retailers extending their high street shops to facilitate “click & collect” services. (loyaltymagazine, June 2015) Economical Doug Stephens (BOF, 2015), global e-commerce increased by 19% in 2014 and is forecasted to reach 30% by 2025. (Fashion.Telegraph, 2014) The British fashion industry is worth £26 billion to the country's economy, according to figures published today by the British Fashion Council. At a press conference to open London Fashion Week Natalie Massenet, chairman of the British Fashion Council, announced the increase of 22 per cent; up from £21 billion in 2009. This figure incorporates not only the direct impact of wholesale, retail and manufacturing on the economy, but also its effect on other industries including tourism and financial services. The fashion industry is estimated to support 797,000 jobs according to research by Oxford Economics. This is a decrease of 2.3 per cent from the report published four years ago. (BBC, march 2015) The UK's economy grew at a faster pace than initially estimated last year, revised official figures show. The economy grew by 0.6% in the final three months of 2014, up from the previous estimate of 0.5%, the Office for National Statistics said. The unexpected increase meant growth for the year was 2.8%, higher than the earlier estimate of 2.6%.The revised rate marks the highest pace of annual growth since 2006, when the economy grew by 3%. (Telegraph , 2015) Investors are hoping for steady progress at Asos when it presents its half-year results, following the online retailer’s bumper second quarter that followed a string of profit downgrades last year.In a trading statement this month, the fashion website reported a 19pc rise in retail sales for the three months to the end of February, driven by a 30pc boost in UK sales and a 12pc rise internationally. This helped increase retail sales by 14pc for the first half of the year and puts the company on track to hit £45m in full-year profits, according to analysts estimates. Shares in Asos spiked by up to 23pc on the promising news, suggesting a turnaround for the London-listed company after a warehouse fire, which prevented the company from taking orders for three days, and a string of profit warnings knocked almost two thirds off its market cap. The retailer, which has websites in nine global markets, said it had 9.3m active customers as of the end of February, a growth of 13pc on the previous year. 81

Social (Paconsulting,2015) 7 key ways in which customer behaviour is changing: 1.Customers no longer compare companies only with competitors Customers compare a company’s performance with their insurance company, their supermarket, their holiday company. If one company exceeds the customer’s benchmark of ‘what good looks like’, they will expect the same from you. 2. Customers are less tolerant They have become faster to complain and harder to satisfy, as evidenced by increasing complaint levels and customer satisfaction dropping across the board. Research shows the importance customers place on ease of service, in particular. 3. Customer-to-customer dialogue has grown Social media and customer forums have huge potential both to build and to destroy brands. Customers are led by the opinions of their ‘friends’ or ‘followers’, corroborated by ‘likes’ and testimonials. The reputation of the company is shaken or strengthened accordingly. 4. Customers are less loyal Customers will no longer accept perceived overpricing or poor standards of customer service, and are open to switching provider. They want value for money, not just cheap goods and services – they demand quality and are willing to pay for it. 5. Customers no longer accept branding and marketing from organisations There’s widespread distrust of mainstream information channels, plus strong legislation against direct marketing and a growing technical ability to screen out advertising messages. Opinions and commercial relationships are formed elsewhere. 6. Customers are more informed Digital technology has given consumers enhanced knowledge of products and services. The company does not have the monopoly on product knowledge: information and opinions on which to base decisions are a click away. 7. All customers are becoming multichannel users Customers – not businesses – decide which communication methods will be most used. If the channel proposed by businesses is suitable for the type of interaction, then it will succeed; otherwise, it will fail.

Technological Tech in the physical space (apparel.edgl.com , 2014) From proximity marketing, to contactless checkout and everything in between, in-store shopping is being revolutionized through innovations that are both creative and functional. By adding technological elements and capabilities to the physical location, retailers can cultivate a more satisfying experience that meets the heightened expectations of modern shoppers. Features such as virtual fitting rooms where you can "try on" fashions without ever undressing, visual signage social media tickers that tally "likes" of individual articles of clothing, and scannable QR codes that trigger detailed product information and carefully crafted marketing displays on handheld devices are just a few ways retailers are using tech to engage shoppers in brick and mortar locations. Foreign growth will be a core part of many UK retailer’s strategies, but they also need to keep on top of accelerated technological developments. Use of mobile technology is growing at a quicker pace than the initial growth of online shopping, Newton-Jones says, and investment in the medium is crucial. “Mobile is going to be bigger than anything we’ve seen so far to date, it’s growing at such a pace, faster than the internet in the early days. There’s a whole generation who are skipping the need to use a PC and go straight to tablet and smartphones. In certain countries you see generations who don’t even bother with the PC.” Environmental Business case studies: ‘Society's habits and tastes are changing. People are more aware of the importance of the environment and becoming 'green consumers'. Green consumers prefer goods and services that are 'environmentally-friendly' and which have less impact on the environment. Legal The rise of manufacturing in countries such as China changed how the fashion sector operated, allowing discount clothing retailers to produce high-quality products for low costs. But a few years later, costs in China have crept up and sourcing is moving closer to home as fashion retailers seek to react more quickly to fast-moving trends

appendix 3 questionnaire analysis

Gender

male 37.0%

female 62.1% age

38.3% below 25 years old 35.3% 25-35 years old 26.3% Above 35 years old

through whate channels do you ususally make clothing purchases?

do you prefer shopping in store or online? Both

in store

when you purchase product in store, what influences your buying decisions the most? 1. 2. 3. 4. 5. 6. 7. 8.

Product style Quality Sale promotion Price Service Visual Merchandise New experience Location

when you purchase product online, what influences your buying decisions the most? 1. 2. 3. 4. 5. 6. 7.

Product price Sale promotion free shipping Service next day shipping click and collect

do you normally search for product information online vefore purchasing in-store?

appendix 4 gentle monsterâ&#x20AC;&#x2122;s customers interview

Age : 24 Female How do you know Gentle Monster? A : I noticed the brand by chance when I was walking on the street with my friends. We were so curious about the store because it looked very outstanding, so we went in to take photos inside, and after that we realised it sells fashion sunglasses. Have you ever been to Gentle Monster flagship store? In your opinion, what is the best part of the store? A : Yes, I have been there. The prominent point is how they decorate the store, that very detail since the entrance, the logo of the brand and inside. When I went there, it was decorated with old classic theme. It really made me want to go inside and take pictures. I stayed for a while browsing around the store. Can you describe how you feel about the brands visual merchandise? A: It is very impressive. It doesnâ&#x20AC;&#x2122;t look like usual sunglasses store which mainly contains lots of glass cabinets. But the visual merchandise of Gentle Monster really did its job by attracting customers into the store. It was a fun and relaxing shopping experience that I can enjoy taking pictures in the same time. Do you think the atmosphere in the store influence you buying decisions? A : Not for me, because I think it depends on the products of the brand. In my opinion, all the decorations appeal me to go in the store, but I still look for product that suits me well. The thing that I like. If other fashion retailers integrate arts into store designing, do you want to visit that stores too? A: Yes, I want to visit for sure. Because it is very interesting and it looks fun to have other activities to do in the store.

Age : 23 Female How do you know Gentle Monster? A : I know this brand from my friend who told me that many Korean actors and actresses wear this brands. Have you ever been to Gentle Monster flagship store? In your opinion, what is the best part of the store? A : Yes, I went to the Showroom in Hong Dae and I think the uniqueness display is the strongest point. That store doesnâ&#x20AC;&#x2122;t look like a retail store. Can you describe how you feel about the brands visual merchandise? A: I think it is pretty good. Do you think the atmosphere in the store influence you buying decisions? A : Of course. Because many people like to share the brands showroom on the Facebook and social media sites and they want to show that they already been there. If other fashion retailers integrate arts into store designing, do you want to visit that stores too? A: Yes, if other brands do this kind of thing, I would like to visit that place too.

Age : 24 Female How do you know Gentle Monster? A : I know it through social media. I saw many pictures from my friends who took pictures with this store. I thought it was a very beautiful place so I wanted to see it by myself. Have you ever been to Gentle Monster flagship store? In your opinion, what is the best part of the store? A : Yes, I went to the flagship store in Garosugil. The place was very modern but the decoration theme at the time I went there was kind of European house with brick walls, a piano and a huge chandelier in the entrance hall. It was something new for fashion store and it really attract people. Can you describe how you feel about the brands visual merchandise? A: I am impressed by the unique style. When people see this kind of artistic store, we always think its Gentle Monster. Do you think the atmosphere in the store influence you buying decisions? A : I think the decorations appeal people to get in the store but what really influence buying decisions is the uniqueness of sunglasses. If other fashion retailers integrate arts into store designing, do you want to visit that stores too? A: Yes, of course I would love to go.